We have an instance where an inventory item with a $0 cost was sold then returned. Unfortunately, on the return, the cost defaulted to the most recent sale price and the item was brought back in with a cost. This caused negative COGS and increased inventory value when it shouldn’t have. This item has since been re-sold so I can’t just use the “Issue” and “Receive” processes to remove it from inventory and bring it back at the correct cost.
Is there any way to correct the cost on this item?
Item costing is specific to the item. I tried using the “Adjustments” but it insists on changing the quantity as well as value.
Solved
How to correct the cost only on inventory return
Best answer by Kandy Beatty
1. If the valuation method is FIFO or Specific Cost
You may still be able to correct cost IF the system shows the original Receipt Number (the return’s cost layer) as selectable.
Fix:
Use IN Adjustment → Cost Only
Leave Quantity = 0
Select the exact Receipt Nbr
Enter the corrected cost
Release
If the cost layer is NOT selectable → this method will not work.
2. If the valuation method is Average Cost
This is the most common scenario where users get stuck.
Once the incorrect return has been consumed by a later sale, the incorrect cost has already flowed into:
A negative/incorrect COGS entry
The Average Cost calculation
Ending Inventory Value
Fix:
Use General Ledger corrections (recommended Acumatica practice):
Option A — Journal Entry to correct COGS and Inventory
You calculate the value difference that should not exist and create a reversing entry:
DR COGS
CR Inventory
(or the reverse, depending on the error)
This fixes GL balances without touching quantities or cost layers.
Option B — GL-only Inventory Reconciliation Adjustment
Some orgs use a designated “Inventory Revaluation Offset” account to document these corrections.
3. If Standard Cost
You would update the standard cost and create a variance adjustment — but your scenario does not sound like Standard Cost.
What you cannot do
You cannot change the cost of a layer that has already been relieved (consumed by later sale).
You cannot perform IN Adjustments on past layers that no longer exist.
You cannot “fix” the return cost from the original return document once it has flowed through to COGS.
What is the valuation method for the item and is it lot/serial tracked? Are you able to select the Receipt Nbr with the related Cost Layer when trying to create a Cost only IN Adjustment? If you could please provide screenshots of the warnings, that would be helpful.
+181. If the valuation method is FIFO or Specific Cost
You may still be able to correct cost IF the system shows the original Receipt Number (the return’s cost layer) as selectable.
Fix:
Use IN Adjustment → Cost Only
Leave Quantity = 0
Select the exact Receipt Nbr
Enter the corrected cost
Release
If the cost layer is NOT selectable → this method will not work.
2. If the valuation method is Average Cost
This is the most common scenario where users get stuck.
Once the incorrect return has been consumed by a later sale, the incorrect cost has already flowed into:
A negative/incorrect COGS entry
The Average Cost calculation
Ending Inventory Value
Fix:
Use General Ledger corrections (recommended Acumatica practice):
Option A — Journal Entry to correct COGS and Inventory
You calculate the value difference that should not exist and create a reversing entry:
DR COGS
CR Inventory
(or the reverse, depending on the error)
This fixes GL balances without touching quantities or cost layers.
Option B — GL-only Inventory Reconciliation Adjustment
Some orgs use a designated “Inventory Revaluation Offset” account to document these corrections.
3. If Standard Cost
You would update the standard cost and create a variance adjustment — but your scenario does not sound like Standard Cost.
What you cannot do
You cannot change the cost of a layer that has already been relieved (consumed by later sale).
You cannot perform IN Adjustments on past layers that no longer exist.
You cannot “fix” the return cost from the original return document once it has flowed through to COGS.
+18Along with what
Thanks, Kandy. That is super helpful.
Valuation method is specific cost so I’ll see if those steps work.
+18Thanks, Kandy. That is super helpful.
Valuation method is specific cost so I’ll see if those steps work.
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