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Re: Perpetual Inventory Valuation in Continental Accounting

by
Jordi Ballester Alomar
- 02/26/2016 19:43:43

Eric, there's no thing as continental or anglo saxon in the accounting world. This is somerthing that Odoo made up.

There's perpetual inventory, and there's periodic.

Then there's accrual accounting and there's cash accounting.

Accrual accountig + perpetual = anglo-saxon

Continental, is, AFAIK, a type of breakfast that you can order in a hotel :)

El dia 27/02/2016 1:19, "Caudal Eric" <caudaleric@gmail.com> va escriure:

Jordi,
This I understand for Anglo-Saxon accounting: what about continental which was the original question?


On Sat, Feb 27, 2016, 02:18 Jordi Ballester Alomar <jordi.ballester@eficent.com> wrote:
Quentin, easy as pie :)

In perpetual inventory valuation, under average and real costing methods.

Scenario:
Purchase Order: 
Product A: 
- Cost: $10
- Qty: 10

1.- Process Incoming Shipment to receive product. Books into inventory the value of the stockable product at PO price.
Dr. Inventory $100
Cr. Goods Received Not Invoiced $100

2.- 3 items are shipped to the customer before you receive the supplier invoice.
Cr. Inventory $30
Dr. COGS Deferral / COGS $30

2.- Receive supplier invoice
Product A:
- Cost: $11
- Qty: 10

Cr. Accounts Payable $110
Dr. Goods Received Not Invoiced $100
Dr. Inventory: $7
Dr. Price Difference: $3

Affectation to the inventory costing:
Average method: Standard price must be re-averaged. 
Real method: update quants in stock for this transaction adding the new extra cost of $11.

In standard costing the current Odoo's approach is fine. Everything is posted to Price Differences.

A similar thing occurs for exchange rate differences between PO and supplier invoice. But then you post to Exchange Rate differences instead of Price Differences.
Of course, it's usual that both exchange rate differences AND price differences occur at the same time, and then you have to post separately.

I'm coming to Brussels on the 8th of march, and would be happy to review with you.

Find attached a module that makes a slight modification to the current anglo-saxon module to post separately price differences and exchange rate differences. It's not covering the re-valuation, so it's not pixel perfect :)











On Fri, Feb 26, 2016 at 6:17 PM, Quentin De Paoli <qdp@odoo.com> wrote:

Hi community,

recently, a question arose from a customer request which I need to confront to your expertise.

Upon validation of a supplier invoice for a product in perpetual inventory valuation, do we have to have to book the difference between the PO price (inventory valuation price) and the supplier invoice price even if the company is doing continental accounting (no anglo-saxon mode)? If yes, what should be the accounting entries for the incoming shipment and supplier invoice?

Thanks in advance

--

Quentin De Paoli
LAN Parties Manager
Odoo (Formerly OpenERP)


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--

Eric  Caudal (from my mobile)

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