Requirement
Inventory revaluation write up: while the creation of transactions for an item with the standard costing method, an error is encountered as “Inventory Revaluation is no longer the first transaction in the item’s history” During Creation of a Transaction for an Item with Standard Costing Method
Our Solution
What is the Error message?
When we try to click on the save the transaction transactions for an item with the standard costing method, sometimes the error message will pop up. The error message screenshot is given below.
What items are affected?
This will affect the assembly or the inventory items that use the standard costing method.
Where and when the error is encountered?
After clicking the save button on posting transactions such as:
- Item receipt
- Item fulfillment
- Vendor bill
- Invoice
- Inventory adjustment
- Assembly build
- Work order issue
- Work order completion
Note: the item can still be used in non-posting transactions like purchase order, sales order, or work order.
When we check in an inventory item, If the purchase/inventory subtab the costing method is standard and on the related records sub-tab there are no transactions that have been done for that item also there is any purchase order, item receipt, inventory adjustment and there is no inventory cost revaluation record has been created yet for this item.
If we try to create a purchase order for that item and that record will save successfully, because it is a non-posting transaction so we could not get any error message.
When we try to receive the same purchase order, It will go to the item receipt page and try to save the item receipt
Possible scenarios that Why are users getting this error message?
- Items using the standard costing method get their cost from the inventory revaluation record.
- Item used in the transaction is a newly created item using the standard costing method and does not have an inventory cost revaluation record yet.
- The posting transaction the user is creating is dated before the earliest inventory cost revaluation record of the item.
- Standard cost is only effective starting from the date on the inventory cost revaluation record. Since the posting transaction is stated before the revaluation and there is no standard cost yet for the item.
How to resolve the error?
We can process an inventory revelation for the item in two ways.
- Bulk revaluing standard cost inventory
For this method, we are selecting the existing cost version record and setting the date those costs become effective. Do so for all items associated with the cost version or only for select ones.
- Manually enter an inventory cost revaluation
For this method, we are selecting an item and enter standard cost details. While submitting the record, a cost version record is created. And these costs become effective as of the transaction date
Note: We can enter only one revaluation transaction per date for each item in a specified location.
Demo using manually entering an inventory cost revelation record on the above example
Firstly go to Transactions > Inventory > Revalue inventory cost
Fill in all the data on the inventory cost revaluation record and save.
Take the inventory item details, the inventory cost revaluation with the date will be shown in the related records subtab.
Click on the purchase order that we have created earlier and click on the receive button
On the item receipt, we have to check the same location and the date that was in the cost revaluation record is being populated. And click on the Save button.
The transaction will be successfully saved without any error message.