The 3336.46 will come from the estimated material costs on the shop order, i.e. the average cost of the component materials before you issue a batch. The revaluation then calculates the difference between the estimated cost i.e. before issues were made, and the actual cost of materials used.

For a simplified example suppose I have a shop order with no manufacturing costs, and 1 unit of 1 component material. If that component material has a couple of batches in stock, batch A at £5 and batch B at £10. When I create a shop order the order doesn’t know which batch I will use so the estimated cost of the shop order will be £7.50, when I issue and recieve and close my shop order it will either put through a revaluation of -£2.50 or + £2.50 depending on which batch I actually used.

You will see this difference between estimate and actual on the shop order costs screen.

Kind regards

Andy

Hi @PRODQ ,

The revaluation triggers during the Cascade Update of Cost on Inventory Transactions. This happens when a manufactured part has valuation method set to either Inventory Valuation method standard cost and cost level cost per serial, or Inventory Valuation method weighted average and any cost level and when a shop order is closed for that part. Then the total work in process on that shop order will be used to calculate the cost that will be used to update the shop order receipt transaction(s) for the part. The change of cost/WA will also be cascaded to transactions made after that shop order receipt.

So, in your case one scenario might be you have performed some transaction after the receipt of shop order and then the revaluation triggered when the shop order status is closed. Else, revaluation might have happened for the component part used in the shop order at the later stage.

More info on Cascade Update of Cost on Inventory Transactions

IFS Online Documentation (ifmsportal.com.au)

Hope this helps!!

Regards,

Mithun K V

Thanks, Andy.  We run Average Costing and not batch so all our material is in stock at a single WA inventory value.  

Re your comment about the “estimated material costs on the shop order” - is that rolling up the Estimated Material Cost from each of the parts on the shop order or the Inventory Value?  

Thank you, Mitun.  For us, when we receive the Shop Order, it IS closed.  Might this “revaluation” be being kicked off if someone re-opens a shop order, performs some transactions, and then re-closes?  And would this then “revalue” any subsequent issues of the part the SO was set up to manufacture?  

I’m still a bit foggy on Cascade Update of Cost on Inventory Transactions.  Is this a background/scheduled task?  

Hi @PRODQ ,

Yes, it does revaluation of the subsequent issue of the parts to the parent Shop orders.

Cascade Update of Cost on Inventory Transaction will be triggered when the shop orders are closed or when it is manually triggered from the shop order using right mouse button option.

For Purchase parts it will be triggered when invoices are matched.

Regards,

Mithun K V