A country-specific update is available to comply with the TMS2 standard requirement for interest expense on purchases in COGS in Microsoft Dynamics AX 2009 with the Turkey GLS layer installed

A country specific update is available to comply with the TMS2 standard requirement for interest expense on purchases in Cost of Goods Sold (COGS) in Microsoft Dynamics AX 2009 with the Turkey GLS layer installed.

In the current version of Microsoft Dynamics AX 2009, you cannot eliminate interest expense that is caused by deferred payment for a purchase transaction from the purchase cost of an item. The requirements that are described in TMS2 standard are not supported.

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After you apply this update, the following functionalities are provided:

• Eliminate the Interest expense that is caused by deferred payment for purchase transaction and from purchase cost of the item accordingly to TMS2 standard for each purchased item.
• Calculate the interest cost for each item in COGS.
• Post GL transactions for Interest Cost on Inventory Values and Interest Cost that is calculated for COGS.
• Write off the Interest expense as deferred expense International Accounting Standards 2 (IAS2).

The following three new periodical procedures are provided to comply the system with the TMS2 and IAS2 requirements:

1. The Interest on deferred payment journal procedure (Account Payable>Periodic):
   • Identifies automatically the incoming invoices for interest expense calculating based on the Days of grace setup and Payment schedule.
   • Eliminates the calculated interest expense per items in identified invoices.
   • Creates the schedule for deferred expense writing off.
   • Stores the allocation and creates GL transactions:
     • Debit: DeferredInterest Expense\ IFRS.
     • Credit: Item cost\ IFRS.
2. The Accrued interest for COGS procedure (Inventory > Periodic)that has to be started after inventory closing:
   • Calculates proportionally the part of Interest Expense in COGS for sold items that use the Cost explorer information. This procedure has no changes in inventory transactions.
   • Stores the calculated amounts and creates GL transactions:
     • Debit: Item cost\ IFRS.
     • Credit:COGS\ IFRS.
3. The Write off amount button (General Ledger > Common forms > Deferrals> Deferrals models):
   • Writes-off the Deferred Interest expense according to the created schedule.
   • Creates GL transactions for every accounting period:
     • Debit: Interest Expense\ IFRS.
     • Credit: Deferred Interest Expense\ IFRS.

Accordingly, the following setups are provided:

1. The Interest rates setup (GL > Setup > Deferrals > Interest rates):
   • Currency, define the currency.
   • Counteragent type, define different rates for different counteragents.
   • Reference type, define the reference type.
   • Reference, define the reference for selected.
   • From date, start date for the rate.
   • To date, start date for the rate.
   • Interest rate, date depended rate for interest calculation (different rates may be used for different currencies).
2. The Value models setup (GL > Setup > Deferrals > Value models):
   • Model number, model identification.
   • Name, model name.
   • Posting layer, posting layer for generated transactions.
3. The Deferrals groups setup (GL > Setup > Deferrals > Deferrals groups):
   • Deferrals groups, identify groups for differed Accrued interest expense.
   • Write off method, select the write off method.
   • Write off time, not applicable.
   • Write off start date, define the first writing off period.
   • Disposal date, not applicable.
   • Posting layer, posting layer for generated transactions.
4. The Write-off methods setup (GL > Setup > Deferrals > Write off methods):
   • Write off method, method for writ-off amount calculation.
   • Name, name of the method.
   • Type, define the type of method for writ-off (select Manual).
   • Write off period, the periodicity of the write off period.
   • Calculation period, the periodicity of the calculation period.
   • Calculation type, select Amount.
   • Round off, rounding precision.
5. The Posting profiles setup:
   • The Overview setup for the Posting profiles setup (GL > Setup > Deferrals > Posting profiles ->Overview):
     • Posting profile, posting profile identification.
     • Description, posting profile description.
   • The Ledger accounts setup for the Posting profile setup (GL > Setup > Deferrals > Posting profiles ->Ledger accounts):
     • Groupings, select the grouping.
     • Account\ Group number, fulfilled automatically.
     • Ledger account, select the ledger account.
     • Offset account, select the offset account
6. The Number sequences setup (Basic > Setup > Number sequences). You can set up the number sequences for the followsing five journals:
   • Deferrals journal numbers.
   • Deferrals journal voucher numbers.
   • Interest on deferred payments.
   • COGS accrued interest value voucher number.
   • Journal for COGS accrued interest numbers.
   
   You can relate number sequences for new journals in the following locations:
   • Inventory > Setup > Parameters > tab Number sequences
   • GL > Setup > Parameters > tab Number sequences
7. The Parameters setup for Deferrals (GL > Setup > Parameters > tab Deferrals):
   • Posting profile, posting profile for Interest posting.
   • Interest free differed payments in days, interest-free period in days for delayed payments.
   • Period type, define the type of writing off period.
   • Round off, rounding precision.
8. The Posting setup:
   • To set up the accounts for posting accrued interest (Inventory > Setup > Posting > Posting):
     • Accrued, interest on a differed payment, purchases.
     • COGS, accrued interest value.
     • COGS, offset accrued interest value.
   • To set up the posting profiles overview (GL > Setup > Deferrals > Posting profiles ->Overview):
     • Posting profile, posting profile identification.
     • Description, posting profile description.
   • To set up the Write off and Disposal operations that identify the GL accounts for the differed Interest Expense (GL > Setup > Deferrals > Posting profiles ->Ledger accounts):
     • Groupings, Select the grouping.
     • Account\ Group number, fulfilled automatically.
     • Ledger account, select the ledger account.