1. Job Cost Implementation Guide
  2. Profit Recognition IS Entry (51/IS)

Profit Recognition IS Entry (51/IS)

If you use the Create Journal Entries program for profit recognition, the system uses locates the offset account to use for the work in progress (WIP) account by using the AAI item IS. If you want to use multiple offset accounts, you can set up the IS AAI by cost type (for example, IS1340). The system uses the account associated with IS1340 for all journal entries that it creates for that account. If, however, you want to differentiate offset accounts by job type, you can do so by setting up codes in UDC 51/IS. When you set up UDC 51/IS, you specify a code for the job type and a user defined AAI in the Description 02 field. You can set up additional codes for job type/cost type combinations, as required.

When you run the Create Journal Entries program, the system uses this hierarchy to locate the AAI that it uses to retrieve the offset account:

  1. The system verifies whether a code for the job type is set up in UDC 51/IS, for example JB.

  2. If the code is set up, the system searches for another code that is set up by job type and cost type, for example JB1340.

  3. If the system locates a code for the job type/cost type combination, it retrieves the AAI from the Description 02 field, the account from the AAI, and uses it in the journal entry.

  4. If the system does not locate a code in UDC 51/IS for JB1340, it uses the AAI associated with code JB.

  5. If a code is not set up for JB, the system uses the AAI item ISxxxx, where xxxx is equal to the cost type.

  6. If the system cannot locate AAI item ISxxxx, it uses AAI item IS.

This table shows an example of how to set up codes and AAIs in UDC 51/IS:

Code

Description 01

Description 02

JB

The system requires that you set up a code for the job type only.

Construction job.

JB00

The system uses the account associated with AAI JB00.

JB1340

JB1340

JB1340

The system uses the account associated with AAI JB1340.

JB1360

JB1360

JB1360

The system uses the account associated with AAI JB1360.

JB1380

JB1380

JB1380

The system uses the account associated with AAI JB1380.
Note: You do not have to set up UDC 51/IS if the IS AAIs are specific enough for the entries on the income statement.