Regrouping of GR/IR Clrg A/c. F.19 and FSV

[Former Member]

Dear Expert,

In F.19 accounting entries are generated as below.

1. GR/IR Correction account Dr  1000

    GR/IR -Liability A/c          Cr   1000  (Goods Delivered but not invoiced)

2. GR/IR Asset Account      Dr.   200

    GR/IR Correction account Cr.   200 (Invoiced received but goods not delivered)

I am aware of the configuration.

But I would like to know how we accomodate above three GLs in Balances (Financial Statement Version)

What is business logic of doing this. Please explain the business use.

It does not make any posting to GR/IR Clearing Account? I am confused.

Best Regards

Ruksana

[nico_dewaele]

on the invoices to be received account you have on one side the invoices and on the other side the goods receipts.

the goods receipts and the invoices are cleared when they "match".

At the end of month/year, you have goods receipts for which no invoice has been received yet. This means the debt/liability has been registered and should be reported like that.

On the other hand, you have the invoices for which no goods receipts have been registered yet. This is considered as a prepaid expense, and should be reported like that;

[narasimhulu_konnipati]

What Nico Dewaele said is right.

Since the GR/IR account is a clearing account, it clears the GR's with IR's and shows the balance zero at the end of the day.

When the GR is made but no IR, GR/IR account shows Credit.

When the IR is made and no GR, GR/IR account shows as Debit.

Thanks

[Former Member]

Dear Nico/Naras,

I know all this. Please let know how we can treat these GLs in FSV. Effects in Balance sheet.

Best Regards

Ruksana

[nico_dewaele]

well,

the GR /IR and correction account and liability I put under liabilities, short term debts, trade - other

because you generally have more receipts without invoice then the invoices without receipt.

in any case: GR/IR & correction account together equal 0 and have no effect. Liability account is left with the "real" part that is already due.

the asset account under current assets - accrual & deferral

this part of GR/IR is transferred to the asset part of the balance sheet (and it cancels out the invoice due) because it's not a liability and gives a more correct view of the company's accounts.

[narasimhulu_konnipati]

Under Current Liabilities head.....

Trade Payables: GR/IR account for all the transactions other than Inter company GL accounts

Inter company payables: GR/IR account related to Inter company payables

Thanks

[Former Member]

Dear Nico,

I am still not clear with this. Let us take a scenario.

Below are four GLs.

1. GR/IR Clearing Account =Rs.1000 (Rs.1600 Cr and Rs.600 Dr)

On Executing F.19 we get below entries.

2. GR/IR-Liability Account  = Rs. 1600 (CR)

3. GR/IR - Asset Account  = Rs.600 (Dr)

4. GR/IR - Correction Account= Rs.1000 (1600 cr and 600 Dr.)

Please let me know which GL should be assigned where in FSV.

Best Regards

Ruksana

[nico_dewaele]

liabilities, short term debts, trade - other

1. GR/IR Clearing Account =Rs.1000 (Rs.1600 Cr and Rs.600 Dr)

2. GR/IR-Liability Account  = Rs. 1600 (CR)

4. GR/IR - Correction Account= Rs.1000 (1600 Db and 600 Cr.)

which leaves 1600 liability

the asset account under current assets - accrual & deferral

3. GR/IR - Asset Account  = Rs.600 (Dr)

which leaves 600 as asset

(and - 600 on your vendor)

which brings your debt to 0.