Understanding NetSuite Item Average Costing Across Locations and Currencies

When performing an Inventory Worksheet Import, the value field must be converted to the appropriate currency for the specific location being imported.

The header average cost for an item is a weighted average. It is important to note that consolidated exchange rates are primarily used for translating financial reports from subsidiary currencies to the parent's reporting currency, rather than directly influencing the calculation of an item's base average cost or last purchase price on the item record.

Consider the following example to illustrate the calculation of item values.

For item 02-000, the relevant exchange rates are:

Navigate to Lists > Accounting > Consolidated Exchange Rates and filter by Period March 2013. The consolidated exchange rate from AlterG : LTD to AlterG Inc is 1.61730003.

Access Lists > Accounting > Currency Exchange Rates as of 3/29/2013. The USA to GBP rate is 1.51972502.

On the item record, under the Inventory tab:

The average cost for location UK Headquarters is 1095.5925, calculated as:

1665 / 1.51972502 [Currency Exchange Rate]

The total value is 77017.61, calculated as follows:

3330 + 66600 + (4382.37 * 1.61730003) [Consolidated Exchange Rate]

This example demonstrates that while average cost may vary by location (unless Group Average Costing is enabled), the calculation of total value, average cost, and last purchase price for an item is influenced by the specific currency exchange rates applied. Consolidated exchange rates are primarily utilized for financial reporting translation and do not directly cause these item header values to differ on the item record itself.