After GR/IR Clearing or WIP Clearing Moving Average Costs and Inventory Value of some Materials is not as expected.
Inventory Values and Moving Average Costs are too high, too low or zero.
Reproducing the Issue
The issue can be reproduced with the following preconditions:
- Material has Perpetual Cost Method "Moving Average"
- More than one clearing transaction in one run allocate values to the same Inventory Object (Material, Business Residence, Valuation Level)
- Total of reference quantities is higher than stock quantity of the specific Inventory Object.
The system behavior is correct.
The logic of inventory valuation of moving average cost materials is explained as follows:
When a process, like GR/IR clearing, determines values that have to be posted to an inventory account each single line item
is processed separately. This means that calculation is not done as a total, but for each line item.
The following example should explain it:
Material number 4711, Moving Average Cost, Stock Quantity = 50 EA,
Stock Value = 5000 USD
GR/IR Clearing determines 3 items with value differences for material 4711:
1. Value -400 USD, Reference Quantity 30 EA,
2. Value -100 USD, Reference Quantity 50 EA,
3. Value -200 USD, Reference Quantity 60 EA.
User might expect the following logic:
Total Value 700 USD, Reference Quantity 140 EA
Change of Inventory Value is -700 USD * 50 EA / 140 EA = -250 USD
Actually the system determines the following:
1. Value -400 USD, Reference Quantity 30 EA -> Change of Inventory Value -400 USD because Stock Coverage above 100 %
2. Value -100 USD, Reference Quantity 50 EA -> Change of Inventory Value is -100 USD because again Stock Coverage is 100 %
3. Value - 200 USD * 50 EA / 60 EA = 166,67 USD
So total change of Inventory Value is -666,67 USD.
In order to avoid such effects it is recommended to conduct clearing transactions as close as possible to the Goods Receipts where the clearing belongs to.
KBA , SRD-FIN-INV , Inventory , How To