Fiscal Inventory Valuation
You must submit an annual report that shows the monetary value of inventory items for the fiscal year. According to the Italian requirements for fiscal inventory valuation, you must calculate the following cost types:
- Year average cost
- Weighted average cost
- First in, First Out (FIFO) cost
- Last in, First Out (LIFO) cost
- Discrete LIFO cost
Fiscal Inventory Valuation in Business Central
Initially, you must set up the fiscal inventory valuation for all cost types on the Item Costing Setup page and the Item Card page. For more information, see Set Up Fiscal Inventory Valuation.
When you set up Business Central, you must enter the inventory item ledger entries for the first year in order to calculate the item’s valuation. You can do this in the Before Start Item Cost page.
To calculate discrete LIFO cost, you must set up information on the Item Card page and the Subcontracting Prices page.
The discrete LIFO cost can only be calculated for items for which the Inventory Valuation field is set to Discrete LIFO on the Item Card page.
After you set up the discrete LIFO cost calculation, you can post sales and purchase transactions based on year-end costs.
End of Year
At the end of the fiscal year, you can run the Calculate End Year Costs batch job to calculate the fiscal inventory value of each inventory item according to the required valuation methods. The results are shown in the Item Cost History List page. Then, you can run the Fiscal Inventory Valuation report and the LIFO Valuation report to show the inventory valuation.
For year-end operations, such as calculating the profit and loss during a fiscal year, there is a definitive period and a non-definitive period. If the Competence Year field on the Item Cost History List page is equal to the fiscal year end date, it is a definitive period, and you cannot recalculate data for a definitive period. If the definitive data differs from the fiscal year end date, then it is a non-definitive period. There should be data for at least one non-definitive period to perform calculations or partial calculations.
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