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How to determine the inventory value

Do you manage inventory? Then you need to determine the inventory value. This is the fifth step in the period closure. Evaluate if there is inventory that needs to be revalued based on the 'Inventory List at Reference Date.' After revaluing items, you make the transaction entry.

 

 

To get a good understanding of the results at the end of a period, in a financial basic setup of MKG, a number of manual transactions need to be made. These transactions ensure a clear result, an organized situation, and immediate insight into the value (composition of the value) of the inventory and in many cases, a situation where problem cases and/or incorrect entries can be easily corrected.

 

Please note!
In a financial basic setup, no financial inventory transactions are made from the processes in MKG. The inventory transaction is based on the Inventory List. The difference between the value of the inventory at the end of the previous period and the value of the inventory on this list is the inventory transaction in the respective period. You can read more about the financial setup of MKG in this article.

 

 

Step 1: Revalue the inventory

 

Set the standard report Inventory List at Reference Date (8791) on the date the period ends. Evaluate if there is inventory that needs to be revalued. Then revalue the batches in terms of quantities and prices. Pay attention to the processing date: it must not be later than the reference date of the period.

 

 

Step 2: Make the inventory transaction entry

 

After processing the revaluations, set up the Inventory List at Reference Date (8791) report again. The new list provides a thorough insight into the inventory value at the entered moment on the last page of the report. Now, based on the inventory value, make an transaction entry from the balance sheet to the income statement or vice versa.

 

The reference date
When preparing the Inventory List at Reference Date (8791) report, it is important to specify the correct reference date in the parameters. After all, a period does not necessarily have to be closed on the last day of the month. In practice, this is usually a few days later.

 

 

Period Closure Checklist | To accurately represent the financial result at the end of a period (year, quarter, month), several steps need to be taken. This checklist serves as a guide when performing the period closure in MKG. Or go directly to one of the following items:

 

 

Knowledge Center
The financial setup of MKG

 

 

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