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During A/P Invoice, inventory account is hit instead of Exchange Rate diff Account

william_fernandes
Participant
0 Kudos

Dear All,

My client is using SAP B1 9 PL 8. When A/P Invoice (having current exchange rate) is copied from GRPO (having previous exchange rate), the exchange rate difference amount is getting posted to 'Inventory A/c', instead of 'Exchange Rate Diff A/c'. Why does this happen?

I have checked the forum for some solution on this, but I have not found any solution.

The system currency is in EUR and local currency is in INR, and the document currency is in EUR.

GRPO :  EUR exchange rate 69.3395  ; Unit price 0.6  EUR ; Qty 1600     =   66565.92 INR

AP Inv :  EUR exchange rate 72.3585  ; Unit price 0.6  EUR ; Qty 1600     =   69464.16 INR

Difference of exchange rate amt : (69464.16 - 66565.92) =  2898.24 INR

This difference is getting posted to Inventory Account instead of Exchange Rate Account.

Please help me out on this.

Thanks & Regards,

William

Accepted Solutions (0)

Answers (4)

Answers (4)

iftikharabbasi
Explorer
0 Kudos

Hi

I would like to endorse suggestion of TVSon, as per accounting standards this should be the case. The exchange rate difference accounting is done by the system at the time of paying the AP Invoice where a foreign currency payment is involved.

I hope this helps.

Regards

Iftikhar

former_member212181
Active Contributor
0 Kudos

Hi William,

My suggestion is to transfer material from GRPO warehouse (Bonded warehouse) to any other usable warehouse before adding AP Invoice.

As per my experience, for an import purchase, this is the procedure.

GRPO > Landed cost > Inventory transfer from bonded warehouse to usable warehouse > AP Invoice.

I guess, system is checking whether stock is exists in purchase (GRPO) warehouse or not?

If yes, Exchange rate difference value getting added to stock(which includes item cost effect)..

If no, Exchange rate difference value getting effected on P&L Account.

Thanks for understanding

Unnikrishnan

former_member186576
Contributor
0 Kudos

Most probably a mistake in account determination.

Former Member
0 Kudos

Hi William,

Please check under Setup--->Finance--> GL Account Determination-->Inventory tab, which account had beend mapped for the Exchange Rate Differences Account.

If it is the same as inventory account then u need to change that (if required)

Regards,

Bhushan Verma

william_fernandes
Participant
0 Kudos

Dear Bhushan,

The Exchange Rate Difference Account is properly mapped to 'Exchange Rate Differences Account'  and not to 'Inventory Account' .

Regards,

William

Former Member
0 Kudos

Hi,

This behavior is correct according to accounting view. It's better to get advice from accounting staff first.

In your case, I just explain it as following:

Exchange Rate Differences is generated in payment document in which the rate in payment document differ to the rate of invoice only. But in your case, GRPO and AP invoice are steps of purchasing process which cause an increase of your asset and liability accounts.

GRPO :  66565.92 INR - your asset

AP Inv :  69464.16 INR - your payable

Difference of exchange rate: 2898.24 INR. Stock value must equal payable value, and that is the reason why system posted to Inventory Account.

In case of outgoing payment, you have to pay 70000 INR for that AP, this transaction will generate an entry with 535.84 INR Realized Exchange Diff. Loss account.

Hope this helps,

TVSon