Enter an inventory revaluation adjustment

You might need to enter an inventory revaluation adjustment if your item has changed in value since you purchased it. For example, if an item is obsolete and you can only sell it at a heavy discount, items have been damaged by fire or flood, or an item is in short supply and you can charge a premium for it.

Before you begin

Review what you need to know about inventory adjustments.

Enter the adjustment

To enter the adjustment:
  1. In the Accounts menu, select Inventory.
  2. Click on the line to open the item you want to adjust.
  3. Click Options, then New adjustment.

    Image showing inventory adjustment option selected.

  4. In the Adjustment type field, select Revaluation.

    Image showing revaluation option selected.

  5. Complete the following fields:
    • Date - Select a date or leave to keep today's date.

      The date you enter is the date of the adjustment journal in Xero. However, Xero updates the quantity on hand as at today's date. Xero does not backdate or forward date inventory quantity adjustments.

    • Either Average Cost or Total Value - Changing a figure in one of these fields will automatically update the other field.

    • Adjustment Account - Select the account from your chart of accounts where you want to record the inventory adjustment. You can add an adjustment account if necessary.
    • Notes - Enter a reason for the adjustment.

      Image showing fields completed for revaluation adjustment.

  6. Click Review Adjustment.
  7. Check that the adjustment details are correct. Click Post Adjustment.

    Image showing revaluation adjustment details for review.