[IMP] inventory: make the structure consistent with the 'Odoo 9 Documentation' spreadsheet
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Yannick Tivisse
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=================================
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How to do an inventory valuation?
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=================================
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:code-column:
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===================================================
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What are the different inventory valuation methods
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===================================================
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Costing Method
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==============
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International accounting standards define several ways to compute product
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costs:
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.. rst-class:: alternatives doc-aside
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Standard Price
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.. rst-class:: values-table
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.. list-table::
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:widths: 28 18 18 18 18
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:header-rows: 1
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:stub-columns: 1
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* - Operation
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- Unit Cost
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- Qty On Hand
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- Delta Value
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- Inventory Value
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* -
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- $10
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- 0
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-
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- $0
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* - Receive 8 Products at $10
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- $10
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- 8
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- +8*$10
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- $80
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* - Receive 4 Products at $16
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- $10
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- 12
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- +4*$10
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- $120
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* - Deliver 10 Products
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- $10
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- 2
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- | -10*$10
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|
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- $20
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* - Receive 2 Products at $9
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- $10
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- 4
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- +2*$10
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- $40
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Average Price
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.. rst-class:: values-table
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.. list-table::
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:widths: 28 18 18 18 18
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:header-rows: 1
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:stub-columns: 1
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* - Operation
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- Unit Cost
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- Qty On Hand
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- Delta Value
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- Inventory Value
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* -
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- $0
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- 0
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-
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- $0
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* - Receive 8 Products at $10
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- $10
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- 8
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- +8*$10
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- $80
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* - Receive 4 Products at $16
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- $12
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- 12
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- +4*$16
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- $144
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* - Deliver 10 Products [#average-removal]_
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- $12
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- 2
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- | -10*$12
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|
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- $24
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* - Receive 2 Products at $6
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- $9
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- 4
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- +2*$6
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- $36
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FIFO
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.. rst-class:: values-table
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.. list-table::
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:widths: 28 18 18 18 18
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:header-rows: 1
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:stub-columns: 1
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* - Operation
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- Unit Cost
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- Qty On Hand
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- Delta Value
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- Inventory Value
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* -
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- $0
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- 0
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-
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- $0
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* - Receive 8 Products at $10
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- $10
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- 8
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- +8*$10
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- $80
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* - Receive 4 Products at $16
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- $12
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- 12
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- +4*$16
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- $144
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* - Deliver 10 Products
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- $16
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- 2
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- | -8*$10
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| -2*$16
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- $32
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* - Receive 2 Products at $6
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- $11
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- 4
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- +2*$6
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- $44
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LIFO (not accepted in IFRS)
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.. rst-class:: values-table
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.. list-table::
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:widths: 28 18 18 18 18
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:header-rows: 1
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:stub-columns: 1
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* - Operation
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- Unit Cost
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- Qty On Hand
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- Delta Value
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- Inventory Value
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* -
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- $0
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- 0
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-
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- $0
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* - Receive 8 Products at $10
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- $10
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- 8
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- +8*$10
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- $80
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* - Receive 4 Products at $16
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- $12
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- 12
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- +4*$16
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- $144
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* - Deliver 10 Products
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- $10
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- 2
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- | -4*$16
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| -6*$10
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- $20
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* - Receive 2 Products at $6
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- $8
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- 4
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- +2*$6
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- $32
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The costing method is defined on the product form: standard, average or real
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price.
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For "real price", the costing is further refined by the removal strategy (on
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the warehouse location or product category), FIFO by default.
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Periodic Inventory Valuation
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============================
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In a periodic inventory valuation, goods reception and outgoing shipments have
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no direct impact in the accounting. At the end of the month or year, the
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accountant post one journal entry representing the value of the physical
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inventory.
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.. rst-class:: alternatives doc-aside
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Supplier Invoice
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.. rst-class:: values-table
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============================= ===== ======
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\ Debit Credit
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============================= ===== ======
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Assets: Inventory 50
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Assets: Deferred Tax Assets 4.68
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Liabilities: Accounts Payable 54.68
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============================= ===== ======
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Explanation:
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* A temporary account is used to note goods to receive
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* The purchase order provides prices of goods, the actual invoice may
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include extra costs such as shipping
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* The company still needs to pay the vendor (traded an asset against a
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liability)
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Configuration:
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* Inventory: defined on the product or the category of related product,
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field: Stock Input Account
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* Deferred Tax Assets: defined on the tax used on the purchase order line
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* Accounts Payable: defined on the supplier related to the bill
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Goods Receptions
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No Journal Entry
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Customer Invoice
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.. rst-class:: values-table
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===================================== ===== ======
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\ Debit Credit
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===================================== ===== ======
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Revenue: Goods 100
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Liabilities: Deferred Tax Liabilities 9
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Assets: Accounts Receivable 109
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Assets: Inventory 50
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Expenses: Cost of Goods Sold 50
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===================================== ===== ======
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Explanation:
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* Revenues increase by $100
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* A tax to pay at the end of the month of $9
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* The customer owns you $109
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* The inventory is decreased by $50 (shipping of the goods)
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* The cost of goods sold decreases the gross profit by $50
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Configuration:
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* Revenue: defined on the product, or the product category if not on the
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product, field Income Account
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* Deferred Tax Liabilities: defined on the tax used on the invoice line
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* Accounts Receivable: defined on the customer (property)
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* Inventory: defined on the category of the related product (property)
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* Expenses: defined on the product, or the category of product (property)
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The fiscal position used on the invoice may have a rule that replaces the
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Income Account or the tax defined on the product by another one.
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Customer Shipping
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No Journal Entry
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Manufacturing Orders
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No Journal Entry
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.. raw:: html
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<hr style="float: none; visibility: hidden; margin: 0;">
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At the end of the month/year, the company do a physical inventory (or just
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rely on the inventory in Odoo). They multiply the quantity of each product by
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its cost to know the inventory value of the company.
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.. h:div:: doc-aside
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If the real value of the inventory is $4800 but the *14000 Inventory*
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account has a balance of $4200, the following journal entry is created
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manually:
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.. rst-class:: values-table
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========================== ==== ====
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14000 Inventory $600
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14700 Inventory Variations $600
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========================== ==== ====
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Perpetual Inventory Valuation
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=============================
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In a perpetual inventory valuation, goods reception and outgoing shipments are
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directly posted in the accounting. The inventory valuation is always
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up-to-date.
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.. h:div:: valuation-chart doc-aside
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.. placeholder
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.. [#average-removal] products leaving the stock have no impact on the average
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price.
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