COGS calculation in end year profit and loss statement

Question

Every year when I submit my annual accounts to New Zealand inland revenue I have to manually calculate Cost of Goods Sold ie:

Opening stock + purchases – closing stock = COGS

Why doesn’t MYOB show this calculation in it’s profit and loss statements?

gavin12345 · Answer

Hi @bobx

No this does not help you. You should discuss this with your accountant.

If your reporting obligations require the accounts presented in this way, then you probably should not be using the 'I Inventory' option in MYOB. MYOB would then capture your Purchases instead of COGS. At year end you would then do a stocktake and manually calculate the value of closing stock and adjust your accounts accordingly.

Or you leave MYOB as is and adjust your accounts as required for your reporting obligations. If inventory is setup and managed correctly (and the MYOB bugs are resolved) this should be a reasonably straight forward thing for your accountant. A balanced Inventory Value Reconciliation Report as at year end should give you an accurate amount of the closing stock figure. The on hand count should be verified by a manual stocktake. Work backwards to get the Purchases.

Inventory is one of the more complex areas of business accounting and an area where your accountant should be involved. The fact there at still quite a number of bugs in the Inventory module in AR2022 means extra attention needs to be paid to ensure all of MYOB's COGS calculations are correct. The large number of forum posts where users have identified COGS and on hand calculation errors in AR2022 emphasise the need for all to look closely at their figures.

Incorrect COGS calculations by MYOB means the IVR Report will also likely be incorrect.

Regards

Gavin

bobx · Answer

Yes but that doesn't help me when submitting my IR10 information to Inland Revenue which requires a COGS calculation - Opening Stock + Purchases - Closing stock = cost of goods sold

It should be easy for MYOB to show this somewhere without me having to work it out manually each year

gavin12345 · Answer

Hi @bobx

Do an internet search on the difference between using a perpetual inventory system v a periodic inventory system. MYOB (if set up correctly) uses a perpetual inventory system, so COGS are calculated as each Sale is processed.

Regards

Gavin