If you use the Standard Cost valuation method, variance accumulators associated with the Inventory Codes keep track of the variance between standard and actual costs. This amount then appears in the Variance Amount label at the bottom of the IN Inventory Codes window. This amount continues to accumulate until you clear it.

You might want to clear your variance amounts for different reasons. One reason to purge these amounts is to keep only up-to-date variance amounts. For example, Company X uses the Standard Cost method to track the cost of their stock items. Once a year they look at the variance between the two and use this to determine if they need to adjust the standard cost they use for their stock items. After they review this number, they run the Variance Amounts function to purge this amount and start over for the new year.

See Adding Inventory Codes for valuation method information.

To purge variance amounts, select Period End Tasks > Clear Variance Amounts from the left navigation pane. Select OK to clear variance accumulators.