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Prerequisites

Background

The price limiter ensures that in certain situations (for example stock shortages) the price will not be distorted. If price or exchange rate differences occur at the point of invoice entry, order settlement, or adjustment they will be taken into account by the single-level material price determination for the cumulative inventory stock coverage check. This means that only costs covered by the inventory are assigned to the material.

The differences not covered by the cumulative inventory are shown in the material price analysis, under the line Not allocated. In addition to this, in the periodic material valuation a difference is made between transactions that:

1. Example

In this example a goods receipt of 200 liters of Milk occurred in the previous period, the same period in which the goods were consumed. In the current period another goods receipt for 100 liters of Milk and an invoice entry for 200 liters occur. The cumulative inventory is 100 Liters. For this reason, only half of the invoice price difference (in this case 100 EUR) will be assigned to the material. The other half of the price difference appears, with reversed +/- sign, as 100 EUR in the line Not allocated. This occurs in order to correct the price differences assigned to the inventory value in the line Cumulative Inventory.

This graphic is explained in the accompanying text

2. Example

In this example a goods receipt and an invoice entry for 100 Liters of Milk take place in the same period. This means that all of the invoice price difference is covered by the inventory. Therefore a difference of 50 EUR is displayed in the line Cumulative inventory.

This graphic is explained in the accompanying text

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