Comment 42 for bug 610738

Hello all!

I just made full research of issue on OCB 6.1 branch only.

My conclusions:
current 6.1 OCB branch does compute accounting entries regarding average price and product return almost :) correctly.
In this I completely agree with Fabien.
Note that I do not intentionally including landed costs in computation what can change results.
What is happening here in this launchpad thread- is mixing apples with pears.

In general you cannot mix AVG price computation with FIFO. What people here generally do, thus receiving incorrect results and mess in accounting.

According to my research:
- Receiving goods from supplier -> you DO update AVG cost price

- Sending goods to customers -> you USE actual AVG cost price (reducing your stock by actual AVG price)

- Returning back to supplier -> you DO NOT update AVG price (reducing your stock by PURCHASE price, then DIFFERENCE goes to "Goods Purchase Expenses" account: debit if Purchase price is < actual AVG price, credit if Purchase price is > than actual AVG price)* + you should return any quantity from exact “done” Incoming picking

- Returning back from Customer -> you DO NOT update AVG price (increasing stock by actual AVG price, then DIFFERENCE goes to "Goods Purchase Expenses" account: debit if SALE/cost price is < actual AVG price, credit if SALE/cost price is > than actual AVG price)* + you should return any quantity from exact done Outgoing picking

* in both mentioned cases you increase or decrease your profit (what is interesting for tax authorities), but you have legal reason.

So what is missing here, at least for OCB branch I'm using ?

1. Suppliers returns: everything is correct now, except we need additonal account entries in "Goods Purchase Expenses" for difference's debit or credit if actual AVG price != Purchase price of picking we want to return.
Now we should add it manualy to adjust.

2. Customer returns: everything is correct now, except we need additonal account entries in "Goods Purchase Expenses" for difference's debit or credit if actual AVG price != Sale/cost price of picking we want to receive back

Conclusion: AVG price calculation rules are correct. There are some missing automatic accounting entries welcome, to keep trial profit reports up to date.

Those missing automatic adjustment accounting entries are very necessary for companies with large amount of transactions.

Normunds
Vilcans
Alistek , Ltd