IFRS compliance for purchase cost of inventory
Sjakko Hendriks
According to IFRS (International Financial Reporting Standards) which are
applicable in the EU as from January 1st , 2005, we must include all
transport, handling costs etc in the purchase price of an item. (IAS 2
Paragraph 11 states: The costs of purchase of inventories comprise the
purchase price, import duties, transport, handling and other costs directly
attributable to the acquisition of finished goods, materials and services).
In my opinion Axapta is not capable to fulfil this requirement as the above
mentioned costs cannot be taken up directly in the purchase price. (only the
purchase price of the supplier can be approved according to the purchase
order and not the additional costs often made by other suppliers or the tax
authorities).
Reaction MBS
"Yes, we can add additional costs (such as freight, insurance etc.) to the
purchase price of the goods and thus update the cost price of the stock item.
(Cost price= purchase price + additional cost related to the acquisition of
the goods).
We can do it both
- at the time of posting of the purchase invoice (for example if
several products are invoiced on the same invoice and on the bottom of the
invoice the supplier adds freight etc. for the whole delivery)
- or subsequently (for example if one invoice is received for the
goods and an other invoice for the freight – from the same supplier or even
from a different supplier).
The functionality, which we can use for this purpose is called
‘Miscellaneous charges’. (Please let me know if you need details on how to do
it.)
However, this functionality has shortcomings.
You can, of course, get the correct cost price, but you can’t trace, to
which vendor/invoice the additional charges are related, which means you
can’t find back to the separate invoice for the additional charges.
From user’s point of view, this is not very handy, you need to keep good
manual files to be able to answer for example questions from auditors if they
want to verify the cost price.
However, this is not the issue in the IFSR.
The IFSR issue is only about correct cost price and therefore the answer to
the question regarding goods purchased for sale is Yes, we can allocate
additional costs to the purchase price using misc. charges functionality on
the Purchase Order.
Customer:
Indeed MBS is right that the functionality in Axapta is present by means of
the “Miscellaneous charges”. As he himself already indicates however, the way
it is processed within Axapta is very unhandy and in my opinion not
acceptable to any auditor.
But in principle he is right that the software is capable working according
to the IFRS standards. However this is typically an answer from a software
supplier’s perspective and not workable in practice.
Maybe Microsoft could take this up in their next releases as an improvement
issue.
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smssiva
grabbing it with both hands to improve the product. Unfortunately MBS takes a
very defensive attitude as I have found on many occasions which is very
encouraging. It also makes you wonder whether any of the hundreds of millions
that they were supposed to spend on development of Axapta is actually being
spent.
Michael Costello [MSFT]
person answering was just trying to provide a solution for now and that
there just be a misunderstanding.
I can assure you that we do appreciate all suggestions that we receive.
/Michael
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"smssiva" <sms...@discussions.microsoft.com> wrote in message
news:A5EB3226-9A99-4645...@microsoft.com...
>> goods and an other invoice for the freight - from the same supplier or