How to - Inventory Revaluations

To revalue inventory in SAP we use the inventory revaluation document instead of posting a journal entry directly to the inventory account on the GL. This ensures that the inventory audit report that outlines the quantity and value of each of your items matches what is on the inventory GL balance. If you post a Journal entry directly to the inventory GL account, SAP does not know which items to apply those changes to and creates discrepancies. Always use an inventory revaluation document, your auditors will thank you. 

To revalue inventory ...

1. Go to the inventory module> inventory transactions and inventory revaluation. 
2. If you need to adjust the value for all the inventory of a particular item select the revaluation type "Price Change".
3. Next enter the item that requires the cost change. The next steps depend on what inventory valuation method you are using for the item.
4. Specify the warehouse if you track the inventory cost per warehouse. 
5. Enter the new cost that you want the inventory to be for each item. 
6. Before you add the revaluation document you can preview the journal entry to see the impact on the GL. 
7. If you are satisfied with the financial impact add the revaluation document. 
   1. We can see the impact of the inventory revaluation on the inventory audit report of the item. You will notice that the quantity did not change but the cumulative value has reflected the change in the inventory.  You will also see the cost reflected on the inventory tab for the warehouse it was adjusted for.

If you need to revalue the inventory by adding or removing a specific dollar value for a certain number of units you can select the revaluation type "Inventory Debit/Credit". Next, specify the item and the warehouse again but instead of defining the new cost you indicate the number of units you want to impact and the total value you want to add or remove from the inventory.  This gets reflected in the inventory audit report and the average cost of the item in the warehouse is adjusted accordingly.