This chapter contains the following topics:
Section 14.1, "Understanding Inventory Inflation Adjustment for Argentina"
Section 14.2, "Entering Imported Item Information for Argentina"
Section 14.3, "Working with Beginning Balances for Inventory Inflation Adjustments for Argentina"
Section 14.4, "Creating an Inflation Adjustment Index for Argentina"
Section 14.5, "Entering the Market Value of an Item for Argentina"
Section 14.6, "Calculating the Price of Last Adjusted Purchase for Argentina"
Section 14.7, "Reviewing and Adjusting Prices for Argentina"
Section 14.8, "Generating Journal Entries for Inflation Adjustments for Argentina"
Section 14.9, "Voiding an Adjustment Journal Entry in Argentina"
Section 14.10, "Adjusting Works in Process for Inflation for Argentina"
In the JD Edwards EnterpriseOne Inventory Management system, one important factor to consider is the value that is assigned to the inventory.
Inventory valuation can be done in different ways, depending on the company's industry or market as well as the legal and fiscal requirements of the country in which it operates.
Inflation is also a significant factor when determining the value of the inventory.
In an inflationary environment, the results that are provided by valuation methods that are used to determine inventory valuation vary considerably. The differences in valuation that occur when using different methods are marked clearly by fluctuations in inflation levels.
This is the reason that, in a stable economy that is unaffected by inflationary changes, a valuation method such as the Weighted Average Price (WAP) does not indicate significant differences in the value of the stock if compared with another method such as the Price of Last Adjusted Purchase (PLAP).
The PLAP method is one of the most accepted methods because it calculates the stock value by using the price of the last item purchased. This method includes not only the price of the last purchase, but also the costs that are incurred in the purchasing process.
If this purchase does not take place within the valuation month, an index that reflects the fluctuation of the inflation is used to adjust it.
This guide explains in detail the process that should be followed to calculate the value of the stock using the PLAP method.
This section provides an overview of imported item information, lists prerequisites, and discusses how to enter imported item information.
You use the standard programs to enter item information for Argentina, then use the Imported Items Data Entry (P76A4108) program to enter information for imported items. The dispatch date, and customs and dispatch information for imported items must be entered so that they appear on the legal invoice. You use the JD Edwards EnterpriseOne Inventory Management system to enter the imported items and their respective lots into the system; then customs and dispatching data, as well as the dispatch and lot expiration dates, are updated. The printed invoice shows the import data for the lot.
Before you complete the tasks in this section:
Verify that codes for the origin of imported items is set up in the Country Codes (OO/CN) UDC table.
Verify that code for customs are set up in the Lot Reporting Code 09 (41/L0) UDC table.
Complete the Country of Origin field on the Item Branch/Plant Info. form when you enter standard information for imported items.
| Form Name | Form ID | Navigation | Usage |
|---|---|---|---|
| Work With Imported Data Entry | W76A4108A | Imported Items (G76A41), Imported Items Data Entry. | Enter imported item information for Argentina. |
| Imported Data Entry | W76A4108B | Select an item in the Detail area on the Work With Imported Data Entry form, and click Select. | Enter imported item information for Argentina. |
Access the Imported Data Entry form.
Enter the commodity code number for the item.
Enter one of ten classification codes available primarily for lot purposes.
Enter the last date that a particular activity occurred. You determine the type of activity that the category represents (for example, inventory completions).
This field represents date category 4. You specify the document types that update this category in user-defined codes (40/LD).
Enter a code (00/CN) that identifies the country in which the item originates. This information is useful to organizations that must periodically separate inventory by country of origin.
See "Lots" in the JD Edwards EnterpriseOne Applications Inventory Management Implementation Guide.
This section discusses how to:
Generate beginning balances for inventory inflation adjustments.
Set processing options for Create Missing AS OF record (R76A397).
Select Inventory Inflation Adjustment (G76A39), Create missing AS OF record.
When a new fiscal year begins and stock movement occurs in the first period, you run the Item Ledger As Of Record Generation program (R41542) for the first period, and then run the Create missing AS OF Record program (R76A397) for the current period to generate records for the fiscal year in the F41112 table.
This section provides an overview of the inflation adjustment index and discusses how to create an inflation adjustment index.
An inflation adjustment index reflects price evolution in an inflationary market or indicates how inflation fluctuates in the market. In the PLAP method, the indexes are used to adjust those purchases that did not occur within the valuation period.
The indexes that should be applied are published monthly by the National Institute of Statistics and Censuses (INDEC).
The indexes are identified by adjustment codes.
You use the Adjustment Indexes program (P76A391) to maintain the inflation adjustment indexes.
Access the Adjustment Indexes form.
Enter a code used in the adjustment process, such as for an inflation stock adjustment.
