Example of Accounting of Lot Split Transactions
This example illustrates the accounting entries for a lot split transaction.
Scenario
The lot Lot1 of Item-A with 10 units each and priced at $100 per item is split into two lots, Lot2 and Lot3, within the same subinventory. The valuation unit set up in the cost profile is at the lot level.
|
Item |
Lot Number |
Transaction Type |
Quantity |
Amount |
|---|---|---|---|---|
|
Item-A |
Lot1 |
Inventory Lot Split |
- 10 |
($1000) |
|
Item-A |
Lot2 |
Inventory Lot Split |
8 |
$800 |
|
Item-A |
Lot3 |
Inventory Lot Split |
2 |
$200 |
Analysis
Cost accounting creates these distributions for the transaction corresponding to the source lot, Lot1.
|
Accounting Event |
Valuation Unit |
Accounting Line Type |
Cost Element |
Amount in USD (+Dr/-Cr) |
|---|---|---|---|---|
|
Lot Split |
Subinventory1-Lot1 |
Offset |
Material |
+ 1000.00 |
|
Lot Split |
Subinventory1-Lot1 |
Inventory Valuation |
Material |
- 1000.00 |
For the resultant transactions of the lot split, these distributions are created.
|
Accounting Event |
Valuation Unit |
Accounting Line Type |
Cost Element |
Amount in USD (+Dr/-Cr) |
|---|---|---|---|---|
|
Lot Split |
Subinventory1-Lot2 |
Inventory Valuation |
Material |
+ 800.00 |
|
Lot Split |
Subinventory1-Lot2 |
Offset |
Material |
- 800.00 |
|
Lot Split |
Subinventory1-Lot3 |
Inventory Valuation |
Material |
+ 200.00 |
|
Lot Split |
Subinventory1-Lot3 |
Offset |
Material |
- 200.00 |