inventory cost adjustment

As a result of a few unusual inventory purchase entries (described below), an inventory cost adjustment was created by Navision that has improperly and grossly distorted our unit inventory costs. We don’t know why that would happen or how to fix it. This problem revolves around a mistakenly posted p.o. and reversing p.o. credit at zero unit cost. Details below: 1. An inventory purchase was posted for 86 SKUs, 44 of which were inadvertently included. (Quantities for only 42 of the SKUs were actually received, so none of the 44 SKUs should have been entered at all.) Each of the 44 inadvertently included SKUs were posted with a quantity and with a zero unit cost. 2. In order to reverse and correct the cost and quantity errors of the 44 SKUs, a purchase credit was created and posted with the same quantities and zero unit costs erroneously entered in the purchase noted in 1. above. However, while Navision allowed the posting of the purchase credit, we found that the adjust cost function automatically changed the inventory cost so that in effect the purchase credit was treated not as the reversal of a purchase, but as a sale. Any ideas on how to work this out[?]

If the Purchase Order was Invoiced at 0 cost, the inventory should be valued at 0. Then, if the Purchase Credit Memo Item Ledger Lines were applied against the Purchase Order Item Ledger Lines, the costs should adjust to 0. If you have not Invoiced the Purchase Order (and dont have expected cost posting on), then the Purchase Credit Inventory will be valued at the average cost until the Invoice is done and the periodic activities run.

I noticed our system enters in a few INVENTORY RECALC lines every so often. Inventory and COGS are affected by the entries. Some are small but some are in the thousands of dollars. What causes this inventory recalculation to occur? Our system uses the Automatic Posting routine setup from Inventory. Thanks…

Hi SKolnick, The Inventory Costs can be constantly changing beacuse of new Item Charges that are being applied to the Same Receipt lines. Each time there is a new Item Charge Invoice the system needs to apply to a receipt line or a Shipment Line. On both Occasions the Item Adjust Cost will readjust the posted COGS is the Receipt Lines are already sold. or the Inventory Account if theyare still in Stock. Cheers,

Seems like I need to have a posting group point to the Inventory account if a recalc is done in order to have inventory adjusted rather than COGS. We base sales on jobs that we quote. Once the file is closed, profitability is assumed and therefore, I think, should not be changed after the fact. If the recalc points to inventory, inventory readjusts on a part to part basis? That is, the adjustment will change the part price for just that particular part?

Actually, disregard last post. After looking further at these adjustments, inventory and COGS are affected both at the same time.