Standard cost release A/C entry

[Former Member]

Dear Experts,

When i release standard cost FG/SFG stock price coming down.

I want a suggestion that when price release

Case.1.If it is favorable (Like Existing stock price 100 $ in costing run it came 120$)

System raise entry Material stock a/c(Balance sheet) Dr. 20$

                              To Material revaluation/Price difference a/c(P&L a/c) 20$

Case 2.If price was unfavorable (Like Existing stock price 100 $ in costing run it came 70$)

System raise entry Material revaluation/Price difference a/c Dr. 30$

                              To Stock a/c 30$

Price difference is always a adjustment & as per my knowledge it is a expenses a/c

In case no 2. it is ok means price difference shows in P&L and less in Stock a/c in Balance sheet

But in case no 1 the price difference add to stock in balance sheet & need to show in revenue a/c in P&L.

In our system only expenses material revaluation/price diff  a/c created shall we created revenue price diff a/c to fulfill the requirement.

Kindly give your valuable solution

Regards,

Debashis

[rajneesh_saxena]

Dear Debashish

in both the cases (favorable or unfavorable revaluation) UMB is hit by the system. You can define separate GL for both if you wish to do so and accordingly do the settings for Debit and credit in OBYC.

But as Srinivas rightly said that normally one GL is created for both and that is opened as expense GL. Probably your concern is that if at any time balance of this account is credit then what to do. Boss, that can be managed at FSV easily.

Regards

Rajneesh Saxena

[Former Member]

Hi Sahoo,

System is behaving correctly in the above case. In 1st case, new standard cost increased and the increased amount is debited to stock and the other side price difference a/c will hit.

Vice versa, in 2nd case, new standard cost is less the existing one and stock value reduced by crediting and other side price difference account debited.

BR, Srinivas Salpala

[Former Member]

Dear Srinivas,

Thanks for your quick response.

In case no 1 new standard cost more than existing one and stock value added.

So in this case price diff is a revenue a/c and shown in revenue side of P&L a/c.

So shall i create a revenue g/l of price diff?

How it mapped in system!

Please give your valuable input.

Regards,

Debashis

[Former Member]

Hi,

Material revaluation Price difference is always P&L expense account only. Try to check with a scenario and revert.

BR, Srinivas Salpala

[Former Member]

Hi,

Thanks a lot.Now i understand price diff is always a expenses a/c.

Regards,

Debashis

[Former Member]

Hi Sahoo,

If you get the solution please close the thread to avoid continuity of new thread in the same.

BR, Srinivas Salpala