Inventory Valuation

eagle_eye

Item is a Standard Cost Item, but cost was set as $0 in error.
Item was received into inventory using Item Journals and posted (at $0 cost)
Inventory Valuation report shows $0 cost.

I have set the Item to correct Standard Cost.

What do I need to run in order to update the costing (value entries)?

Thank you.

AlexWiley

Inventory Adjustment Journal- negatively adjust all in the inventory out at $0 and bring it back in at the correct value.

ara3n

You need to use Standard Cost Worksheet to change the cost of the existing entries.

AlexWiley

Both methods have the exact same effect on the g/l. Doing the negative then positive adjustment will clearly show you backed the inventory out in the item ledger entries and the revaluation journal will simply increase inventory value. Just depends on how you'd like to see it.

kapil4dynamics

AlexWiley wrote:

Both methods have the exact same effect on the g/l. Doing the negative then positive adjustment will clearly show you backed the inventory out in the item ledger entries and the revaluation journal will simply increase inventory value. Just depends on how you'd like to see it.

Number of entries posted in G/L would be different.

ara3n

I would go with Std worksheet, especially if the entry has been applied already.

David_Singleton

I would definitely use the std cost worksheet.

AlexWiley

kapil4dynamics wrote:

Number of entries posted in G/L would be different.

No, I even tested it to make sure- the number of entries to the g/l are exactly the same.

I'm not trying to be contentious, but I am curious as to why both of you are so adamant about using the Standard Cost Worksheet. From a process standpoint I think the revaluation of inventory, and the related entries and how they look in the value ledger entries, should be for when you have an actual change of cost- this is an outright error. I see it as being procedural, for example if they would have brought the inventory in at $2.00 instead of $50.00, you wouldn't want to use the standard cost worksheet because then you would get misleading adjustments to your g/l- the inventory value never changed, it was just wrong. When an error is made it should be reversed, not 'adjusted', in my opinion.

I agree that if any of the inventory has been applied the cost worksheet is more reliable, but this doesn't sound like it is part of the issue- but if entries were applied you would then having even more misleading entries to deal with from revaluing. Again, I am asking so I can see your viewpoint of things and maybe correct my thinking on the issue- I do value everyone's input here

David_Singleton

Fundamentally you have three methods of costing in Navision, FIFO; based on the Cost on the purchase receipt (or other Item Ledger Entry), Average; based on the Cost on the Purchase Invoice (or other Vlaue ledger entry) and Standard; based on a value manually entered by the user.

These three methods are very different, and managed very differently. If costing was FIFO then your suggestion I would agree with, but for Standard the correct way is to use the tools provided.

Kowa

AlexWiley wrote:

I agree that if any of the inventory has been applied the cost worksheet is more reliable, but this doesn't sound like it is part of the issue- but if entries were applied you would then having even more misleading entries to deal with from revaluing. Again, I am asking so I can see your viewpoint of things and maybe correct my thinking on the issue- I do value everyone's input here

Seen from a FIFO view:
The major issue is that you can't reverse an incorrect item ledger entry by moving it in and out as if it hadn't happened because there are other item application entries created than would have been created if you had revalued it. You are overriding the costing method this way. In the worst case: 1.different posting date than the older purchase because the period may be closed and 2. incorrect current average unit cost from the time of your adjustment, not the original unit cost taken from the purchase anymore. The corrected item is both "young" again and will screw up an age composition or item turnover analysis, and has a possibly changed valuation.

The revaluation should be used whenever possible, this is the only way to ensure accuracy and transparency. There are some seldomly encountered scenarios where this will not work (eg., if a inventory adjustment posted earlier for this item has the same posting day as the revaluation, you get an error message "There are new postings made in the period you want to revalue item no. X" from Codeunit 23) but usually it will work fine.
The possiblility of revaluation without adjusting the quantity was a major breakthrough in Version 3 with the introduction of value entries. In Version 2 your method was the only way.

eagle_eye

Thank you for all the input. Is there any documentation regarding Standard Costing in NAV? Is there any documentation regarding the Standard Cost Worksheet (there is some info in help, but I was looking for a document if there is one)? I understand Standard Cost, but what would be great is some documentation on the tools available in NAV to manage Standard Cost.

kapil4dynamics

AlexWiley wrote:

kapil4dynamics wrote:

Number of entries posted in G/L would be different.

No, I even tested it to make sure- the number of entries to the g/l are exactly the same.

If u negate them and bring them in again it will be two entries for ur Inventory in G/L (which u have in hand) one for out and another one for in . But if u will use revaluation it would be just an adjustment entry.
For documentation I think Inventory costing pdfs should be good.

Alex_Chow

eagle_eye wrote:

Thank you for all the input. Is there any documentation regarding Standard Costing in NAV? Is there any documentation regarding the Standard Cost Worksheet (there is some info in help, but I was looking for a document if there is one)? I understand Standard Cost, but what would be great is some documentation on the tools available in NAV to manage Standard Cost.

If you're an end user and current on your annual enhancement, you can download the costing manual on eLearning from CustomerSource.

PureHeart

Please help I'm getting the error message "There are new postings made in the period you want to revalue item no.", what do I need to do to avoid it?
I'm running the adjust cost post to g/l ticked for the item before posting, posting date today. The version is NAV 2013 R2
Any help greatly appreciated!

gvolkov

did you try contacting your partner who implemented the solution?