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In standard cost release, How to avoid revaluation of old stock ?

Jun 27, 2017 at 09:23 AM


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Hi All

I have a query related to Inventory revaluation. It is in context of Indian client having continuous manufacturing operation. Has 3 company code across 3 countries.

When Standard cost is released, system revalues total inventory while client wants revaluation should happen only for 1 month old inventory.

Revaluation of total inventory causes financial posting in system for old stock also. e.g. I have 6 months old stock ( e.g. 100 units ) and Standard price has now increased by 1 INR.

System will post following entry

Dr Inventory 100 [B/S ]

Cr Inventory revaluation 100 [P&L ]

Please share your views how inventory revaluation of old stock can be avoided. Do other Indian / Global company have similar requirement ??

Does accounting standard specify that only current month inventory should be revalued ? Can FIFO/LIFO valuation method help in this context ??



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2 Answers

KAPIL MEHTA Jul 03, 2017 at 05:16 AM

Appreciate feedback on this SAP Controlling related query

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MALAY VAKIL Jul 18, 2017 at 10:09 AM

Hi Kapil,

This is a limitation of standard costing. It revaluates all inventory in same plant (old or new) with same material code. Actual costing is the only solution for this issue



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Dear Malay

Thanks for your feedback.

By using actual costing, How can we ensure old inventory is not revalued ?

I understand actual costing will calculate PUP but I believe even this will revalue inventory irrespective of age. Please elaborate on your suggestion.