Obsolete inventory items

Yahoo Archive
1
That should work. If you don't count them during the physical, Vantage should write them off to your inventory adjustment account when you post...but....

It doesn't matter if you use standard or not as long as you just set the cost to zero. If you're just setting the cost to zero you don't have to adjust the quantity out and then back in. Just do a 'Cost Adjustment' and adjust to zero. The only time you have to adjust the quantity down is if you're changing the cost set (Average-Standard) If you leave it at 'average', and in the future make it again, Vantage will revalue it at average. This could be an approach since if you make it again...it may no longer be obsolete and you want it to have value. If you don't your stock status for the obsolete warehouse will have value and alert you to reset it. But then you will know you made it again!

I know this is more than what you asked...but that's my thoughts...for what it's worth.



----- Original Message -----
From: Greg Clauser
Sent: Thursday, January 11, 2001 7:08 AM
To: vantage@egroups.com
Subject: [Vantage] Obsolete inventory items


We are just wrapping up our year end inventory and I have quite a few items
that are for all practical purposes obsolete. These are almost exclusively
overruns of manufactured parts. I'd like to "write them off" in value, not
physically dispose of them, and still keep visibiliy of what I have.
Sometimes our customers need a few parts for service. Otherwise, we might
use some items when making prototypes and samples or even convert some into
parts for new items.

(We're on version 4.00.904)

One way I thought of was to make all of these parts "standard cost" with a
standard cost of $0.00. This is really an GAAP type accounting question in
how things will shake out in Vantage if I do things a certain way. If I
simply do not count them in the year end inventory then post and have the
balances adjusted in the process is that a proper method? I would then
convert them to $0.00 standard cost parts and make inventory adjustments to
put the quantities back.

Is anyone out there doing something similar? Should I use some other method
that would cleanly segregate and aggregate the total cost of the write-off
for the accountants?

Greg Clauser
Lakin General Corporation
gclauser@... <mailto:gclauser@...>


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2
We are just wrapping up our year end inventory and I have quite a few items
that are for all practical purposes obsolete. These are almost exclusively
overruns of manufactured parts. I'd like to "write them off" in value, not
physically dispose of them, and still keep visibiliy of what I have.
Sometimes our customers need a few parts for service. Otherwise, we might
use some items when making prototypes and samples or even convert some into
parts for new items.

(We're on version 4.00.904)

One way I thought of was to make all of these parts "standard cost" with a
standard cost of $0.00. This is really an GAAP type accounting question in
how things will shake out in Vantage if I do things a certain way. If I
simply do not count them in the year end inventory then post and have the
balances adjusted in the process is that a proper method? I would then
convert them to $0.00 standard cost parts and make inventory adjustments to
put the quantities back.

Is anyone out there doing something similar? Should I use some other method
that would cleanly segregate and aggregate the total cost of the write-off
for the accountants?

Greg Clauser
Lakin General Corporation
gclauser@... <mailto:gclauser@...>
3
Greg,
We have a "inactive warehouse" that I transfer the parts into and then I
adjust out all the cost. Then I run 2 reports under material transaction
detail. 1) showing the cost that was adjusted 2) parts that were transferred
into the warehouse inactive. The cost adjustment report has been very
helpful to our accounting department. We feel we wont be selling these
parts again or that they haven't had any activity in over a year.
Hope this helps!

Kimberly Maxwell
Westwood Precision, Inc.
PH: 425-347-1303 Ext. 41
Fax: 425-353-8945
email: kimberly.maxwell@...
www.westwoodprecision.com


-----Original Message-----
From: Greg Clauser [mailto:gclauser@...]
Sent: Thursday, January 11, 2001 6:04 AM
To: vantage@egroups.com
Subject: [Vantage] Obsolete inventory items


We are just wrapping up our year end inventory and I have quite a few items
that are for all practical purposes obsolete. These are almost exclusively
overruns of manufactured parts. I'd like to "write them off" in value, not
physically dispose of them, and still keep visibiliy of what I have.
Sometimes our customers need a few parts for service. Otherwise, we might
use some items when making prototypes and samples or even convert some into
parts for new items.

(We're on version 4.00.904)

One way I thought of was to make all of these parts "standard cost" with a
standard cost of $0.00. This is really an GAAP type accounting question in
how things will shake out in Vantage if I do things a certain way. If I
simply do not count them in the year end inventory then post and have the
balances adjusted in the process is that a proper method? I would then
convert them to $0.00 standard cost parts and make inventory adjustments to
put the quantities back.

