on 05-05-2012 2:37 AM
We have freight condition types in PO pricing procedure.
Can we assign GL accounts that are PL in nature with cost object as cost centre.
In my previous project, the accounts that we assigned to freight condition types were of balance sheet accounts.
Hi,
Yes you can assign a P&L account for booking freight expense. You have to assign a cost center in OKB9 or KA02 to that G/L account. The entries will be as follows for a PO with one item
GR:
Inventory Account - Dr
GR/IR Material - Cr
Freight Expense - Cr - Cost Center (As per assigned)
MIRO:
Vendor A/C: - Cr
GR/IR Material - Dr
Freight Expense - Dr - Cost Center (As per assigned)
The only advantage that you will get by this is that you can analyse your freight expenses against that cost center.
Regards
Ayyallas
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Thanks for your reply.
We transfer finished goods by either rail or road from one plant A to another plant B, will use STO 351.
In plant B packing is done.
Have 2 different condition types for each type of mode of transportation.
do it is adviseable to have PL account with cost object cost centre.
client have 2 legacy account for this
for material procurement in PO we use also freight, that is a BS account.
what is ur advice?
Dear Ajit.
Freight GL SHould be as a Balance Sheet (Liabilities) account not required any cost center or assigning in OKB9.
Entry on MIGO: When Freigh to be included in material cost.
Inventory Dr 100
GR/IR Clearing Account cr 90
Freight Clearing Account cr 10
MIRO:
GR/IR Clearing Account 90 Dr
Freight Clearing Account 10 Dr
Vendor Account 100
This is the entry.
Note: Vendor is liability and unless miro is not done GR IR/Freight Clearing account are considered as liability.
Regards
Ruksana
Hi Ruksana,
Can you please let me know why the frieght GL account should be treated as Balance Sheet account?
My client wants to add the freight charges to Inventory account while posting the Goods Receipt.
To achieve this functionality, we can add a GL account in automatic account determination for FR1 key.
I would like to know, what type of GL account we should assign in OBYC for FR1 key? Whether it should be a balance sheet account or P&L account and also the reasons. I would like to know the benefit of adding the freight charges to inventory.
I did some googling and noticed the below statement:
- If the freight is part of an asset’s cost, it is to be considered an extension of the asset’s overall value. That means that, in practice, it is recorded as part of the asset’s value and figured into your calculations as a “laid down cost.”
Can you please give your valuable suggestions on the above.
As soon as your freight gets added to your inventory, it becomes a part of your asset.
The reason the freight clearing should be a balance sheet account is as explained above: the freight vendor will eventually send an invoice for his services. This when captured will be a liability. Now say I check the balance sheet of the company today, and the freight vendor has still not sent his invoice.
I have inflated my asset side by loading the freight there, but what about my liability. We know the freight vendor is going to send his invoice soon. So in this case, the freight clearing is treated as a provisional liability in the balance sheet, till I can actually firm up the liability against the freight vendor during invoice capture.
This is the case with GR/IR clearing as well.
yes , the cost object come from the account assignment in PO , i Suppose
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