Adjustment Propagation

If you're using the Actual cost method, you have an option to propagate adjustments, such as price changes, through the supply chain.

For example, an acquisition cost adjustment transaction created for an invoice price variance can trigger the reopening of a closed work order if the corresponding receipt was used in a work order. After the cost of the work order is recalculated, if the item is available in stock, then the inventory valuation is adjusted. If the item has been shipped, then the cost of goods sold is adjusted.

Note: The propagation of cost adjustment is applicable only if the item is costed using the Actual cost method. Also, the Propagate Cost Adjustment option must be selected in the cost profile associated with the item.