Enter the calendar year for this calendar.
Enter a number that corresponds to the month in a calendar year.
Enter an index used in the adjustment process, such as for an inflation stock adjustment.
This section provides an overview of market values of items and discusses how to enter the market value of an item.
The market value reflects the current price of the item. Following accounting norms, this value is used as a comparative value with regard to any inventory measurement method.
The market value acts as an upper limit. It is also used for the routine comparison called Cost or market, whichever is less.
You can compare the market value and the price resulting from the PLAP method. You activate this comparison in the processing options for the Inflation Inventory Adjustment program (R76A395).
| Form Name | Form ID | Navigation | Usage |
|---|---|---|---|
| Item Pool Cost Maintenance | W76A396B | Inventory Inflation Adjustment (G76A39), Market Value.
Select the Add button on the Work With Item Pool Cost form. |
Enter the market value of an item. |
Access the Item Pool Cost Maintenance form.
Enter the amount per unit, calculated by dividing the total cost by the unit quantity.
Enter the date on which the item, transaction, or table becomes inactive, or through which you want transactions to appear. This field is used generically throughout the system. It could be a lease effective date, a price or cost effective date, a currency effective date, a tax rate effective date, or whatever is appropriate.
This section provides an overview of the price of the last adjusted purchase, lists prerequisites, and discusses how to:
Run the Inflation Inventory Adjustment Process program.
Set processing options for Inflation Inventory Adjustment Process (R76A395).
You use the Inflation Inventory Adjustment Process program (R76A395) to calculate the PLAP. The PLAP reflects the fluctuation of inventory prices in an inflationary market.
The Inflation Inventory Adjustment Process program obtains the price adjustment value for the last inventory receipt, calculates the new stock valuation by using the price adjustment value, and compares the original or historical price of the stock to the price adjustment value. The difference that results from this calculation is indicated in an accounting entry, thus reflecting the new stock value, given the effect of inflation.
The PLAP that is calculated by the Inflation Inventory Adjustment Process program considers the price variations that exist between the price when items were received and the price when the invoice is entered in the system (matching variations). The related costs incurred during the purchasing process are also considered in the PLAP.
To generate the price adjustment, the system searches the F43121 table by general ledger (GL) date, using the parameters that are set up in the processing options and data selection, to find the last item receipt.
The price that is calculated by the system is never zero if stock is available because the logic that is used for the calculation contains a search hierarchy:
The system searches for the last receipt before the period end date of the year and month that is to be adjusted, and then applies the inflation index (As of Date Index / As Of GL Receipt Date index).
If no receipt exists, the system calculates the WAP, searching for it in the As Of table with the fiscal year and period that is less than or equal to the process date, obtains the first positive balance, and then applies the inflation index (As of Date Index / the Base Date index that is specified in the Date Beginning Adjustment processing option).
Data selection defines the search for the price in the receipt table, indicating what must be selected for the process: branch, company, GL class, item category codes, and so on.
The costing level that is used to obtain the price of the last receipt is determined by the Adjustment Cost Level processing option. Values are:
Blank: Item master's cost level
A: Item
B: Item and company
C: Item and branch
D: Item, branch, and lot location
If you have chosen costing method C, item and branch, the process searches for the last item receipt by using item by deposit, regardless of its location.
For example, these records exist in table F43121:
| Date | Receipt | Item | Branch | Location | Price |
|---|---|---|---|---|---|
| 12/01/05 | 10 SO | 001 | BR01 | A1 | 45 |
| 15/01/05 | 11 SO | 001 | BR01 | B3 | 42 |
| 15/01/05 | 12 SO | 001 | BR02 | C1 | 47 |
The process selects these receipts to determine the price:
| Date | Receipt | Item | Branch | Location | Price |
|---|---|---|---|---|---|
| 15/01/05 | 11 SO | 001 | BR01 | B3 | 42 |
The process selects these receipts to determine the price:
| Date | Receipt | Item | Branch | Location | Price |
|---|---|---|---|---|---|
| 15/01/05 | 12 SO | 001 | BR02 | C1 | 47 |
The value that is calculated by the process for the price of the last purchase can also be subjected to the market value validation, which is activated through a processing option. This validation does not enable for the value that is calculated by the system to be greater than the value specified as the market value.
|
Note: The cost level from the F4101 table and the cost level that is specified in the processing options of the Inflation Inventory Adjustment Process program (R76A395) are related.The cost level from the F4101 table, defined with the values 1-Item, 2-Item/Branch and 3-Item/Branch/Location, determines the level that is used to adjust the inventory, whereas the cost level from the processing options determines the search level that is used to find the price in the receipt table. To obtain the price of the last purchase, the minimum cost level that is specified is used, whether it is the one specified in the processing option or the one from the F4101 table. |
Before you complete the tasks in this section:
Set up an inflation adjustment index.
