Transferring materials plant to plant without cost

[Former Member]

My client is construction co. and They have several plants under one company. They transfer some materials after using to another plant. When the materials is in use at one plant they issue it to particular WBS element. After completion of the work they reserve the issue note and then transfer it to another plant (new site).

Now the problem is system transfer the materials to another plant with its original cost. Now project manager has objection that he get old used materials with the cost of new materials. It is affecting his project budget.

While preparing the budget project manager considers 50% cost of the used materials.

Now they want to transfer the such used materials at 50% cost or nil cost.

Can we do like this.

Atul Kulkarni

[pankaj_singh9 · Accepted solution]

Hi,

Create a dummy WBS Element.

Before transferring stock of materials from supplying plant to receiving plant, carry out transfer of normal stock to project stock for revaluation purpose and then transfer this revaluated stock to receiving plant.

In this process the material will be transferred at value other than MAP (> or <). The differential cost will adjusted to sending plant inventory by transferring the plant stock to dummy WBS and then revaluating the inventory at sending plant. Thereafter transfer transaction will follow with revaluated inventory value.

Following Accounting Entries will happen during this Process;

Issuing Site: -

At the time of Stock Transfer from Plant Stock to Dummy WBS Stock in Sending Plant;

Stock Account - Dr
Stock Account - Cr

At the time of revaluation in Sending Plant;

If Stock revaluation is more than prevailing MAP

Stock Account - Dr
Stock Transfer Gain/Loss A/c - Cr

If Stock revaluation is less than prevailing MAP

Stock Transfer Gain/Loss A/c - Dr
Stock Account - Cr

At the time of Goods Issue against Stock Transport Order

Stock Account - Dr (Receiving Site)
Stock Account - Cr (Sending Site)

Note: - There wonu2019t be any Accounting Entry generated during Goods Receipt against Stock Transport Order in Receiving Plant.

Receiving Site: -

At the time of Stock Transfer from Dummy WBS Stock to Plant Stock in Receiving Plant;

Stock Account - Dr
Stock Account - Cr

[former_member533946]

Hi dear,

U can transfer the material from one plant to another plant.

Once the material is received in the new plant u can chage the price of the material in MR21.After entering the required data on the entry screem select the varient as special stock WBS element.

Niw at this u can maintain new price of that material against the WBS element.