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Does Retroactive Price Adjustment Update Actual Inventory Cost? — Cloud Customer Connect
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Does Retroactive Price Adjustment Update Actual Inventory Cost?

Accepted answer


We are using average costing for our inventory items. If we create a receipt for an inventory item PO and later revise the PO unit cost, would the new cost be captured by costing?

For example,

Original PO price = $10, Qty = 1

Perform GRN

Dr inventory $10

Cr Receiving Inspection $10

Dr Receiving Inspection $10

Cr Accrual $10

Perform Retroactive Price Adjustment to $12

Dr Price Adjustment $2

Cr Accrual

Assume 0 beginning balance and this is the only transaction in the current period, will the inventory cost after Retroactive Price Adjustment be 10 or 12?

I understand that the Retroactive Price Adjustment will NOT update the inventory costing in EBS (according to the note below. I would like to confirm the behavior in Cloud. Thanks.

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