• Registered: 02/03/2014
  • Posts: 8

Topic: Discrepancy: value of stock in balance and inventory valuation report

Hello,

I found discrepancy in the inventory valuation report and the stock value in the balance. This happens in the following situation:

Let's say the cost price is 10 euro. Currently we have 0 stock. So stock value is 0.

1) We receive 10 pieces from our supplier. GRN Entry is booked. Stock quantity is updated, but the GL is not updated.
e.g. Let's say we start with a costprice of 10 euro.
Total number of stock: 10
Total stock value should be 100 euro.
Balance is not updated yet.

2) Before we receive the invoice from the supplier we have sold some of the products to our customers. Direct invoice is booked.
Let's say we sell 1 piece. Costprice is still 10 euro. Stock management and GL are booked.
Total number of stock: 9
Total stock value should be: 90 euro
Stock value in balance is: - 10 euro

3) We receive invoice from supplier, but we find that some of the price has changed (e.g. other currency rate)
We receive an invoice from our supplier, but the costprice is not 10, as we assumed, but it is now 11 euro.
Total number of stock: 9
Total stock value should be: 99 euro (9 x 11 euro)
Stock value in balance is: -10 (from step 2) + 110 (10 x 11) = 100 euro.

After step 3 when we check the inventory valuation report it would show 99 euro. When we check the balance sheet it would show 100 euro.

Calculation of the GRN provision should use the amount in stock.

  • joe
  • Administrator
  • Offline
  • Registered: 03/15/2007
  • Posts: 5,107

Re: Discrepancy: value of stock in balance and inventory valuation report

1. You should enable the goods clearing account for booking temporary on this account. When the invoice is final the real inventory account is updated.

2 and 3 might be a follower on number 1.

Please have a look in the wiki about how this is done.

Joe

  • Registered: 02/03/2014
  • Posts: 8

Re: Discrepancy: value of stock in balance and inventory valuation report

Hi Joe,

Thanks for coming back this quick. I did try to turn on the goods clearing account. But it still shows this descrepency.

The version I am using currently is 2.3.21

Loeng

  • Registered: 02/03/2014
  • Posts: 8

Re: Discrepancy: value of stock in balance and inventory valuation report

Joe, let me know if you need a more detailed info.

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: Discrepancy: value of stock in balance and inventory valuation report

Please check if this issue still persists in FA v2.3.24+ as well

apmuthu's Website

  • Registered: 02/03/2014
  • Posts: 8

Re: Discrepancy: value of stock in balance and inventory valuation report

Hi Joe and Apmuthu.

I have tested the same scenario in version v2.3.24. The results are the following:

1) Entry of GRN for 10 products "X" against a standard costprice euro 10. The standard costprice was entered in the Purchasing pricing tab of Item Maintenance.

Total stock of product "X": 10

GL Entries are as follows:
Stock                   100
Clearing account                 100

2) Direct sales invoice of 1 product "x" against the standard costprice of 10 euro.

Total stock of product "X": 9

GL Entries look as follows:
Costprice              10
Stock                                  10

3) We receive the invoice from our supplier at a later moment. The costprice turns out to be 11 euro instead of 10 euros. A direct purchasing invoice is booked.

Total stock of product "X": 9

GL Entries look as follows:
Clearing account        100
Stock (GRN provision)  10
Creditors                             110

After step 3) I checked the balance, inventory valuation report and item.
- Balance of this stock is 100
- Inventory valuation report shows the standard cost price of this material is 11,1111111
- Item also shows the standard costprice of this material is 11,1111111

The standard cost price may look strange at the first sight, but it is actually correct.

  • From: Nicaragua, Leon
  • Registered: 05/12/2012
  • Posts: 74

Re: Discrepancy: value of stock in balance and inventory valuation report

I am not sure whether this is the same problem. What happens is that when we check the value of the inventory in the balance and compare with the value in the Inventory Valuation Report, they are normally the same at a given date. However, if a month later I check the same Inventory Valuation Report, the prices have changed. I can see that the valuation is made at average prices, and they of course change as new purchases are made. But why should it change the historical valuation of the inventory? Seems the system uses the actual prices from say October to determine the value of the inventory in say May. What we have been doing is to print out the inventory report at the end of each month, so we can document that the balance and the inventory report gave the same result at that date, even if the system is not able to reproduce that report later on. This is illogical and not very useful.

thorbjornw's Website