Why are the quantities in the Inventory Valuation Reports different from that in the inventory?

You must run the Transfer Transactions from Inventory to Costing process so that the latest information is available in Cost Management. Ensure that you run this process before you generate the report.

Also, do note that the costs and inventory balances are typically stored at the valuation unit level. But the Period Inventory Valuation Report uses the inventory control attributes to show the inventory organization, sub-inventory level balances.

So let's consider the valuation unit is at the cost organization - inventory organization level. In this case, the quantity balances at the sub-inventory level might be different from that shown in Inventory Management because Cost Accounting uses a FIFO depletion logic to identify receipts to be depleted. You can use the valuation level balances, in this case the inventory organization, for reconciliation purposes.