E1: 43: P4314 Exchange Rate Variance and Purchase Price Variance Both Update F4105 Weighted Average Cost (Doc ID 2967254.1)

Last updated on AUGUST 10, 2023

Applies to:

Symptoms

The implemented enhancement Enh 16935315 - JDE NOT IFRS COMPLIANT FOR INVENTORY VALUATION/CARDEX in P4314 Processing option 18, Update Weighted Average Cost (WAC) and Cardex with Exchange Rate Variance, when used in combination with a Purchase Price Variance (PPV), will ignore the processing option.

P4314 processing option, tab 3 - Process, Option 18. Update Weighted Average Cost and Cardex with Exchange Rate Variance

Blank = Update weighted average cost and cardex with exchange rate variance
1 = Do not update weighted average cost and cardex with exchange rate variance

If a combination of variances such as amount (PPV)or tax variances exist along with the exchange rate variance, then the system will ignore the value set in the processing option and the system updates both the Cardex and the weighted average cost for that difference. The Cardex entry and the Weighted Average Cost (WAC) updates will include the both the exchange rate variance and the PPV, when business requirement is to only include the PPV in updates to WAC.

Steps:

1. Setup a foreign supplier in a currency environment.
2. P4310 - Add purchase order for foreign supplier with domestic and foreign amounts, exchange rate as of date ordered.
3. P0015A - Change exchange rate prior to purchase order receipt, and again prior to voucher match.
4. P4312 - Receive and post a receipt batch, using exchange rate as of G/L date.
5. Set P4314 processing option, tab 3 - Process, Option 18. Update Weighted Average Cost and Cardex with Exchange Rate Variance to 1 = Do not update weighted average cost and cardex with exchange rate variance.
6. P4314 - Perform voucher match to open receipts, 3-way match, using a purchase price increase, independent of the exchange rate change. Use exchange rate as of Voucher Date.

When the P4314 processing option is set to not update the WAC with the Exchange Rate Variance, the WAC is updated by both the PPV and exchange rate variance. This does not support the business requirement.

The business requirement is to only include the PPV in updates to WAC. There is no option to update the WAC with just a PPV, independent of the exchange rate variance.

Expect the ability to make use of the implemented enhancement for 3 way voucher match in multi-currency environment without combining the PPV and exchange rate variance in the update to Weighted Average Cost.

Cause