Inventory valuation reporting — FIFO or average cost?

Question

I am preparing our inventory configuration for deployment and require clarification on the cost accounting methodology employed by FieldPulse.

Specifically: 
 
 Does the Inventory Reporting module utilize First-In-First-Out (FIFO) or weighted average cost methodology for valuation? 
 If FIFO is used, how does the system handle part returns that were drawn from different cost layers? 
 For the Inventory Valuation Report (referenced in documentation as help-036), what is the exact calculation logic applied?

Our finance team requires this information for SOX compliance documentation. I have reviewed the available documentation but did not locate explicit methodology statements.

I am using FieldPulse version 3.3.1-web. Please advise.

Priya Nair (Staff) · Accepted Answer

Hi Anita, great question and I appreciate the detailed context on your compliance requirements.

FieldPulse currently uses weighted average cost methodology for inventory valuation, not FIFO. Here is how this works:

When parts are received, the system calculates: (Existing Quantity × Current Average Cost + New Quantity × Purchase Cost) ÷ Total Quantity 
 This average cost is applied to all subsequent consumption until the next purchase adjusts the calculation 
 For the Inventory Valuation Report (accessed via Reports → Inventory → Valuation ), this calculated average cost is multiplied by current on-hand quantity

Regarding part returns: when a technician returns a part to inventory, it is revalued at the current average cost at time of return, not its original acquisition cost. This is standard for perpetual average cost systems.

Currently, FIFO is not available as an alternative methodology. I have logged your request for configurable costing methods with our product team — this is a common request from organizations with specific compliance frameworks.

Would you like me to provide the exact API field names if your finance team needs to extract this data for external reconciliation?

Omar Hassan · Answer

I would add that from a SOX perspective, you should document the cost flow assumption in your internal controls documentation explicitly, noting that FieldPulse implements perpetual weighted average. This differs from IAS 2's benchmark treatment (FIFO or weighted average are both permitted, but the method must be consistently applied).

One edge case to consider: negative inventory balances. If your technicians consume parts before the corresponding purchase order is received, most perpetual average systems will use the last known average cost, then recalculate upon receipt. You should verify whether FieldPulse permits negative inventory and how it handles the subsequent "catch-up" calculation. This is a common source of valuation discrepancies during period-end close.