Inventory Control Module
You may create inventory transactions for any Transaction Date and Transaction Time when you are processing a batch in the Inventory Transactions process (IC>Inventory Transactions). This means you can create a transaction on an inventory item dated prior to existing transactions.
The system uses the transaction date and transaction time to determine the unit cost of inventory items. If you create an inventory transaction prior to existing transactions, then the costing of the existing transactions may need to be recalculated to take into account the new transaction information.
An example of a transaction that creates recosting would be creating a receipt transaction with a date prior to existing issue transactions that change the unit cost of the inventory item.
Average Cost example:
| Transaction Type | Date | Unit Quantity | Unit Cost | Transaction Total |
|---|---|---|---|---|
| Receipt | 12/01/14 | 10 | $10.00 | $100.00 |
| Issue | 12/20/14 | 1 | $10.00 | $10.00 |
| Issue | 12/30/14 | 1 | $10.00 | $10.00 |
| Receipt (pre-dated) | 12/15/14 | 5 | $5.00 | $25.00 |
If the new receipt transaction changes the average, LIFO, or FIFO unit cost of the inventory item, the cost of the existing issue transactions should be recalculated using the new costing information.
To recost the transaction, the system will create reversing journal entries on the existing issue transactions and then create new transactions based on the new costing information. The new journal entries will create the transaction history of the inventory item as it would have been had the predated transaction been posted before the existing transactions.
Average Cost example:
| Transaction Type | Date | Unit Quantity | Unit Cost Old | Unit Cost New | Transaction Total Old | Transaction Total New |
|---|---|---|---|---|---|---|
| Receipt | 12/01/14 | 10 | $10.00 | $10.00 | $100.00 | $100.00 |
| Receipt (pre-dated) | 12/15/14 | 5 | $5.00 | $5.00 | $25.00 | $25.00 |
| Issue | 12/20/14 | 1 | $10.00 | $8.33 | $10.00 | $8.33 |
| Issue | 12/30/14 | 1 | $10.00 | $8.33 | $10.00 | $8.33 |
The recosting creates reversal and replacement transactions for all the costed transactions for the inventory item that occurs after the predated transaction. These journal entries will be created when you print a proof list in the inventory transactions process (IC>Inventory Transactions>Print Proof List).
The reversal and replacement transactions are inserted into the transaction batch that contains the new receipt transaction. The reversal and replacement transactions will be deleted when the transaction batch is deleted or reset.
When the historical Inventory Control transactions have been changed by the recosting process, it is necessary to update the GL to reflect these changes. The reversal and replacement transactions are distributed to the GL just like regular transactions. They are posted with the same journal entry date as the base transactions in the batch.
In most cases, the changes caused by recosting adjustments are small. There will be entries for the reversal that post to the same accounts as the original transaction except with the debits and credits reversed. There will also be entries for the replacement transaction. The replacement transaction will be distributed according to the current account distribution for the inventory item, not the original distribution containing the predated transaction. The journal entries for the original transactions are not affected.