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This blog post is part of a series of related blog posts highlighting the enhancements to address the handling of landed costs.
Link to main blog post.
The objective of this blog post is to explain the posting logic for when landed costs are handled as expenses.
The statutory requirements regarding the need to either capitalize landed costs or post them as expenses can vary in different accounting principles. As such, it can be required that one set of books post certain landed costs as expenses and for another to capitalize landed costs. This is supported with the new functionality in SAP Business ByDesign. The system behavior will be explained in this blog post, based on the following settings:
The individual process steps in this scenario variant are like the ones described in detail in the inbound process blog.
The emphasis of the current blog post is to highlight the differences in financials to the capitalized landed cost.
Note: The process steps of how to handle landed costs do not change:
1. Planned landed costs in a purchase order
The process variant will be based on the following initial situation:
2. Post goods receipt and inventory valuation
The goods receipt is handled in the same way as any other goods receipt in the warehouse. The landed costs will be posted on the debit side of the corresponding cost account without an impact on the inventory values, independent of whether the perpetual method of the applied material is standard or moving average. On the credit side, the landed costs are posted on the Unbilled Payables account that is dedicated for this landed cost category:
3. Supplier invoice for landed costs
This process step is identical to the one described in point (3) of the inbound process blog.
In this example, the actual landed costs are 600 USD in total, which means they are 100 USD higher than the planned landed costs.
4. Allocation of the landed cost invoice items to the inbound delivery items
This process step is identical to the one described in point (4) of the inbound process blog.
In this example, the actual landed costs are distributed as 120 USD to material LC004 and 480 USD to material LC005.
5. Financial clearing and inventory update
This process step is identical to the one described in point (5) of the inbound process blog.
Since the allocated landed costs cause landed cost clearing variances, they will be posted to the corresponding expense account, as in the example here. The difference of 100 USD in total is posted as an expense on the LC Others Expenses account. On the credit side, the difference is added to the corresponding In Transit account.
Back to main blog post.
Link to main blog post.
Overview
The objective of this blog post is to explain the posting logic for when landed costs are handled as expenses.
The statutory requirements regarding the need to either capitalize landed costs or post them as expenses can vary in different accounting principles. As such, it can be required that one set of books post certain landed costs as expenses and for another to capitalize landed costs. This is supported with the new functionality in SAP Business ByDesign. The system behavior will be explained in this blog post, based on the following settings:
- Used landed cost component: Landed Costs – Others (Expenses)
- Products:
- LC004 valuated with standard unit costs
- LC005 valuated with moving average unit costs
The individual process steps in this scenario variant are like the ones described in detail in the inbound process blog.
The emphasis of the current blog post is to highlight the differences in financials to the capitalized landed cost.
Note: The process steps of how to handle landed costs do not change:
- Plan landed costs in the purchase order
- Post the goods receipts
- Post the landed cost invoice
- Allocate the landed cost invoice items to the goods receipts
- Set the landed cost clearing sets to ‘To be Cleared’
- Execute the landed cost clearing run
Details
1. Planned landed costs in a purchase order
The process variant will be based on the following initial situation:
| Material | Material Unit Costs | Ordered Quantity | Planned Landed Costs - Other Expenses - |
| LC004 | 200 USD | 20 ea | 400 USD |
| LC005 | 100 USD | 10 ea | 100 USD |
2. Post goods receipt and inventory valuation
The goods receipt is handled in the same way as any other goods receipt in the warehouse. The landed costs will be posted on the debit side of the corresponding cost account without an impact on the inventory values, independent of whether the perpetual method of the applied material is standard or moving average. On the credit side, the landed costs are posted on the Unbilled Payables account that is dedicated for this landed cost category:
3. Supplier invoice for landed costs
This process step is identical to the one described in point (3) of the inbound process blog.
In this example, the actual landed costs are 600 USD in total, which means they are 100 USD higher than the planned landed costs.
4. Allocation of the landed cost invoice items to the inbound delivery items
This process step is identical to the one described in point (4) of the inbound process blog.
In this example, the actual landed costs are distributed as 120 USD to material LC004 and 480 USD to material LC005.
5. Financial clearing and inventory update
This process step is identical to the one described in point (5) of the inbound process blog.
Since the allocated landed costs cause landed cost clearing variances, they will be posted to the corresponding expense account, as in the example here. The difference of 100 USD in total is posted as an expense on the LC Others Expenses account. On the credit side, the difference is added to the corresponding In Transit account.
Back to main blog post.
