Issuing Project Stock to Vendor

Question

Hi,
  I have the following scenario-
  The organization's projects are being carried out by EPC/Turnkey contractors.But the management wants to keep a tab on the quantity of material issued to the vendor and then later consumed.But the Finance department does not want that to show as a valuated inventory in their accounts.
I think that the probable solution could be to have a non-valuated stock for my project.i would procure the materials with an account assignment category Q.In that case I can keep a track of the materials issued to the contractor without any values being shown against the stock in the inventory. Am i right?
But if the material is sent from one project to another under a different company code then in that case material values cant be taken into account for the different Comany codes.Please advise if its workable or not.
Thanks and Regards

Answer 1

Hi Abdul,
This is not an exact case of project sub contracting persay.
the scenario is that the organization is into construction business and it procures materials for the project but does not valuate it at the inventory level.
the materials are needed to be tracked at 2 levels-
1. giving the materials to the vendor for construction activity(for that we have made a separate storage location for the vendor and on receiving the material we transfer the material to that specific storage location).
2. tracking the materials actually used by the vendor(material is issued(GI) against the particular project element).
this is the reason we plan to procure materials with a Q account assignment using non-valuated stock option.
would request to let me know if the solution discussed above is right or not?
Secondly.the procured materials against a project may be transferred to another project which comes under a different company code.Here the point is that the stock being non-valuated would not result in value updations reflection in the companies' accounts.any input is appreciable
Thanks and Regards