Derive Account Combinations for Costing Distributions in Periodic Average Costing

In the periodic average cost method, the cost of an item can change every time you run the cost processor because the cost is calculated based on all the cost owned transactions in the period. Therefore, you can run the Create Accounting process only after the period is closed to create the accounting entries. However, customers have expressed a need to view the impact on accounting during the period and before the period is closed. You can now derive the account combinations when you run the Create Cost Accounting Distributions process if you're using the periodic average cost method.

Using the Transaction Account Definition option in Cost Accounting that's introduced exclusively for customers using the periodic average cost method, you can set up mapping sets to identify and stamp the account combinations on costing transactions without having to run Create Accounting process for the same. You can use the Costing Transactions and Distributions page or the Cost Distribution Details Report to review the distributions with the account code combinations.

Let's take an example of a miscellaneous transaction that's fully costed and not accounted in a periodic average cost book.

Cost accounting distributions

The Subledger transaction account builder process, which is a new subprocess in Create Cost Accounting Distributions, uses the mapping sets that are seeded in the Standard Accrual Subledger Method to identify a code combination and stamps this code combination on the distributions. These code combinations are visible under the Source Account column as shown here.

Distributions showing the source account stamped

You can also see the source account in the Cost Distribution Details Report.

Cost Distribution details report

This feature will help you to identify and resolve issues well before period close thus helping you to close the period faster. 

Steps to Enable

Task 1: Set up Subledger Accounting Options

1. In the Setup and Maintenance work area, navigate to Cost Accounting > Manage Subledger Accounting Options.
2. Search for the required ledger.
3. Select the Cost Management subledger for the selected ledger and click edit under Accounting Options.
4. Set the Transaction Account Definition option to Costing Transaction Accounting Definition for Standard Accrual.
5. Click Save and Close. 

Task 2: Create the CST_DERIVE_CCID_DISTRIBUTIONS_FOR_PAC Profile Option

1. In the Setup and Maintenance work area, access the Manage Profile Options task.
2. Click the new (+) icon.
3. Set the parameters on the Create Profile Option page. 
   • Profile Option Code: CST_DERIVE_CCID_DISTRIBUTIONS_FOR_PAC
   • Profile Display Name: Derive distributions for costing transactions
   • Application: Cost Management
   • Module: Cost Accounting
   • Description: Derive distributions for costing transactions
   • SQL Validation: Select MEANING, LOOKUP_CODE from FND_LOOKUPS where LOOKUP_TYPE='YES_NO'
   • Start Date: First date of the current open period or today's date
4. Click Save and Close.

Task 3: Enable the CST_DERIVE_CCID_DISTRIBUTIONS_FOR_PAC Profile Option

1. In the Setup and Maintenance work area, access the Manage Cost Accounting Profile Options task.
2. Search for the CST_DERIVE_CCID_DISTRIBUTIONS_FOR_PAC profile option code.
3. Click the new (+) icon under Profile Values and set the parameters:
   • Profile Level: Site
   • Profile Value: Yes 
4. Click Save and Close.

Task 4: Configure the Mapping Sets

In the Setup and Maintenance work area, access the Manage Transaction Account Definitions task. The Transaction Account Definition uses the seeded Account Combination Rules, as shown here.

Transaction account definition

You can use the seeded mapping sets that are linked to these Transaction Account Types to set up the mapping sets. For example, for the Inventory Valuation account, you need to identify the mapping set linked to the Inventory Valuation account combination rule and modify it as per your requirements.

Account rule

Because this is a seeded mapping set, you can only add the chart of accounts and enter the conditions in the Mappings section.

Mapping sets

After you've enabled the profile option, you'll notice a new subprocess as part of the Create Cost Accounting Distributions process called Subledger transaction account builder process.

Cost processing run control

Tips And Considerations

The Transaction Account Definition framework uses the seeded mapping sets that have the most commonly used accounting sources. The Transaction Account Definition, seeded account rules, and the sources attached to the seeded mapping sets can't be edited. If your account derivation needs aren't met with the seeded mapping sets and the sources attached to it, you can run the Create Accounting process after the period is closed to derive the account combinations using a customized implementation approach.

Key Resources

• Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management guide, available on the Oracle Help Center.
• Oracle Fusion Cloud SCM: Using Supply Chain Cost Management guide, available on the Oracle Help Center.

Access Requirements

Users who are assigned a configured job role that contains these privileges can access this feature:

• Review Cost Distribution (CST_REVIEW_COST_DISTRIBUTIONS)
• Review Cost Distribution by Web Service (CST_REVIEW_COST_DISTRIBUTIONS_WEB_SERVICE_PRIV)