refactor: move Fifo Valuation to a new class
diff --git a/erpnext/stock/stock_ledger.py b/erpnext/stock/stock_ledger.py
index e95c0fc..056e4a7 100644
--- a/erpnext/stock/stock_ledger.py
+++ b/erpnext/stock/stock_ledger.py
@@ -16,6 +16,7 @@
 	get_or_make_bin,
 	get_valuation_method,
 )
+from erpnext.stock.valuation import FifoValuation
 
 
 class NegativeStockError(frappe.ValidationError): pass
@@ -456,9 +457,8 @@
 					self.wh_data.qty_after_transaction += flt(sle.actual_qty)
 					self.wh_data.stock_value = flt(self.wh_data.qty_after_transaction) * flt(self.wh_data.valuation_rate)
 				else:
-					self.get_fifo_values(sle)
+					self.update_fifo_values(sle)
 					self.wh_data.qty_after_transaction += flt(sle.actual_qty)
-					self.wh_data.stock_value = sum(flt(batch[0]) * flt(batch[1]) for batch in self.wh_data.stock_queue)
 
 		# rounding as per precision
 		self.wh_data.stock_value = flt(self.wh_data.stock_value, self.precision)
@@ -696,87 +696,39 @@
 						sle.voucher_type, sle.voucher_no, self.allow_zero_rate,
 						currency=erpnext.get_company_currency(sle.company), company=sle.company)
 
-	def get_fifo_values(self, sle):
+	def update_fifo_values(self, sle):
 		incoming_rate = flt(sle.incoming_rate)
 		actual_qty = flt(sle.actual_qty)
 		outgoing_rate = flt(sle.outgoing_rate)
 
+		fifo_queue = FifoValuation(self.wh_data.stock_queue)
 		if actual_qty > 0:
-			if not self.wh_data.stock_queue:
-				self.wh_data.stock_queue.append([0, 0])
-
-			# last row has the same rate, just updated the qty
-			if self.wh_data.stock_queue[-1][1]==incoming_rate:
-				self.wh_data.stock_queue[-1][0] += actual_qty
-			else:
-				# Item has a positive balance qty, add new entry
-				if self.wh_data.stock_queue[-1][0] > 0:
-					self.wh_data.stock_queue.append([actual_qty, incoming_rate])
-				else: # negative balance qty
-					qty = self.wh_data.stock_queue[-1][0] + actual_qty
-					if qty > 0: # new balance qty is positive
-						self.wh_data.stock_queue[-1] = [qty, incoming_rate]
-					else: # new balance qty is still negative, maintain same rate
-						self.wh_data.stock_queue[-1][0] = qty
+			fifo_queue.add_stock(qty=actual_qty, rate=incoming_rate)
 		else:
-			qty_to_pop = abs(actual_qty)
-			while qty_to_pop:
-				if not self.wh_data.stock_queue:
-					# Get valuation rate from last sle if exists or from valuation rate field in item master
-					allow_zero_valuation_rate = self.check_if_allow_zero_valuation_rate(sle.voucher_type, sle.voucher_detail_no)
-					if not allow_zero_valuation_rate:
-						_rate = get_valuation_rate(sle.item_code, sle.warehouse,
-							sle.voucher_type, sle.voucher_no, self.allow_zero_rate,
-							currency=erpnext.get_company_currency(sle.company), company=sle.company)
-					else:
-						_rate = 0
-
-					self.wh_data.stock_queue.append([0, _rate])
-
-				index = None
-				if outgoing_rate > 0:
-					# Find the entry where rate matched with outgoing rate
-					for i, v in enumerate(self.wh_data.stock_queue):
-						if v[1] == outgoing_rate:
-							index = i
-							break
-
-					# If no entry found with outgoing rate, collapse stack
-					if index is None:  # nosemgrep
-						new_stock_value = sum(d[0]*d[1] for d in self.wh_data.stock_queue) - qty_to_pop*outgoing_rate
-						new_stock_qty = sum(d[0] for d in self.wh_data.stock_queue) - qty_to_pop
-						self.wh_data.stock_queue = [[new_stock_qty, new_stock_value/new_stock_qty if new_stock_qty > 0 else outgoing_rate]]
-						break
+			def rate_generator() -> float:
+				allow_zero_valuation_rate = self.check_if_allow_zero_valuation_rate(sle.voucher_type, sle.voucher_detail_no)
+				if not allow_zero_valuation_rate:
+					return get_valuation_rate(sle.item_code, sle.warehouse,
+						sle.voucher_type, sle.voucher_no, self.allow_zero_rate,
+						currency=erpnext.get_company_currency(sle.company), company=sle.company)
 				else:
-					index = 0
+					return 0.0
 
