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Error in NAV 5.1 rounding !!
Anders_Quistgaard-Leth
Member Posts: 8
Error in NAV 5.1 rounding !!
Old Item Ledger entries which was created from purchase are rounded at point of sale (when Adjust Cost - Item entries are run and posted) ??
Consider the scenario below:
Rounding entries are created so that the cost of a positive item ledger entry is equal to the total cost of the negative entries that are applied against it. Suppose you purchase 3 units of an item at a total of 10.00 and you consume them 1 at a time. The cost of each consumption entry will be 3.33 (the precision may be different here depending on your amount rounding precision in G/L setup). So the purchase entry has a cost of 10.00 and the total of the consumption entries is 9.99. NAV will create a rounding entry for the purchase for -0.01. Now the cost of the purchase will equal the total cost of the consumption entries (9.99 in both cases). The rounding entry is created by the adjust cost process and only when the remaining quantity on the positive entry is zero.
The consequence is that the cost of purchased items are not finite until they have been sold.
Thus the closing of periods/year (and relating restriction on when G/L posting can be done) can not be made - or it will have to be opened again every time Inventory batch jobs have to be run, since a rounding must be made on the old inbound entry.
In older versions it was the outbound entry which was adjusted. So the entries from the scenario above would be:
1/1 2007 Inbound: 10
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.34
instead of as it is now:
1/1 2007 Inbound: 10
1/1 2007 Inbound: -0.01 (rounding posted back in time!)
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
Old Item Ledger entries which was created from purchase are rounded at point of sale (when Adjust Cost - Item entries are run and posted) ??
Consider the scenario below:
Rounding entries are created so that the cost of a positive item ledger entry is equal to the total cost of the negative entries that are applied against it. Suppose you purchase 3 units of an item at a total of 10.00 and you consume them 1 at a time. The cost of each consumption entry will be 3.33 (the precision may be different here depending on your amount rounding precision in G/L setup). So the purchase entry has a cost of 10.00 and the total of the consumption entries is 9.99. NAV will create a rounding entry for the purchase for -0.01. Now the cost of the purchase will equal the total cost of the consumption entries (9.99 in both cases). The rounding entry is created by the adjust cost process and only when the remaining quantity on the positive entry is zero.
The consequence is that the cost of purchased items are not finite until they have been sold.
Thus the closing of periods/year (and relating restriction on when G/L posting can be done) can not be made - or it will have to be opened again every time Inventory batch jobs have to be run, since a rounding must be made on the old inbound entry.
In older versions it was the outbound entry which was adjusted. So the entries from the scenario above would be:
1/1 2007 Inbound: 10
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.34
instead of as it is now:
1/1 2007 Inbound: 10
1/1 2007 Inbound: -0.01 (rounding posted back in time!)
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
5/5 2008 Outbound: -3.33
0
Comments
Independent Consultant/Developer
blog: https://dynamicsuser.net/nav/b/ara3n
Inventory periods define a period of time in which you can post changes to inventory. An inventory period is defined by the date on which it ends, or the ending date. When you close an inventory period, you cannot post any changes to inventory, either expected or invoiced, before this ending date, and you cannot post any new values to inventory before the ending date. If you have open item entries in the closed period, meaning positive quantities that have not yet been applied to outbound transactions, you can still apply outbound quantities to these entries, even if the period is closed.
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
Any suggestions would be greatly appreciated!
I reported this to PC&C as a bug in 1994 in the DOS version 3.04. It was different then, but basically the same core issue.
The issue then (as it is now) is not that there is a bug there (clearly its a bug), but how exactly should the system handle such rounding. I think what happens, is that they "fix" this bug, but then another client says "hey thats wrong, this is how it should work" and so it get changed again. Ideal would be another account in the posting group setup "Rounding differences" and let the used decide how to post it.
The amounts are generally trivial, but try explaining that to an auditor.
I have discussed this with MS, and after some more research I realized 2 things.
1) If the rounding is due to different UoM (as in my example) it is actually handled in NAV 5.01 by automatically making the rounding posting on the first allowed posting date
2) The "error" seams to appear if the rounding is due to different currencies (purchasing in foreign currency, while the G/L posting is i LCY)