Chile

Monetary correction

In Chile, it is required to have a monetary correction system (inflation adjustment) for certain assets based on changes in the consumer price index (CPI) and the foreign exchange rates. The monetary correction impacts the annual income tax return (annual tax payments for the income generated) and is required by the SII. The monetary correction calculation is performed on item level and the rules depend on whether the item is acquired nationally or abroad.

LN now supports this monetary correction requirement of Chile.

Depending on whether an item is acquired nationally or through import, a correction of the inventory value is calculated using the Monetary Correction Calculation (lpchl2213m000) session.

If an item cannot be classified as exclusively 'nationally purchased' or 'imported' with a single foreign currency, the item will be classified as ‘mixed’. For these items, no monetary correction is performed and manual calculation is required.

In cases of actual costing, the inventory value is derived from the purchase currency. Consequently, these settings must be applicable:

• The Inventory Valuation Method is unequal to Standard Cost
• The Default Inventory Receipt Value parameter is set to Inventory Value