Accounting Entries for Vouchers with Recoverable VAT Calculated at Gross

The following examples illustrate accounting entries for vouchers with recoverable VAT calculated at gross.

Action: Voucher Entered and Posted

The system calculates the VAT amount using the VAT basis amount (10000), the VAT rate (10 percent), and recoverable percentage (100 percent). The VAT calculation type is Exclusive; therefore you must enter a VAT amount on the Voucher Invoice Information page or on the VAT Header page.

GL Business Unit	Distribution Account Type	Foreign Amount	Foreign Currency	Monetary Amount	Currency Code	Calculation
DEU01	Expense Distribution	10000	EUR	10000	EUR
DEU01	VAT Input Recoverable	1000	EUR	1000	EUR	10000 * .1
DEU01	Accounts Payable	(11000)	EUR	(11000)	EUR

Action: Payment Entered and Posted, Discount Not Taken

The payment accounting entries for this example are no different from those for the standard voucher example, but a balance exists in the VAT Input Recoverable account.

GL Business Unit	Distribution Account Type	Foreign Amount	Foreign Currency	Monetary Amount	Currency Code
DEU01	Accounts Payable	11000	EUR	11000	EUR
DEU01	Cash Distribution	(11000)	EUR	(11000)	EUR

Action: Payment Entered and Posted, Discount Taken

The payment accounting entries for this example are no different than those in the standard voucher example. The differences are the calculation of the discount, based on the total merchandise amount including the VAT, and the balance in the VAT Input Recoverable account.

GL Business Unit	Distribution Account Type	Foreign Amount	Foreign Currency	Monetary Amount	Currency Code	Calculation
DEU01	Accounts Payable	11000	EUR	11000	EUR
DEU01	Cash Distribution	(10800)	EUR	(10800)	EUR	11000 - ((11000 - 1000) * .02)
DEU01	Discount Earned	(200)	EUR	(200)	EUR	(11000 - 1000) * .02

Action: Payment Entered and Posted, Discount Taken, Recalculate at Payment

When you recalculate at payment, you can create adjusting entries to reduce the amount of recorded VAT based on payment discounts. This is only true when VAT is set to calculate at gross. The system assumes 100 percent recoverability of VAT unless set up differently.

GL Business Unit	Distribution Account Type	Foreign Amount	Foreign Currency	Monetary Amount	Currency Code	Calculation
DEU01	Accounts Payable	11000	EUR	11000	EUR
DEU01	Cash Distribution	(10780)	EUR	(10780)	EUR	11000 - (11000 * .02)
DEU01	Discount Earned	(220)	EUR	(220)	EUR	11000 * .02
DEU01	Discount Earned Adjust Due to VAT	20	EUR	20	EUR	1000 * .02
DEU01	VAT Input Rec. Discnt Adjust	(20)	EUR	(20)	EUR	1000 * .02