Issue
In many businesses, especially those managing large inventories, there may be a need to reduce the value of aged, obsolete, or slow-moving stock while keeping the physical quantity unchanged.
However, NetSuite’s standard Inventory Adjustment transaction typically expects quantity changes along with cost adjustments. This poses a challenge when the goal is solely to revalue the inventory without affecting stock levels.
Solution
The correct way to handle this in NetSuite is by using the Inventory Adjustment Worksheet. This transaction type allows for adjusting the inventory value (cost) independently of the stock quantity — particularly effective when using the Average Costing method.
Steps to Revalue Inventory Without Changing Quantity
- Navigate to:
Transactions > Inventory > Adjustment Inventory Worksheet- Select the item(s) you wish to adjust.
- Enter the same quantity currently held in stock — this keeps the quantity unchanged.
- Input the new reduced total value to reflect the write-down of stock value.
- Select an appropriate Inventory Adjustment Account:
- You may create a dedicated Expense account (e.g., Inventory Write-Down Expense), or
- Use the standard Inventory Adjustment account under Cost of Goods Sold (COGS).
Results and Impact
- The average cost of the item is recalculated based on the new total value.
- Financial reports and item records reflect the adjusted cost:
- Inventory Valuation Report
- Item Record Average Cost
- Balance Sheet Inventory Asset values
This process ensures accurate financial reporting while preserving the operational accuracy of stock quantities.
Final Note:
Revaluing inventory using the Adjustment Inventory Worksheet is a best practice for maintaining financial accuracy in situations where inventory has devalued over time but remains unsold. Always ensure proper documentation and consult with finance before applying such adjustments in a live system.