1. Localizations for Argentina Implementation Guide
  2. Understanding the Price of the Last Adjusted Purchase

Understanding the Price of the Last Adjusted Purchase

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 Adjustment Cost Level processing option determines the costing level to obtain the price of the last receipt. Values are:

Blank: Item master's cost level

A: Item

B: Item and company

C: Item and branch

D: Item, branch, and lot location