Items, Valuation Units, and Cost Profiles

You can define different cost profiles for asset items and expense items. You can define an asset cost profile or an expense cost profile for an asset item. For an expense item you define an expense cost profile.

You can manually associate cost profile to items or create a default cost profile rule to automatically associate them to items when they are encountered for the first time by the costing processor.

The cost processor identifies the appropriate cost profile to be applied on the transaction based on the Inventory Asset Value flag on the item and the Asset subinventory flag on the sub-inventory.

	Asset Subinventory	Expense Subinventory
Asset Item	Asset cost profile	Expense cost profile
Expense Item	Expense cost profile	Expense cost profile

The cost processor maintains the cost, inventory balances, and distributions separately based on the cost profile. For example, the same item could have two different costs for a Cost Organization – Cost Book – Valuation Unit combination. As listed in the table here, the item RCV-101 has two different costs. It costs $3.25 when costed using expense cost profile and $1.10 when costed using asset cost profile.

Item	Valuation Unit	Cost Profile	Total Unit Cost	Quantity	Inventory Value
RCV-101	ORG4-V1	ZCST-Expense	$3.25	10	32.5
RCV-101	ORG4-V1	ZCST-Asset	$1.10	15	16.5

Also, the inventory valuation is maintained separately for asset and expense valuation structure types. You can view this on the Review Inventory Valuation page. The valuation structure type is also available as a parameter in all reports so that you can review the on-hand value separately by asset and expense valuation structure types.