Dynamic GLD Calculation (Moving Average in Accordance with German Commercial Code (HGB)) – Xentral help center

Note

The function for Dynamic Calculation of the Purchase Price (Moving Average in Accordance with German Commercial Code (HGB)) is currently in Closed Beta status.

Are you interested in using and testing this feature right now? Contact support@xentral.com so that we can enable the feature for your Xentral instance.

Typical use case: This function represents a new calculation option for the moving average purchase prices in Xentral. Enabling this function allows the correct calculation and subsequent tracking of the so-called GLD (moving average price) and thus also clean inventory valuation and financial accounting for your company.

With the new function, you can now master your inventory valuation under HGB even more easily. From now on, you can have the moving average price (GLD) calculated fully automatically and dynamically in Xentral. This gives you an inventory valuation that is aligned with common German HGB practice and always takes your current stock and the latest purchase prices into account.

Xentral then recalculates the value each time you post a goods receipt linked to a purchase order. This ensures that your inventory values always correspond to the current acquisition costs and are incorporated into your balance sheet in a legally compliant manner.

In this article you will learn how to carry out the necessary settings in Xentral.

Background Information on Inventory Valuation under HGB

For your annual financial statements to be legally compliant, the German Commercial Code (HGB) prescribes precise rules for the valuation of your inventories. The dynamic calculation of the moving average price (GLD) helps you to automatically comply with these rules.

Acquisition cost principle (§ 253 para. 1 HGB): Your goods may be valued at most at the actual acquisition costs. The GLD in the system ensures that price fluctuations from new purchases are correctly incorporated.
Strict lower-of-cost-or-market principle (§ 253 para. 4 HGB): If the market price of your goods falls below the calculated GLD, you must write down to the lower value. A clean calculation basis is absolutely necessary for this.
Valuation simplification (§ 240 para. 4 HGB): Since you cannot track every small item individually in the warehouse, the law permits the "weighted average". Dynamic calculation at each goods receipt is the most precise implementation of this rule.
Individual valuation principle (§ 252 para. 1 no. 3 HGB): In principle, each item must be valued individually. The GLD serves as a permissible simplification to represent the total value of your warehouse in a legally compliant manner.

Practical Example: The Lower-of-Cost-or-Market Principle in the Warehouse under HGB

Imagine you have 100 units of an item in stock. Your GLD dynamically calculated in Xentral (i.e. your historical acquisition costs) is €10.00 per unit.

On the balance sheet date, you compare this value with the current market situation. Two scenarios may arise:

Scenario A: The current market price is €12.00. According to the acquisition cost principle (§ 253 para. 1 HGB), you must continue to value the item at your GLD of €10.00. You are not permitted to calculate your inventory for the item as more valuable than it was at the time of purchase.
Scenario B: Due to oversupply, the market price drops to €8.00. Here the strict lower-of-cost-or-market principle (§ 253 para. 4 HGB) applies. You are legally required to write down the inventory value to the lower market price of €8.00.

The dynamic calculation of the GLD in Xentral provides you with the exact acquisition costs through automatic calculation at each goods receipt linked to a purchase order. Only with this reliable basis can you carry out the comparison with the current market price in a legally compliant manner and avoid distorting your company’s results.

Activating the Calculation in Item Master Data

To activate the dynamic calculation of the GLD in Xentral, you only need to make a few settings in the master data of the desired items for which the purchase price is to be calculated dynamically. Proceed as follows.

Open the menu Sales > Items.
Open the desired item by clicking on the pencil icon.
Scroll down in the Details tab of the item until you reach the Other Settings section.
Enable the Calculated Purchase Price option.
Click on Save in the top right.
Now open the Calculation tab of the item.
Open the subordinate Settings tab.
In the Calculated Purchase Price Settings section, make the desired setting. If you want to enable the new function for dynamic GLD calculation, select the option shown in the example Update Calculated Purchase Price on Goods Receipt with Purchase Order Reference for the Moving Average in Accordance with German HGB setting.

Important

You can only select a single calculation method for the calculated purchase price. In the table below you can read exactly which calculations take place at which point in Xentral, depending on which option you select here.
Click on Save.

Setting	Explanation
Weighted average of all recorded purchases	With this calculation method, all entries with the cost type Purchase from the Calculation > Details tab of the item master data are weighted according to their respective For Quantity values (plus further cost types included in the purchase price calculation).
Weighted average of all recorded purchases up to current stock level	Here, all entries with the cost type Purchase from the Calculation > Details tab of the item master data are weighted according to their respective For Quantity values. This calculation takes into account the current stock level at the time of recalculation and further cost types included in the purchase price calculation.
Moving average in accordance with German HGB	Enable this setting when you want to use the new dynamic calculation in accordance with German HGB. The calculation works as follows: The previous calculated purchase price from the item master data is weighted with the current stock level at the time of recalculation, plus the purchase price from the purchase order for the current goods receipt, which in turn is weighted with the stored item quantity. Important With this calculation method, additional cost types are only applied to the stored quantity, as additional cost types that were configured for previous goods receipts have already been incorporated into the calculated purchase price in previous recalculations.

Important Restrictions and Notes

Note the following when using the new Moving Average in Accordance with German HGB setting for calculating your purchase prices:

Goods receipts without a reference to a purchase order do not trigger a recalculation of purchase prices.
Goods issues and transfers between storage locations also do not trigger a recalculation.
The history of calculated purchase prices can be found in the Item > Calculation tab of the item master data — this allows you to transparently track at any time when which quantities from which purchase order were posted and which GLD was subsequently determined.