ANS-1725 · INVENTORY & ITEM MANAGEMENT
How Does NetSuite’s Inventory Revaluation Effective Date Work?
Understanding how NetSuite processes inventory revaluations and their impact on standard costing and transaction dates.
Short answer
NetSuite's inventory revaluation effective date determines when new standard costs apply. While revaluations can be backdated to open periods, it is crucial to establish the revaluation *before* any other inventory transactions on that specific effective date to ensure correct costing and prevent system errors.
Scenario
Users often need to understand how NetSuite's inventory revaluation effective date impacts standard costing and prior transactions. Confusion arises regarding whether a revaluation can retroactively apply to transactions on the same effective date, leading to potential errors if not handled correctly.
Solution
The inventory revaluation effective date determines when a new standard cost becomes active.Inventory revaluations can be backdated, provided the transaction date falls within an open accounting period.The standard cost record is utilized for all costing calculations.If an item receipt is created before the effective date of a standard cost, the system will not recognize the standard cost and will generate an error.Through testing, it has been observed that if an item receipt is processed (e.g., for $150 on 10/6/2012) and an inventory revaluation is subsequently created for a new cost (e.g., $175) with the *same* effective date (10/6/2012), an inventory variance of $25 will be generated for the previous item receipt.Therefore, to ensure accurate costing and avoid potential errors, the inventory revaluation must be established *before* any other inventory transactions on its effective date.
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