update Stock to Nominal - Weighted Average Value Corrections Report
The Period End window, opened from the Period End menu option, will contain an additional menu if you have selected the System option Update Stock to Nominal and a Profit Cost of Weighted.
The Stock Variance Reports menu contains the report option Weighted Average Value Corrections Report.
This report will assist in resolving discrepancies in the value of stock posted to the Cost of Goods Sold accounts when using Weighted Average Profit Cost.
The report includes the option to post a journal to correct any discrepancies.
When postings are made during the month using the Weighted Average Profit Cost methodology, the updates to the Nominal Ledger are based on a moving average during the month.
Actual costs are posted to the Stock inventory account and a moving average Weighted Cost is posted to Cost of Goods Sold within the Profit and Loss.
This report is designed to highlight where there might be variances between the posted values and the correct recalculated values at the end of the month.
The software recalculates the Weighted Average Value (and hence the Weighted Average Costs) and reports on the amount of variance between these values and the values posted during the month.
The User can then elect to make a manual posting or let the system make a correcting journal. The correcting journal will post to the relevant Stock inventory account and the default Cost Of Sales Account within Profit and Loss.
Discrepancies may occur for various reasons:
If invoices for Landed Costs are received after the goods have been sold. These values should be included in the Cost of Goods Sold.
If Stock is moved in at Actual Cost but Profit Cost is calculated at Weighted Average.
If the Stock Control account is debited with the actual cost of stock (not including Landed Cost) but then Landed Costs are added to the value of the stock. The value transferred to Cost of Goods Sold will include the Landed Cost element (if using Weighted Average) thus leaving a credit on the Stock Control Account.
Selecting Weighted Average Value Corrections Report from the Stock Variance Reports menu will open an Output window for the report.
This is a Landscape report and you should check the print-page setup from the Page setup option before printing.
When the report is printed to a printer or to file you will be prompted to accept the report.
If you answer Yes, accept the report, the output window will be extended to enable you to post a journal to correct any discrepancies.
To post the Journal, tick the option Post Corrections to Stock and Nominal.
Enter a Voucher Reference and the Contra Account for the journal. The Contra account will default to Cost of Goods Sold account as recorded in the Home Currency Default Stock Nominal Accounts.
When the journal is accepted, a Weighted Correction Adjustment transaction will be posted to the stock record to correct the transaction totals and bring them in line with the Weighted Average Value as at that period.
This Weighted Correction Adjustment line will be flagged as being excluded from the Weighted Average formula so that it does not affect the next Weighted Average value calculation.