Purchase price variance allocation - example 2 | Visma Net ERP

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.

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.

During the next few days, you sell some quantities of the items. The system generates an inventory issue with the following lines.

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.

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.

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.

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.

When you release this adjustment, the system generates the following transactions.