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Goods are ordered using a foreign currency and need to include GST as the supplier is in Australia.  Any foreign currency purchase orders does not allow GST to be included. 

Step-by-step guide

There are two results we need to have happen here - firstly to get the correct values for your BAS reports and secondly, raise the liability for the GST due.  There are two options to enter the relevant data in for your BAS report and creditors - the Value Of Taxable Import tab in Landed Cost or Creditor Purchases and Creditor Credit Adjustments.  

Example - 10Using this example of $10,000.00 Ex GST Total + 1$1,000 GST here is how the two approaches work.

Option 1 - Value of Taxable Import

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Journal entry

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1. Creditor Purchases for the Total Ex GST Value of the goods posting to COGS account with G11 selected
Debit COGS          10,000 (G11)
Debit GST               1,000 (G11)
Credit Creditors                            11,000 (No Code)

2. Creditor Credit Adjustment for Total Ex GST Value selecting No Code posting to the COGS account

Debit Creditor      10,000 (No code)
Credit COGS                               10,000 (No Code)

Allocate the credit to the purchase and the Image Added

When using the Shipment form to enter the GST invoice, the check box Use Value of Taxable Import must be ticked before the Shipment is set to 'Commit for Booking In'.  

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• Value of Taxable Import tab
• select the creditor and type in Description
• type in the Tax Amount (GST due on the purchase order) and the Amount field is automatically calculated (Note:  The Amount field is not editable - only the Tax Amount can be entered)
• select ledger account, type in the Invoice Number
• tick Invoiced and save

This is the journal entry that gets created.  The net result is GST Acquisition $1,000 and Creditors $1,000

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Option 2 - Creditor Transactions

Step 1 - Creditor Purchases

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• Creditors > Transactions > Purchases > Purchases
• new record
• select the creditor, type in Invoice No and select the ledger account
• type in the Trans. Amount of $11,000 and GST amount is automatically populated
• save and activate

This is the journal that gets created

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Steps 2 - Creditor Credit Adjustment

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• Creditors > Transactions > Payments > Credit Adjustment
• new record
• select the creditor, type in Invoice No and select the ledger account
• type in the Trans. Amount of $10,000 and select No Code
• save and activate

This is the journal that gets created

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Step 3 - Allocate the credit to the purchase

The balance is the GST amount due to the creditor

Net result is COGS in the P&L is            0
COGS for BAS Reporting is                  10,000 G11
GST for BAS Reporting is                       1,000 G11

GST in Balance Sheet is Debit                        1,000
Creditors in Balance Sheet is Credit                         1,000

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Summary

Both options result with the same value in the Business Activity Statement

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