Purchase Gain/Loss Accounts

Many companies find that when currency exposure is significant, it is useful to include currency variance in margin reports. In some countries such as Poland, it is a legal requirement that all variances affecting item cost are recorded against the item product line.

To support this requirement, use Purchase Gain/Loss Account Maintenance (26.17) to define a purchase gain and a purchase loss account, sub-account, and cost center for each currency or combination of currency and product line. These accounts are updated during receiver matching when the exchange rate changes between the point of goods receipt and matching.

Without these detailed accounts, the variance is posted to the system unrealized exchange gain or unrealized exchange loss account and combined with other currency variances.

Enter a valid currency code defined in Currency Create (26.1.1). You can enter a product line code or you can leave this field blank. Records defined for a blank product line are used for memo items in Supplier Invoice Create.

Then, enter a purchase gain account, sub-account, and cost center combination and a purchase loss account, sub-account, and cost center combination. Standard account validation is used: the account must be an existing active standard account, and the combination of account, sub-account, and cost center must also be valid.

When these accounts have been defined, they are used in supplier invoices as follows. When the exchange rate changes between receipt of the purchase order and update in Supplier Invoice, the resulting difference is posted to one of the following:

• The purchase gain or purchase loss account defined in Purchase Gain/Loss Account Maintenance for the combination of the invoice currency and the item’s product line if this record is available

• If this account is not available, the purchase gain or purchase loss account defined in Purchase Gain/Loss Account Maintenance for the invoice currency (needed when the item being invoiced is a memo item), if this record exists

• If this is not available, the system unrealized exchange gain or unrealized exchange loss account

You can use Purchase Gain/Loss Account Inquiry (26.18) to display details about accounts defined in Purchase Gain/Loss Account Maintenance.

Use Purchase Gain/Loss Account Copy (26.22) to quickly create new accounts by copying existing ones. You can access and edit the new accounts in this program or in Purchase Gain/Loss Account Maint (26.17). The data that displays is similar. You can edit all associated data for the record, except for the currency and product line that uniquely identify the new record. You cannot delete the new purchase gain or purchase loss account records using Purchase Gain/Loss Account Copy.