Enter the market value of the items with prices that you are adjusting for inflation.
Run the Item Ledger As Of Record Generation program (R41542) to create the balance forward records for item transactions.
Set up Distribution AAIs 3910 and 3911.
Select Inventory Inflation Adjustment (G76A39), Inflation Inventory Adjustment Process.
Processing options enable you to specify the default processing for programs and reports.
Enter a value that exists in the Adjustment Code (76A/CA) UDC table to specify which inflation adjustment index to use.
Specify the year for which to process transactions.
Specify the month for which to process transactions.
Specify the date on which the adjustment index becomes effective.
Specify the level at which the price of the last receipt search takes place. The level that you specify in this processing option can be different from the costing method that is specified in the F4101 table. The F4101 table specifies the detail level that is used to adjust inventory.
Values are:
Blank: By item master
A: By item
B: By item and company
C: By item and branch
D: By item, branch, and location
Specify a value that exists in the Document Type (00/DT) UDC table that is used to obtain the automatic accounting instructions (AAI) accounts.
Enter 1 to validate the market value. If you enter 1 for this processing option and the market value is missing or has a value of zero, the Market Value field displays a value of zero, and the process uses the last purchase price adjustment that is calculated by the system for the adjustment.
Enter 1 to retain the item's GL class when these circumstances exist:
A different GL class is used.
The item balance amount is other than zero.
The quantity is zero.
Review records in the F4111 table to view cases where purchase order-related costs have a GL class that is different from the one that is defined of the item in the F41021 table. In these cases, the GL class becomes significant because it defines the adjustment entry; the Market Value Validation processing option enable the system to charge generated adjustments to the inventory account where they originated.
This section discusses how to:
Review and adjust prices.
Set processing options for Calculated Costs (P76A392).
| Form Name | Form ID | Navigation | Usage |
|---|---|---|---|
| Work with Calculated costs | W76A392B | Inventory Inflation Adjustment (G76A39), Inquiry Calculated Costs. | Review and adjust prices. |
| Work with Adjustments | W76A392D | Select a record in the detail area of the Work with Calculated costs form, and select Adjustments from the Row menu. | Review and adjust prices. |
Access the Work with Calculated costs form.
Enter the list or base price to be charged for one unit of this item. In sales order entry, all prices must be set up in the F4106 table.
Processing options enable you to specify the default processing for programs and reports.
Enter 1 to prevent the value that is entered from being greater than the market value.
Specify the version of the Inflation Adjustment Journal Entry program (R76A396) to run.
The Inflation Adjustment Journal Entry program (R76A396) creates the journal entries for the results that are generated by the Inflation Inventory Adjustment Process program (R76A395).
You can run the journal entry generation in final or proof mode; in both cases, the system creates a detailed report for the entry.
This section discusses how to:
Run the Inflation Adjustment Journal Entry program.
Set processing options for Inflation Adjustment Journal Entry (R76A396).
Select Inventory Inflation Adjustment (G76A39), Inflation Adjustment Journal Entry.
Processing options enable you to specify the default processing for programs and reports.
Specify the GL date for the report.
Specify the batch type (98/IT) for the report.
Specify the document type (00/DT) for the report.
Specify the ledger type (09/LT) for the report.
Enter R if you want the journal entry to be automatically reversed.
Enter 1 to run in final mode.
You can void journal entries that are generated by the Inflation Adjustment Journal Entry program (R76A396).
|
Important: You must use the Calculated Costs program (P76A392) to void entries that are created by the Inflation Adjustment Journal Entry program.Do not perform the void by using the JD Edwards EnterpriseOne General Accounting system. |
This section discusses how to void an adjustment journal entry.
| Form Name | Form ID | Navigation | Usage |
|---|---|---|---|
| Enter Void Date | W76A392E | Inventory Inflation Adjustment (G76A39), Inquiry Calculated Costs.
Select a record in the detail area on the Work with Calculated costs form, and select Void from the Row menu. |
Void an adjustment journal entry. |
Access the Enter Void Date form.
To void an adjustment journal entry, complete the Void GL Date field, and select OK.
This section provides an overview of adjusting works in process for inflation, lists prerequisites, and discusses how to:
Create the journal entries for work in process inflation adjustments.
Set processing options for Work in Process Adj. Journal Entry (R76A398).
Void a work in process adjusting journal entry.
Group transaction types.
Inventory valuation can be done in different ways, depending on the company's industry or market as well as the legal and fiscal requirements of the country in which the company operates.
In an inflationary economy, the valuation of works in progress is as important as the valuation of stock. The Work in Process - Inflation Adjustment process is designed to reflect the effects that inflation has over works in process. The system calculates the value of stock issues, which are considered works in progress within work orders, and then revalues the stock issues with prices that are calculated by using the PLAP method.
