What is FIFO Cost Determination in SAP SRD-FIN-INV - FIN-Inventory?

SAP Term: FIFO Cost Determination

• Component: SRD-FIN-INV

• Component Name: FIN-Inventory

• Description: A work center view where you execute FIFO cost determination runs that calculate the FIFO cost for selected materials and update the results to the cost type Periodic FIFO Cost in the material valuation master data.

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• Key Concepts: 
  FIFO Cost Determination is a feature of SAP's SRD-FIN-INV FIN-Inventory Accounting component. It stands for First In, First Out, and is a method of inventory valuation that assumes the oldest items in inventory are the first to be sold. This method is used to determine the cost of goods sold and the value of inventory on hand. 
  
  How to use it: 
  In SAP, FIFO Cost Determination is used to calculate the cost of goods sold and the value of inventory on hand. To use this feature, you must first set up a FIFO valuation method in the system. This can be done by going to the Inventory Accounting menu and selecting “FIFO Cost Determination”. Once this is done, you can enter the cost of goods sold and the value of inventory on hand into the system. 
  
  Tips & Tricks: 
  When using FIFO Cost Determination in SAP, it is important to remember that it only applies to inventory that has been purchased or manufactured. If you have any inventory that has been acquired through other means, such as donations or bartering, it will not be included in the FIFO calculation. Additionally, it is important to keep accurate records of all inventory transactions so that you can accurately calculate your cost of goods sold and value of inventory on hand. 
  
  Related Information: 
  FIFO Cost Determination is just one of many methods used for inventory valuation in SAP. Other methods include LIFO (Last In, First Out), Average Costing, and Standard Costing. Additionally, there are several other features related to inventory accounting in SAP such as Inventory Management, Warehouse Management, and Material Requirements Planning.