LCM: It is correct Using Negative Landed Cost Charges to Reduce Inventory Value for Allowances?

Summary: Using Negative Landed Cost Charges to Reduce Inventory Value for Supplier Marketing Allowances: Supported Design?

Hi team, customer requires the next scenario:

Client receives supplier-funded marketing allowances called Market Development Funds (MDF). Suppliers provide these funds for activities such as advertising, product placement, in-store displays, and other promotions.

The allowance may be agreed annually and calculated as a percentage of qualifying purchases. Client performs the marketing activity, provides supporting evidence, submits a claim, and receives settlement through a payment, credit memo, or deduction from a supplier invoice.

For qualifying allowances, the customer expects the amount to reduce:

• Inventory cost for merchandise still on hand