-				# select first batch or the batch with same rate
-				batch = self.wh_data.stock_queue[index]
-				if qty_to_pop >= batch[0]:
-					# consume current batch
-					qty_to_pop = _round_off_if_near_zero(qty_to_pop - batch[0])
-					self.wh_data.stock_queue.pop(index)
-					if not self.wh_data.stock_queue and qty_to_pop:
-						# stock finished, qty still remains to be withdrawn
-						# negative stock, keep in as a negative batch
-						self.wh_data.stock_queue.append([-qty_to_pop, outgoing_rate or batch[1]])
-						break
+			fifo_queue.remove_stock(qty=abs(actual_qty), rate=outgoing_rate, rate_generator=rate_generator)
 
-				else:
-					# qty found in current batch
-					# consume it and exit
-					batch[0] = batch[0] - qty_to_pop
-					qty_to_pop = 0
+		stock_qty, stock_value = fifo_queue.get_total_stock_and_value()
 
-		stock_value = _round_off_if_near_zero(sum(flt(batch[0]) * flt(batch[1]) for batch in self.wh_data.stock_queue))
-		stock_qty = _round_off_if_near_zero(sum(flt(batch[0]) for batch in self.wh_data.stock_queue))
-
+		self.wh_data.stock_queue = fifo_queue.get_state()
+		self.wh_data.stock_value = stock_value
 		if stock_qty:
-			self.wh_data.valuation_rate = stock_value / flt(stock_qty)
+			self.wh_data.valuation_rate = stock_value / stock_qty
+
 
 		if not self.wh_data.stock_queue:
 			self.wh_data.stock_queue.append([0, sle.incoming_rate or sle.outgoing_rate or self.wh_data.valuation_rate])
 
+
+
 	def check_if_allow_zero_valuation_rate(self, voucher_type, voucher_detail_no):
 		ref_item_dt = ""
 
