Inventory · Daily operations · 9 min read

Add landed costs and revalue stock

Spread freight and duty over received goods, replace an estimate with the actual charge, and change a unit cost with a second person's approval.

Before you begin

• The Landed costs switch must be on.
• The receipt must be Done.
• Revaluations need inventory.revalue, and the approver must be a different person with that right.

Add a landed cost to a receipt

1. Open Inventory > Warehouse > Landed costs and click New landed cost.
2. Choose the Receipt (completed receipts only) and the Date.
3. Choose the Charge: Freight, Duty, Insurance, Handling, Brokerage or Other.
4. Enter the Amount · AED. It must be above zero.
5. Choose Spread it: By value, By quantity, By weight or By volume.
6. Choose Estimate or actual: Actual charge or Estimate (accrued now).
7. Choose the Expense account: the account credited (default 5100).
8. Click Save draft and check the preview, then click Post.

What happens next

Stock value rises by the amount, a journal debits Inventory and credits the expense account, and unit costs include the charge. Goods already sold take their share in cost of goods sold (or work in progress/variance for manufacturing).

Worked examples

A receipt has two products worth AED 1,000 and AED 3,000. A freight charge of AED 400 spread by value adds AED 100 and AED 300.

If 6 of 10 units are already delivered and you post AED 100, then 40 is capitalised to stock and 60 goes to cost of goods sold.

Replace an estimate with the actual

1. Post an estimate of 400 first.
2. When the invoice arrives at 450, create a new landed cost with Actual charge 450.
3. In Replaces the estimate, choose the posted estimate.
4. Click Post.

Only the AED 50 difference reaches stock and the estimate's accrual is cleared. An estimate can be replaced once; a second attempt is refused: 'That estimate has already been replaced: a charge is capitalised once.' A draft estimate cannot be replaced.

Revalue stock

A revaluation changes a product's unit cost and posts the difference.

1. Open Inventory > Operations > Revaluations and click New revaluation.
2. Choose the Product (and lot). It must be a goods product with stock on hand.
3. Enter the New unit cost and the Effective date.
4. Enter a Reason.
5. Click Submit for approval.
6. A different user with inventory.revalue opens it and clicks Approve (or Reject).

On approval the difference is posted: value rises or falls, with the journal between Inventory and the stock adjustment account.

Example: 10 units on hand at AED 12.50. New cost AED 11.00. The change is 10 x (11.00 - 12.50) = AED -15.00.

Good to know

• Approving your own revaluation is refused: 'A revaluation must be approved by somebody other than the person who asked for it.'
• If stock moved after the request, the approval is refused and you must raise it again.
• A cost cannot be negative or equal to the current cost.
• Dates are checked against stock periods when posting.
• Posting a landed cost currently needs only inventory.operate, so limit who has it.