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Reconciling Consignment Inventory to the G/L
The Consignment Master record (ICCF) has its own Weighted Average Unit Cost.The first time you move stock into Consignment, it increases the Consignment Quantity and stores the product's Average Cost in the Weighted Ave Unit Cost field in the Consignment record. Each subsequent shipment to Consignment (TAT=SHC) increases the Consignment Quantity and, using today's Average Cost for product, calculates a new Weighted Average Unit Cost in the Consignment record.
| Date | Transaction | Transaction Value | Balance in Consignment GL Account | Balance on IC88 - Consignment Report |
| Dec31 | Ship 10 to Consignment (SHC) @ current Ave Cost in warehouse | 10 @ 10.00 = 100.00 | DR 100.00 = 100.00 | 10 @ 10.00 = 100.00 |
| Jan29 | Ship 10 to Consignment (SHC) @ current Ave Cost in warehouse | 10 @ 15.00 = 150.00 | DR 150.00 = 250.00 | 20 @ 12.50 = 250.00 |
| Jan31 | Bill 6 to Consignee (BIC) using Consignment Ave Cost | -6 @ 12.50 = -75.00 |
CR -75.00 = 175.00 | 14 @ 12.50 = 175.00 |
When you bill for a consigned item that was purchased by the Consignee (TAT=BIC) or bill a third party that purchased the consigned item from the Consignee (TAT=SOC), then the cost that gets picked up is the Average Cost from the Consignment file. This cost is used for COS/GP in the Sales files and for the GL entry from IN44 (i.e. DR COS and CR Consignment Inventory).
IC88 with Restriciton 1-Valuation set to Consignment Unit Cost is using the Weighted Average Cost from the Consignment file. This report should reconcile the Consignment Inventory GL account if you DO NOT backdate IC88. If you do, while IC88 is capable of calculating what the Consignment Quantity was on that "As Of" date, it always picks up the current Weighted Average Cost from the Consignment record (which may have changed in the interim). This will create a discrepancy between IC88 and the GL.
Using the example above, printing IC88:
- On Jan31, as of Jan31, balanced: GL = 175.00 and IC88 = 175.00 (14 @ 12.50)
- On Jan31, as of Dec31, not balanced: GL = 100.00 but IC88 = 125.00 (10 $ 12.50)
This same backdating consideration is applicable to IC81-Inventory Evaluation with Restriction 5-Include Consignments.
