Inventory Cost Write-down

Acclamare makes it purposely difficult to perform actions to alter the cost of inventory for the purpose of "writing down" the value of inventory. There are GAAP rules as to how often a company can take write-downs, how much can be taken, and how the product needs to be identified or segregated from "regular stock". You should discuss with your accountant your intent to write-down inventory and following their suggestions to remain in compliance.


I can provide you with instructions for correcting quantity of an item on hand or the cost of an item on hand. Option A removes the inventory such that it is no longer available for sale and it expenses the full cost of the inventory removed. Option B removes the inventory at it's existing cost, and adds the inventory back to being available to sell at a new cost. The difference in existing cost and new cost will be the net impact on the expense account.

Option A) In the event it is determined that a quantity of product is no longer on hand or is no longer acceptable to be sold, the quantity on hand can be adjusted out of inventory.

Using the Quantity Adjustment screen, set Adjust Type = Decrease Available, set Quantity = the value being removed, LEAVE Cost as it defaults, set a Reason code, then Post. The Reason code establishes the GL account to which the expense (cost) is posted to.

Option B) In the event you have found the cost of an inventory item is incorrect or you desire to write-down the cost, you can alter that cost using a two-step process.

Step1. Repeat the steps listed in Option A above. You must adjust out the COMPLETE quantity leaving 0 on hand. Again, do not edit the Cost value..leave it as defaulted. Make note of the Reason code chosen, as you will be using that same code in Step2.

Step2. Using Quantity Adjustments, you will now perform an "Increase Available" adjustment for the item. In this step you WILL want to edit the Cost value to the desired value (possibly $0.00 or some other desired value). Also use the same Reason code as was used in Step1.

These two actions will adjust out the existing layers of inventory and expense that, after which a new layer is created for the sum of the quantity and at the cost you provided.

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