How it works
For Standard Cost items, the inventory value cannot be changed from the Standard Cost. At the point of transfer receipt, Business Central will post the stevedore cost using an Item Charge Value Entry, but Business Central will adjust the cost back to Standard Cost immediately and push the cost to the Purchase Variance account.
When the stevedore invoice arrives, an Item Charge Value Entry will again be posted with any variance from the expected cost, which will follow the same path as stated above, ensuring that the item is valued at Standard Cost.
Stage 1 - Transfer Receipt
Business Central posts the transfer and the Landed Cost for stevedore is posted using a Value Entry, which is then moved using a G/L correction to the Landed Cost accrual account. Standard Business Central functionality re-values the item to Standard Cost with a Purchase Variance Value Entry.
| Account | Debit | Credit | Source |
| Inventory | 5.00 | BC - Actual Item Charge Value Entry | |
| Direct Cost Applied | 5.00 | BC - Actual Item Charge Value Entry | |
| Direct Cost Applied | 5.00 | LC - move cost to accrual account | |
| Landed Cost Invt. Accrual Acc. (Interim) | 5.00 | LC - move cost to accrual account | |
| Purchase Variance | 5.00 | BC - variance to restore Standard Cost | |
| Inventory | 5.00 | BC - variance to restore Standard Cost |
Balances: Invt. Accrual (Interim) (Landed Cost) 5.00 Cr ~ Purchase Variance 5.00 Dr
Stage 2 - Landed Cost Invoice
When you set the Landed Cost Type Code on the purchase invoice line, Clever automatically sets the line to Type = G/L Account with the account set to the Purch. Account from the Charge Item's "General Posting Setup".
This stage involves multiple coordinated postings where BC posts the vendor invoice and Clever Landed Cost functionality posts G/L corrections to reverse the receipt accrual and route variances to the correct accounts. An Item Charge Value Entry will be created for the difference between the actual and expected cost, which will finally be adjusted to bring Inventory back to Standard Cost. If the actual cost is the same as the expected cost, no Item Charge Value Entry is posted at this stage.
| Account | Debit | Credit | Source |
| Landed Cost Purch. Account | 8.00 | BC - Purchase invoice line | |
| Payables Account | 8.00 | BC - Vendor liability | |
| Direct Cost Applied | 5.00 | LC - Reverse expected stevedore cost | |
| Landed Cost Invt. Accrual Acc. (Interim) | 5.00 | LC - Reverse expected stevedore cost | |
| Inventory | 3.00 | LC - Post Variance for Actual stevedore using Item Charge Value Entry | |
| Direct Cost Applied | 3.00 | LC - Post Variance for Actual stevedore using Item Charge Value Entry | |
| Purchase Variance | 3.00 | BC - variance to restore Standard Cost | |
| Inventory | 3.00 | BC - variance to restore Standard Cost |
Final Position
The item's inventory cost stays at the Standard Cost. The net variance of 8 is posted to the Purchase Variance Account of the Item's "General Posting Setup", because the Item Charge Value Entry on a Transfer Receipt keeps the Item's own Gen. Prod. Posting Group. This is consistent with how Business Central handles all item charge variances against Standard Cost items. Cost of Goods Sold when inventory is sold will also be stated at the Standard Cost.
| Account | Balance | Type |
| Inventory | Unchanged | Balance Sheet |
| Direct Cost Applied | 8.00 Cr | Intermediate |
| Purch. Account | 8.00 Dr | Intermediate |
| Payables (stevedore vendor) | 8.00 Cr | Balance Sheet |
| Purchase Variance (landed costs) | 8.00 Dr | Income Statement |
| All interim and intermediate accounts | 0.00 | Cleared |