Periodic Costing ensures that the inventory account is properly balanced even when you:

When you update costs for a period using the WAVG or FIFO method, Periodic Cost Calculation creates adjustment transactions to balance the amount in each inventory account for an item based on the calculated cost of the item. This results in the GL account balance accurately stating the inventory value associated with the account. It also ensures that the accounts are balanced when you summarize the inventory quantity in the locations for that account and multiply the summary by the calculated periodic cost for the item and that the summary is equal to the account balance for the item.

You can define a cost revalue account to ensure that inventory accounts are properly balanced when the unit cost for the item in the site changes. You define the cost revalue account in the Cost Revalue Account field in Periodic Costing Control (30.5.24).

The account is separate from other existing revaluation and adjustment accounts for visibility in reconciling any non-zero balance. The account is for situations in which different inventory accounts per location exist.

When different inventory accounts per location exist, an item can have multiple inventory transactions within the same cost period, but be linked to different inventory accounts. When this occurs, the unit cost for the item in the site changes. The inventory revaluation now reflects all inventory accounts in which the item holds an inventory balance.