Revalue Inventory

Revalue Inventory

Revalue inventory

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Revaluation Journal, and then choose the related link.

  2. Choose the Calculate Inventory Value action.

  3. On the Calculate Inventory Value page, fill in the fields as necessary. Hover over a field to read a short description.

  4. Choose the OK button.

  5. On each line on the Revaluation Journal page, in the Unit Cost (Revalued) field, enter the new unit cost. Alternatively, enter the new total amount in the Inventory Value (Revalued) field.

    The relevant fields are automatically updated. Note that the Amount field shows the actual change in inventory value for the selected item ledger entry. It calculates the difference between the Inventory Value (Calculated) field and the Inventory Value (Revalued) field.

  6. When you have completed all lines in the revaluation journal, choose the Post action.

New value entries are now created to reflect the revaluations that you have posted. You can see the new values on the respective item cards.



2 scenarios

There are times when it becomes necessary for a company to revalue inventory. This blog entry explains how to revalue inventory using the Revaluation Journal in Business Central.

NOTE:
Because Standard Cost is handled differently, this will deal only with costing Methods of FIFO, LIFO, Average, and Specific at this time.

There are typically two scenarios regarding inventory revaluing. In the first scenario, you would want to revalue all of the remaining quantity in inventory for an item. In the second scenario, you would want to revalue a single increase to inventory (positive adjustment, for instance). This scenario could be caused by an incorrect cost posted in a Business Central Item Journal in which that inventory has already been deducted from inventory.

Scenario 1

Looking at a Item Card below, we can see that the Unit Cost for this item is 148.10. We would like to revalue the entire inventory to 150.00.


Figure 1 – Item Card showing original cost of $148.10

Using Revaluation Journal, run the function to “Calculate Inventory Value”.


Figure 2 – Run the function “Calculate Inventory Value” using the Revaluation Journal

The function will populate the Revaluation Journal with a line for all of the Item Ledger entries for this item that have a “remaining quantity” greater than zero. Then, repopulate the “Unit Cost (Revalued)” with 150.00:


Figure 3 – Repopulate “Unit Cost (Revalued)”

When the Revaluation Journal is posted, you can see the result on the Item Card, where the Unit Cost is now 150.00:


Figure 4 – Item Card showing revised Unit Cost

Scenario 2

If you would like to revalue a single positive entry only, you will need to use the Revaluation Journal differently. First, find the “Entry No.” you want to revalue in the “Item Ledger Entries” list for this item. 

I want to revalue the positive adjustment posted on 12/31/2013.  In the Item Ledger Entries list below, the Entry No. for that Item Ledger Entry is 34:


Figure 5 – Locate the Entry No. of interest in the Item Ledger Entries list

Next, populate the Revaluation Journal by manually entering the item number, then the Entry No.  Finally, enter the “Unit Cost (Revalued)” and post: 


Figure 6 – Enter the item number, the Entry Number, and the Unit Cost (Revalued)

Posting date error
You may encounter the error regarding being out of the allowed posting date range.  In this case, you might need to change the General Ledger Setup date range, the User Setup date range, and/or reopen an inventory period. The challenge here is that the General Ledger posting may be in a prior accounting period. If this is the case, you would likely post a General Journal that moves the accounting effect out of the closed period into the current period.

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