Inventory Write Off/Receipt Reversal

Problem: We've entered Inventory Write-Off documents but do not want them to reflect the expense account and want to move them to the balance sheet. 

Solution: Generally, the Inventory is written off to COGS or other PL Expense Accounts, but in the case when it should not reflect Profit and Loss the reversal of Inventory Write-off can be done using Other Expense document. 

On the example of the below Inventory Write Off, we'll proceed this transaction. 

For the above Inventory Write Off can be temporary transferred from Other Operating Expense to Suspense Account.

1) Create a new account under BS Inventories as Suspense Account:

2) Create a new Other Expense Document: Type - Reversal, Date - end of the year

Expense Account Cr - Other Operating Expense, GL Account Dr - BS Suspense Account:

In Account Dr Dimension create dummy item:

Put the item and Warehouse in Dr Dimension, put the Amount and post the document:

3) Execute Month end closing (for the month when Other Expense is entered) - this option is mandatory only if you have run Month end closing before the Other Expense Entry:

4) The balance will appear under Other Inventories:

5) The same procedure is relevant for Inventory Receipts, but instead of Other Expense, Other Income document is used

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