---
title: "Purchase price variance allocation - example 1"
description: "This topic gives examples of the documents that you create and the transactions that the system generates for purchase price variance allocation."
lang: en
languages:
  en: https://docs.vismasoftware.no/visma-net-erp/help/purchases/process-purchase-receipts-and-returns/purchase-price-variance-allocation-example-1/index.md
lastmod: 2026-02-19
---

> Documentation index: https://docs.vismasoftware.no/visma-net-erp/help/purchases/process-purchase-receipts-and-returns/llms.txt


# Purchase price variance allocation - example 1

Last modified February 19, 2026

> 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.
+ All quantities of items in stock remain unchanged between the dates of receipt and invoice.

## Step 1 - Create a purchase receipt

In the [Purchase receipts (PO302000)](https://docs.vismasoftware.no/visma-net-erp/help/purchases/purchases-windows/purchase-receipts-po302000/index.md) 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 invoice

In the [Purchase invoices (AP301000)](https://docs.vismasoftware.no/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/purchase-invoices-ap301000/index.md) 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|120|2760|
|**Item 3**|15|180|2700|
|**Total**:|9960|||

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**|9960|0|
|**Supplier ledger**|0|9960|

When you release this invoice, the system also creates an inventory adjustment with the following lines.

### Inventory adjustment

|Item|Extended cost|
|---|---|
|**Item 1**|2000|
|**Item 3**|-3000|

### General ledger transactions generated for the inventory adjustment

|Account|Debit amount|Credit amount|
|---|---|---|
|**Inventory (Item 1)**|2000|0|
|**Inventory (Item 2)**|0|3000|
|**Purchase accrual**:|1000|0|


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[View this page](https://docs.vismasoftware.no/visma-net-erp/help/purchases/process-purchase-receipts-and-returns/purchase-price-variance-allocation-example-1/)