Enhancing Sales and Purchase Commodity Contracts with Mark to Market Adjustments

In the latest Levridge release, R3 2024, Mark to Market adjustments have been enhanced to include up to 10 user-defined adjustments on commodity contracts. This update is designed to provide more flexibility and accuracy in managing both sales and purchase contracts.

Setting Up Mark to Market Adjustments

To begin utilizing the new adjustments, navigate to the setup under commodity accounting.

Here you will find the parameters for commodity accounting and risk management.

The new update allows you to define up to ten adjustments, providing greater flexibility in managing your contracts. For example, you can now add adjustments for freight, fees, and other costs, tailoring the setup to your specific needs.

Applying Adjustments to Purchase Contracts

Once the setup is complete, you can apply these adjustments to your purchase contracts. Navigate to commodity accounting under inbound contracts and select purchase contracts.

In the updated interface, you will notice a new grid in the lower right of the upper fast tab. This grid displays the mark to market adjustments that have been defined during the setup.

For instance, in one of the purchase contracts, adjustments for freight, other fees, and additional costs have been added. These adjustments are now visible and can be entered with each contract, ensuring that all relevant costs are accounted for.

Running the Mark to Market Report

The next step is to run the mark to market report to see the impact of these adjustments. Navigate to commodity accounting under risk inquiries and reports, Risk, and Mark to Market.

This report will display all the purchase contracts brought to market, along with the calculated gain or loss based on the adjusted basis. You can filter your view to make it easier to find the contracts you are looking for.

In the example provided, the system calculates the gain or loss by taking the adjusted basis, which includes the new adjustments for freight, other fees, and additional costs. This ensures a more accurate reflection of the contract’s value, providing better insights for financial decision-making.

Benefits of the R3 2024 Mark to Market Enhancements

1. Increased Flexibility: With the ability to define up to ten adjustments, you can tailor the setup to your organization’s specific needs, ensuring that all relevant costs are accounted for.
2. Improved Accuracy: The expanded adjustments provide a more accurate reflection of the contract’s value, leading to better financial reporting and decision-making.
3. Enhanced User Experience: The updated interface and new features make it easier to manage and track adjustments, improving overall efficiency.

By allowing up to ten Mark to Market adjustments, organizations can achieve greater flexibility and accuracy in their financial reporting. These enhancements not only streamline the process but also provide valuable insights for better decision-making.