How do I write down the value of a unit?
Summary
This article explains how to write down the value of a unit when, for example, it has been in stock for too long.
More Information
 | Units: Unit is a general term used to cover all types of vehicle and machinery, including items such as motorcycles, scooters, cars, trucks, vans, caravans, motorhomes, boats, tractors, ATVs, agricultural equipment, wholegoods and construction equipment. |
It is good practice to review the value of your unit stock on a regular basis, decide whether they are at the lower of cost and net realisable value and write the values down if necessary.
First, run a unit valuation report and review the units in stock. If there are units that are over-valued, then use the following procedure.
- Go to " Unit Sales Add or Edit Units".
- Find and edit the first unit that you want to write down.
- Go to the [Purchase] tab.
- Move to the "True Value" field.
- Enter the revised value of the unit.
- Click [Done] and accept the change.
Your unit valuation report will now reflect the lower value.
 | Please bear in mind you must enable the system settings to allow it to post these values in your Nominal, if required - see What effect does the true value figure have?. Seek advice before making this change if you are unsure on how to proceed. |
Nominal Postings
If you have the system setting for Unit Write Downs switched on, the system will create an expense record against the unit for the difference between the purchase price and true value.
If your system is configured to follow the automatic cost of sales system it will also post a journal to Debit the Stock of Expenses nominal centre and Credit the Unit Expenses nominal centre. When the unit is sold the system will post this expense to Credit the Stock of Expenses nominal centre and Debit the Unit Cost of Sales centre.
If your system is not using automatic cost of sales you will need to take the reduced value into account when posting your month end journals. The standard reports will allow you to choose whether to value stock at Cost or True Value.
See also
- How do I get a unit valuation?
- What effect does the true value figure have?
- How are unit expenses classified?
- How do I post expenses against a unit?
- Unit expenses explained
