How Price Difference is Calculated
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7/14/2019 How Price Difference is Calculated http://slidepdf.com/reader/full/how-price-difference-is-calculated 1/2 This is not an issue. This is exactly what we expect to be done by the standard solution. This document enables us to understand how price differences (plus exchange rates differences) work on SAP standard. Related: CKM3N – Price analisys. 1 Initial inventory: In Period 1, there is a beginning inventory of 10kg of the raw material , in this case we will call “PEAD” in warehouse that is valuated with the standard price of 20 Reais (BRL). 2 Goods Receipt: In the same period, a purchase order is placed for 20kg of “PEAD” in the foreign currency US dollars (USD). The goods receipt of 20 kg of “PEAD” takes place at a price of 2.1 USD with an exchange rate of 1USD: 10 BRL. 20 kg of “PEAD” costs 42 USD or 420 BRL. 400 BRL are posted to the material stock account and 20 BRL to the price difference account. 3 Invoice Receipt: At invoice receipt a kilogram of “PEAD” costs 2.2 USD. The increase in the price of “PEAD” causes price differences to arise, and fluctuations in the exchange rate (at invoice receipt 1USD is 11 BRL) cause exchange rate differences to arise. At invoice receipt 20 kg of “PEAD” costs 44 USD or 484 BRL. At invoice receipt, 22 BRL are posted to t he price difference account and 42 BRL are posted to the exchange rate difference account. In the material price analysis CKM3N, the following values are displayed for Period 1. Quantity Preliminary valuation Price differences Exchange rate differences Price 1 Initial inventory 10 kg 200 BRL 0 0 20 BRL Receipts Procurement 2 Goods receipt 3 Invoice receipt 20 kg 20 kg 20 kg 0 400 BRL 400 BRL 400 BRL 0 42 BRL 42 BRL 20 BRL 22 BRL 42 BRL 42 BRL 0 42 BRL 24.2 BRL 24.2 BRL 21 BRL 0 Other inward/outward movements 0 0 0 0 0 Cumulated inventory 30 kg 600 BRL 42 BRL 42 BRL 22.8 BRL Consumption 0 0 0 0 0 Ending inventory 30 kg 600 BRL *The price is calculated as follows: (Preliminary valuation + price differences + exchange rate differences)/ quantity = price Postings:
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Transcript of How Price Difference is Calculated
7/14/2019 How Price Difference is Calculated
http://slidepdf.com/reader/full/how-price-difference-is-calculated 1/2
This is not an issue. This is exactly what we expect to be done by the standard solution.
This document enables us to understand how price differences (plus exchange rates differences) work on SAPstandard.
Related: CKM3N – Price analisys.
1 Initial inventory:
In Period 1, there is a beginning inventory of 10kg of the raw material, in this case we will call “PEAD” in warehouse thatis valuated with the standard price of 20 Reais (BRL).
2 Goods Receipt:
In the same period, a purchase order is placed for 20kg of “PEAD” in the foreign currency US dollars (USD).
The goods receipt of 20 kg of “PEAD” takes place at a price of 2.1 USD with an exchange rate of 1USD: 10 BRL.
20 kg of “PEAD” costs 42 USD or 420 BRL. 400 BRL are posted to the material stock account and 20 BRL to the pricedifference account.
3 Invoice Receipt:
At invoice receipt a kilogram of “PEAD” costs 2.2 USD.
The increase in the price of “PEAD” causes price differences to arise, and fluctuations in the exchange rate (at invoicereceipt 1USD is 11 BRL) cause exchange rate differences to arise. At invoice receipt 20 kg of “PEAD” costs 44 USD or 484 BRL. At invoice receipt, 22 BRL are posted to the price difference account and 42 BRL are posted to the exchangerate difference account.
In the material price analysis CKM3N, the following values are displayed for Period 1.
Quantity Preliminary
valuation
Price differences Exchange rate
differences
Price
1 Initial inventory 10 kg 200 BRL 0 0 20 BRL
Receipts
Procurement
2 Goods receipt
3 Invoice receipt
20 kg
20 kg
20 kg
0
400 BRL
400 BRL
400 BRL
0
42 BRL
42 BRL
20 BRL
22 BRL
42 BRL
42 BRL
0
42 BRL
24.2 BRL
24.2 BRL
21 BRL
0
Other inward/outward
movements
0 0 0 0 0
Cumulated inventory 30 kg 600 BRL 42 BRL 42 BRL 22.8 BRL
Consumption 0 0 0 0 0
Ending inventory 30 kg 600 BRL
*The price is calculated as follows:
(Preliminary valuation + price differences + exchange rate differences)/ quantity = price
Postings:
7/14/2019 How Price Difference is Calculated
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Postings are made to the following accounts (This is an example, since I am not yet familiar to Technicolor char of
account ECHA):
No. Periods Inventory Price
differences
Exchange rate
differences
GR/IR clearing account Vendor account
1
2
3
1 200
400 20
22 42 420
420
484
The gross invoice amount without tax is calculated as follows:
2.2 USD/kg * 2.2 USD/kg = 44 USD
Translation is carried out through invoice verification (MM-LIV) at the current exchange rate:
44 USD * 11 BRL/USD = 484 BRL
The price difference in the local currency BRL at goods receipt is calculated with the exchange rate at the time of goods
receipt:
Price difference at goods receipt = price at goods receipt * goods receipt quantity - standard price* goods
receipt quantity
or
20 BRL = 420 BRL - 400 BRL
or
(2.1 USD/kg *10 BRL/USD-20 BRL/kg) * 20 kg = 20 BRL
The exchange rate difference in local currency BRL at invoice receipt is the difference between the valuation of the
goods receipt with the old and new exchange rates:
42 USD * ( 11 BRL/USD –
10 BRL/USD) = 42 BRL
The price difference in local currency at the time of invoice receipt is the difference between the invoice amount and the
total from the valuation of the goods receipt and the exchange rate:
Price difference at invoice receipt = price at invoice receipt - price at goods receipt - exchange rate difference
or
22 BRL = 484 BRL - 420 BRL - 42 BRL
The 22 BRL is the price difference in purchase order currency, in this case USD, translated at the current exchange
rate:
20 kg * 0.1 USD/kg * 11 BRL/USD = 22 BRL.
That´s it
