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Account Determination for Inventories

Jun 24, 2017 at 12:53 PM

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Hi all,

I couldn't see the use of the GL accounts configured in these columns. Could any experts provide detail explanation and perhaps scenarios that will trigger postings to the GL accounts?

1) Gain/ Loss from Purchase Price Differences

According to the explanation provided in Fine-Tune, purchasing differences might be valuation differences, price differences or exchange rate difference. However, there is another column for Gain/Loss from Exchange Rate Differences. What is the difference between (1) and (3) ?

And if PO price differs from material inventory, the value will be posted to Gain/ Loss from Purchase Valuation. I don't see how system will post to Gain/ Loss from Purchase Price Differences.

2) Gain/ Loss from Other Differences

This account collects all losses resulting from activities other than purchasing or production differences. What kind of activities?

3) Gain/ Loss from Exchange Rate Differences

I felt it is the same as (1).

4) Gain/ Loss from Production Differences

Actual production costs differ from the inventory price. Does this mean that if I am using standard costs for Finished Goods and Semi-Finished Goods, system won't trigger postings to the GL account maintained in this column?

Thanks

Regards,

DK

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1 Answer

Harshal Vakil Jun 26, 2017 at 05:39 AM
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Hi Dk,

Please see the details below.

1) Gain/ Loss from Purchase Price Differences

Answer :

Let's say you have order 10 quantity of XYZ product at 10 USD/ Each. Resulting value of PO will be 100 USD.

During the invoice, Price of the product has been changed to 15 USD/Each. total invoice value will be 150 USD.

Hence difference of 50 USD will be posted to this GL account.

Usually,

Purchase valuation difference will be used when there is a difference between purchase order price and inventory cost.

Purchase price difference will be used when there is difference between purchase order price and invoice price.

2) Gain/ Loss from Other Differences

Answer: Difference that may occur during the material movement. Let's say stock transfers between sites/ Businenss residence.

3) Gain/ Loss from Exchange Rate Differences

Answer : This GL will be used only if there is difference between Purchase order / Invoice / Payment due to exchange rate.

Company Curency = INR

Purchase order and invocies are created in USD. (let say value of PO and invocie is 1 USD.)

At the time of PO creation 1 USD = 65 INR

At time of invoice 1 USD = 70 INR.

this will create the difference due to exchange rate and this GL will be affected for the 5 INR as loss.

4) Gain/ Loss from Production Differences

Answer : Even if you are using standard cost, this GL can be affected.

Let's say Inventory cost for Finished goods is maintained as 10 USD/Each.

when you complete the production (Semi finished /Raw materials , Service, resources are consumed and finished product is manufactured), system will calculate the cost of the input material and calculate the actual cost (via actual costing / Cost estimates). this cost differs from Cost of finished goods. Meaning input materials' cost is 110 USD. where output material is stored at 100 USD. So during WIP clearing, there will be a difference due to production difference which will be posted against this GL account.

Can you also check my blog on GR/IR run where I tried to cover the how differences will be posted and to which GL : https://blogs.sap.com/2016/04/04/grir-clearing-run/

Regards,

Harshal

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