[Catherine Collins]

?We are on NAV 2015.

We created a group of inventory items that represents “parts” that we use for repairs and maintenance on our machines.
These “parts” were purchased and paid(expensed) a long time ago but we wanted to bring in the quantities so we would have visibility to quantity on hand and then begin utilizing the requisition worksheet for future purchases.

We brought in the beginning balances using the item journal and with zero cost.

Question:    Does anyone know if this causes a problem to bring in beginning balances this way, with zero cost on the “Reservation Table”?

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Catherine Collins
Business System Analyst
San Francisco Bay Coffee Company
Lincoln CA
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[Ian Ray]

Whether this is a problem or not will depend on how you want to treat the items and what your costing method is.

In general, when I post item journals to place items in inventory that were formerly expensed, I will calculate the unit cost based on the previous invoice and make sure there are general journals posted to de-expense those invoices. This makes inventory add up nicely.

However, when there is a desire not to have the items hold inventory value either temporarily or ever, I will just use $0.00.

You may run into problems if your costing method is average for these items as the cost will be diluted once you buy them. Standard costing may show an unwanted variance. LIFO costing may cause a situation where eventually you have a $0 cost. FIFO should be fine as you will have $0 at first, but then a value once you run through the initial inventory.

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Ian Ray
Cypress Grove
Arcata CA
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[Catherine Collins]

?We are using Actual Costing.
We were unable to easily get access to the original unit cost so it was brought in at $0.00 and I knew that this would add some complexity to the costing once we started receiving new inventory with Cost but figured with FIFO it would use the layer with 0.00 cost first.

It sounds like, though, that it should not have been a problem with bringing in the beginning balances with 0.00 cost and should not have had any impact on items being hung up in the reservation table.   

Thanks for your help.

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Catherine Collins
Business System Analyst
San Francisco Bay Coffee Company
Lincoln CA
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