Hi, I am selling items with a unique serial number and as such, I may need to adjust the value as per the serial number. However, the stock reconciliation tool only allows adjust for all item in that warehouse and not for individual items with serial nos. Is there anyway to adjust item valuation individually?
I tried this but I don’t think it will work in my case, because for example the purchase receipt contains 2 pcs, and only 1 pc is still on hand, and the other is already sold. If I process the landed cost voucher, I cannot separately apply the value adjustment for the 2 pcs. What happens to the value adjustment done to the 1 pc that is already sold? I cannot trace it…
Interesting. It sounds like you’re working with items that are in the class I know as “Named Asset Inventory” which is very common with high-cost or highly specific items (the opposite of fungible items or bulk goods). Common examples are motor vehicles, jewelry and large, unique machines and industrial equipment. If that’s the case, you can likely solve this problem with an Inventory Dimension - either one that’s unique to your business or by using the built in Serial Number feature.
If you need per-item traceability, you need to be able to identify the items uniquely.
Our products are high value equipment and thus are traced with serial nos. Value is affected by gain / loss due to foreign exchange due to fluctuation of exchange rate upon down payment and balance payment. I don’t know how to adjust the items individually. When using Stock Reconciliation, all the items in that specific warehouse tend to be adjusted even though I need to adjust only one specific item with a specific serial number.
I tried a work around by transferring the item to a temporary warehouse and adjusting the value in that warehouse and then returning the item to the original warehouse using same day posting date. However, the value difference does not reflect under the account that I selected in the stock reconciliation module. It just seems to adjust the total inventory value in the stock ledgers and stock balance of the warehouse and I don’t seem to know where to value difference goes…? There is no accounting entry impact. The system just automatically recomputes the item valuation and it is reflected in the “Repost Item Revaluation” but doesn’t appear in accounting ledgers in the stock transfer and stock reconciliation transaction.
Ah. I believe the most correct accounting for this is not to adjust the valuation until the sale, at which time I would use the Taxes and Charges table to make an adjustment to the gain/loss exchange account.
Logically, the change in value of ANY currency is external to the value of the item from book-basis perspective. It’s external and does not play into either book value or a lower-of-cost-or-market.
As an aside, I doubt that revaluing your inventory based on foreign exchange rates is an accepted accounting practice in your jurisdiction, though the exceptions would most likely be places that have a history of hyperinflation. I think you should get an opinion of an accounting professional who is local to you about this problem and familiar with your tax and income/expense recognition laws.
Another alterative is to de-risk the exchange float is by purchasing an exchange rate lock. In this scenario I think it would completely reasonable to either pass this surcharge onto the customer or absorb it an cost of sales expense and include the increase in the sales price. I can’t comment on if the price of such a rate lock is reasonable for you but it may be helpful tool.