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Hi all, is there any way we can confirm the formula for COGS value in our NetSuite system - Is it purely driven by the setting in Accounting Preferences -&gt; Item Costing?

Well, no. It's dependent on the items in your account. That merely sets the defaults. So look at your item setup

<@U3N7BKJ79>, <@UER9Q3SGM> is right. to be specific, it is driven by whatever is set under the Costing Method field of each inventory item record. The one you see in the accounting preferences is used to set a default costing method value when creating new inventory item records. So in your case when you create a new item, the costing method set for each item defaults to Average Costing. These are the following costing methods available:

FIFO, LIFO, Average, Standard, and Group Average

The Average Costing calculation in NetSuite uses the Periodic Average Costing calculation on a daily basis.

<@U2AF1TSTX> <@UER9Q3SGM> Thank you both. I got it now.

But one other question - in IF records, we noticed the value that is hitting the COGS accounts comes out to be Qty * Last Purchase Price - but in items it says "Average Costing" so then how does the IF record's COGS value get calculated?

 Already did; it does say about the formula of total qty/ starting cost of the period- it also talks about the negative inventory will get slightly higher than average cost in case of average cost- all of this doesn’t line up with what we’re observing

We have the Inventory cost preference of “after transaction is saved” setting enabled (meaning it calculates the average cost immediately)

Was your inventory negative in the impacted location?