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Question

Project Material Usage

  • March 6, 2026
  • 3 replies
  • 41 views
E
Superhero (Partner)
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Hi Community,

I have a requirement from a client where they purchase parts (these parts are not assets) for a project. When the parts are received, they need to be issued for work, and after the work is completed, the same parts will be returned back to stock.

However, the challenge is that we need to issue the inventory that was purchased for the project, because the cost must be moved from the Inventory account to the P&L account to support project revenue recognition.

Could you please share your experience if you have come across a similar requirement, and whether there is any possible way to handle this scenario within IFS?

One possible option I considered is using a Work Order, where materials can be issued and later returned. However, this approach does not work for our case.

Also, I cannot simply issue and unissue the material against the project demand, because the cost of the purchase needs to be moved from Inventory to P&L for revenue recognition purposes.

    3 replies

    Chamath Kuruppuarachchi
    Hero (Partner)
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    Hi ​@EqeMithuV  you found a workaround for this. I am also having a similar requirement.

    Thanks,

    Chamath

    Lingesan08
    Hero (Partner)
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    • Lingesan08
    • Hero (Partner)
    • April 6, 2026

    Hi Community,

    I have a requirement from a client where they purchase parts (these parts are not assets) for a project. When the parts are received, they need to be issued for work, and after the work is completed, the same parts will be returned back to stock.

    However, the challenge is that we need to issue the inventory that was purchased for the project, because the cost must be moved from the Inventory account to the P&L account to support project revenue recognition.

    Could you please share your experience if you have come across a similar requirement, and whether there is any possible way to handle this scenario within IFS?

    One possible option I considered is using a Work Order, where materials can be issued and later returned. However, this approach does not work for our case.

    Also, I cannot simply issue and unissue the material against the project demand, because the cost of the purchase needs to be moved from Inventory to P&L for revenue recognition purposes.

    Hi ​@EqeMithuV ,

    This is a common scenario when handling project material consumption with financial impact in IFS.

    The key point is:

     When you issue inventory to a project, the cost is moved from Inventory to P&L (project cost)
    So a simple “unissue” is not always suitable once accounting is posted.

     Recommended Approach

    1. Use Project Material Demand + Issue to Project

    • Receive parts into inventory

    • Issue material to the project (this correctly moves cost to P&L)

    2. Handle returns using “Return Material” (not Unissue)

     Instead of unissuing, use:

    • Return Material from Project back to Inventory

    This will:

    • Move quantity back to stock

    • Post reversal accounting entries (P&L → Inventory)

     Important Considerations

    • Ensure posting control allows proper reversal entries

    • Check cost bucket / project cost element mapping

    • Verify same part cost is used during return

    • Partial returns are supported

     Why Work Order doesn’t fit well

    • Work Orders are better for execution tracking

    • But not ideal when project financial recognition is required

     Alternative (if business is complex)

    If frequent returns and financial adjustments are expected:

    • Consider Project Inventory or Project-specific supply

    • This avoids repeated financial movement between Inventory and P&L

     Summary

    ✔️ Issue → moves cost to P&L (correct)
    ✔️ Return Material → moves cost back to Inventory
    ❌ Avoid Unissue for financial scenarios

    Let me know if you want help checking posting controls or accounting impact.

    Thanks, Lingesan R 🔗 linkedin.com/in/lingesanr86
    E
    Superhero (Partner)
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    • EqeMithuV
    • Author
    • Superhero (Partner)
    • April 7, 2026

    Hi ​@EqeMithuV  you found a workaround for this. I am also having a similar requirement.

    Thanks,

    Chamath

    Hi Chamath,

    We have decided to develop a CRIM that will automatically create an inventory count for materials with the same lot/batch and serial number, at zero cost, when materials are issued to a project. We have defined specific criteria for when this should occur and which types of parts should be considered.

    The key requirement is to write off the cost to the project once the material is issued. We then bring the material back into inventory at zero cost solely to support inventory management and logistics.

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