Greatings to the team.The landing cost feature is great.For a company into a serious importation, the feature as it is presently in the ERPnext is not useable because the Expense Included in Valuation can only be created as an expense.It cannot be created as an asset.
In a serious importation company,the amount accumulated in the account runs into several million dollar pending arrival of the stock.Since management account is prepared monthly,that accumulated amount will make mess of the monthly management account since those expenses does not belong to the month.
REQUEST
Make it possible to be created as an asset account so that it can be selectable in Company Set up under Expenses Included in Valuation
@Fred1
I agree. Please open a new issue concerning this on Github and someone will take it up from there. Please add the URL of this thread also for trail
Any update
You can actualy change the account classificaton ?
Have you tried that?
It cannot be created as an asset.
Yes it can
I did, for this test I classified it under “temporary accounts”.
And that is an asset classification.
But why do you need to classify it as an asset? if you do it will have a negative value as shown below.
Regards
@olamide_shodunke They have corrected it .It was not possible to create it as an asset in a month ago when i was in version 9.02.This is my firest post on this thread given reason why it must be an asset:. *Greatings to the team.The landing cost feature is great.For a company into a serious importation, the feature as it is presently in the ERPnext is not useable because the Expense Included in Valuation can only be created as an expense.It cannot be created as an asset.
In a serious importation company,the amount accumulated in the account runs into several million dollar pending arrival of the stock.Since management account is prepared monthly,that accumulated amount will make mess of the monthly management account since those expenses does not belong to the month
Thanks
Fred
The problem is solved by the team.Thanks.The tread can be closed
Actually I am contesting the basis for it to be an asset.
It should be a liability.
Think about it,
-
The Inventory asset account was increased by the value of this landing costs, this is what the landing cost voucher does. So the Inventory asset value was increased, the corresponding leg should be a reduction of an asset account or an increase of a liability account.
-
Technically the expenses included in valuation account will be knocked off by debiting payments made to Clearing agents and freight forwarders to this account, or debiting invoices raised on Forwarding/Clearing agents. In my opinion that is the only way to knock off the balance in this account. Hence it should read as a liability in your Balance Sheet.
-
Do a test, once you run the transaction, the balance on the “Asset account” you create will always be negative. Meaning it is in effect a liability.
So am not contesting if it should be an asset or expense. It should be neither, it should be a liability.
I stand to be corrected.
In real life majority of all the expenses are paid before the arrival of the goods that is why it has to be an asset.Many time it may take more than a month before the goods arrive.It is at the arrival that you raise LCV to knock off the the expenses and spread on the stock.If yiou dont book those payments to the suppliers of services as an asset to that valuation account,your MA will be a mess if treat them as expense.Clear?
Re read my post. I never said they should be treated as expenses. My argument is if it should be an asset or liability type classification.
In real life most compamies have 30 days to pay these bills, I know we do.
But to each his own. Happy your problem is now solved.
Hello sir, Just to share something i knew.
This is how we will close the Landed cost…
FIRST: When we make Landed Cost voucher, the entry would be:
Dr Stock In Hand
Cr Expenses Included in Valuation
SECOND: When we make Purchase Invoice for the billing of shipping cost and insurance and taxes,
we should make an ITEM CODE for the shipping cost first and set a default account " EXPENSES INCLUDED
IN VALUATION". So the entry when we make PI is:
Dr. Expenses Included in Valuation
Cr Payable to Supplier
So, meaning, the Expenses Included in Valuation has been closed. This is how to erp works for the landed cost
Thanks
Louie
2 Likes