Which Stock Valuation method to use with Stock Update to Nominal Accounts

In this article, the topics covered will be as follows:

If ‘Latest Value’ is used then the ‘valuation as at report’ will look for the cost price from the last stock movements in, prior to the "as at" date, and will use that to calculate the latest valuation as (last cost price * quantity as at that date).
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However, the value in the nominal will be the sum of the value of movements up to that point in time. Recognise that reconciliation is required if using this method.

If ‘Average Value’ is used when the report will use the stored average price and multiply by the quantity as at a given point in time. However, the value in the nominal will be the sum of the value of movements, up to that point in time.
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Recognise that reconciliation is required if using this method. Also recognise that the average price can be set to zero, which would result in a zero value.

If ‘FIFO’ is used then the report will calculate the quantity and ’FIFO As At’ valuation based on the total ’INWARD’ movements adjusting back from the most recent movements to the point that satisfies that stock level.
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As the FIFO value is also used in the sale of goods, the values posted on transactions, and therefore posted to the nominal should match the values on the "as at" report.

If ‘Fixed Weighted’ is used, then there is a routine that should be run monthly, to calculate and adjust the valuation. This is found under

This is necessary (and in accordance with HMRC guidelines) because the cost price is "Fixed" as a weighted average between revaluation recalculations. So stock may move in and out at different prices, but at the average cost price, which is weighted by the order quantity.
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At month end any variations in price from the fixed average are calculated, adjustments posted and the "fixed" average price is updated, in preparation for the next month.