Inventory Valuation

mbrown

Hi Everyone,

I've recently been informed of a problem with our inventory valuation. As part of my investigation, I've created a report that will list all the positive entries followed by the applied entries. Can anyone explain why an entry would be completely applied against (qty = total applied qty) but yet have a remaining amount. The field "applied entry to adjust" is "No" for the positive entry. It is my understanding that the cost adjust routine should have taken care of this. We are on version 4.0 and run the cost adjust routine on a weekly basis.

Any help would be appreciated.

Thanks

ara3n

"applied entry to adjust" is set to true, when there is something that needs to be adjusted otherwise it's set to false.

vgvozdev

As David asked: Is this average cost item?

mbrown

No, costing is FIFO. Also, I understand the use of "Applied Entry to Adjust". The question is why is this set to 'no' when the entire value for the entry has not been removed from inventory?

ara3n

It has nothing to do with remaining quantity, unless you change the cost of the inbound entry.

To give you an example

If I purchase Item A w/ qty 10 at 100 $.

And I sell it 3. The cost of Purchase is still at 100 and outbound entries do not need to be adjusted. So there is nothing to adjust.

mbrown

Yes, I agree with your statement but quantity does play a role. If you buy 10 at $100 ($10 each) and remove 10 at $90 then there should be an adjustment, ie. all qty's in that layer are gone but a value remains. There isn't any other way to get the value out of inventory because the purchase qty has been completely applied.

ara3n

remove 10 at $90

You cannot in Navision dictate at what cost outbound entries get, unless you do direct application, but even then you are specifying which from which inbound the cost comes.

The Cost in NAV is determined by the inbound entries.


You will need to value the Purchase at qty 10 to a new value 90 and run adjust which will adjust your outbound entries.

mbrown

I agree that you can't dictate the cost. But the cost comes from the entry it is applied to, regardless of whether you manually apply it (via the appies to) or whether Navision applies it. So, in this case the cost should be adjusted to the value of the purchase and once it is completely applied to and the cost adjusted, there shouldn't be any remaining value.

ara3n

what costing method do you have?
There are certain scenarios where you could have zero on hand and with amount in inventory aging report.

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