Job Aid for Inventory Price Revaluation (MAP Adjustments)

Job
Aid
Advanced BI Funds Management

Table of Contents

Overview ......................................................................................................................................... 2
PART 1: Identify Material(s) / locations relevant for Price Change- MB52 .................................... 3
To review the MAP of a Material use MM60. ................................................................................ 5
Adjust the Material Prices............................................................................................................... 5
Review the Postings ........................................................................................................................ 8
Troubleshooting Error Messages .................................................................................................. 12
PART 2: Corrections for Non-financial inventory MAP adjustments ............................................ 14

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Overview

In accordance with IPSAS 12, inventory held for sale are to be measured at the lower of cost and net
realizable value (NRV) on an item-by-item or group basis. Inventories held for distribution at no charge,
or for a nominal charge, are to be measured at the lower of cost and current replacement cost.

Upon full deployment of Umoja, the cost of inventory shall be determined using MAP (as outlined in the
UN Policy Framework for IPSAS). The moving average price MAP method is a method of determining
the cost of inventory by re-calculating the average cost of each inventory item after every inventory
purchase.

In Umoja all items managed operationally as inventory are all initially recognized in the same manner (as
a current asset) however adjustments are made to expense non-financial inventory for financial
statement reporting purposes.

Financial inventories include inventory held for sale or external distribution, Strategic Consumables &
Supplies including UN Reserves, and Raw Materials and Work in progress. Financial inventories will be
reported in the IPSAS statement of financial position as a current asset until used, sold, or distributed, at
which point it will be expensed.

Non-financial inventories are materials and supplies consumed internally for the United Nations own
use. These are items that are managed as inventory within the organization though do not meet the
definition of inventory as a current asset. Non-financial inventory will be expensed and not recorded as
a current asset.

Further information regarding financial accounting for inventory can be found in the Umoja job aid
published for financial inventory on iseek.

The following job aid sets out the procedures to be followed once it is identified that MAP adjustments
of inventory are necessary. For example as a result of impairment or in exceptional cases where
inventory was received into a plant and due to the fact there was no existing material at the plant the
item has a MAP of zero (i.e. receiving items with no associated PO).

IMPORTANT: All MAP adjustments post against expenditure GL accounts for Impairment (GL account
ranges 77300000 to 77599999). When the MR21 adjustment relates to a material that is non-financial

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 Job
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Advanced BI Funds Management in nature a separate JV (FV50) needs to be posted off set the amount posted to the impairment
account (the contra account for the posting is the manual inventory account, this is outlined below in
PART 2).

Material Valuation changes (using MR21) is only currently performed by the FINANCIAL_ACCOUNTING:
CLOSING_USER, Currently this is done centrally in UNHQ. This is necessary as the user posting needs to
review and adjust for any affects related to Non-Financial inventory in the Statement of Financial
Performance (P&L). Hence any adjustments needed to MAP must be documented in an ineed ticket.

In the case entities need to receive items without a PO an ineed ticket should be also raised once raised
the Logistics Execution Team will provide the appropriate job aids and outline the procedure to be
followed by the entity.

The method by which the new MAP is obtained needs to be documented fully and approved by the CFO
at the location.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

PART 1: Identify Material(s) / locations relevant for Price Change-

MB52
Each entity will identify when a MAP adjustment is necessary. For example when material is considered
financial inventory (it should be revalued regularly). Note: for generic material items created where
there are large variations in price it is necessary to look on a case by case basis to ensure inventory is
correctly valued in accordance with IPSAS.

Once material adjustment is identified, a report should be run which outlines at the storage locations
where this material is currently available. The Warehouse Stocks of Material report (Transaction
MB52) should be used.

1. In the selection screen of MB52 transaction, enter the desired material number into the
Material field and ensure to flag the No zero stock lines option, so all plants/storage
locations where the material exist can be considered for the reporting

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2. After executing the transaction, the report shows all the plants / storage locations where the
specified material is available in the organization, together with the actual stock value
information.

If any quantity is available at non-physical storage locations the price revaluation cannot be performed
(for more details, see chapter Troubleshooting Error Messages).

The current non-physical storage locations (for all plants/entities) are:

9000 : Virtual Location
A000 : Asset Receiving Consumable

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To review the MAP of a Material use MM60.

Alternatively a user can simply review the current MAP of items using MM60 and entering the material
and plant

Adjust the Material Prices

1. Log in to Umoja ECC.

2. Execute Transaction code MR21.

3. Fill out the following fields as described below and then press the Enter key to continue.

Posting Date: This will default to todays date, change if necessary.

Company Code: Always = 1000
Plant: Leave this blank, if you are posting to more than one plant, otherwise enter the plant.
Reference: Reference ID for the postings to be made (Will appear on the header of FI document)
Doc.Header Text: A more detailed description of the postings to be made (Will appear on the
header of FI document).

