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When you receive and sell inventory, the Valuation Rate determines how much cost you recognize. In the CGIC App you can choose one of three methods under Stock Settings on each Item:
  • FIFO (First-In, First-Out)
  • LIFO (Last-In, First-Out)
  • Moving Average
Consider these transactions:
DateTransactionQtyUnit Cost
2020-04-01Purchase10100
2020-04-06Purchase10120
2020-04-10Sale15?

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1.0 FIFO

With FIFO, you consume oldest stock first:
  • Take 10 @ 100 and 5 @ 120
  • Consumed Value = (10×100) + (5×120) = 1,600
  • Remaining 5 @ 120 → Balance Value = 600

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1.1 LIFO

With LIFO, you consume newest stock first:
  • Take 10 @ 120 and 5 @ 100
  • Consumed Value = (10×120) + (5×100) = 1,700
  • Remaining 5 @ 100 → Balance Value = 500

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1.2 Moving Average

With Moving Average, you recalculate the average cost on each receipt:
  • New average = ((10×100) + (10×120)) ÷ 20 = 110
  • Sale of 15 × 110 = 1,650 → Consumed Value = 1,650
  • Remaining 5 × 110 → Balance Value = 550
MethodConsumed ValueBalance ValueTotal Value
FIFO1,6006002,200
LIFO1,7005002,200
Moving Average1,6505502,200
Each method impacts your Cost of Goods Sold and inventory valuation differently—choose the one that best aligns with your financial strategy and inventory flow.