The Work in Process Adj. Journal Entry program (R76A398) creates journal entries that reflect the effect of inflation on works in process. The system first revalues stock issues (document type WO) by using the price that is calculated through the PLAP process. The system then generates a journal entry for the differences between the historic amounts from the F4111 table and the PLAP adjusted amounts.
Using the data selection that you specify (document types, branch, items, and so on), the system searches table F4111 by post date and calculates the adjustment for each of the transactions that are found. The adjustment amount is based on the PLAP that is calculated for the year and period being processed, and the item cost level that is specified in the F4101 table.
The system generates journal entries by using the Work in Progress accounts of the original transactions. The system searches the AAI tables that created the transaction by company, transaction document type, and GL class.
The system uses this search hierarchy to obtain the business unit of the account:
The system obtains the business unit from the AAI table, using the AAI that is set up for the document type in the AAI Document Type - Work in Process Adjustment program (P76A395).
The system obtains the business unit from the work order, searching the F4801 table to determine whether the business unit from the AAI is blank.
The system uses AAI table 3911 (Expense or Cost of Goods Sold - Stock Valuation Adjustments) to create journal entries in the offset account and summarizes journal entries by current account.
You can run the Work in Process Adj. Journal Entry program in proof or final mode, and you can run it as many times as necessary.
The Work in Process Adj. Journal Entry program produces a report that lists the processed data. The report includes these fields:
Branch
Business Unit
Item
Document Type
Document Number
Quantity
UM
Original Amount
Adjusted Amount
Future Adjustment
Information on the report is grouped by company, fiscal year, fiscal period, GL date, and batch type and number. At the end of the report, under each transaction detail, the report indicates the journal entry.
When run in final mode, the Work in Process Adj. Journal Entry program generates journal entries in the F0911 table and indicates which transactions were processed in the F76A4111 table.
|
Note: The price that is calculated by using the PLAP method must exist for the period for which you are processing the inventory adjustment. The system uses both the calculated price and the inventory journal entries to calculate the final adjustment. |
You use the Void Work in Process Ad. Journal Entry program (P76A398) to void an entry that is generated by the Work in Process Adj. Journal Entry program (R76A398) so that the entry can be reprocessed.
In addition to voiding the journal entry, the Void Work in Process Adj. Journal Entry program deselects transactions that have already been processed so that they can be processed again.
You must specify the post date on which the entry should be voided.
|
Important: You must use the Void Work in Process Adj. Journal Entry program to void entries that are created by the Work in Process Adj. Journal Entry program.Do not use the JD Edwards EnterpriseOne General Accounting system to perform the void. |
The Inventory Turn report (R41116) enables you to analyze:
Trends in the inventory environment.
Inventory turnover in amount.
Before you run the Inventory Turn report, you must group the transaction types by document codes.
For example, you can group the transaction codes for inventory adjustments (IA), inventory issues (II), and inventory transfers (IT) into a transaction type for inventory transactions (I). You can then run the Inventory Turn report using I as a transaction family document type in the processing options.
Before you complete the tasks in this section:
Calculate prices using the PLAP method.
Generate inflation adjustment journal entries.
Set up AAI document types.
Set up document type codes.
| Form Name | Form ID | Navigation | Usage |
|---|---|---|---|
| Enter Void Date | W76A392E | Works in Process (G76A391), Void Work in Process Adj. Journal Entry.
Select a record in the detail area on the Work with Inflation Adjustment Journal Entries form, and select Void from the Row menu. |
Void a work in process adjusting journal entry. |
| Work with Transaction Type | W43115A | Inventory Reports (G41111), Transaction Family Documents. | Group transaction types. |
Select Work in Process (G76A391), Work in Process Adj. Journal Entry.
Processing options enable you to specify the default processing for programs and reports.
Specify the adjustment code (76A/CA).
Specify the year in which to run the report.
Specify the month in which to run the report.
Specify the GL date for the report.
Specify the batch type (98/IT) for the report.
Specify the document type (00/DT) for the report.
Specify the ledger type (09/LT) for the report.
Enter R if you want the journal entry to be automatically reversed.
Enter 1 to run in final mode.
Access the Enter Void Date form.
To void a work in process adjusting journal entry, complete the Void GL Date field.
Access the Work with Transaction Type form.
Inquire on different document transaction types, such as I for inventory transaction documents, O for purchase order documents, and S for sales order documents.
Enter a user defined code (00/DT) that identifies the origin and purpose of the transaction. The system reserves several prefixes for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are:
P: Accounts payable documents
R: Accounts receivable documents
T: Time and Pay documents
I: Inventory documents
O: Purchase order documents
S: Sales order documents