Well Done Intuit.

With Item Receipts turned on, if I now create an Expense for a part/item (i.e. not a category), the part no longer goes into stock and there is no option to receive those goods.  However, it shows up in the item reports.

A small update;

If you put a Bill on without a PO nothing goes into stock.  The value just goes into Stock Offset.

This does mean you can probably find the POs and Expenses that were Billed/paid for but not receipted, as they will be in Stock Offset.

The staff are still working on the cases with no developments. 

I notice that if the PO has several lines, the item receipt enters one combined line in Stock Offset but the Bill enters several lines.

If the PO is for one line AND the price matches perfectly, when Item receipt and Bill are entered the records are deleted from the Stock Offset account entirely (nice, avoids a confusing mess).  

If, however, the PO is for multiple lines or the price does not match that doesn't happen so they stay there forever, building up over time (not nice, confusing mess).

Therefore, make sure the exchange rates/price match all the way through or you'll have a difficult task of trying to work out where your stock value has disappeared to.

My recommendation is to use Bills only and not turn on item receipts.

In regards to entering only one PO per Item Receipt, apparently it is working as intended

The reasoning is that if using multi-currency you can't receive multiple POs on one item receipt "to avoid conflicting exchange rates".

This seems odd for several reasons, 

1. They permitted multiple POs on one Bill so didn't mind conflicting exchange rates then.

2. Now, the PO exchange rate seems to be none posting, the Item Receipt is what drives the value that sits in the Stock Offset account and which generates the new (quite hidden) Exchange Rate Gain and Loss.  So I'm not sure where the conflict is.