Item Charge for part of the quantity

proffeszor

Hi,

one of our clients has issued a request to change item cost (using Item charge) for part of items bought in one Purch. Invoice. The explanation is that if they buy 100 items, sell 80 of them and keep the rest in a warehouse for sufficient time, the remaining stock is charged for usage of the warehouse. Thus Item charge should be issued to change the cost of the remaining 20 items. The problem is that 100 items were posted in one purchase invoice line (one Item ledger entry line) and the item charge is applied to the item ledger entry line by creating new Value entry. Is there any way to post Item charge that would apply for a part of quantity of item ledger entry.

Any suggestions are appreciated.

ssingla

Ask them to confirm the policy with the auditors. Unless its a country specific requirement (required by law of land) accounting principle clearly tells that the invenotry holding cost should not be loaded on the inventory.

In case the client persist, the only standard option is to revalue the inventory.

proffeszor

ssingla wrote:

Ask them to confirm the policy with the auditors. Unless its a country specific requirement (required by law of land) accounting principle clearly tells that the invenotry holding cost should not be loaded on the inventory.

In case the client persist, the only standard option is to revalue the inventory.

I will check the requirement with the law, thanks for the tip there.

However, revaluation uses whole quantity of the line not the part of it, so it doesn't really solve my problem.

proffeszor

I have checked with the law and the law says:
If the amount is insignificant expenses for transportation, storage and other may be recognized as cost.

No solution yet I'm afraid.

Sunset

When using the revaluation journal and the function to calculate inventory value, the journal line will be for the remaining quantity. i.e. the quantity in stock as long as what they sell has been posted.

proffeszor

Sunset wrote:

When using the revaluation journal and the function to calculate inventory value, the journal line will be for the remaining quantity. i.e. the quantity in stock as long as what they sell has been posted.

Thanks for your reply. It looks like a good idea. I'll try to implement inventory value calculation automatically and post the journal.

David_Singleton

Hi Preffeszor,

I have seen this requirement a number of times. The issue is that although Navision will apply costs only for the remaining amount, once you run AIC routine it will spread the cost over all sales. I actually think this was fixed in a version of Navision, so you might want to try a later version to check.

Anyway one work around is to transfer the items. Then the transferred quantity will only be the qty you need to revalue. Use the same data as the original purchase on the transfer so it has a net zero inventory affect.

proffeszor

David Singleton wrote:

Hi Preffeszor,

I have seen this requirement a number of times. The issue is that although Navision will apply costs only for the remaining amount, once you run AIC routine it will spread the cost over all sales. I actually think this was fixed in a version of Navision, so you might want to try a later version to check.

Anyway one work around is to transfer the items. Then the transferred quantity will only be the qty you need to revalue. Use the same data as the original purchase on the transfer so it has a net zero inventory affect.

The client uses Nav 3.7. However I'm not sure if I know which function you are talking about. If by AIC you mean "Adjust Item Cost/Prices" then it seams that it does not change item cost, but it does change sale price. I might be wrong thou.

Talking about the transfer version, if I transfer remaining amount, change the cost for it and run "Adjust Cost - Item Entries" the cost will be adjusted according to purchase cost. Am I wrong there? Cos my experiments show that way.

David_Singleton

proffeszor wrote:

The client uses Nav 3.7. However I'm not sure if I know which function you are talking about. If by AIC you mean "Adjust Item Cost/Prices" then it seams that it does not change item cost, but it does change sale price. I might be wrong thou.

Talking about the transfer version, if I transfer remaining amount, change the cost for it and run "Adjust Cost - Item Entries" the cost will be adjusted according to purchase cost. Am I wrong there? Cos my experiments show that way.

By AIC I mean't Adjust Inventory Cost (Adjust Cost - Item Entries). I can't remember which version had this problem for sure it was in 3.01 and I think also 3.10 but not sure about 3.70.

You don't revalue the purchase entry, you revalue the transferred entry.