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Suggested Sun, 02 Apr 2017 11:19:40 GMT by Ludwig ReinhardPlanned Long Term
Category: Cost management

Hello,
For financial accounting and statutory reporting purposes companies have to be able to evaluate their inventory according to different valuation methods, such as FIFO, LIFO, etc. in parallel.
Currently it is only possible to assign a single inventory model to an item. There is a standard Russian functionality (dual warehouse) available that allows assigning two inventory models. This Russian functionality does, however, also not help in cases where companies need more than two inventory models, which is often the case in international companies that have to report to local GAAP, local tax rules and - at the group level - IFRS if those accounting standards require different valuation methods.
Please note that this does not require that items in the inventory are revalued. What is needed is a financial feature that allows obtaining alternative inventory values based on different inventory valuation principles.
It would be great if this gap could be closed with the next release/update.
Many thanks and best regards,
Ludwig

Status Details

Thank you for your feedback. This is a great suggestion! We will consider this in our roadmap.

 

Sincerely,

Anders Even Girke

PM, Microsoft 

 

Comments (3)
  • @Uwe: I had a case in Germany for a "standard cost for ... and an average costing model" at one site, therefore +1 to Ludwig :)

  • Hi Ludwig,

    Sounds to me more like a reporting requirement where you need to adjust the receipts and issues accordingly. Not sure if this should be calculated at run-time. Especially looking at manufacturing and project accounting etc.

    What I have though in a real life scenario is the requirement to have a standard cost for a product in the manufacturing site and an average costing model in the sales sites. So I would support this request to have different inventory models per site and calculated in real time. Having different costing models in parallel is a reporting request from my point of view and only adds an overhead to calculations at the time of processing.

    Regards

    Uwe

     

  • For intercompany/consolidation scenarios, a welcome addition would be the ability to run inventory closing across legal entities. The reason is the elimination of intercompany profit from inventories, WIP and COGS. In case where there are complex intercompany supply/subcontracting/manufacturing relationships between companies within a consolidated group, "rule of thumb" (deduct an estimated percentage from inventory, WIP and COGS accounts) becomes an increasingly poor measure of actual intercompany profits, especially if companies operate on an "arms-length" relationship, that is, working on mostly market conditions without agreeing up front on transfer prices.