fix: Negative rates should be allowed via Update Items in SO/PO

erpnext/controllers/accounts_controller.py

@@ -3040,16 +3040,19 @@ def should_update_supplied_items(doc) -> bool:
 		conv_fac_precision = child_item.precision("conversion_factor") or 2
 		qty_precision = child_item.precision("qty") or 2
 
-		if flt(child_item.billed_amt, rate_precision) > flt(
-			flt(d.get("rate"), rate_precision) * flt(d.get("qty"), qty_precision), rate_precision
-		):
+		# Amount cannot be lesser than billed amount, except for negative amounts
+		row_rate = flt(d.get("rate"), rate_precision)
+		amount_below_billed_amt = flt(child_item.billed_amt, rate_precision) > flt(
+			row_rate * flt(d.get("qty"), qty_precision), rate_precision
+		)
+		if amount_below_billed_amt and row_rate > 0.0:
 			frappe.throw(
 				_("Row #{0}: Cannot set Rate if amount is greater than billed amount for Item {1}.").format(
 					child_item.idx, child_item.item_code
 				)
 			)
 		else:
-			child_item.rate = flt(d.get("rate"), rate_precision)
+			child_item.rate = row_rate
 
 		if d.get("conversion_factor"):
 			if child_item.stock_uom == child_item.uom:

erpnext/selling/doctype/sales_order/test_sales_order.py

@@ -54,6 +54,35 @@ def tearDownClass(cls) -> None:
 	def tearDown(self):
 		frappe.set_user("Administrator")
 
+	def test_sales_order_with_negative_rate(self):
+		"""
+		Test if negative rate is allowed in Sales Order via doc submission and update items
+		"""
+		so = make_sales_order(qty=1, rate=100, do_not_save=True)
+		so.append("items", {"item_code": "_Test Item", "qty": 1, "rate": -10})
+		so.save()
+		so.submit()
+
+		first_item = so.get("items")[0]
+		second_item = so.get("items")[1]
+		trans_item = json.dumps(
+			[
+				{
+					"item_code": first_item.item_code,
+					"rate": first_item.rate,
+					"qty": first_item.qty,
+					"docname": first_item.name,
+				},
+				{
+					"item_code": second_item.item_code,
+					"rate": -20,
+					"qty": second_item.qty,
+					"docname": second_item.name,
+				},
+			]
+		)
+		update_child_qty_rate("Sales Order", trans_item, so.name)
+
 	def test_make_material_request(self):
 		so = make_sales_order(do_not_submit=True)