1. Localizations for Mexico Implementation Guide
  2. Understanding Reports to Reclassify VAT for AR Transactions

Understanding Reports to Reclassify VAT for AR Transactions

You use the AR Vat on Gain Loss report to reclassify VAT for AR transactions.

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

  • VAT recognition on AR gain or loss amount.

  • VAT recognition on voided AR gain or loss amounts.

  • VAT recognition on gain or loss amounts for closed collection draft.

VAT Recognition on AR Gain or Loss Amount

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

  • Enter a foreign invoice and a receipt.

    When you post a receipt, the system reclassifies the invoice VAT amount from the temporary VAT account to the final VAT account.

  • Run the AR Vat on Gain Loss report to reclassify the VAT applicable on the gain or loss amounts from the gain or loss account to the final VAT account.

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

  • Selects the gain or loss amounts for the invoice.When you enter standard receipts or customer drafts, the system saves the gain or loss amount in the F03B14 table. The AR Vat on Gain Loss report selects all receipts that have a gain or loss amount not amounting to zero.

  • Calculates VAT for each invoice gain or loss amount.

    If you enter a tax amount manually and this amount is not the result of applying the standard tax calculation process, the system uses the standard calculation process to calculate the VAT on gain or loss amounts. The system uses the tax rate area and tax explanation codes from the F03B11 table.

    Generates two gain or loss amounts that comprise accounts associated with foreign and alternative currencies if you use an alternative currency to receive a payment. The report obtains the invoice gain or loss amount and the tax rate area and tax explanation codes associated with the gain or loss. If an invoice has multiple tax rate areas, the new report considers those. If you enter a tax amount manually through the standard invoice entry applications and the amount you enter is not the result of applying the standard tax calculation process, the system uses the standard calculation process to calculate the VAT on gain or loss amounts. The system uses the tax area and tax explanation codes from the F03B11 table.

  • Searches AAI for journal entries.

    The report retrieves the gain or loss amount and the final VAT account to generate the journal entry for each gain or loss amount. You can specify a value in the processing options for the final VAT account. If you do not specify a value in the processing options, the system determines these accounts based on the AAI values.

  • Generates the journal entry.

    The system writes the journal entries based on the VAT gain or loss amount, gain or loss account, and the final VAT account and update only the AA ledger.

  • Updates the journal entry in the F76M930 table.

    When you run the AR Vat on Gain Loss report, the system generates a journal entry for each gain or loss VAT amount of each payment line. The system saves these journal entries in the F76M930 and F0911 tables. Then, you post the new batch.

VAT Recognition on Voided AR Gain/Loss Amount

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

  • Void a foreign invoice.

  • Post the voided receipt.

  • The system reclassifies the payment VAT amount from the final VAT account to the temporary VAT account.

  • Run the AR Vat on 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 AR Vat for Gain Loss report, the system performs these steps:

  • Selects gain or loss amounts for voided invoices.

    The standard receipt process uses the document type RO to save the voided invoices on the Receipt Detail table (F03B14). The AR Vat on Gain Loss report includes these RO records when selecting the receipts to process for all gain or loss amounts different from zero.

  • Calculates VAT for the gain or loss amount for each voided invoice.

    The report obtains the invoice gain or loss amount and the associated tax rate area and tax explanation codes. If an invoice has multiple tax rate areas, the new report considers those. If you enter a tax amount manually through the standard invoice entry applications and the amount that you enter is not the result of applying the standard tax calculation process, the system uses the standard calculation process to calculate VAT on gain or loss amounts. The system uses the tax area and tax explanation codes from the F03B11 table.

  • Generates the journal entry for voided receipts by reversing the AAI accounts.

    For each gain or loss amount, this report retrieves the gain or loss account and the final VAT account to generate the journal entry. In some cases, the gain or loss account is defined in F03B14.AIDT for receipts and in F03B14.AIDA for receipts in an alternative currency. If these fields are blank, the system uses AAIs to define the accounts.

  • Updates the journal entry in the F76M930 table for voided receipts.

    The system generates new lines in the F03B14 table for the voided receipts. The AR Vat on Gain Loss report generates a journal entry for the gain or loss VAT amount of the voided receipt. The system saves this journal entry in the F76M930 table.

VAT Recognition for Gain or Loss Amounts for Closed Collection Draft

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

  • Enter a foreign invoice and receive payment via draft.

    When you post a collection draft, the system reclassifies the draft VAT amount from the temporary VAT account to the final VAT account. The AR VAT on Gain Loss report reclassifies the VAT of the gain or loss amounts from the gain or loss account to the VAT account.

  • Remit the draft and then process the draft collection.

    The collection process generates the gain or loss amount by draft. This process selects the original documents associated with a collection by searching for records with document number and distributes the gain or loss amount between the draft invoices.

  • Void the draft collection record.

    When you void the draft collection record, the system generates gain or loss.

  • Run the AR Vat on Gain Loss report to select the gain or loss amounts from the F0911 table.

    The report searches for the tax rate area and tax explanation codes of each invoice and calculates the VAT on the gain or loss amount of the invoice.

When you run the AR Vat on Gain Loss report, the system performs these steps:

  • Selects the gain or loss amounts for closed drafts.

  • Assigns the gain or loss amount to each invoice in a prorated ratio.

  • Calculates VAT from the gain or loss amount for each receipt.

  • 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 AR Vat on Gain Loss report generates the journal entry and updates the F76M930 table.