Purchase Price Variance (Standard Cost, Non-Recoverable Tax)
Tax accrual at goods receipt
• When goods are received, entries are created for received item cost (1), variance (2) and tax on item cost + variance (3).
• When an invoice is received, entries are created for invoice value, including tax (4).
• When an invoice is matched, entries are created for item cost (5), variance (6), and tax (7).
Tax accrual at supplier invoice
• When goods are received, entries are created for received item cost (1) and variance (2) but not for tax.
• When an invoice is received, entries are created for invoice value, including tax (3).
• When an invoice is matched, entries are created for item cost (4), variance (5), and tax on item cost + variance (6).