AP Postings - Purchase Price Variance

Purchase Price variance occurs when there is a difference in price between the standard price of an item and that actually charged. The postings generated depend on a PPV account being defined on screen MPXN.

For example, an order is raised for 5 items at an order price £22.00. The item standard cost, on the Item Master, is £20.00. There are no GL postings at order time. e5 is set up for online accruals. The system generates the following postings at receipt time:

DR - Expense account from the invoice line	£100.00
CR - Accrued liability	£110.00
DR - Purchase Price Reserve	£10.00

When you receive the invoice, the receipt postings are reversed:

CR - Expense account from the invoice line	£100.00
DR - Accrued liability	£110.00
CR - Purchase Price Reserve	£10.00CR

The invoice is posted:

DR - Expense account from the invoice line	£100.00
CR - AP liability	£110.00
DR - Purchase Price Variance	£10.00

NOTE The menu path shown is the default for the system. Your company may have customised menu options, so the path shown may not be accurate. Please contact your system administrator for details.