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Accounting Entries at the time of MR21

Hi All Experts,

What accounting entries will be get posted when we will perform at the time of MR21 ?

What I know is BSX & UMB keys will be in picture ! But function is behind these account get posted...

Experts guidance would be great on this....

Regards,

Sharu....

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3 Answers

  • Best Answer
    Posted on May 23, 2013 at 10:53 AM

    Hi Sharvari,

    MR21 Purpose Price Changing Process.

    Old Material Price changed to material pricing at the time following enter in accounting side,

    1. Material A/C dr

    Price diff A/c cr

    2.Price Diff A/c dr

    Material A/C cr

    Price at which a material is valuated:

    • Materials with price control S are be valuated with the standard price.
    • Materials with price control V are valuated with the moving price (moving average price/periodic unit price).

    Thanks

    Muthu

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    • Hi Sharu,

      Price difference account always which is under change in stock group.It's never consider as revenue and also which is not covered AS-18. Mentioned Example ,may clarify to you.

      When you produce the FG 1 unit rate is INR 10 > Produced 200 Units. Entry as follows.

      Finished goods account........Dr 200 Unit - 2000.00

      To Cost of Production .............Cr 200 Units - 2000.00

      Now FG account shown under Balance sheet and Cost of production account shown under P&L change in stock grouping.

      If you increase the cost of unit as INR 11 ,mentioned entry will pass

      Finished good account.........Dr 200.00

      To Price difference account...........Cr 200.00

      You increased the value ,means some where you would have to consume the materials.But you have not consumed the material ,you just valuated. That means according to AS2 you would have to show as cops under.

      Regards

      Mani Kumar

  • author's profile photo Former Member
    Former Member
    Posted on May 22, 2013 at 06:51 PM

    Hi Sharu,

    While doing MR21 the below entries will be in place.

    Dr/Cr Inventory A/c ----Dr XXXX

    Dr/Cr Gain/Loss from Revaluation A/c XXXX

    Regards

    Sridhar

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  • author's profile photo Former Member
    Former Member
    Posted on May 23, 2013 at 04:26 AM

    Hi Sharvari,

    The accounting entry at the time of MR21 will be

    If price increases,

    Inventory DR xxxx

    Gain from revaluation CR xxxx(With cost object like cost center/WBS/Sale order line item)

    If price decreases,

    Loss from revaluation DR xxxx(With cost object like cost center/WBS/Sale order line item)

    Inventory CR xxxx.

    The inventory will be flown from BSX - OBYC and Gain/Loss will flown from UMB - OBYC.

    Hope it clarifies.

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    • Former Member Former Member

      Hi Sharvari,

      First of all increase in price would not increase the stock(quantity), actually it increases the moving average price. For example,you have 10 quantity of Rs.100 each total value of stock would be Rs.1000 and if you do MR21 with price of Rs.110, the quantity would be only 10 with MAP of Rs.110 so the value would be Rs.1100.

      Hope it clarifies.

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