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The FIFO method uses layer architecture. If an item does not have an open layer in a certain warehouse, then the item cost is zero. Hence, FIFO items returned to a warehouse where it didn’t exist before via credit note, it will not have a cost.

 

Using the FIFO method when items are returned to a warehouse, the layer the return document creates takes its cost price from the first open layer. If the item has never existed in that warehouse before then it has no open layer to take its cost price from. Consequently, an item returned to a warehouse where it did not exist before will be returned at a cost of 0 if using the FIFO valuation method.

 

EOP_January08, EOP_Items, EOP_Valuation, EOP_Logistics, EOP_Stock

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