How You Track Profits in Inventory

You can now track intercompany profit in the physical inventory's item costs in a separate cost element type.

For example, lets assume Vision Operations, an inventory organization, owns inventory valued at 10.00 USD which was transferred from another inventory organization, Vision Manufacturing. Vision Manufacturing added a markup of 1.50 USD to its item cost of 8.50 USD to arrive at a sales price of 10.00 USD to Vision Operations. In Vision Operation's item cost, the intercompany profit in inventory of 1.50 USD is tracked in a separate cost element type with the cost element as Vision Manufacturing, the source organization which incurred this gain.

Tracking Profit in inventory separately enables you to eliminate the intercompany profits in the inventory valuation during financial consolidation process. You can enable or disable this feature using the Track Profit in Inventory option while creating the Documentation and Accounting rule.