How Valuation Rate is Calculated for an Item
By Umair Sayed on November 11, 2017Intermediate
When item's stock is inwarded via stock transactions (like Purchase Receipt, Stock Entry or Stock Reconciliation), valuation is calculated for an item. There are the various sources of rates based on which valuation rate is calculated. Following are the options which explain various cases where rates are picked from different sources for calculating the item's valuation rate.
- Based on the Basic Rate / Incoming Rate / Valuation Rate entered in an entry, valuation rate is calculated for an item. In the transactions, you can enter item's rate, apply taxes and other charges. Based on these values, Valuation Rate is calculated for an item.
- If the user doesn't enter any valuation rate, then it checks for Valuation Rate field in the Item master, in the first section.
- If both the above fail to provide valuation rate to an item, then it calculates the average of old valuation rate available for this item and applies for the current stock entry. This is what happened in the Stock Entry in question.
- If there is no reference at all, also allowing stock entry at zero valuation is not enabled, then system correctly throws this validation message.
On 11th November 2017, firstname.lastname@example.org wrote:Hello Support,We have noticed some issues in our Stock transactions and reports. In Stock Entries (particularly for Material Receipt), the Rate and Incoming Value fields are sometimes coming as zero ('Allow Zero Valuation' field is not checked) yet when you click on View => Accounting Ledger you will find values in the Debit and Credit fields! An example of such a Stock Entry is below:Also, possibly linked to the first issue above, we are seeing a number of items in the Stock Balance report with Balance Quantity as zero but the Balance Value is negative! For example, if you check balance of Item 'ITM000000224' as of today, the Balance Quantity is zero but the Balance Value is -14,247.704!Our account is https://smartflowtech.erpnext.com Please help look into this and resolve asapThanksKind Regards,Olawale OlowuGDSPlus Ltd