Understanding Reports to Reclassify VAT for AP Transactions

You use these reports to reclassify VAT for AP transactions:

AP Vat for Gain Loss report
Closed AP Draft Vat on Gain Loss report

After you post a payment, depending on the type of transactions, you run one of these reports to reclassify VAT on the gain or loss amount. When you run either of these reports, the system performs these steps to generate journal entries:

Selects the journal entry records for gain or loss transactions with document type PG when you run the AP Vat for Gain Loss report and PI when you run the Closed AP Draft Vat on Gain Loss report.
Selects tax area and tax explanation code of all selected voucher records and calculates VAT using tax area percentage and the gain or loss amount. If there are multiple tax areas associated to a voucher, the new report processes those vouchers considering all those tax areas.
Calculates VAT on gain or loss amount.
Searches the automatic accounting instructions (AAIs) or the processing options to find out the final VAT account for generating the journal entry for reclassified VAT.
Generates the journal entry.

When you run one of these reports, the system displays the payment and the associated journal entry on the report output, but if there is any error in the processing, the system does not generate journal entries. If there are no errors, the report classifies the payment as processed.

When you rerun the AP Vat for Gain Loss or the Closed AP Draft Vat on Gain Loss report, the report displays the transactions, but does not recalculate VAT on gain or loss amounts. It calculates VAT on gain or loss amounts only when you run the report for the first time.

The system stores the reclassification status in the AP VAT on Gain/loss (F76M940) or GL VAT on Gain/loss MEX (F76M990) table.

The accounts payable system considers these cases to reclassify VAT for AP transactions:

VAT recognition on AP gain or loss amount.
VAT recognition on voided AP gain or loss amounts.
VAT recognition on gain or loss amounts for closed draft.

VAT Recognition on AP Gain or Loss Amount

You follow these steps in the VAT recognition on AP gain or loss amount process:

Enter a foreign voucher and pay it using the foreign or alternative currency.
Post the payment. The system reclassifies the payment VAT amount from the temporary VAT account to the final VAT account.
Run the AP Vat for Gain Loss report to reclassify the VAT applicable on the gain or loss amounts from the gain/loss account to the final VAT account.

When you run the AP Vat for Gain Loss report, the system performs these steps:

Selects the gain or loss amounts of posted vouchers.
The standard payment process generates a PG record on the Payment Detail table (F0414) associated with the gain or loss amounts respectively. The AP Vat for Gain Loss report selects all posted payments with PG records for processing.
Selects tax rate area and tax explanation code of the associated voucher.
If a voucher has multiple tax areas, the new report considers those. If you enter a tax amount manually through the standard voucher entry applications, the system continues to use the standard calculation process to calculate VAT on gain or loss amounts. The system uses the tax rate area and tax explanation code from the F0411 table.
If you use an alternative currency to make a payment, the payment process generates two gain or loss amounts that comprise accounts associated with foreign and alternative currencies.
Calculates VAT on the gain or loss amount.
For each gain or loss amount selected, the report calculates the VAT associated with the gain or loss amount. The system searches the percentage on the first transaction of the tax rate area that is different from zero. This process does not consider the discount amounts. It calculates VAT using tax rate area percentage and the gain or loss amount. It considers all explanation codes that begin with V or A.
Searches AAI for journal entry.
The report retrieves the gain or loss account and the final VAT account to generate the journal entry for each gain or loss amount. You can specify the final VAT account in the processing option. If you do not specify an account in the processing option, the system determines this account based on the AAI values.
Generates the journal entry.
The journal entries use the VAT gain or loss amount, gain or loss account, and the final VAT account and update only the AA ledger. The system generates a different batch by payment to reclassify the VAT of the gain or loss amounts.
Updates the journal entry in the F76M940 table.
When you run the AP Vat for Gain Loss report, the system generates a journal entry for each gain or loss VAT amount for each payment line. The system saves these journal entries in the F76M940 and F0911 tables. Then, you post the transaction batch.

VAT Recognition on Voided AP Gain/Loss Amount

You follow these steps in the VAT recognition on voided AP gain or loss amount process:

Void a foreign payment.
When you post a void payment, the system reclassifies the payment VAT amount from the final VAT account to the temporary VAT account.
Run the AP Vat for Gain Loss report to reclassify the VAT of the voided gain or loss amounts from the VAT account to the gain or loss account.

When you run the AP Vat for Gain Loss report, the system performs these steps:

Selects gain or loss amounts for voided payments.
The standard payment process generates PG or PL records in the Payment Detail table (F0414) for voided payment lines. The AP Vat for Gain Loss report selects all posted payments with PG or PL records to process the gain or loss amounts so that it includes voided payments for processing. The report searches the PG or PL documents associated with a voided payment and verifies whether the previous document is a PO document in the F0414 table.
Calculates VAT for the gain or loss amount for each voided voucher.
The report obtains the voucher gain or loss amount and the associated tax rate area and tax explanation code. If a voucher has multiple tax rate areas, the new report considers those. If you enter a tax amount manually through the standard voucher entry applications, the system continues to use the standard calculation process to calculate VAT on gain or loss amounts. The system uses the tax rate area and tax explanation code from the F0411 table.
Reverses the AAI account when you void a payment.
Updates the journal entry in the F76M940 table for voided payments.
The system generates new lines in the F0414 table for voided payments. The AP Vat for Gain Loss report generates a journal entry for the gain or loss VAT amount of the voided payment. The system saves this journal entry in the F76M940 table.

VAT Recognition for Gain or Loss Amounts for Closed Draft

You follow these steps in the VAT recognition on AP gain or loss amounts for closed draft process:

Enter a foreign voucher and make a draft payment for that voucher.
When you post a payment, the system reclassifies the payment VAT amount from the temporary VAT account to the actual VAT account. Additionally, the AP VAT for Gain Loss report reclassifies the VAT of the gain or loss amounts from the gain or loss account to the VAT account.
Run the Post Outstanding Drafts program (R04803) to close the draft.
When you run this report, the system generates a gain or loss amount by payment entry in the F0911 table.
Run the Closed AP Draft Vat on Gain Loss report to distribute the gain or loss amounts amongst all vouchers in payment and to update the F76M990 table.

When you run the Closed AP Draft Vat on Gain Loss report, the system performs these steps:

Selects the gain or loss amounts for closed drafts.
Calculates gain or loss amount for each voucher.
Calculates VAT from the gain or loss amount for each voucher.
Searches the accounts for the journal entry and after it obtains the VAT of the gain or loss amount, the gain or loss account, and the VAT account, the Closed AP Draft Vat on Gain Loss report generates the journal entry and updates the F76M990 table.