Is anyone out there doing something similar? Should I use some other method
that would cleanly segregate and aggregate the total cost of the write-off
for the accountants?

Greg Clauser
Lakin General Corporation
gclauser@... <mailto:gclauser@...>


We no longer allow attachments to files. To access/share Report Files,
please go to the following link: http://www.egroups.com/files/vantage/
(Note: If this link does not work for you the first time you try it, go to
www.egroups.com, login and be sure to save your password, choose My Groups,
choose Vantage, then choose Files. If you save the password, the link above
will work the next time you try it.)
4
How about putting them in a different warehouse?
- In the part master, set this new warehouse as the primary warehouse for the part.
- You would need to segregate or otherwise identify them as obsolete on the warehouse floor.
- You could choose to not include this warehouse when conducting your full physical or cycle counts.
- Maybe set a user-defined or VB form field for date the part was written off.
- For reconciliation purposes, accounting would need to know that stock status at x date should be adjusted for the value of parts in this warehouse.
- Periodically, an adjustment might need to be made to cost of sales for the change in value of the stock in this warehouse (I'm assuming it would be immaterial, and could be done annually.)
- This way, costs would be visible for when you do have occasion to use these parts, so you're not underestimating your selling prices (what if you had to go out and buy/make them now?).

Just a suggestion.

Gail M. Grillo
Manager, Corporate Administration
Allegheny Bradford Corporation

>>> Greg Clauser <gclauser@...> 01/11/01 09:04AM >>>
We are just wrapping up our year end inventory and I have quite a few items
that are for all practical purposes obsolete. These are almost exclusively
overruns of manufactured parts. I'd like to "write them off" in value, not
physically dispose of them, and still keep visibiliy of what I have.
Sometimes our customers need a few parts for service. Otherwise, we might
use some items when making prototypes and samples or even convert some into
parts for new items.

(We're on version 4.00.904)

One way I thought of was to make all of these parts "standard cost" with a
standard cost of $0.00. This is really an GAAP type accounting question in
how things will shake out in Vantage if I do things a certain way. If I
simply do not count them in the year end inventory then post and have the
balances adjusted in the process is that a proper method? I would then
convert them to $0.00 standard cost parts and make inventory adjustments to
put the quantities back.

Is anyone out there doing something similar? Should I use some other method
that would cleanly segregate and aggregate the total cost of the write-off
for the accountants?

Greg Clauser
Lakin General Corporation
gclauser@... <mailto:gclauser@...>


We no longer allow attachments to files. To access/share Report Files, please go to the following link: http://www.egroups.com/files/vantage/
(Note: If this link does not work for you the first time you try it, go to www.egroups.com, login and be sure to save your password, choose My Groups, choose Vantage, then choose Files. If you save the password, the link above will work the next time you try it.)
5
This is exactly how we did it and our CPA firm is very happy with the
results. When an occasional need arises for one of these parts we can then
move it or sell it and keep track of what happened to the part-and the
$$value. We also know what we have over in the "Obsolete" warehouse (a big
shelf in a secure area) in case one of our development engineers wants
something to experiment with.

You'll have to transfer the parts from the current warehouse to the obsolete
warehouse, but if you time that just right (read: don't let anyone else do
any transfers that day), then you can print a material transaction detail
report, include only transfers and you have a valued report of what is now
"obsolete." Stock status will work once you get them into the warehouse.
And the transaction will show the date the items were moved to obsolete.

Lydia
Canyon Engineering Products, Inc.


-----Original Message-----
From: Gail Grillo [mailto:ggrillo@...]
Sent: Thursday, January 11, 2001 6:54 AM
To: vantage@egroups.com
Subject: Re: [Vantage] Obsolete inventory items

How about putting them in a different warehouse?
- In the part master, set this new warehouse as the primary warehouse for
the part.
- You would need to segregate or otherwise identify them as obsolete on the
warehouse floor.
- You could choose to not include this warehouse when conducting your full
physical or cycle counts.
- Maybe set a user-defined or VB form field for date the part was written
off.
- For reconciliation purposes, accounting would need to know that stock
status at x date should be adjusted for the value of parts in this
warehouse.
- Periodically, an adjustment might need to be made to cost of sales for the
change in value of the stock in this warehouse (I'm assuming it would be
immaterial, and could be done annually.)
- This way, costs would be visible for when you do have occasion to use
these parts, so you're not underestimating your selling prices (what if you
had to go out and buy/make them now?).

Just a suggestion.

Gail M. Grillo
Manager, Corporate Administration
Allegheny Bradford Corporation