Project Actual Costs calculations are excluding tax amounts

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Posted on by Community Member Microsoft Employee

I am encountering an issue with the Project "Actual Costs" calculations that are not including the calculated sales tax amounts. The cost commitments are recognizing the tax amounts, but the actual cost calculations are not. US Tax rules are enabled.

Simple 1 line PO created for $100, with a 6% sales tax. PO line is for a Procurement Category with no Item number:

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After confirmation of the PO, the committed costs on the Cost Control Inquiry for the project shows $106.00 as follows:

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After invoicing the PO in full, the committed cost is relieved. The amount is now considered an Actual cost, but omitted the $6.00 sales tax amount. Same calculation is shown on the Actual costs FactBox for the project. Any reason why?

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When looking at the Project expense transaction, it shows a cost price that includes the tax for the full $106.00:

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Smells to me like a bug. Any reason why the tax amount would be omitted on the "Actual" cost calculations?

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Ankit Batra 1,561 on at

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RE: Project Actual Costs calculations are excluding tax amounts

I am encountering the same issue. AX 2012 R1 CU4.

With "apply us tax rules" turned off:

Purchase Requisitions:

1. On a project purchase requisition the tax amount is not considered at the time of budget validation if cost control is on.

2. On PR approval the committed cost is without tax amount

3. On PO invoice posting the actual cost without tax amount reduces the remaining budget amount

Net: Tax is not considered anywhere

General Journals:

1. If posted amount is inclusive of taxes, budget validation is against the amount without tax and the remaining budget is reduced by the amount without tax.

However, on the posted project transactions the amount with tax is shown which is different from PR/PO above in which amount without tax is shown.

With "apply us tax rules" turned on:

Purchase Requisitions and General Journal:

Full amount inclusive of tax is used

Is this expected behavior of "apply US tax rules" checkbox? Can you please help explain the actual intent/usage and how should tax amount vs project cost/remaining budget behave from an industry standpoint.

Thank you in advance.

Thanks in advance.

Thanks.
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Ludwig Reinhard Microsoft Employee on at

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RE: Project Actual Costs calculations are excluding tax amounts

Hello Justin,

the KB for the R2 system is 'Solution 1051061Project Committed Cost Includes Tax'

PROBLEM

Project Committed Cost Includes Tax

MITIGATION

Unmark Apply U.S. taxation rules in the General Ledger parameter under Sales tax.

If you test this on a R3 machine, please also have a look at the following Hotfixes to ensure that they do not cause you some 'headache'

KB 3181136Incorrect Committed costs when you partially invoice a purchase order

KB 3106294Committed cost and encumbrances are wrong when converting a project PR into a PO and working with exempt tax

Best regards,

Ludwig
Community Member Microsoft Employee on at

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RE: Project Actual Costs calculations are excluding tax amounts

Thanks for the response Ludwig.

Following is the voucher transaction for the original Product Receipt posting:

Following is the voucher for the original vendor invoice posting:

I can confirm that the PO header "Price incl. sales tax" setting was not changed prior to invoicing.

I also validated that disabling the "Apply US tax rules" parameter did not have the desired result. When that is disabled, the sales tax calculation did not even show up as a committed cost. Instead the tax amount was omitted from both the committed and actual cost standpoints within the project.

I am validating this on R3. Could you share the KB number for the R2 issue you found in LCS?

Thanks
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Ludwig Reinhard Microsoft Employee on at

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RE: Project Actual Costs calculations are excluding tax amounts

Hello Justin,

For AX2012R2 I found a hint on LCS that suggest deactivating the parameter 'apply US tax rules' in GL. Can you possibly test whether this might be the underlying reason in your case?

Another Thing that would be interesting to know is whether somebody might have changed the PO Header Parameter 'Price incl. sales tax' before invoicing the PO.

Can you also post the vouchers that AX created when the PO was posted?

Ludwig