AFAIK it is FIFO indeed, documented that way as well iirc. Assemblies are a whole other ballgame again i seem to recall.
Unless you work with serial numbers for all parts and scan the parts per sale, I do not see any simple way around the FIFO method. Unless you need other figures, it is a solid and approved method of stock valuation.So no real problem apart from maybe a like or dislike of this specific accounting method. At one point in time, you bought a hard disk for price x1. Now you sell a hard drive, COGS x1 is taken into account. Suppose you bought a total of three hard disks, next time, COGS x2 will be used. Leaving the x3 still in stock at the right x3 COGS. You did not CHECK the COGS before? Just changed the values to what seems right? Manually adjusting the level of inventory value means either taking a profit or a loss on that specific balance day. Say you re-valued X2 to X2 minus 200. Two thing happen: 1) ALTHOUGH NO SALE WAS MADE, you book a profit / loss. 2) since nothing was actually sold, and no new disk of type x1 was bought, cogs x1 has not changed. So cogs of X1 will still be used in any future sale. Now when you really DO sell a server or two, the booked prices are off. Well, seeing this method of valuation it would be very strange if they where right to be honest. *Note *I think the ´last purchase price´ field might be manually updated and maybe that would fix the drive to use the COGS you would like to see. But imho there IS nothing to be fixed, as the accounting method used and the COGS you would like to see is not correct. Just because I am interested in the total picture, the two servers, where they put together as an assembly before the sale, or did you enter all parts used on the invoice? That again might be of impact. If no amount was used for the memory, it may indeed be set up wrong. Eg. as as a non-tracking item, or as a non-stock item. Compare to the items that did register a COGS, although it may not be the one you would like to see, in order to find out the reason it did not pick up a cogs.. HtH, Paul 2010/7/15 Jeff Kaminsky <[email protected]> > Since 2002, I have been adjusting the dollar value of our cost of goods > sold to reduce inventory to what we believe the correct inventory level > should be. Every time, I'm increasing COGS and decreasing Inventory. > Recently since we've become a larger company and face higher levels of > scrutiny I have become more interested in this particular phenomenon. So I > ran a test case, we sold 2 expensive servers to a customer, and I > immediately went into COGS and Inventory to see if the correct figures were > adjusted. > > Quantities seem correct > Dollar amounts are not correct. > > We sold > 2 chassis, Inventory was decremented by 2, but COGS shows only the cost of > one of them > 12 hard drives, Inventory was decremented by 12, but COGS does not show the > actual costs of the hard drives we bought, but took costs based on obviously > a FIFO (first in, first out basis), > 16 pieces of memory, Inventory was correct, but... nothing shows in COGS!! > > There is more, but, the recorded costs for this sale were 9,613.50 and > according to our purchase receipts it actually cost us 12,486.00. So I was > wondering if anyone has seen this before, did we set up some parts wrong, or > use an odd character somewhere that would make COGS react in this way? > > Jeff > > -- > > Jeff Kaminsky > Sr. Accountant > IX Systems > 408-943-4100 ext 122 > > _______________________________________________ > SQL-Ledger mailing list > [email protected] > http://lists.ledger123.com/mailman/listinfo/sql-ledger >
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