How purchase prices are calculated
Role: adminRole: managerUpdated 2026-08-29
What is calculated
Two numbers that are easy to confuse:
- The agreed price — what stood on the supplier's paper, in the currency it was agreed
in, at the document's exchange rate.
- The valuation — the value the goods enter stock at, always in the branch's currency.
The document shows both when they differ. Only the second one moves stock value.
Inputs
| Input | Where it comes from |
|---|---|
| Purchase price per unit | The line, in the document currency. |
| Line discount (%) | The line. |
| Total discount (%) | The document header, applied on top of the line discount. |
| Tax rate | The line, from the article's tax class or picked by hand. |
| Prices include tax | The document header. Decides whether the entered price is gross or net. |
| Exchange rate | The document header, captured once. |
The rule
- The line's gross value is quantity × purchase price.
- The line discount comes off, then the document's total discount.
- If Prices include tax is set, the tax is taken out of that figure; otherwise it is
added on top. The result is the line's net value.
- The net value, converted at the document's rate, is what the goods enter stock at —
net, after all discounts.
The exchange rate is captured once and stays put. There is deliberately no revaluation at today's rate: stock value must not change unless goods moved. A currency equal to the branch currency is stored as "nothing was converted here".
Worked example
10 units at 12.00 USD, line discount 10%, total discount 5%, tax 20% on top, rate 1 USD = 11.00 of the branch currency:
| Step | Result |
|---|---|
| Gross | 120.00 USD |
| After line discount | 108.00 USD |
| After total discount | 102.60 USD |
| Net per unit | 10.26 USD |
| Tax (added, not part of the value) | 20.52 USD |
| Enters stock at | 102.60 × 11.00 = 1,128.60 |
What this does not change
- The selling price. Purchasing never writes one.
- Existing stock bought earlier. Only the newly received quantity carries the new cost into
the average.
- The valuation currency. It stays the branch's currency, whatever the document was agreed
in.