What effect does the true value figure have?
Contents
Summary
The following article explains the effect of filling in the "True Value" field on the [Purchase] tab of a unit stock number.
 | If this feature is not enabled or configured correctly the expense postings outlined in this article will not be posted. If this is the case Contact your Platinum dealer or our support team on 0116 230 1500 or by using our website support contact page and they will be happy to help. |
More Information
 | Units: Unit is a general term used to cover all types of vehicle and machinery, including items such as motorcycles, scooters, cars, trucks, vans, caravans, motorhomes, boats, tractors, ATVs, agricultural equipment, wholegoods and construction equipment. |
On a default Platinum setup when the "True Value" is entered on a unit record the system behaves differently depending on how the unit is coming into stock.
In all cases the the system will post an automatic unit expense for the difference between the actual "Purchase Price" and the "True Value".
 | The Nominal centres used in the postings may vary from those outlined in this article depending on your system settings. |
On a Straight Unit Purchase - Write Down
If the "True Value" is entered for a stock unit or one being purchased directly from a person, the expense will be posted against the unit being purchased, thus affecting the overall cost on this unit. This is a write-down of the value of the unit being purchased.
The following postings will be made immediately:
- A negative expense record to the unit for the write down.
- A nominal posting to Credit - Unit Stock Value and Debit - 'Z945' Unit Write Down Cost (P&L Cost of sales).
When the vehicle is sold the following postings will be made:
- A nominal posting to Credit - Cost of Sales (the cost of sale for the unit being sold) and Debit - Unit Stock Value.
| The unit price you enter here should always be Nett of V.A.T. |
| Please be aware that amending the True Value field for a sold unit will not result in Nominal Postings. |
On a Unit Purchased as a Part Exchange - Write Back
If the "True Value" is entered against the unit being purchased as a part exchange, the following postings will be made when the deal is invoiced:
- A negative expense record to the part exchange for the over allowance (Write Back).
- A nominal posting to Credit - Stock of Expenses and Debit - Expense Accruals
- A positive expense against the unit which has been sold.
- A nominal posting to Credit - Expense Accruals and Debit - Stock of Expenses plus a posting to Credit - Stock of Expenses and Debit - Cost of Sales (the cost of sale for the unit being sold).
When the part exchange is later sold the following posting is made:
- A nominal posting to Debit - Stock of Expenses and Credit - Cost of Sales.
Please note the nominal centres used in the postings will be the default centres unless alternatives are specified in system settings.
Ideally, you would reduce the price of the sale unit and reduce the actual purchase price of the part exchange so that the true value is not required, but this may not be possible in some circumstances.
| The unit prices you enter here should always be Nett of V.A.T. |
See also
