KB3023131 Accounting for Purchase charge and Stock variation


We are pleased to announce the availability of KB3023131 "Accounting for Purchase charge and Stock variation"/ "No posting is on charges account at a purchase order (PO) return and issues when posting a purchase order".

The KB introduces a significant update for the "Post to charge" accounting principle.

The update includes a significant change in the ledger accounting logic consumed by the "Post to charge" accounting principle. This change might require that customers reconfigure their posting profiles in order to get the correct accounting entries in the general ledger.

Configuration

The "Post to charge" accounting principle is still enabled through parameter configuration.

Path: Accounts payable > Setup > Accounts payable parameters

We recommend the following parameter settings for accounting of inventories. Applying these recommended settings will make reconciliation to General ledger much simpler at the end of the fiscal period.

Module/form

Parameter

Recommended setting

Inventory management/Item model group

Post physical inventory

Yes

Inventory management/Item model group

Post financial inventory

Yes

Inventory management/Item model group

Accrue liability on product receipt

Yes

Accounts payable/Accounts payable parameters

Post product receipt in ledger

Yes

Procurement and sourcing/Procurement and sourcing parameters

Generate charges on product receipt

Yes

Accounts receivable/Accounts receivable parameters

Post packing slip in ledger

Yes

Production control/Production control parameters

Post picking list in ledger

Yes

Production control/Production control parameters

Post reports as finished in ledger

Yes

 Note: The "Post to charge" accounting principle now has a dependency on the Post product receipt in ledger parameter. The system will validate the current settings and warn customers in case of a conflicting configuration.

Accounting for material

The "Post to charge" accounting principle originally used two designated posting types:

  • Charge
  • Stock variation

The new accounting logic will make the Charge posting type obsolete.

Instead, the Purchase expenditure, un-invoiced and Purchase expenditure for product posting types should be used for accounting charges of the Material type in General ledger.

The Stock variation posting type will act as stock variation for direct material cost.

Accounting for purchase overhead

The Estimated indirect absorption and Indirect absorption posting types will now act as stock variation for overhead cost.

Accounting for Miscellaneous charges

The DCR for "Post to charge" has intentionally been delivered after the release of the "Post Misc. charges on product receipt" DCR. You can read more about this feature in this blog post: http://blogs.technet.com/b/dynamicsaxse/archive/2014/12/05/kb3006787-procurement-accounting-charges-as-product-cost-with-product-receipt.aspx

The reason for the delayed release is that miscellaneous charges that are accounted for at the time of product receipt are now correctly treated by the posting logic of the "Post to charge" accounting principle.

Miscellaneous charges on a purchase order can affect the valuation of inventory assets under two configurations:

  • Debit item – Credit Ledger account
  • Debit item – Credit Customer/Vendor

In the case of Debit item – Credit Ledger account, the ledger account selected as the absorption account now acts as a stock variation account.

In the case of Debit item – Credit Customer/Vendor, the miscellaneous charges will be accounted as material cost, and the stock variation account of the item will be used.

Example 1

Prerequisites for this example:

  • Item: #mq-1
  • Valuation method: FIFO
  1. A purchase order of 1 piece is created. A unit cost of 100.00 is agreed on.

  1. Confirm the PO.
  2. Post the product receipt.
  3. Validate the posting of the product receipt.

    Validating the ledger accounting entries in the voucher

Account

Name

Posting type

Amount

03-Stock var Mat

Stock variation-Material

Purchase, stock variation

-100.00

01-Inventory

Inventory

Product receipt

100.00

02-Purchase charge

Purchase charges

Purchase expenditure, un-invoiced

100.00

04-Purchase accrual

Purchase Accrual

Purchase, accrual

-100.00

 

Validating the physical cost amount on the inventory transaction

  1. Post the invoice, and validate the postings.

    The unit price has changed since the product receipt was posted. The unit price is now 110.00

    Voucher of the invoice

Account

Name

Posting type

Amount

03-Stock var Mat

Stock variation-Material

Purchase, stock variation

-10.00

01-Inventory

Inventory

Product receipt

-100.00

01-Inventory

Inventory

Purchase, Inventory receipt

110.00

02-Purchase charge

Purchase charges

Purchase expenditure, un-invoiced

-100.00

02-Purchase charge

Purchase charges

Purchase expenditure for product

110.00

04-Purchase accrual

Purchase Accrual

Purchase, accrual

100.00

211100    

Accounts Payable – US

Vendor balance    

-110.00

 

Validating the financial cost amount on the inventory transaction

Example 2

Prerequisites for this example:

  • Item: #mq
  • Valuation method: FIFO
  • Misc. charge 1: Debit item – Credit Ledger account 10.00%
  • Misc. charge 2: Debit item – Credit Customer/Vendor 10.00 Proportional
  • Indirect cost: 2.00% on top of purchase price
  1. A purchase order of 1 piece is created. A unit cost of 100.00 is agreed on.

  1. Assign the miscellaneous charges codes, and allocate them to the lines.

  1. Confirm the PO.
  2. Post the product receipt.
  3. Validate the posting of the product receipt

    Validating the miscellaneous charges amount calculated and accounted on the product receipt

Validating the ledger accounting entries in the voucher

Account

Name

Posting type

Amount

03-Stock var Mat

Stock variation-Material

Purchase, stock variation

-110.00

05-Stock var Ovh

Stock variation-Overhead

Estimated indirect absorption

-2.40

06-Stock var Misc.C

Stock variation-Misc. charges

Purchase freight

-10.00

01-Inventory

Inventory

Product receipt

122.40

02-Purchase charge

Purchase charges

Purchase expenditure, un-invoiced

110.00

04-Purchase accrual

Purchase Accrual

Purchase, accrual

-110.00

 

Validating the physical cost amount on the inventory transaction

  1. Post the invoice, and validate the postings.

    For the sake of simplicity, there is no change in unit price in this example, and no additional miscellaneous charges are added.

    Voucher of the invoice

Account

Name

Posting type

Amount

06-Stock var Misc.C

Stock variation-Misc. charges    

Purchase freight

0.00

05-Stock var Ovh

Stock variation-Overhead

Estimated indirect absorption

2.40

05-Stock var Ovh

Stock variation-Overhead

Indirect absorption

-2.40

01-Inventory

Inventory

Product receipt

-122.40

01-Inventory

Inventory

Purchase, Inventory receipt

122.40

02-Purchase charge

Purchase charges

Purchase expenditure, un-invoiced

-110.00

02-Purchase charge

Purchase charges

Purchase expenditure for product

110.00

04-Purchase accrual

Purchase Accrual

Purchase, accrual

110.00

211100

Accounts Payable – US

Vendor balance    

-110.00

 

Validating the financial cost amount on the inventory transaction

Released versions

KB3023131 "Accounting for Purchase charge and Stock variation" is currently available for following releases of Microsoft Dynamics AX:

  • Microsoft Dynamics AX 2012 R3

KB is planned to be released for Microsoft Dynamics AX 2012 R2 February 2015


Comments (3)

  1. Federico M. says:

    Hi Henrik,
    that’s a very good news for us.. 😉
    Unfortunately I wasn’t able to find any reference to the KB3023131 (Accounting for Purchase charge and Stock variation) into the PartnerSource website 🙁

    Can you provide us a direct link, please?

    Thank you and best wishes!

    Federico M.

  2. Henrik says:

    Hi Frederico, This is the correct direct link to PartnerSource website for the KB:

    https://mbs2.microsoft.com/Knowledgebase/KBDisplay.aspx?scid=kb;EN-US;3023131

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