Account Schedule / Income Statement / Expected Cost Posting

Hello All,

I’ve posted this in the Technical Forum section by mistake. Should have been posted here!

We are running MBS - Nav 4.0 SP1. We have expected and automatic cost posting enabled. We use FIFO and we verified, by comparing the Inventory Valuation report with Inventory To G/L Reconcile report that everything is setup correctly. From time to time we have to send out material that has been received into inventory, and has been invoiced on the vendor side, to third party vendors for additional upgrades or repairs. We do this via a $0.00 VRMA, as we are tracking our material via serial numbers, and bring the material back in via moving the negative lines on the VRMA to a PO. When we bring tha material back in we bring it, as we did when we shipped it, at $0.00 cost in. The problem we are having is that the expected cost is being consumed and posted to the G/L, which taints our Income Statement as some of the material may not ship the same month.

The question we are having is whether or not the following accounts should be included on the account schedule for an income statement:

Inventory Interim Accrual
COGS - Interim Accrual
Inventory Adjustment Interim Accrual

Currently, because of the expected cost posting, our bottom line is way off because the expected costs moved all the way through, but the material is not being sold for another 2 - 3 month, potentially. Our fiscal year end is June 30th, and our numbers are way off. Fun stuff!

Any advice will be much appreciated.


Had a similar situation at a fast moving distribution firm after a salesman had gone in and advised them to set the return cost to zero. We handled this by setting the returns on a return specific location and setting up the posting groups to handle this so it was separate in the accounts. Knowing what caused this the accountant could then journal out the inventory with a reversing journal for the month as it was not really the asset of the business as it was going back out. We did however have to advise them not to use zero costing as this really screwed the costing figures as they were on FIFO. Not sure if this approach meets your needs as they were using the return orders as this gave much better tracking and a level of control rather than your negative line on a purchase order, they were however serial tracked as you were. It was 5+ years ago and they have been fine with the approach since, but my memory may not be telling me everything!

I deleted your other posting.

Thank You for your response. On the customer side we have implemented what you suggest, but overlooked the vendor side.

Thanks Again