Cost Cutoff Dates

The run control parameters you define for the cost processors include the cost cutoff date and the cutoff date for the cost organization books being processed. The cost cutoff date sets the last transaction date processed for an accounting period.

This enables you to continue normal business operations with no interruptions from one period to the next, using the cost cutoff date to define accounting period boundaries for these transactions.

The following discusses the cost cutoff date option, backdated transactions, and the costing date of transactions.

Cost Cutoff Date Option

In the Cost Accounting work area, access the Create Cost Accounting Distributions page to set the cutoff date option to User-Defined or Auto. The User-Defined option requires you to specify the cutoff date, while the Auto option saves you the effort of redefining the cutoff date which is automatically moved forward by the cost processor.

When you select the Auto option, the cost processor moves the cutoff date forward to the last date of the earliest open cost period and then it stops, until the costing period is closed. After the period is closed, the cost processor advances the cutoff date into the next open period, and so on. However, for a transaction, if preprocess is successful after the cutoff date, then the cutoff date for that cost organization book moves forward to the date of the last transaction for which the preprocess was successful. This could happen, for example, if you originally set the cutoff date option to User-Defined and subsequently changed it to Auto.

Backdated Transactions

One of the purposes of the cost cutoff date is to allow backdating of transactions in an orderly fashion. For example, if you set the cost cutoff date to October 31, you can still process October transactions that were entered in November but meant for the period ending October 31 by backdating them to October 31 or earlier. However, when the cost cutoff date advances forward to a date past October 31 and other transactions are processed beyond October 31, then the backdated transactions can no longer be processed as October transactions.

If you set a cost cutoff date at October 31, the cost processor will queue up but not process any transactions with a date after October 31. If you subsequently need to backdate transactions to a date before October 31, you can still process those backdated transactions as long as you don't process any transactions beyond October 31. You can also backdate transactions to any date after October 31, with the assurance that these transactions will be processed in the correct order when the cost cutoff date moves forward.

Note: If you've opted-in for the Use Enhanced Period Inventory Valuation and Gross Margin Reporting feature, then a transaction can be backdated only to period with open or pending close status. If the transaction is backdated to a date that falls in a period which is in closed or final close status, then the the cost date of the transaction is set to the 1st day of the next open period. If no open period is available, then the transaction processing fails with an error.

Costing Date of Transactions

The costing date of transactions is normally the same as the transaction date, or the cost adjustment date, except for backdated transactions.

Note: If you've opted-in for the Use Enhanced Period Inventory Valuation and Gross Margin Reporting feature, then:

• Cost date for a transaction is only derived when a cost is available to successfully cost the transaction.

• Cost date for a transaction is always derived in a period that's in the open or pending close status. If the period is closed, the cost date for the transaction is moved to the next open period.

The cost date for backdated transactions inherits the greater of the backdated transaction date and the date of the last processed transaction.

Note: The cost cutoff date affects the costed date of the transaction and the inventory value that's reported as of a given accounting date. It doesn't affect the inventory transaction date.