We have a lot of slow moving stock that is aged over a year since last used. I was told that we would like to write off all the aged stock. Is there a way to reduce the cost to 0 and reflect the change on the GL.
Would using cost adjustment module and changing the values to zero be enough?
If you use the stock later would you want the original cost to be reflected? For example, if you sell those parts would you want your sales gross margin to include the cost of the parts or be 100% (0 cost)? Making a cost adjustment to zero would lose the original cost of that stock if it’s used in the future.
We run the Slow Moving Stock report and use GL journal entries to create a slow-moving stock reserve on the balance sheet, but we leave part costs as-is so that our costs and margins calculate using the actual cost of the parts in the future.
If we ever do sell them, they can be 100%. I’m told they’re fine with that.
I believe that the normal concept is to run the slow moving stock report to find the total value of the inventory… then create a manual/reversing journal entry that writes off the total… if you do this every month, then your value will continue to float as more items become slow moving, and/or as items get sold that WERE slow moving. By doing this, the value in inventory is not actually changed.