In the previous post of this series ; Cost Adjustment (1 of 4) Override Documents, the first of four scenarios in which cost variance documents are calculated was thoroughly explained. In this post, we will move on with the second scenario of cost adjustment.
When using the shipment – enter match approach, the cost recorded at the shipment could be different than the one on the invoice. For instance, we received one piece of item (X) with cost of 150, then upon receiving the invoice it shows that the cost is different like 160. The following journal entries are recorded;
Upon Receiving | Purchasing > Transactions > Receiving Transaction Entry (Shipment)
Upon Invoicing | Purchasing > Transactions > Enter Match Invoice
Once the shipment is posted, the following records will be written in inventory tables
Now, when an invoice with different unit cost (160) is matched to the shipment, a new cost adjustment record is thrown in SEE30303 (HITB), as well as other modifications in other tables;
- IV30300 records an addition record with the total difference as an extended cost
- IV10200 updates the unit cost field with the new unit cost, while the old unit cost is saved in another field which is ADJUNITCOST, Adjusted Unit Cost
- SEE30303 records an addition record with all the cost adjustment details. Unit cost, extended cost and the associated Journal Entry created on the general ledger level
Helping Note !
This scenario supposes that the shipment is not consumed at all until the time that the invoice is recorded. The third scenarios of this series illustrate how sales documents posted before the invoice is recorded will be updated accordingly to reflect correct cost of goods sold.Best Regards,
Mahmoud M. AlSaadi