Unified Operations & Dynamics AX Forum

Expand all | Collapse all

correcting inventory cost and re-calculating margin/COGS

  • 1.  correcting inventory cost and re-calculating margin/COGS

    Posted 14 days ago
    Hi there,

    Our inventory cost method is FIFO.

    We have an item that was entered into inventory, through a journal, with an inflated price.
    This inventory was later sold , and COGS in the same way was overstated.

    We have not closed inventory yet for that period.

    How do we  fix that?

    I can think of 2 ways to adjust down the inventory value:
    * I can use a movement journal to adjust the item out, and then adjust it back in using the correct cost.
    * on the "Close Inventory" worksheet, I see I can use the adjustment functionality to adjust up/down a particular inventory transaction.

    Is that correct?

    Now, after I adjusted the inventory cost, how to I make the cost manifested when selling the item to also get adjusted?

    Zvika Rimalt
    Functional Consultant
    Vancouver BC

  • 2.  RE: correcting inventory cost and re-calculating margin/COGS

    Posted 13 days ago
    I you make an adjustment to the original value/cost of the transaction used to bring the stock on, via "closing and adjustment", then the cost adjustment should flow through all the way to COGS. You should be able to see/check this after a "recalculation" i.e. before you close stock.

    Jonathan Howe
    IT Manager
    Cross Manufacturing

  • 3.  RE: correcting inventory cost and re-calculating margin/COGS

    Posted 13 days ago

    Assuming you first used the periodic adjustment which is the best practice,  NOW use the IM - Periodic - Recalc for the selected item (that you adjusted) in the recalc and the cost will push through the value chain from that adjusted item to the next FIFO consumption point and you should be set.

    If the item was a component of a production or the like, you will then also have to recalc those parent items and push it through the value chain.

    Hope this helps.

    Troy Jones
    Functional Systems Architect / Consultant
    Hi-Vue Solutions, LLC
    Akron OH

  • 4.  RE: correcting inventory cost and re-calculating margin/COGS

    Posted 6 days ago
    If you spot the error before you run inventory close, I think Inventory Marking might help you out.

    You have the option to create another journal to bring the stock in at the correct price. You can use inventory marking functionality to mark this cost to the sales order. You can then remove this stock using another journal. When you run Inventory close, AX will adjust the cost on the sales order to match the cost of the second journal.

    Guy Terry
    Application Consultant

If you've found this thread useful, dive deeper into User Group community content by role