Logic of price difference posting

Invoice posting through MIRO takes into account either Stock or Price differences. In case stock is
available,system transfer that amount to inventory. if the stock is not available system transfers that amount to price
differences account. System hits MAP in case of part availability of stock and the accounting entry generated goes as

GR/IR Account Debit

Inventory account Debit (Price increase )
Price diff. account Debit (Price increase )

For Vendor account

Inventory account Debit (Price decrease)
Price diff. account Debit ( Price decrease )

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Example: Material with MAP Without Stock Coverage

Postings in the Case of Price Variance and Extract from Material Master Record

Goods Receipt
The stock account is posted with the receipt value based on the purchase order price:

The offsetting entry is posted to the GR/IR clearing account.

Value Calculation
The purchase order price is different to the moving average price: At the time of posting, the value in the
material master record does not increase in proportion to the stock, so the moving average price
changes.

Goods Withdrawal
The posting to the cost center is based on the moving average price.

The offsetting entry is posted to the stock account.

Value Calculation
The stock and the value are reduced in proportion to the goods withdrawal, so the moving average price
in the material master record does not change.

Invoice Receipt
The GR/IR clearing account is cleared on the basis of the purchase order price. The offsetting entry is
posted to the vendor account based on the invoice price.
The invoice price is different to the purchase order price: The variance between the purchase order value
and the invoice value is posted to the stock account only for the actual stock.
Since only 80 pieces of the material are in stock at the time of invoice receipt, the price difference is
debited to the material for 80 pieces only, in this case:

The remainder of the variance is posted to the account "Expenses from price differences", in this case:

Value Calculation
The invoice price is different to the purchase order price: When you post the invoice, the system corrects
the value in the material master record, so the moving average price changes. The stock in the material
master record does not change.