Asset capitalization using project driven supply chain, Transaction entry and accounting

Hi All,

 

 

Our client is using project driven supply chain. where we are moving the inventory items from common sub-inventory to project sub-inventory. When we do that, then it increases the cost in project (PPM). But we have not consumed/used those items to project yet, hence out inventory value/qty is not reduced. So when we actually consume it we do a miscellaneous issue from Proj Sub-inventory (we have created a new misc issue type) but we dont transfer it to Project else it reduces the cost of the project (by sending a negative line).

 

The overall issue of this process is when we do the Misc issue, then we debit an offset account and credit inventory account. This offset account is not knocked off upon asset capitalization. On asset capitalization it credit the inventory valuation account which is causing double reduction in Inventory accounts.