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Former Member
Jun 30, 2016 at 12:13 AM

Exchange rate differences for GR

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Hello experts,

We are working with standard price materials and the Controller does want to change the way the PPV (purchasing price variance) and FX (Exchange rate differences) are posted at the moment of the goods receipt.

Currently the following is posted at the goods receipt:

CASE 1 PPV is 0

Material X

Standard Price MXN : 15

Standard Price USD : 1

Current USD Price in Schedule Agreement for Material X : 1 USD

Exchange rate P at the moment of standard price calculation: 1 USD=15 MXN

Quantity 1 piece

Exchange rate M at the moment of the goods receipt: 1 USD=20 MXN

Posting in Group Currency USD

Inventory : 1 piece received * 1 USD Standard price = 1 USD

AP : 1 piece X 1 USD (where 1 USD is the current price of material X in the schedule agreement) 1 USD

PPV Account: 0 (difference between Inventory and AP lines is zero in USD)

Posting in Local Currency MXN

Inventory : 1 piece received * 15 MXN Standard price = 15 MXN

AP : 1 piece X 20 (where 20 is 1 USD valuated at the exchange rate at the moment of goods receipt)

PPV Account: 5 (difference between inventory and AP lines)

CASE 2 PPV is <> 0

Material X

Standard Price MXN : 15

Standard Price USD : 1

Current Price in Schedule Agreement for Material X: 2 USD

Exchange rate P at the moment of standard price calculation: 1 USD=15 MXN

Quantity 1 piece

Exchange rate M at the moment of the goods receipt: 1 USD=20 MXN

Posting in Group Currency USD

Inventory : 1 piece received * 1 USD Standard price = 1 USD

AP : 1 piece X 2 USD (where 1 USD is the current price of material X in the schedule agreement) 2 USD

PPV Account: 1 USD (difference between Inventory and AP lines is zero in USD)

Posting in Local Currency MXN

Inventory : 1 piece received * 15 MXN Standard price = 15 MXN

AP : 1 piece X 40 (where 40 is 2 USD valuated at the exchange rate at the moment of goods receipt)

PPV Account: 25 (difference between inventory and AP lines)

The Controller says that for Case 1 the amount posted in PPV account is in reality an exchange rate difference because the Standard price in USD and the USD price in the Schedule Agreement are the same. For case 2 even when there are a PPV because the USD standard price of the material is different than the USD price in the Schedule Agreement , he says there is a portion of PPV (20) plus a portion of exchange rate difference (5) mixed in the PPV account. Therefore he wants to have a separate FX account for the exchange rate difference posted at the moment of the goods receipt, in addition to the PPV account.

Do you think this is possible to achieve? How? We have tried to play with customizing in OMRW "Treatment of exchange rate differences" and KDM, but nothing has worked so far, Differences are calculated at the IR instead of GR.

Thank you for your help

Gabriela Perdomo