How to correct a negative Finished Goods COGS going back 13 years

I’ve seen this before. You can’t really fix 13 years of activity retroactively without reopening old years (and you don’t want to, since the CPA has already closed 2024). The cleaner approach is to treat January 1, 2025, as your reset point.

What most folks do in that case is book a one-time journal entry on 1/1/25 to true up Finished Goods Inventory to the actual value you’ve determined. That way, the Balance Sheet reflects the correct inventory asset, and the offset is applied to an equity account (usually Opening Balance Equity or a custom adjustment equity account). From there forward, make sure all assemblies are built before invoicing so COGS flows correctly.

If you try to fix all prior years, you’ll throw off tax filings and reconciliations that the CPA already signed off on. Better to lock the past and start clean. You may also want to involve the CPA now just to document why you adjusted, so future audits or reviews don’t raise red flags.