GR/IR Account and Price difference Account

[Former Member]

Hello Guru's

Please tell me how the values goes to GR/IR account and Price/diffrence

Account when we do GR.What portion of value goes to the GR/IR and Price difference Account.Please illustrate with some example.like

PO-GR-IV(Order quantity and Value).

[Former Member]

Dear Shikha

Assume material standard price is Rs 250

Now you are raising PO for 5 nos for Rs 300 total=Rs 1500

During goods receipt the value will posted as

Stock account Rs 1250(Dr)

GR/IR Clearing account Rs 1500 ( gr/ir Cr)

Price variance account Rs 250 ( gr/ir Dr)

During MIRO

Vendor account 1500 (Cr)

GR/IR Account 1500 (Dr)

Further clarification let me know.

Shobana

[Former Member]

Dear Shobhana,

I want to know how this Price diff Account is settled.What is its user.As in the example given by you the amount 250 has gone to Price difference Account(PRD)

Is there any diff of the amount PRD when we take standard or Moving Material.

Please help............

With Lots of thanks

From

Shikha

[former_member218067]

Hi,

When you Post GR system take the price from either info record if maintained or purchase order price

Multiplied by Qty system posts this value to your inventory account as debit but system does not know where to post credit till you post Invoice so it posts this value as credit in some sort of Transit account which GR/IR account

When you post invoice for this GR system comes to know that this account is to be paid to invoice vendor so it cleared the GR/IR account and then debits it to vendor account

Now if there is a difference in Price of your invoice entry and PO price then this difference is posted to Price difference account if you are using valuation control as S i.e. Price if you are using V i.e. Moving average price then it looks for available stock if sufficient stock is available it posts to stock account else it posts to price difference account

Hope it’s clear to you

BR

Diwakar

Reward if useful

[Former Member]

Hello Diwakar,

Thanks alot for your reply.I am having Problem with the

material having Moving Avg Price.Can u give some example

to the illustrate the flow of amounts to various accounts.

Pls explain the V case with Eg.

I have one case.

Material has been tagged as V(Moving Price)

Material PO Price is 28,176.00

Quantity : 42

Base Amount at the time of doing IV : 1,183,392 INR

then the amount which has gone to PRD Acct :342,186 INR

If we try to post the IV by reducing the base amount

ie 1000000 INR

1183392 - 1000000 = 183392

this amount should go to PRD Account in addition to

what is already there (342,186 + 183392)

but what i found the amt 158,794 has gone to PRD Acct.

(342,186 - 183,392)

Please reply........................

From

Shikha

[Former Member]

hi

here u have reduced the po amount then it is debited the prd account not credited

regards

srinivas kona