Currency differences to inventory

From LN 10.4, currency differences resulting from a purchase order receipt and purchase invoice matching and approval, are posted to inventory instead of to profit and loss accounts.

For the invoiced value to be reflected in inventory, the Gain & Loss (G&L) on the Purchase Order\Receipt transaction (the difference between the order rate and receipt rate) was posted to Interim Variance. This variance was posted to inventory using Processing Inventory Variances. Because inventory variances could be processed only after the invoice was approved, the Gain and Loss of the receipt stayed on the Interim Variance account and could be processed only after the invoice was handled and final receipt was done. This was an undesired situation which could lead to a balance on the Interim Variance account at period end. Therefore, solution 1972959 was built: the variances could be posted to inventory immediately.

An undesired effect of this solution was that after processing the inventory variances, the inventory value was reverted to the order rate.

To resolve all issues, these changes have been made:

• The Purchase Order\Receipt transaction is posted against the receipt rate, if no hedging is used. So, the inventory value is based on the receipt rate.
• After approval of the purchase invoice, the inventory value must reflect the invoiced value. The Gain and Loss resulting from Purchase Order\Currency Variances is posted to inventory through the Interim Variance.

Consequently, at the end of a period, no balances are present on the Interim Variance account.