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Re: Perpetual Inventory Valuation in Continental Accounting

by
Lek Wipawii
- 02/26/2016 21:37:58

Hi,

Sorry. Wrong figure in average cost. Pls see below.

Cheers,

Lek

www.ecosoft.co.th

Sent from my Android
On Feb 27, 2016 9:30 AM, "Wipawii" <wipawiij@ecosoft.co.th> wrote:
>
> Hi Jordi,
>
> Your reply is useful. Can I ask more here? It seems there will be a difference between shipping to Customer before and after receiving Supplier invoice. Do I misunderstand any points?
>
> My entry there is no difference of entry but different cost, which depends on costing method.
>
> Please suggest my entries below are correct or not.
>
> With anglo-saxon
>
> STD cost. Product cost = 10.
>
> My all entries are the same as you described except when receiving supplier invoice. I record all dif to price dif account to keep product cost is the same as standard cost we set = 10
>
> Dr.  GR not IR     100
> Dr.  Price dif  10
>   Cr.       AP     110
>
> In case of Average cost. Now Product cost is 11 --> 10.5 (1st receiving PO is 10 and 2nd is 12 --> 11) and your example here is the 3rd receiving
>
> Incoming shipment
> Dr.  Inventory    105
>    Cr.  GR not IR    105
>
> Now Product cost = 10.6
>
> Ship to Customer 10.6*3
>
> Dr.  CoGS     31.8
>    Cr.  Inventory    31.8
>
> Receiving Supplier Invoice.
>
> Dr.  GR not IR   105
> Dr.  Price dif.        5
>    Cr.  AP                    110
>
> Is this wrong? To record all dif to price dif account, not charge and average it to product cost.
>
> Please suggest.
>
> Cheers,
>
> Lek
>
> www.ecosoft.co.th
>
> Sent from my Android
>
> On Feb 27, 2016 01:18, "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)
>>>
>>>
>>> odoo.com | Facebook | Twiter | Linkedin | Google Plus | Youtube
>>>
>>>  
>>>
>>> _______________________________________________
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>>
>>
>>
>>
>> --
>> Jordi Ballester Alomar
>> Founder | Eficent
>> (+34) 629530707 | jordi.ballester@eficent.comhttp://www.eficent.com
>> Twitter: https://twitter.com/jbeficent_erp | Linkedin: https://www.linkedin.com/in/jordiballesteralomar
>>
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