Example of Procurement Flow using Dual Units of Measure with Partial Receipt and no Invoice
This example illustrates the accounting entries for a procurement flow with partial receipts and no invoice when using dual units of measure.
Scenario
Let's consider a purchase order for an item A005. The details for the purchase order PO1 are listed in this table.
Quantity |
UOM |
Secondary Quantity |
Secondary UOM |
Unit Price |
Pricing UOM |
Amount |
Invoice Match Option |
---|---|---|---|---|---|---|---|
100 |
Ea |
200 |
Lbs |
$1.000 |
Lbs |
$200.000 |
Order |
You should note that the purchase order is priced by the secondary UOM and, therefore, the amount is calculated by using the secondary quantity. Also, the invoice match option is set to order.
For this PO, you have these receiving transactions.
Transaction |
Transaction Quantity |
Transaction UOM |
Secondary Quantity |
Secondary UOM |
---|---|---|---|---|
R1 |
4 |
Ea |
9 |
Lbs |
R2 |
2 |
Ea |
4.5 |
Lbs |
You also have an inventory put away transaction as listed in this table.
Transaction |
Transaction Quantity |
Transaction UOM |
Costing Quantity |
Costing UOM |
---|---|---|---|---|
D1 |
2 |
Ea |
4.5 |
Lbs |
Also, no invoice has been raised.
Analysis
We know the primary UOM is Each and the secondary UOM is Lbs.
For the purchase order PO1 we have this information:
Uninvoiced PO Quantity: 100
Ea
Uninvoiced PO Amount: $100.000
And for the put away transaction D1 we have this information:
Uninvoiced Delivered Quantity:
2 Ea
Uninvoiced Delivered Amount:
$2.000
Therefore, the acquisition amount is $2.00. We arrive at this value by using this equation:
Acquisition Amount = Total
Uninvoiced Delivered Quantity * Latest PO Price + Total Invoice Amount
In this case, we have no invoice.
The total delivered quantity in the costing UOM is 4.5 Lbs. Therefore, the unit cost in the costing UOM is $0.444.
$2.000/4.5 = $0.444
The corresponding entries created in Oracle Receipt Accounting are here.
Accounting Line Type |
Source Document Number |
Quantity |
UOM |
Unit Cost |
Amount |
---|---|---|---|---|---|
Receiving Inspection |
PO1 |
4 |
Ea |
$1.000 |
$4.000 |
Receiving Inspection |
PO1 |
2 |
Ea |
$1.000 |
$2.000 |
The corresponding entries created in Oracle Cost Accounting are here:
Accounting Line Type |
Reference Number |
Costing Quantity |
Costing UOM |
Unit Cost |
Amount |
Document Number |
---|---|---|---|---|---|---|
Purchase Order Receipt |
PO1 |
4.5 |
Lbs |
$0.444 |
$2.000 |
D1 |