What is Book Value and how can it be different from my on-hand inventory?
In theory, if your inventory never goes negative and you never make adjustments to unit cost, Book Value will be the total value based on on-hand times unit average cost and it can be reset as such in UT-K-G. However, as parts are received in and issued or shipped out, the Book Value will always increase or decrease in an amount equal to the total transaction amount. The unit average cost, however, will be reset to the current transaction unit cost if a transaction causes a negative on-hand to recover to positive which may result in Book Value not equal to On-Hand times unit cost. Consider the following: 10 units on hand @ $1.00 each. Book Value=$10 Ship 20 units, total transaction processes at -$20 -10 units on hand @ $1.00 each, Book Value = -$10 Receive 20 units @ $2.00 each, total transaction value is +$40 +10 Units on hand @ $2.00 each but now Book Value= $30 (-10 + 40) If you change unit cost in IN-K without changing quantity, there is no inventory transaction generated (as no pa
