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+**Question:** What are for various options in `Valuation Based On` in the Bill Of Materials (BOM)?
+
+**Answer:** There are 3 available options in the <i>Valuation Based On</i> field:
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+<img alt="Nested BOM" class="screenshot" src="/files/valuation-based-on-134c2a0.png">
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+**Valuation Rate:** Item valuation rate is defined based on it's purchase or manufacture value.
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+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 there won't be any Valuation Rate for that item.
+
+**Price List Rate:** This option allows to pull item rates from [Price List.](/docs/user/manual/en/stock/item-price)
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+**Last Purchase Rate:** It will be the last Purchase (Order) Rate of an item.