We have USD base currency, FIFO inventory costing, and have the multi-currency module in place. We are currently on Kinetic 2023.2.
When we place a PO for a part in Euro, then the default exchange rate setup in Exchange Rate Entry dictates USD purchase price for the Purchase Order, the USD inventory cost for material receipt, and the USD line cost of the part on the supplier invoice. Then, when we actually pay the supplier invoice with “today’s” exchange rate, the USD invoice amount is adjusted and a correcting entry is made in our currency exchange rate gain/loss G/L expense account. But, the USD cost of the part in inventory and stock status report does not change from the original. Is that expected?
The Currency Revaluation Process does not seem to cover inventory. Is there some other setup or process that I might need to get the inventory cost to match what we actually paid in USD?
I’m not 100% on the process, but when you receive the goods, whatever the value is on the PO is what the inventory will be costed at. I’m not sure if the exchange rate is updated after the PO was entered, but before it was received if the cost changes.
When the invoice is entered/paid, it probably hits the accounts set up in the Currency GL Control.
Thanks for the confirmation that what I’m seeing is not unusual (the inventory cost is set by the PO, and doesn’t get updated when the invoice is paid with a slightly different exchange rate). It makes it more important than we thought to keep the conversion factors set in Exchange Rate Entry reasonably up-to-date. We had previously thought it didn’t matter much because we thought all transactions and inventory cost were adjusted once the actual exchange rate was entered in Payment Entry.