brotherton-erpnext/erpnext/docs/user/manual/en/manufacturing/articles/valuation-based-on-field-in-bom.html

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<h1>'Valuation Based On' Field in BOM</h1>
<div><b>Question:</b> What do the various options in <i>Valuation Based On </i>Field in Bill Of Materials (BOM) Form mean? <br><br><b>Answer:</b> There are 3 available options in the <i>Valuation Based On</i> field;<br><br><img src="{{docs_base_path}}/assets/img/articles/kb_bom_field.png"><br><br><ul><li><b><i>Valuation Rate:</i></b> <br></li><ul><li>Item valuation rate is
defined based on it's purchase/manufacture value + other charges. <br></li><li>For
Purchase Item, it is defined based on charges entered in the Purchase
Receipt. If you don't have any Purchase Receipt
made for an item or a Stock Reconciliation, then you won't have
Valuation Rate for that item.</li></ul></ul><ul><li><b><i>Price List Rate:</i></b> <br></li><ul><li>Just like you pull item prices in sales and purchase transaction, it can be pulled in BOM via Price List Rate.</li></ul></ul></div><div><ul><li><i><b>Last Purchase Rate</b>:</i> <br></li><ul><li>It will be the last Purchase Rate value of an item. This
value is updated in the item master as well, based on rate in the
Purchase Order for this item.</li></ul></ul><p><br></p></div>