ManualDoc:WD1B11CBC0FEF4CA0B44D3BECEBA219BC

All those cost are needed to place the product in the organization's warehouse.

Every time that a landed cost is booked for a product receipt valued at "Average" cost, a landed cost adjustment is created.

Landed costs distributed and allocated to products valued at "Average" cost implies a change in the inventory value of the product. In other words, the calculated cost ("Total Cost") of the product receipt will need to be adjusted same as the "Average" cost of the product.

Note, that the "Unit Cost" of the receipt transaction will not change as this type of adjustments is not a unit cost adjustment type but an "extra" cost.

All of the above will have an accounting impact therefore product inventory value can be the same as product accounting value.

On the other hand, if a landed cost is booked for a product receipt valued at "Standard" cost, no cost adjustment will be created but a "Variance" between the "standard" cost defined for the product and its "actual" cost. This variance which will need to be posted to a "Landed Cost Variance" account, so it can be later on analysed.

Landed cost window allows both:

• either to book "estimated" landed cost that can be later on matched against "actual" landed cost by landed cost type.
• or directly book "actual" landed cost by landed cost type.

Landed cost window also allows to post landed costs once processed.

"Estimated" Landed Cost scenario:

• A purchase order is booked and after that the corresponding goods receipt and purchase invoice.
  The "average" cost of the products included in the receipt is calculated at this point.
• After that "estimated" landed costs (i.e freight costs) are allocated to the goods receipt and booked in the landed cost window.
  The cost of the products included in the receipt is then adjusted same as products asset accounting.
• After that a purchase invoice including the actual amount of freight cost is booked and post to the ledger.
• Then, it is possible to match "estimated" landed cost against "invoiced" landed cost.
  The cost of the products included in the receipt is adjusted once more if there are differences between estimated and actual landed cost amounts.

"Actual" Landed Cost scenario:

• A purchase order is booked and after that the corresponding goods receipt and purchase invoice.
  The "average" cost of the products included in the receipt is calculated at this point.
• After that a landed cost document is created to record actual landed cost to the goods receipt.
  The cost of the products included in the receipt is then adjusted same as products asset accounting.

In Summary, landed cost feature follows below detailed steps:

• Landed Cost Process:
  • A landed cost document is created including as many different landed cost types and amounts as required.
  • This landed cost document can be related to a single goods receipt, to several goods receipts or to specific goods receipts lines.
  • This landed cost document can record "actual" landed cost in case of selecting the corresponding invoice, therefore landed cost process and matching is done in one step.
  • Landed cost is processed.
    • This action creates a landed cost adjustment linked to the landed cost document.
      This cost adjustment has as many adjustment lines as products included in the goods receipt(s) selected, therefore the cost of those products is adjusted as applicable.

• Landed Cost Post:
  • Once a landed cost document is processed it can be posted to the ledger, therefore product(s) asset accounting are adjusted as well.

• Landed Cost Matching:
  • Landed cost invoice is booked and post to the ledger later on.
  • After that the "estimated" landed cost booked in the landed cost document can be matched against actual landed costs by landed cost type in the landed cost invoice.
  • Landed cost matching can generate an additional cost adjustment for the product(s) if estimated landed cost amounts were not the same as actual landed cost amounts.

• Landed Cost Matching Post:
  • Once landed cost(s) are matched can be posted therefore:
    • product(s) asset accounting is adjusted once more if applicable
    • and landed cost posting gets landed cost invoice accounting dimensions