Adjusting the cost of item ledger entries in a specific location

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Posted on by Perrett2311

Hi All,

I just wanted to confirm the following scenario:

We have a client who wants BC to show the market value of the physical inventory instead of the actual cost of the item at the point that it was positively adjusted/purchased. In this case, the only way to re-adjust the costs of the items is through an item re-evaluation journal.

However, I understand this is risky, is it recommended to take this approach?

Please let me know if any more information is required?

TIA

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Valentin Castravet 23,440 Super User 2024 Season 2 on at

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Adjusting the cost of item ledger entries in a specific location

I would say it depends on the accounting standards his company follows, sometimes there are scenarios where it needs to be adjusted and market value is taken into consideration - NRV: What Net Realizable Value Is and a Formula To Calculate It (investopedia.com)
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Yi Yong 948 Super User 2024 Season 2 on at

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Adjusting the cost of item ledger entries in a specific location

Hello Perrett,

It is not right to adjust the cost of the items to the market value using item revaluation journal.

If they need to know the 'market value' of their inventory, then you can consider creating a simple report using Inventory Quantity * Unit Price.

You need to understand that adjusting the item's cost to the market value; which is your selling price; will make your sales invoice to be zero since the sales amount = cost amount now.
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Valentin Castravet 23,440 Super User 2024 Season 2 on at

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Adjusting the cost of item ledger entries in a specific location

Are they simply looking for a report that shows the market value of all inventory, or are they wanting to adjust the value of the inventory on their balance sheet from cost to market value? If it’s the latter, then item revaluation journals are the only viable approach.

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

Adjusting the cost of item ledger entries in a specific location

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