Understanding Advanced Cost Accounting audit Reports

One of the obstacles that organizations using Activity Based Costing (ABC) face is trying to reconcile GAAP based reporting to ABC based reporting. GAAP methodologies of recognizing costs differ from ABC methodologies.

ABC changes the way costs are allocated to products in two ways. First, costs are redistributed between products and services. Second, more overhead costs are driven to products. As a result, the recognition of costs is often changed between accounting periods.

To be able to reconcile traditional or GAAP based accounting to that based on ABC accounting methodologies, organizations need to reconcile the opening and closing account balances from both a standard and activity-based view.

The JD Edwards EnterpriseOne Advanced Cost Accounting system provides four audit reports that assist in reconciling the two accounting systems:

• Resource To Activity Cost Audit Trail Report.

• Audit Trail By Assignment.

• Resource To Cost Object Audit Trail Report.

• Activity To Cost Object Audit Trail Report.

All four reports are based on information from an audit log file, called the Cost Calculations (F1611) table. You must indicate in the processing options of the Assignment Calculations (R1610) program that you want to generate the audit log table.