Stock Value Adjustment

July 31, 2018 in Inventory Control


This function is used to adjust the average cost of a product in stock in order to revalue it. Such a change would be by exception – usually to correct some previous problem/mistake typically caused by the incorrect processing of a stock receipt transaction value.

This value maintenance is carried out at either the Warehouse or Stock Location level depending on whether the Warehouse Average Cost option is enabled. If the Location average cost is in use for inventory costing, a change in the value of a product in stock will only affect the Stock Location specified. However note that if the Warehouse Average Cost option is being used, the following warning is displayed at the start of the procedure:

WARNING: You are using the Warehouse Average Cost Option. Details displayed will be for the warehouse and any adjustments made will affect that level (i.e. all locations within the warehouse will be re-costed).

As the message suggests, any and all stock locations that are also within the warehouse for the stock location selected will be re-valued at the new cost. This is because all the stock locations are sharing the same warehouse average cost.

If the product selected for stock value adjustment is costed at Standard Cost, then you should use the Cost Maintenance routine to revalue stock and not this procedure. However if the product is a Manufactured item then the Standard Cost is derived from its Manufacturing Specification and so the cost can only be permanently adjusted by changing the specification details.

Data Input


Step 1 – Location Code


Enter a valid Stock Location that contains the inventory you need to make the value adjustment for. The user’s default stock location is automatically selected at this prompt by default.

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Step 2 – Product


Enter an existing ‘Product’ for which you wish to change the inventory value. Note that once a product is entered/selected, if appropriate the user is prompted to select a Size and/or Colour. This assumes these features are turned on in the Product Format function and that the product itself is sized/coloured.

There must be stock on hand for the product at the selected location in order for you to make an adjustment. If there is no stock on hand, then there is no value to adjust. The product selected must also be a valid stock item i.e. it cannot be a ‘Service’ or ‘Add-On’ charge product.

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Step 3 – Details

Document Reference

Enter the relevant ‘Document Reference’ (docket number/transaction number) to be used to record this stock value adjustment transaction. You have up to 12 characters to enter manually.

Document Details

Enter a short description relating to the stock re-valuation being performed. This is shown in displays/reports for future reference. It’s normal to record the reason for the stock value change here. You have up to 30 characters for this entry.

Stock On Hand / Average Unit Cost / Average Cost Value

These details are all shown on the screen for the product at the location selected for visual confirmation.

New Average Unit Cost

At this prompt you can enter the ‘New Average Unit Cost’ for the product at the stock location selected. Note that ‘Unit’ is assuming the ‘Stock Unit of Measure’ as recorded on the Product.

New Value of Stock / Adjustment Value

After entering the ‘New Average Unit Cost’ at the prompt above, the ‘New Value of Stock’ is calculated and displayed (Stock on Hand * New Average Unit Cost). The ‘Adjustment Value’ is also calculated and displayed (Average Cost Value – New Value of Stock). This is the amount that will be posted to General Ledger/Job for the change to the Inventory value of the product.


A mandatory part of completing a stock value adjustment is to enter the “Posting” details for the transaction that will be created. You may post the value of the adjustment to either a General Ledger account or to the Job Costing ledger. Read here for more details on Account Postings.

Note: When posting to a GL account, the account entered here would NOT normally be a Stock On Hand account. The system already knows that this is a stock adjustment and so will retrieve the appropriate GL account from the Product Group for the product being adjusted and use that for one side of the GL posting. This prompt is asking for the other side of the posting, which is typically a non-balance sheet account i.e. a P&L or trading account.
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