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Adjust the value of an inventory item

When should I adjust the value of an inventory item?

The value of your inventory directly affects your financial statements, so keeping the value of your inventory accurate helps ensure the accuracy of your financial statements. If the value of an inventory item changes due to such things as seasonal demand or spoilage, you'll need to decide if the change is significant enough to warrant a value adjustment.

To do this task

  1. Choose Vendors > Inventory Activities > Adjust Quantity/Value on Hand.

    Choose Inventory > Inventory Activities > Adjust Quantity/Value on Hand.

  2. Click the Adjustment Account drop-down arrow select Total Value or Quantity and Total Value.

  3. Enter the date of the adjustment.

  4. Click the Adjustment Account drop-down arrow and then click the account where you want to track inventory adjustments.

    Which account should I use?

    You may want to create a new account just for tracking inventory adjustments. Because inventory adjustments generally tend to reduce inventory value, you might want to create the new account as an expense account. However, if your inventory mostly increases in value over time, you might want to create an income account. Consult your accountant if you aren't sure what type of account to use.

    If you're making adjustments to more than one item and need to assign the adjustments to different accounts, you'll need to create multiple adjustments—one for each account.

  5. Click the Inventory Site drop-down arrow and select the site to apply the adjustment to.

    Important: If you are making a Total Value adjustment you can't select a site because value is calculated across all sites.

  6. (Optional) Enter a reference number.

  7. (Optional) If you want to assign this adjustment to a customer or job, click the Customer:Job drop-down arrow and then click a customer or job.

  8. (Optional) If you use class tracking, click the Class drop-down list and then click a class.

  9. Click in the Item column to add items. You can also add multiple items.

  10. Select the Value Adjustment checkbox near the bottom of the Adjust Quantity/Value on Hand window. More...

    This adds the Current Value and New Value columns to the table of items. The amount displayed for an item in the Current Value column represents the total value for the entire quantity of that item currently in inventory. The value is calculated by multiplying the item's current average cost by the current quantity on hand. For example, if you have 15 fasteners on hand and their value is $30, the current average cost for the fastener item is $2 (15 x $2 = $30).

  11. For each item whose value you want to change, calculate the new value by multiplying the new individual item value by the current quantity on hand. More...

    This adds the Current Value and New Value columns to the table of items. The amount displayed for an item in the Current Value column represents the total value for the entire quantity of that item currently in inventory. The value is calculated by multiplying the item's current average cost by the current quantity on hand. For example, if you have 15 fasteners on hand and their value is $30, the current average cost for the fastener item is $2(15 x $2 = $30).

    If you want to change the value of the fastener item to $3, multiply the current quantity (15) by the new individual item value ($3) to come up with the new value ($45).

    Important: You can't select an inventory site when you are doing a value adjustment, because inventory value is calculated across all sites.

  12. (Optional) Enter a memo in the Memo field to remind yourself later why you made this value adjustment.

  13. Save the adjustment.

KB ID# H_INVTRY_ADJUST_INVTRY_ITEM_VALUE
9/26/2016 3:25:12 PM
PPRDQSSWS406 9138 Pro 2017 a2bbbf