Knowledge Management

Question:
How does FIFO valuation works in SAP ?
In Mat. Master, we set either MAP or standard price. If you set the FIFO indicator Accounting 2 View, what is the effect ?
I have tested by receiving multiple times using different pricing. Each GR for PO changes the MAP. When you issue out, the MAP price is still used & does not follow the last purchase price.
Read the online help, still don't quite understand the concept.
Any help appreciated
Zack
Answer:
The LIFO procedure is a type of key date valuation (mostly the balance sheet date) that enables the increase in stock per fiscal year to be valuated separately. To do this, layers are formed per fiscal year.
There are two procedures:
Quantity LIFO procedure
The layers are based on quantity and value.
Index LIFO method (Dollar Value Method)
The layers are only based on value.
In addition, it is possible to group materials together in LIFO pools and valuate them together.
The FIFO procedure is a valuation method which calculates the value of
the stock on the basis of the last receipts. This
enables you to valuate stock in the most realistic fashion.
Actions
For LIFO/FIFO valuation, you must make the following settings:
1. In Customizing:
a) Set the control parameters.
b) Define the valuation levels.
c) Define LIFO/FIFO-relevant movements.
d) Define LIFO pools (ONLY with pool formation).
e) Set the automatic assignment of materials to LIFO pools (ONLY with pool formation).
2. In the material master record:
a) Define whether a material is to be valuated according to the LIFO/FIFO procedure.
b) Set the manual or automatic assignment of a material to a LIFO pool (ONLY with pool formation).
S