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4. You will now see a table below the price change document. This is where you will fill out the list
of materials/plants and their new prices. Enter a Material number and Plant on the first line and
press Enter.
Note: In case the material is split valuated, the Valuation Type field also has to be
populated to all relevant materials. Please also note, the revaluation should be done
only for NEW_SUPP or NEW_SPARES split valuations (depending on the material).

5. After pressing enter you will see the current valuation (price) and the new price.

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6. Generally the MR21 adjustment will only be done by Plant Location. But where materials exist in
more than one plant. Continue adding all of the additional material/plant combinations you plan
to adjust. The example below shows three lines for one material, with each plant having its own
unique valuation for the same material (if the user is adjusting for their plant only care should
be taken to only include the relevant plant ID).

7. If you need to remove any lines that you added, click on the button to the left of the material
number and then click on the Delete icon.

8. When all material/plant combinations are entered, update the New price field for each line.
Enter in the FIRST New Price Column

9. After all new prices have been entered, post the changes by clicking on the Save icon.

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10. If the postings were made successfully, you should see a message in the status bar showing the
document number for the change.

Review the Postings

1. Execute Transaction code CKMPCD

2. Enter the document number and year that you wish to review.

3. The document will show a line for each line material/plant combination adjusted. The Value
chg. field is showing the amount which was posted in the particular plant.

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4. To view the accounting documents, select a line by clicking on it and then click on the
Accounting Documents button.

5. Double-click on the document you wish to review. Each will bring you to the appropriate
document that you are familiar with.

6. The financial postings were split up across all inventory holding storage locations which are
currently storing the price changed material. This means the total amount of postings (per plant)

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Advanced BI Funds Management were split up among the Funds Management coding blocks of inventory holding storage
locations based on how much portion of the material is stored in the particular storage location.

Plant
AT00

Plant KE00

Plant
US00

Review each document as necessary. You can press the back button to return to the Price
Change document view.

7. The following calculation helps to understand how the above posting is generated. The quantity
information is coming from the MB52 report which was mentioned earlier. The Ratio field is
calculated based on the total quantity within a given plant and shows what portion is available
in the particular storage location. Based on the expected posting value is calculated, which can
be found in the previously mentioned accounting document

Plant/Storage Quantity in Ratio (within Expected posted value

Location location plant)
AT00 / 1903 5 26.32% 4.200672 -> 4.20$
AT00 / 1905 14 73.68% 11.75933 -> 11.76$
KE00 / 8102 1 100% 4.5$
US00 / 4102 23 23.71% 20.00887 -> 20.01$
US00 / 4112 33 34.02% 28.70948 -> 28.71$
US00 / 4122 41 42.27% 35.67165 -> 35.67$

The following report is a snap-shot of MB52 report, used for the above detailed calculation

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8. Last but not least, the Reference and Doc. Header Text information which were provided in
the beginning of executing MR21 transaction are copied into the header of the finance
accounting document.

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Troubleshooting Error Messages

Price revaluation can be performed only if the materials are only in physical storage locations or at least
on the way (Stock Transfer Order document is created) to the final, physical storage location. The reason
behind is only physical storage locations are assigned to Funds Management coding block elements
(Fund, Fund Center, Functional Area), therefore the financial transactions can happen only based on
such storage locations.

If any quantity of the particular material is available at a virtual storage location during the price change
transaction (MR21 transaction) the system is raising an error message:

1. First thing you notice is the save of the document (the posting) is not performed and the
following error appears on the bottom of the screen.

2. If you double click on the error, it gives you a generic overview about the reason why the
posting was not completed.

3. As a next step, you can run the MB52 Logistic report to have a better understanding which
entity has inventory in the virtual storage locations.

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4. As it can be seen in the above screen-shot, 360 quantity is available at UNONs virtual location,
which need to be moved to the final, physical location. If materials are on the way to the final
physical location, those quantities can be found in the report, without being linked to any
storage location, like the 1100 quantity, also in UNON. The in-transit quantities will be
considered for the financial posting, under the receiving plant/storage locations coding block,
which information is coming from the related logistic document (Stock Transfer Order
document).

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PART 2: Corrections for Non-financial inventory MAP adjustments

Part one covered MAP adjustments for materials. However, often there may be a changed needed in
MAP for a material purely for cost recovery purposes. These materials at a plant storage location for the
entity concerned may be actually non-financial in nature.

The correction to the MAP will generate a posting to an inventory impairment account (in the P&L). This
posting needs to be reversed to the manual inventory account created for the particular inventory class.

Lets assume from the above example that the MR21 adjustment performed on the material in the KE00
Plant relates to non-financial inventory. To correct the effect on the trial balance the following would be
posted.

The correction to the GL needs to be done using t-code FV-50

Document type SF to be used.

