0029723: Landed Cost differences must not trigger a cost adjustment and need to be post to a "LCV" for products valued at Standard Cost.

Openbravo Issue Tracking System - Openbravo ERP

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Date Submitted

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0029723

Openbravo ERP

04. Warehouse management

public

2015-04-28 17:42

2015-08-20 23:16

Reporter

VictorVillar

Assigned To

aferraz

Priority

urgent

Severity

major

Reproducibility

always

Status

closed

Resolution

fixed

Platform

OS Version

Product Version

Target Version

Fixed in Version

Merge Request Status

Review Assigned To

dmiguelez

OBNetwork customer

Web browser

Modules

Core

Support ticket

Regression level

Regression date

Regression introduced in release

Regression introduced by commit

Triggers an Emergency Pack

Summary

0029723: Landed Cost differences must not trigger a cost adjustment and need to be post to a "LCV" for products valued at Standard Cost.

Description

Landed Cost differences must not create a cost adjustment and besides that must be post to a "LCV" account (Landed Cost Variance) account instead of an "Asset" (Product Asset) account for products valued at Standard Cost.

Steps To Reproduce

You should work with a Standard Cost Algorithm

As group Admin role,
  Go to Product window:
    create a new one
    Name: test
  Add a purchase Price list: Tarifa bebidas
  unit/list price: 5
Add a Cost register:
  Start date: 01/01/2012
  Ending date: 31/12/9999
  Cost: 5
  Warehouse: blank
  manual: Y
  permanent: Y

Go to Purchase Order:
   Create a new one for this product: qty: 1
Complete it.
Go to Goods receipt window,
  Create the lines from the Purchase Order created before.
  Storage Bin: RN- 2-0-0
Complete it.

Go to Goods Shipment window,
  Create a new one selecting the product: Test
  qty:1
Process it.

Go to Product window:
  create a new one
  Type: service
  name: transport
Accounting tab:
Asset Account : 62400 Transportes
Product Expense : 62400 Transportes

Go to Landed Cost Type document:
select the Distribution by Amount algorithm
select the product: Transport

Create a landed cost document --> Cost 20 assigned to the Goods Receipt created before. Process it and post it.

Landed Cost posting looks like:

20.00 € (Product Asset) - DEBIT
20.00 € (Transport Expense) - CREDIT

Launch the Costing Background process and realise that the transactions have been calculated.

Realise that there is only one adjustment for Goods Receipt document (not for the Goods shipment), therefore the "Total Cost" and "Unit Cost" of that transaction has changed.

This is not correct as landed cost booking should not change the cost of a transaction valued at "Standard" cost, and it should not trigger the creation of a cost adjustment.

Realize also that there is no recalculation of the Cost. This is correct.

As a summary:

The stock of this item is 0 units but the posting valuation is 20 as you can see in the journal entry of the Landed Cost. this is not correct:

35000 Productos terminados A Debit 20.00
62400 Transportes Credit 20.00

Above means that this adjustment for a product under Standard cost calculation implies a value in the Product Asset account that is not true.

Above posting should be something like:

XXXXX Product Price Differences Debit 20.00
62400 Transportes Credit 20.00

Moreover, if you introduce now a new goods receipt (qty: 1 => transaction cost 5) and you launch the valued stock report, you will see qty:1 and valuation 25 => 'Average Cost': 25 which is not correct, correct cost is 5 (it is not 20+5)

If the users does not navigate to the Costing tab of this product they will not realise that there is a difference between the cost shown in this report and the actual cost of the product.

Proposed Solution

(1) Landed cost processing must not trigger a cost adjustment for products valued at "Standard Cost".

(2) landed cost posting must use an "Invoice Price Variance" account instead of a "Product Asset" account for products valued at "Standard Cost".

Correct posting should be:

XXXXX Invoice Price Variance Debit 20.00
62400 Transportes Credit 20.00

Same would apply to differences between "Estimated" Landed Cost and "Actual" Landed Cost.

Those differences are post now as "Product Asset" if marked as "Is Cost Adjusted" = Yes.

Same way those differences must be posted as "Invoice Price Variance".

(3) Review "valued stock report". It is necessary to change the name of the column "Average Cost" by "Cost". Once all of this is fixed, the "Cost" shown for this kind of "products" will be the "Standard" cost. See issue related 29731

Additional Information

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Relationships

related to	defect	0029728	closed	aferraz	Purchase price differences need to be post to a PPV account for products valued at "Standard" cost
related to	defect	0029731	closed	AtulOpenbravo	"Value Stock Report" needs to be enhanced.
related to	defect	0029729	closed	aferraz	Differences between actual cost and standard cost (variances) should not trigger Cost Adjustments.