@@ -1158,13 +1110,3 @@
 			and timestamp(posting_date, posting_time) >= timestamp(%(posting_date)s, %(posting_time)s)
 		limit 1
 	""", args, as_dict=1)
-
-
-def _round_off_if_near_zero(number: float, precision: int = 6) -> float:
-	""" Rounds off the number to zero only if number is close to zero for decimal
-		specified in precision. Precision defaults to 6.
-	"""
-	if flt(number) < (1.0 / (10**precision)):
-		return 0
-
-	return flt(number)
diff --git a/erpnext/stock/valuation.py b/erpnext/stock/valuation.py
new file mode 100644
index 0000000..33191d8
--- /dev/null
+++ b/erpnext/stock/valuation.py
@@ -0,0 +1,125 @@
+from typing import Callable, List, NewType, Optional, Tuple
+
+from frappe.utils import flt
+
+FifoBin = NewType("FifoBin", List[float])
+
+# Indexes of values inside FIFO bin 2-tuple
+QTY = 0
+RATE = 1
+
+
+class FifoValuation:
+	"""Valuation method where a queue of all the incoming stock is maintained.
+
+	New stock is added at end of the queue.
+	Qty consumption happens on First In First Out basis.
+
+	Queue is implemented using "bins" of [qty, rate].
+
+	ref: https://en.wikipedia.org/wiki/FIFO_and_LIFO_accounting
+	"""
+
+	def __init__(self, state: Optional[List[FifoBin]]):
+		self.queue: List[FifoBin] = state if state is not None else []
+
+	def get_state(self) -> List[FifoBin]:
+		"""Get current state of queue."""
+		return self.queue
+
+	def get_total_stock_and_value(self) -> Tuple[float, float]:
+		total_qty = 0.0
+		total_value = 0.0
+
+		for qty, rate in self.queue:
+			total_qty += flt(qty)
+			total_value += flt(qty) * flt(rate)
+
+		return _round_off_if_near_zero(total_qty), _round_off_if_near_zero(total_value)
+
+	def add_stock(self, qty: float, rate: float) -> List[FifoBin]:
+		"""Update fifo queue with new stock and return queue.
+
+			args:
+				qty: new quantity to add
+				rate: incoming rate of new quantity"""
+
+		if not len(self.queue):
+			self.queue.append([0, 0])
+
+		# last row has the same rate, merge new bin.
+		if self.queue[-1][RATE] == rate:
+			self.queue[-1][QTY] += qty
+		else:
+			# Item has a positive balance qty, add new entry
+			if self.queue[-1][QTY] > 0:
+				self.queue.append([qty, rate])
+			else:  # negative balance qty
+				qty = self.queue[-1][QTY] + qty
+				if qty > 0:  # new balance qty is positive
+					self.queue[-1] = [qty, rate]
+				else:  # new balance qty is still negative, maintain same rate
+					self.queue[-1][QTY] = qty
+		return self.get_state()
+
+	def remove_stock(
+		self, qty: float, rate: float, rate_generator: Callable[[], float]
+	) -> List[FifoBin]:
+		"""Remove stock from the queue and return queue.
+
+		args:
+			qty: quantity to remove
+			rate: outgoing rate
+			rate_generator: function to be called if queue is not found and rate is required.
+		"""
+
+		while qty:
+			if not len(self.queue):
+				# rely on rate generator.
+				self.queue.append([0, rate_generator()])
+
+			index = None
+			if rate > 0:
+				# Find the entry where rate matched with outgoing rate
+				for idx, fifo_bin in enumerate(self.queue):
+					if fifo_bin[RATE] == rate:
+						index = idx
+						break
+
+				# If no entry found with outgoing rate, collapse stack
+				if index is None:  # nosemgrep
+					new_stock_value = sum(d[QTY] * d[RATE] for d in self.queue) - qty * rate
+					new_stock_qty = sum(d[QTY] for d in self.queue) - qty
+					self.queue = [[new_stock_qty, new_stock_value / new_stock_qty if new_stock_qty > 0 else rate]]
+					break
+			else:
+				index = 0
+
+			# select first bin or the bin with same rate
+			fifo_bin = self.queue[index]
+			if qty >= fifo_bin[QTY]:
+				# consume current bin
+				qty = _round_off_if_near_zero(qty - fifo_bin[QTY])
+				self.queue.pop(index)
+				if not self.queue and qty:
+					# stock finished, qty still remains to be withdrawn
+					# negative stock, keep in as a negative bin
+					self.queue.append([-qty, rate or fifo_bin[RATE]])
+					break
+
+			else:
+				# qty found in current bin consume it and exit
+				fifo_bin[QTY] = fifo_bin[QTY] - qty
+				qty = 0
+
+		return self.get_state()
+
+
+def _round_off_if_near_zero(number: float, precision: int = 6) -> float:
+	"""Rounds off the number to zero only if number is close to zero for decimal
+	specified in precision. Precision defaults to 6.
+	"""
+	if flt(number) < (1.0 / (10 ** precision)):
+		return 0
+
+	return flt(number)