Adjustments to inventory value are made using Process Cost Tier Adjustments task. Here are some important things to know about cost adjustments :
- Inventory Quantity cannot be adjusted through Cost Tier Adjustments. Quantities in the cost tiers are not adjusted through this program, but rather, would be corrected or adjusted through the inventory transactions program.
- Cost adjustments will create general ledger transactions so that inventory value can be properly tracked. The user will select a combination of item and warehouse and the system will display all cost tiers.
- Only inventory on hand can be adjusted. The cost for inventory that has been shipped cannot be adjusted using this task – only inventory on hand can be adjusted. Depleted inventory cost must be adjusted thru GL Journal Entries by direct posting to COGS account.
A row exists in timCostTier for each ‘Cost Tier’. This includes Open and Closed cost tiers. A cost tier is closed when FIFO,LIFO or Actual valuation method is used and the inventory quantity in the tier has been fully relieved. Once the status of a Cost Tier is Closed, the cost tier cannot be adjusted.
Negative tiers can be adjusted as well.
This process does not create new cost tiers, this process simply adjusts the costs within each existing cost tier.
- Cost tier adjustments are only processed in the stock unit of measure.
- Pending cost tier records cannot be updated by this process.
- Pending quantities will not be included in the quantity displayed to the user.
Users cannot create two pending transactions for one cost tier.
A standard cost valuation method item has only one tier. Users may adjust the cost components for that single tier on the main page.
- After selecting an item and clicking on the Tiers…button, the system will display all available cost tiers for the warehouse specified on the batch header. This button is not enabled for standard and average valuation methods since they can have only one open tier.
- A GL account will default based from the inventory record for this item/warehouse combination.
- Tax Cost, Freight Cost, and Other Cost fields are disabled for items with Standard valuation method.