Visma Net
Purchase price variance allocation - example 2
This topic gives examples of the documents that you create and the transactions that the system generates for purchase price variance allocation. The examples assume that:
- You select Inventory account as the allocation mode for purchase price variance (PPV) amounts.
- You assign the Average cost valuation method to the purchased items.
- Some quantities of the purchased items were issued (sold) between the date of the receipt and the date of the invoice.
Step 1 - Create a purchase receipt
In the Purchase receipts (PO302000) window, you create a purchase receipt for the following items.
Purchase receipt
| Item | Quantity | Unit cost | Amount |
|---|---|---|---|
| Item 1 | 10 | 250 | 2500 |
| Item 2 | 23 | 120 | 2760 |
| Item 3 | 15 | 380 | 5700 |
| Total: |
10960 |
When you release the purchase receipt, the system creates the following transactions.
General ledger transactions generated for the inventory receipt
| Account | Debit amount | Credit amount |
|---|---|---|
| Inventory (Item 1) | 2500 | 0 |
| Inventory (Item 2) | 2760 | 0 |
| Inventory (Item 3) | 5700 | 0 |
| Purchase accrual: | 0 | 10960 |
Step 2 - Create an inventory issue
During the next few days, you sell some quantities of the items. The system generates an inventory issue with the following lines.
Inventory issue
| Item | Quantity | Unit cost | Amount |
|---|---|---|---|
| Item 1 | 7 | 250 | 1750 |
| Item 2 | 23 | 120 | 2760 |
| Item 3 | 5 | 380 | 1900 |
| Total: |
6410 |
As a result of this inventory issue, the system generates the following transactions.
General ledger transactions generated for the issue (sale)
| Account | Debit amount | Credit amount |
|---|---|---|
| Inventory (Item 1) | 1750 | 0 |
| Inventory (Item 2) | 2760 | 0 |
| Inventory (Item 3) | 1900 | 0 |
| Expense (COGS) | 0 | 6410 |
Step 3 - Create an invoice
In the Purchase invoices (AP301000) window, select Actions - Create purchase invoice.
When you receive and enter the purchase invoice for the initial quantities of the items, you enter the following information.
Purchase invoice
| Item | Quantity | Unit cost | Amount |
|---|---|---|---|
| Item 1 | 10 | 450 | 4500 |
| Item 2 | 23 | 200 | 4600 |
| Item 3 | 15 | 180 | 2700 |
| Total: | 11800 |
When you release the purchase invoice, the system creates the following transactions.
General ledger transactions generated for the purchase invoice
| Account | Debit amount | Credit amount |
|---|---|---|
| Purchase accrual | 11800 | 0 |
| Supplier ledger | 0 | 11800 |
When you release this invoice, the system also creates an inventory adjustment with the following lines.
Inventory adjustment
| Item | Extended cost |
|---|---|
| Item 1 | 600 |
| Item 3 | -2000 |
| Item 1 (PPV expense) | 1400 |
| Item 2 (PPV expense) | 1840 |
| Item 3 (PPV expense) | -1000 |
When you release this adjustment, the system generates the following transactions.
General ledger transactions generated for the inventory adjustment
| Account | Debit amount | Credit amount |
|---|---|---|
| Inventory (Item 1) | 600 | 0 |
| Inventory (Item 3) | 0 | 2000 |
| PPV expense (Item 1) | 1400 | 0 |
| PPV expense (Item 2) | 1840 | 0 |
| PPV expense (Item 3) | 0 | 1000 |
| Purchase accrual | 0 | 2000 |
| Purchase accrual | 0 | 1840 |
| Purchase accrual | 3000 | 0 |
