Note: 1161697 (To be released shortly.)
When creating an A/P Invoice based on a Goods Receipt PO and there is a price difference between the documents, the G/L Accounts used when posting this difference depend on the current In Stock quantity of the item.
- If the In Stock Qty > = A/P Invoice Qty, then only the Stock Account will be used.
- If the In Stock Qty<A/P Invoice Qty, the price difference will be split between the Stock and Price Difference accounts.
- If the In Stock Qty = Zero, then the entire price difference will be posted to the Price Difference account.
Let us take this example:
1. Create a Goods Receipt PO for item ‘Apple’, 10 units at GBP 1.00 each.
2. Create an A/R Invoice for 2 units. This will now reduce the In Stock to 8 units.
3. Create an A/P Invoice based on the Goods Receipt PO for 2 units, with Unit Cost of GBP 1.25.
As In Stock (8) is greater than the A/P Invoice quantity (2), the Price Difference of GBP .50 is posted to the Stock Account.
The price difference is computed as:
A/P Invoice Quantity x [A/P Invoice Price – Goods Receipt PO Price]
2 x [GBP 1.25 – GBP 1.00]
The price difference has also updated the moving average cost of the item to GBP 1.06333.
4. Create an A/R Invoice for 5 more units. This will now reduce the In Stock from 8 to 3 units.
As In Stock (3) is not sufficient to cover the A/P Invoice quantity (5), the Price Difference of GBP 1.25 is posted to the Stock and Price Difference Accounts.
Stock (GBP 0.75) = GBP 0.25 x 3 Units
Price Difference (GBP 0.50) = GBP 0.25 x 2 Units
6. Create an A/R Invoice for the remaining 3 units. This will make the In Stock 0.
7. Create an A/P Invoice based on the Goods Receipt PO for the remaining 3 units, with Unit Cost of GBP 1.25.
As In Stock is currently zero, the entire Price Difference of GBP 0.75 is posted to the Price Difference Account.
EoP_EoP, EoP_Logistics, EoP_April08, EoP_Purchasing, EoP_AP/AR Posting