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https://issues.apache.org/jira/browse/OFBIZ-9500?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel&focusedCommentId=16199945#comment-16199945
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Jacopo Cappellato commented on OFBIZ-9500:
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I have voted for this issue! [~paul_foxworthy]'s description of the current
situation and the proposed fix is perfect.
On a side note, there are other processes (alternative use cases/corner cases)
that may introduce some errors in the accounting quantity values; but we will
analyze and fix them after the above changes have been introduced as suggested
by Paul.
> Maintain accountingQuantity for all COGS valuation methods
> ----------------------------------------------------------
>
> Key: OFBIZ-9500
> URL: https://issues.apache.org/jira/browse/OFBIZ-9500
> Project: OFBiz
> Issue Type: Improvement
> Components: accounting, order, product
> Affects Versions: Trunk
> Reporter: Paul Foxworthy
> Assignee: Paul Foxworthy
> Labels: accounting, inventory, stock, valuation
>
> From
> http://ofbiz.135035.n4.nabble.com/AccountingQuantity-COGS-method-and-inventory-valuation-td4700867.html
> *Why accounting quantity?*
> When inventory is shipped, there's an accounting transaction that debits the
> inventory on hand value and credits Cost of Goods Sold (COGS).
> There's more than one way of deciding what value is added to COGS.
> First and most obvious is the actual cost of the inventory item. But
> companies may prefer other strategies. OFBiz has the option of three others:
> average cost, first-in-first-out or last-in-first-out. There's a nice survey
> of _why_ you might choose one of these at
> http://www.dummies.com/business/operations-management/choosing-an-accounting-method-for-the-cost-of-goods-sold-expense/,
>
> http://www.dummies.com/business/accounting/the-fifo-method-for-cost-of-goods-sold/,
>
> http://www.dummies.com/business/accounting/the-lifo-method-for-cost-of-goods-sold/
>
> Note that if you choose anything other than inventory item cost, the money
> amount transferred to the COGS account may be *different* to the cost price
> of the inventory items being shipped. When you choose FIFO or LIFO, the
> amount may have originated from a different inventory item, received at a
> different time.
> *Current situation in OFBiz*
> The cogsMethodId field in the PartyAcctgPreference entity is a enum with four
> possible values: COGS_INV_COST, COGS_AVG_COST, COGS_FIFO, COGS_LIFO..
> The accountingQuantity field in the InventoryItem entity and
> accountingQuantityDiff in the InventoryItemDetail entity track the quantity
> of an item still "live" for the purpose of inventory valuation and COGS.
> In the service createAcctgTransForShipmentReceipt implemented in
> /applications/accounting/minilang/ledger/GeneralLedgerServices.xml
> (http://svn.apache.org/viewvc/ofbiz/ofbiz-framework/trunk/applications/accounting/minilang/ledger/GeneralLedgerServices.xml?view=markup#l1306)
>
> the accountingQuantity is always set to the same value as the quantity
> received (i.e. the same as the quantityOnHand) for a newly received inventory
> item regardless of the COGS method.
> When items are shipped, the service createAcctgTransForSalesShipmentIssuance
> will only reduce the accounting quantity if the COGS method is FIFO or LIFO
> (http://svn.apache.org/viewvc/ofbiz/ofbiz-framework/trunk/applications/accounting/minilang/ledger/GeneralLedgerServices.xml?view=markup#l1127).
> With FIFO, when an item is shipped, inventory items for the product with a
> non-zero accounting quantity are found sorted from earliest to latest
> received. The quantity of the item shipped must be decremented from the
> accounting quantities, starting with the earliest. Similarly, with LIFO,
> items are sorted from latest to earliest, and the latest item or items are
> decremented.
> In other words, if you have chosen a COGS method of COGS_INV_COST or
> COGS_AVG_COST, the accounting quantity is meaningless and in OFBiz as of
> now, should be ignored.
> And yet, the Inventory Valuation report uses accounting quantity, regardless
> of the the COGS method
> (http://svn.apache.org/viewvc/ofbiz/trunk/applications/accounting/widget/ReportFinancialSummaryForms.xml?view=markup#l535).
> In other words, the Inventory Valuation report is broken for COGS methods of
> COGS_INV_COST or COGS_AVG_COST.
> *What should happen*
> The Inventory Valuation report, and anybody else who cares, should always be
> able to trust the accounting quantity. For COGS_INV_COST and COGS_AVG_COST,
> maintaining the accounting quantity is simple -
> createAcctgTransForSalesShipmentIssuanceit should just adjust it to match the
> remaining quantity on hand.
> No matter what the COGS method, the total accounting quantity for a product
> across all inventory items should always be equal to the total QOH.
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