1. T-code FV50
2. Enter the Doc date and Posting date (same period as the MR21 posting)
3. Enter Header Text as appropriate
4. Doc type SF
5. Credit the Expense impairment account (use the same fund and fund center as the MR21
posting)
6. Debit the Manual Inventory Account (use the same fund and fund center as the MR21 posting).
For a list of Main and Manual inventory accounts please see Annex A.

7. Simulate the posting in GL

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8. Once the document is posted in work flow please check the accounting documents (FI and FM)

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Annex A: Valuation class, Inventory Account, Consumption Account*

Valuation Inventory Inventory Account GL description Manual Consumption Impairment

Class Account Reversal Account Account
(current Account (Expenditure (Expenditure
Asset) (Current Account) Account)
Asset)
F015 17001010 Invent Sanitary and Cleaning Supply 77001010 77301010
17001014
F016 17001510 Invent Public Information Supply 77001510 77301510
17001514
F017 17002010 Invent Uniform Badge and Gear 77002010 77302010
17002014
G001 17002510 Invent Medical Supply 77002510 77302510
17002514
J001 17003010 Invent Packaging Material 77003010 77303010
17003014
F020 17003510 Invent Stationary and Office Supply 77003510 77303510
17003514
F021 17004010 Invent Mine Detection and Clearing Supply 77004010 77304010
17004014
F022 17004510 Invent Ammunition 77004510 77304510
17004514
B001 17005010 Invent Spare Part Generic Supply 77005010 77305010
17005014
B003 17005410 Invent Spare Part IT End User 77005410 77305410
17005414
B004 17005420 Invent Spare Part IT Computer and Media Storage 77005420 77305420
17005424
B005 17005810 Invent Spare Part Communication and Network 77005810 77305810
17005814
B006 17006210 Invent Spare Part Engineering 77006210 77306210
17006214
B002 17006610 Invent Spare Part Ground Transport 77006610 77306610
17006614
B007 17007010 Invent Spare Part Air Transport 77007010 77307010
17007014
B008 17007410 Invent Spare Part Marine Transport 77007410 77307410
17007414
F025 17007610 Invent Engineering Supply 77007610 77307610
17007614
I001 17008010 Invent Petrol Oil and Lubricants Facility Infrastr 77008010 77308010
17008014
I002 17008210 Invent Petrol Oil and Lubricants Air Transport 77008220 77308210
17008214
H001 17009010 Invent Ration 77009010 77309010
17009014
F023 17009030 Invent Water Bottle 77009030 77309030
17009034
E001 17011010 Invent Publication for Sale 77011010 77311010
17011014
E002 17012010 Invent Stamp for Sale 77012010 77312010
17012014
E003 17019010 Invent Liquor for Sale 77019010 77319010
17019014
A001 17021010 Invent Raw Material Construction 77021010 77321010
17021014
A005 17023010 Invent Raw Material Textile 77023010 77323010
17023014
A002 17026010 Invent Raw Material Printing 77026010 77326010
17026014
A003 17027010 Invent Raw Material Bottling 77027010 77327010
17027014
A004 17143050 Invent PreFab Unassembled 77143050 77443050
17143054
F001 17151010 Invent Office Equip 77151010 77451010
17151014
F002 17152010 Invent Furniture 77152010 77452010
17152014
F003 17156010 Invent Fixture 77156010 77456010
17156014
F026 17159010 Invent Library Reference Book Set 77159010 77459010
17159014
F004 17171010 Invent IT Equip End User 77171010 77471010
17171014
F005 17171020 Invent IT Equip Computer and Storage 77171020 77471020
17171024
F019 17171510 Invent Communication and Network Equip 77171510 77471510
17171514

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Valuation Inventory Inventory Account GL description Manual Consumption Impairment
Class Account Reversal Account Account
(current Account (Expenditure (Expenditure
Asset) (Current Account) Account)
Asset)
F018 17172010 Invent Audio Visual Equip 77172010 77472010
17172014
F006 17172510 Invent Medical Equip 77172510 77472510
17172514
F012 17173010 Invent Safety and Security Equip 77173010 77473010
17173014
F013 17173510 Invent Mine Detection and Clearing Equip 77173510 77473510
17173514
F014 17174010 Invent Accomodation and Refrigeration Equip 77174010 77474010
17174014
F008 17174510 Invent Printing Publishing and Conf Equip 77174510 77474510
17174514
F007 17175010 Invent Engineering Machinery Equip 77175010 77475010
17175014
F009 17176010 Invent Water Treatment and Fuel Distribution 77176010 77476010
17176014
F010 17177010 Invent Ground Transport Equip 77177010 77477010
17177014
F011 17177510 Invent Air Transport Equip 77177510 77477510
17177514
F024 17178010 Invent Marine Transport Equip 77178010 77478010
17178014
* As at November 2015.

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