Odoo 12 Inventory Valuation and Costing Method

Hello everyone, now we will talk a little in-depth about a couple of Costing Method types.

First, there are 3 Costing Methods inside Odoo 12 Inventory Module: Standard Prices, Average Cost, and First in First out(FIFO).

Standard Prices

Standard Price is the standard pricing available it is as simple as when we create a product and when we insert the Cost for the product that is the Price and nothing gonna change that, even when we trying to buy more or less the system will still count it as the first standard Price in the inventory evaluation.

Average Cost

Average Cost is when we buy multiple products with multiple Prices. We can set the average Price for all the products to combine as the pricing for the product.

First in First out (FIFO)

Now here is quite complicated. The concept is when we create a product, the Cost will not be count as the actual Cost and Price for the product, but the cost is derived from the value when we buy the product and still like that as we have the product. Even if another product came in with a different Price, the value from the previous product didn’t change. So the product holds a value to their own based on the Price they are bought in the first place.

More detail about each type and the implementation on the Odoo modules can be seen in my youtube video.

Source : https://www.broadtech-innovations.com/blog/fifo-inventory-valuation-in-odoo-12/
I hope this article helps anyone reading this, and thank you for reading this. See ya on another episode of me and Odoo 12!!

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Aditya Nanda Tri Prakoso
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