Try: job work, SCADA, GST, Faridabad, pharma
Try: job work, SCADA, GST, Faridabad, pharma
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Enter your material receipts and issues in date order and compare the closing stock value and the cost of issues under FIFO, LIFO and weighted average – side by side, instantly. Free, no sign-up, nothing is stored.
Receipts need a quantity and a rate per unit. Issues (to production or sale) need only a quantity. Sample numbers are filled in - change them or add rows.
| # | Type | Quantity | Rate per unit | Remove |
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All three are calculated perpetually - each issue is costed at the moment it happens.
Tejaxo Manufacturing buys 100 kg of Product A at ₹50 and 200 kg at ₹55, issues 150 kg to production, buys 100 kg more at ₹60 and issues 120 kg (sample numbers). 130 kg is left at the end.
Total purchases of ₹22,000 are the same in every case; the method only decides how they are split between the cost of issues and the closing stock. With rising rates, FIFO shows the highest closing stock and the lowest cost of issues.
AS 2 and Ind AS 2 require inventories to be valued at the lower of cost and net realisable value, with cost worked out by FIFO or weighted average (specific identification for items that are not interchangeable). LIFO is not allowed in financial statements, though it can still be useful for internal costing. Whichever method you choose, apply it consistently and include freight, non-recoverable duties and other direct costs of bringing the material in – see landed cost explained.
Doing this by hand for hundreds of items every month is where spreadsheets break. Tejaxo ERP values every receipt and issue as it happens, with FIFO, LIFO, weighted average or standard cost, and batch-wise FIFO issue on the floor – see inventory management for manufacturers. Also try our free OEE calculator and corrugated box calculator and reorder point and EOQ calculator.
FIFO issues the oldest stock first, so closing stock is valued at the latest purchase rates. LIFO issues the newest stock first, so closing stock stays at the oldest rates. Weighted average re-calculates one average rate after every receipt and issues at that rate.
No, not for financial statements. AS 2 and Ind AS 2 allow FIFO or weighted average cost (and specific identification for items that are not interchangeable). Some businesses still look at LIFO for internal costing and pricing decisions.
FIFO. The older, cheaper stock is charged to production or sales first, so the cost of issues is lower and the closing stock value is higher than under LIFO or weighted average.
Perpetual: every issue is costed at the moment it happens, using the stock available at that point. This is how an ERP values stock transaction by transaction.
Yes. Inventory cost includes the purchase price plus non-recoverable duties, freight and other direct costs of bringing the material in; GST that you can claim as input tax credit is not part of the cost. In Tejaxo ERP the landed rate of an import becomes the stock rate.
FIFO, LIFO, weighted average and standard cost, with batch-wise FIFO issue on the shop floor.
See item-wise stock value, batch-wise FIFO and landed rates in Tejaxo ERP – on your own items in the demo.
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