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Inventory Write-Off - keeping quantity but removing book value.

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Posted on by CN-14101141-0

Hello looking for any other solutions out there.

Context:

I work in a regulated industry which means I cannot just adjust out inventory.
We have a large amount of controlled inventory that has a NRV (net realizable value) of 0
I need to financial write-off to happen now for our book valuation however destruction needs to happen at a later time.

Problem:

I cannot use the standard inventory adjustment to remove the value from my Balance sheet as I need to still show we have the inventory.
We are lot tracked and use a mix of standard and average costing.
I cannot revaluate specific lots for a specific date and average cost is a headache to do for specific lots.

Current solution:

Created write off locations that has inventory posting setup post to my P&L so when I move inventory into that location it credits my Asset account and Debits my Expense account.
I have a gen bus posting group that I use to override at time of inventory removal so that it posts the adjustment to the same expense account at time of inventory remove resulting in a debit/credit of the same value.

Challenge with current solution:

The inventory still shows on my inventory valuation report at its full value. I now have to create an "exclusion list" which has caused some confusion for other financial users.

Question:
Is there another solution or one that is more elegant and truly writes off the value of the inventory that isn't crazy complicated?

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Dynamics 365 Business Central

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Valentin Castravet 31,262 Super User 2025 Season 2 on at

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Inventory Write-Off - keeping quantity but removing book value.

After you move the items to the new location, you can use the Item Revaluation Journal to set their cost to 0 for that location only. In the journal, you can run Calculate Inventory Value and apply a Location Code filter for the new location only.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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Rishabh Kanaskar 6,147 on at

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Inventory Write-Off - keeping quantity but removing book value.

Hi,

There are a few ways to handle this, but here’s what usually works best:

> Use Item Revaluation Journal to set the cost to zero while keeping the quantity. This updates the book value without removing inventory.
> If lot-specific revaluation is tricky with average cost, consider creating a custom dimension or location for “Write-Off” and apply revaluation there for clarity.
> For compliance, document the adjustment and destruction separately for audit purposes.

Your current approach works, but revaluation is the most standard and elegant way to remove value while keeping stock visible.

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Rishabh Kanaskar 6,147 on at

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Inventory Write-Off - keeping quantity but removing book value.

Hi,

There are a few ways to handle this, but here’s what usually works best:

> Use Item Revaluation Journal to set the cost to zero while keeping the quantity. This updates the book value without removing inventory.
> If lot-specific revaluation is tricky with average cost, consider creating a custom dimension or location for “Write-Off” and apply revaluation there for clarity.
> For compliance, document the adjustment and destruction separately for audit purposes.

Your current approach works, but revaluation is the most standard and elegant way to remove value while keeping stock visible.

Thanks

Rishabh

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Sumit Singh 9,989 on at

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Inventory Write-Off - keeping quantity but removing book value.

Hi,

As per my opinion, I think Item reclassification can be used to move the inventory (not sure, whether you are already using it) to write off location and then using revaluation journal to nullify the value.

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CN-14101141-0 8 on at

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Inventory Write-Off - keeping quantity but removing book value.

Thank you everyone, I followed your suggestions,

Item reclass to move to write off location.

then revalued that specific transaction into the new location to set the inventory value to zero.

This Resulted in:

- Inventory on hand for compliance and destruction.

- A zero valuation of the inventory with a specific posting date tied to the Item Reclassification posting.

- Inventory Valuation report now shows the correct reduction in value as of the specific date. :-D

- Removal from my active inventory for planning. (Bonus)

Thank you all for your help!

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Valentin Castravet 31,262 Super User 2025 Season 2 on at

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Inventory Write-Off - keeping quantity but removing book value.

Please mark the answer as verified if it helped.

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