Running the LIFO Inventory Valuation Report

The LIFO Inventory Valuation Report calculates the value of your inventory as of a specified date and compares that value to what it would be if the same inventory were valued at a previous cost. The report is used primarily for tax purposes. The report is typically run at a fiscal or calendar year end, but it can be run as often as needed, such as quarterly, depending on your business needs.

Before running the report, you need to update the Product LIFO file.

This report takes the on-hand quantity based on the as-of-date indicated and extends it using this year's cost and either the last or base year's cost.

Dividing this year's cost by the last or base year's cost produces a LIFO Index. The index is the ratio of change in the cost. The Index is 1 if the price has not changed.

For a description of the report, see What the Report Shows at the end of the topic.

To run the LIFO Inventory Valuation Report:

Update the LIFO product information.
From the Reports > End of Month Reports #2 menu, select LIFO Inventory Valuation Report to display the LIFO Inventory Valuation window.

Edit the LIFO product information, if needed.
In the Branch/Territory field, enter the branch or territory for which to run the valuation. To run the report for all branches and territories, enter ALL.

The system populates the As of Date field with the date of the most recent LIFO update in view-only mode. Typically, this is the fiscal year end.

In the Pool field, if LIFO eligibility pools are defined, enter the name of the pool by which to limit the report.

To produce a report for all products not assigned to a pool, enter None. If left blank, the system includes all pools in the report.

If needed, change the Cost Basis field. The system populates the Cost Basis field with the costing method chosen when you elected to use the LIFO valuation method.
In the Cost Branch field, if one branch purchases product for all branches, specify the branch whose costs determine the costs for all other branches. Unless pricing policy changes, do not change the entry in this field.

Note: The system populates the Last Posted field with the date when the LIFO Update program was last run. This is a view-only field.

In the Report Type area, enter one of the following to determine the report level of detail:

Summary - Displays product count, extensions, indexes, branches, lines, pools, grand totals.
Detail - Displays all product information, sorted by line within pool within branch.

In the Report Method area, select one of the following reporting methods:

BASE-YEAR - Compares current year pricing with pricing for a designated beginning year.
LINK-CHAIN - Compares current year pricing with previous year pricing. This is the default.

In the Format area, specify one of the following types of products to include in the report:

Full Inventory - Selects every product that has a non-zero quantity. Products with a zero quantity produce a price extension of zero, and therefore are never included in the LIFO report.
Extension of Like Items - Selects only products that are not new this year. Any product that was first bought this year does not appear on the Extension of Like Items report.
Extension Less Non-Purchased - Selects products that were both not new this year and were purchased this year. This means the product has a purchase date later than the last year's As of Date. The most recent purchase date that is saved when the update is run indicates whether the product has been purchased this year.

In the Negative Qtys area, specify whether to include negative quantities on the report or run the report for negative quantities only.

Note: Use the Only option on a full inventory to determine which products are showing a negative quantity at the end of the year. If your company performed a physical inventory and made adjustments dated after the fiscal year end, a product may display a negative quantity. To correct this problem, change the adjustment dates to the fiscal year-end date and re-run the LIFO Updating program.

Set options, if needed, and generate the report.

What the Report Shows

The LIFO Inventory Valuation Report contains the following information when run in Detail mode.

Field/Column	Description
Product Description	The description of the product as defined in Product Maintenance.
Unit	The pricing unit of measure for the product.
Pool	The pool to which the product belongs. A pool is a collection of products your company sells. You are eligible to use LIFO tax accounting if you have more of a product on hand at the end of the current year than you had at the end of the previous year. You can pool your products to determine your company's overall eligibility for LIFO tax accounting, according the rules determined by the Internal Revenue Service (IRS). For more information, see LIFO Inventory Valuation Overview.
Line	The price line to which the product is assigned.
PN	The product ID number as defined in Product Maintenance.
LY.VALUE	Last Year's Value. The cost of the product per unit, for example each, 100, etc, as of the BASE-YEAR or LAST-YEAR end for the respective price basis that is displayed in the heading at the top of the report.
LY.EXT	Last Year's Extension. This Year's Count (TY.CNT) multiplied by Last Year's Value (LY.VALUE). The column title is LY.EXT, but the comparison could be on a Base Year basis.
TY.CNT	This Year's Count. The quantity on hand of the product on this year's as of date.
TY.VALUE	This Year's Value. The cost of the product on this year's as of date.
TY.EXT	This Year's Extension. This Year's Count (TY.CNT) multiplied by This Year's Value (TY.VALUE).
Index	The LIFO Index. The Value of This Year's Extension (TY.EXT) divided by Last Year's Extension (LY.EXT). If the product has not had a price change, the index number is 1.000.
Br	The branch for which the report was run.