MAP / Standard GRC and inventory unit price used during MIGO

Question

Hi,
I want to seek advice of the below.
The value is quantity x unit price where I would like to ask on unit price.
MAP - during MIGO
1 debit inventory - price refer to PO or material master
2 credit GR/IR - price refer to PO or material master
Standard - during MIGO
3 debit inventory - price refer to PO or material master
4 credit GR/IR - price refer to PO or material master
Thanks alot

Answer 1

> What about GR/IR? The unit price is getting from where for both cases?
> Also for inventory account, I thought for standard, it should be from material master?
>
> Now a bit confusing to me.
>
> Shiva reply below :
> MAP
> PO price Dr to Inventory A/c
> Cr-GR/IR - ?
>
> Standard
> PO price Dr to Inventory A/c
> Cr-Gr/IR - ?
Hi Cal,
Obviously it is the PO price. GR/IR is the offsetting intermediary entry that is to be paid to the vendor with respect to the price you have mentioned in the PO, it is acc payable to the vendor depending on PO unit price. In real time you are buying the goods from the vendor at the price which you mention in the PO, hence system has to take account how much worth material in coming to inventory and how much outstanding to the vendor (GR/IR).
In case of MAP, market price keeps varying and the same is updated in the material master on averaged base as and when the procurement price keeps changing, but that will not stop you from buying material at lesser or higher price everytime you order your vendor.
In case of standard price (usually for FERT, HALB) it's your business decision to keep the material price standard and fixed for various resons (such as costing and cost sales price) hence any price differences in S are to be mapped to separate G/L acc to track the differences. Nevertheless if your standard price is say $10 and your PO price is say $8 or $15, inventory is debitted with the PO price ( $8 or $15) and the same is creditted to GR/IR as acc payable to vendor.
Hope its clear
Regards
Shiva