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Re: Purchase price variance / cost tier adjustment

by
Projetgrup, Levent Karakaş
- 10/10/2016 05:09:32
Here in Turkey, we have a special invoice type which is called price difference invoice (this is usually due to currency fluctuation).  In your case, we receive an invoice of $100 and we get another invoice of $10 when the price is settled as $110. Then we load this invoice amount into stock with landed costs (costs on quants are updated correctly). If the price settled as $90 then we send an invoice of $10 back to supplier and load this invoice amount into stock with landed stock with negative amount (costs on quants are updated correctly again). If the goods are sold, this is not a problem since landed cost module handles this and creates appropriate accounting entries.

I'm not sure if this is applicable to you but this is how we handle it here.


2016-10-08 13:12 GMT+03:00 John Pia Jr <jpiajr@southmill.com>:

Great thank Jordi.

I have installed the module and noticed 2 things.

1. It seems that the revaluation has to be done manually. I was assuming that this action would be automatically when the PPV entry is made (once invoice is validated with a different pride then on the PO)

Is it possible to have this done?

2. I may be missing something that's right in front of me, but I cannot seem to figure out how to adjustment the inventory value of a specific quant. It seems like when I do an inventory revaluation, it revaluates the value of all quants for the respective product.

Is it possible to only revaluate specific quants? (Assuming it isn't the most recently received quant)

As always,
Thank you for all your help Jordi.


On Oct 7, 2016 10:55 AM, "Jordi Ballester Alomar" <jordi.ballester@eficent.com> wrote:

On Fri, Oct 7, 2016 at 3:48 PM, John Pia Jr <jpiajr@southmill.com> wrote:

Jordi,

Thank you ask always for your thorough response and great information.

It is unfortunate that this is not possible now in odoo. Taking your first example, you mentioned manually revaluating a quant of stock.

If I remember properly there is the ability to manually revaluate stock. I believe I've seen the option in the past but I'm not able to locate it now. Is this the module that I missing?

Thanks


On Oct 6, 2016 6:03 PM, "Jordi Ballester Alomar" <jordi.ballester@eficent.com> wrote:

Hi John,

I had this same discussion with the Odoo accounting architect a few months ago:

https://www.odoo.com/groups/community-accounting-and-finance-61/community-accounting-and-finance-16789553?mode=thread&date_begin=&date_end=

Long story short, what you ask for is not yet in odoo.

You'd need the following scenarios, depending o. The status of the quants received.

Case 1: The received quant has not been shipped (the FIFO Layer is intact):

Original PO: 1 kg @ $10/kg

Invoice: 1kg @$10.25

Result: 

Cr. Accounts Payable: $10

Dr. Goods Received Not Invoiced $10

Dr. Inventory $0.25

In this case the quants should be revaluated, adding to them the extra inventory price.

Case 2: The received quant has shipped completely

Original PO: 1 kg $10/kg

Receive: 1kg

Invoice: 1 kgs at $10.25

Result: 

Cr. Accounts Payable: $10

Dr. Goods Received Not Invoiced 1 kgs @ $10/kg = $10

Dr. Purchase Price Variances $0.25

In this scenario, since you no longer have the stock on hand, you must assume as a PPV.

Case 2: The received quant has shipped partially

Original PO: 1 kg at $10/kg

Receive: 1 kg

Invoice: 1 kg at $10.25

Result: 

Cr. Accounts Payable: $10

Dr. Goods Received Not Invoiced 1 kgs @ $10/kg = $10

Dr. Inventory $0.125

Dr. Purchase Price Variances $0.125

In this scenario, you revaluate the quantity that is still on hand for that quant. The amount corresponding to the quantity that has been issued should be posted to PPV.


Hope that this helps.


El 5 oct. 2016 7:43 p. m., "John Pia Jr" <jpiajr@southmill.com> escribió:

Hello,

I am trying to figure out how to manage cost tier adjustments, also known as purchase price variance.

Situation:
Purchase order created for 10 widgets valued at $10 per widget.

10 widgets are received. At this time the value of my inventory goes up by $100.

A week later we received the invoice and see that the widgets were only $9 each

Before I validate the invoice I would like to change the cost to $9 per widget bringing my invoice total down to $90.

Once I validate the invoice I need the inventory value to be adjusted from $100, down to $90 I also need to make the adjustment on record in my purchase variance account.

Basically I need to create a journal entry to the inventory account if there is a price variance between the original purchase order and the invoice price.

I believe this is a fairly common task.

Would this be handled with a return?

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