Ran into a question on the HITB impact and GL valuation when resetting a standard cost.
If I have a FIFO Periodic item that is currently valued @ $5.00, on the HITB report, all in/out activity for that item is at the standard cost of $5.00.
So assuming a QoH of 100, my total value for that item is $500.00
If I reset the standard cost to $6.00 and rerun the HITB, it's still showing those existing lines at $5.00. However, were I to sell all the items in question, they would be valued from a COGS standpoint at $6.00 and would drive my inventory account down by an extra $100.
So, the question is, what is the recommended approach when resetting a standard cost? I would think I'd need to revalue my GL inventory account (in this case it would be a debit of $100 to the inventory account and a credit to an inventory reval account). But if I do that, my inventory will not balance with my HITB.