Question

Inventory valuation in the books (purchased and manufactured)

  • 4 May 2023
  • 1 reply
  • 92 views
L
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Dear IFS community,

 

Hope this message finds you well.

One of my clients would like to hold its accounting books with 2 different inventory valuation methods at the same time in IFS.

Does anyone has already “studied” such a case?

 

In a nutshell, 

they want to be able to retrieve (from an accounting point of view), an inventory valuation either in standard cost method (and then identify price variance on specific accounts to reconcile with actual price) or in weighted average method. They would like to apply it to their full perimter : purchased and manufactured inventory part

 

To my understanding, an inventory part can only be applied one inventory valuation method so it doesn’t look like it is possible but maybe I am missing something.

 

Thanks for help

Laurent 

1 reply

S
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Userlevel 7
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You can’t have both completely, but there is a possibility to force costing of some parts at certain times using an alternate costing method.

In our Italian subsidiary, we have everything setup as weighted average as that most closely aligns with Italian law and the way inventory value needs reported on a monthly basis.  However, for new parts and to reset part costing at the beginning of the year for comparison purposes, we use Cost Set 2 with different costing templates to perform standard costing and utilize the uploaded estimated cost for the part (which could come from last purchase price or last shop build).  In this way, some parts at the start of the year or if they haven’t been purchased or manufactured for a period of time can get reset to a more realistic value.  

 

It isn’t exactly the same as your customer requirement, but it may be workable for the customer needs.

There is a downside in that it isn’t automatic, requires the use of migration jobs to achieve, and it is a fair bit of IT heavy work to acccomplish, it is not something the accounting department can accomplish on their own using the out of the box UI and system setup.

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