A client in the Retail industry wants to use Article Master as well as Material Master for a brand new SAP implementation - Material master for Procurement and Article Master for their Sales.While helping the Client to understand Material Vs. Article and Plants vs. Sites, an important question has arisen about what would be a best Practice to valuate the inventory on a periodic basis. Since many players in the Retail industry use the Retail Inventory Method (of Accounting), which is not very compatible with IFRS, adopting a weighted average type method of Cost Method Accounting is a sensible alternative. However, since the Client is not a publicly held company, IFRS is currently not applicable to them and they are leaning towards adopting LIFO or FIFO as their method of valuating Inventory. In such a scenario, are there any known constraints to using LIFO / FIFO as Inventory Valuation methods in the Retail industry?
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