There are occasions when it may be necessary to adjust the cost of an inventory item already recorded into inventory. For example, a cost may have been initially entered, or calculated, incorrectly. At one time, users with Supervisory rights could use the 'Fix' button in Inventory Maintenance to adjust an item's costs. However, it was determined that using the 'Fix' button to make these changes caused out-of-balances in Inventory, and was not updating General Ledger, when used incorrectly. Therefore the 'Fix' button was removed for version 4.05.

A means of properly adjusting the costs associated with an inventory item is outlined in the sections below for each Valuation method:

Standard Cost

Use an adjustment to bring the total quantity (for all warehouses) to 0 at the current (incorrect) standard cost. This adjustment will bring the total quantity and total value in inventory to 0. At that time, you can manually change the standard cost within the Inventory Masterfile and adjust the total quantity back in at the new standard cost. This transaction will update General Ledger with the new inventory value.

Average Cost

To change average cost, the total quantity in all warehouses must be adjusted out at the current (incorrect) average cost. This adjustment will reduce the inventory quantity and value to 0. Once the inventory has a $0 value, the same quantity can be adjusted back in at the correct average cost. This transaction will update General Ledger with the new inventory value.

LIFO, FIFO, Lot, and Serial

The negative and positive adjustments must be made to the same cost tier (i.e., the receipt date and reference for LIFO/FIFO or lot/serial number for lot/serial items) by clicking the distribute ('Distrib') button on the Transaction Entry Lines tab and distributing the quantities to the correct cost tier. In other words, for a FIFO item, if the cost was incorrect on a particular FIFO tier, the negative adjustment would be entered for the quantity in that tier at the current (incorrect) cost and then distributed back to that tier with the correct cost.

Note: For Serial/Lot items, you must first update the negative adjustment before entering the positive adjustment. For the other valuation methods, the negative adjustment and positive adjustment can be within the same update.

For more information, please see the Best knowledgebase article “How to Adjust Costs On Inventory Items in MAS 90 and MAS 200.”