What is 'valuation strategy' in SAP SRD-FIN-INV - FIN-Inventory?

valuation strategy - Overview

• Component: SRD-FIN-INV

• Component Name: FIN-Inventory

• Description: A priority sequence applied by the system for selecting costs or prices in a material cost estimate. There is a valuation strategy for materials and a valuation strategy for resources and services.

valuation strategy - Details

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  Key Concepts: 
  Valuation strategy is a component of the SAP SRD-FIN-INV FIN-Inventory Valuation module. It is used to determine the value of inventory items and to ensure that the value of inventory is accurately reflected in the company’s financial statements. The valuation strategy is based on the cost of goods sold (COGS) method, which takes into account the cost of materials, labor, and overhead associated with producing a product. 
  
  How to use it: 
  The valuation strategy is used to calculate the value of inventory items at any given time. This calculation is based on the cost of goods sold (COGS) method, which takes into account the cost of materials, labor, and overhead associated with producing a product. The valuation strategy also takes into account any discounts or markups that may be applied to the item. Once the value of an item has been determined, it can be used to calculate the total value of inventory for a company. 
  
  Tips & Tricks: 
  When setting up a valuation strategy, it is important to consider all factors that may affect the value of an item. This includes factors such as market conditions, production costs, and any discounts or markups that may be applied to an item. Additionally, it is important to ensure that the valuation strategy is regularly updated to reflect any changes in market conditions or production