Example of Consigned Inventory Accounting of an Interorganization Transfer Within the Same Business Unit
An intraorganization transfer is a trade transaction involving the movement of goods or services between organizations in the supply chain. The following is an example of accounting performed by Oracle Cost Accounting and Oracle Receipt Accounting for an interorganization transfer of goods within the same profit center business unit.
This example illustrates:
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Transactions captured in Oracle Inventory Management and interfaced to Cost Accounting and Receipt Accounting.
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Accounting entries that Cost Accounting and Receipt Accounting generate for the forward flow.
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Accounting entries that Cost Accounting and Receipt Accounting generate for the return flow.
Scenario
Supplier Advanced Network Devices (AND-Fresno) ships the goods in consigned status to inventory organization M3-NY, who in turn transfers the goods to inventory organization M4-NJ. Inventory organizations, M3-NY and M4-NJ, are within the same business unit.
Interfaced Transactions
Cost Accounting and Receipt Accounting receive the following transaction from Inventory Management:
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Consignment Purchase Order (PO) #1000.
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Purchase Order price USD 100.
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Ship-to organization is M3-NY which is also the contingent owner. Contingent owner assumes ownership from the supplier when inventory is consumed.
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Receipt and put away transactions are performed in M3-NY in consigned status.
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Goods are transferred in consigned status from M3-NY to M4-NJ.
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Ownership changes from supplier to M4-NJ through M3-NY when the goods are consumed.
Cost Accounting generates transactions for:
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Ownership changes from supplier AND-Fresno to inventory organization M3-NY and from M3-NY to M4-NJ.
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Transfer of goods from M3-NY to M4-NJ. The transfer is at cost because the organizations are within the same profit center business unit.
Analysis
Receipt Accounting and Cost Accounting create accounting distributions for the forward and return shipment of goods.
Accounting Entries
The following are accounting entries for the forward flow.
The following table lists the distributions that Receipt Accounting generates under inventory organization M3-NY for the shipment from supplier AND-Fresno to M3-NY.
|
Subledger |
Event Type |
Accounting Line Type |
Amount in Functional Currency +Dr/-Cr |
Functional Currency |
Basis of Amount |
|---|---|---|---|---|---|
|
Receipt Accounting |
PO Receipt |
Consigned Clearing |
100 |
USD |
PO Price |
|
Receipt Accounting |
PO Receipt |
Consigned Accrual |
-100 |
USD |
PO Price |
|
Receipt Accounting |
PO Delivery |
Consigned Inventory |
100 |
USD |
PO Price |
|
Receipt Accounting |
PO Delivery |
Consigned Clearing |
-100 |
USD |
PO Price |
The following table lists the distributions generated by Cost Accounting under inventory organization M3-NY for the interorganization transfer from M3-NY to organization M4-NJ.
|
Subledger |
Event Type |
Accounting Line Type |
Amount in Functional Currency +Dr/-Cr |
Functional Currency |
Basis of Amount |
|---|---|---|---|---|---|
|
Cost Accounting |
In-Transit Shipment |
Consigned In-Transit |
100 |
USD |
PO Price |
|
Cost Accounting |
In-Transit Shipment |
Consigned Inventory |
-100 |
USD |
PO Price |
|
Cost Accounting |
Consigned Trade In-Transit Issue |
Consigned Receivable |
100 |
USD |
PO Price |
|
Cost Accounting |
Consigned Trade In-Transit Issue |
Consigned In-Transit |
-100 |
USD |
PO Price |
Cost Accounting generates distributions under inventory organization M4-NJ for the interorganization transfer from M3-NY to M4-NJ.
|
Subledger |
Event Type |
Accounting Line Type |
Amount in Functional Currency +Dr/-Cr |
Functional Currency |
Basis of Amount |
|---|---|---|---|---|---|
|
Cost Accounting |
Consigned Trade Receipt Accrual |
Consigned Clearing |
100 |
USD |
PO Price |
|
Cost Accounting |
Consigned Trade Receipt Accrual |
Consigned Payable |
-100 |
USD |
PO Price |
|
Cost Accounting |
Consigned Trade In-Transit Receipt |
Consigned In-Transit |
100 |
USD |
PO Price |
|
Cost Accounting |
Consigned Trade In-Transit Receipt |
Consigned Clearing |
-100 |
USD |
PO Price |
|
Cost Accounting |
In-Transit Receipt |
Consigned Inspection |
100 |
USD |
PO Price |
|
Cost Accounting |
In-Transit Receipt |
Consigned In-Transit |
-100 |
USD |
PO Price |
|
Cost Accounting |
In-Transit Delivery |
Consigned Inventory |
100 |
USD |
PO Price |
|
Cost Accounting |
In-Transit Delivery |
Consigned Inspection |
-100 |
USD |
PO Price |
Receipt Accounting and Cost Accounting generate distributions under inventory organization M3-NY for the change of ownership from supplier AND-Fresno to M3-NY.
|
Subledger |
Event Type |
Accounting Line Type |
Amount in Functional Currency +Dr/-Cr |
Functional Currency |
Cost Element |
Basis of Amount |
|---|---|---|---|---|---|---|
|
Receipt Accounting |
Trade Receipt Accrual |
Trade Clearing |
100 |
USD |
Not applicable |
PO Price |
|
Receipt Accounting |
Trade Receipt Accrual |
Accrual |
-100 |
USD |
Not applicable |
PO Price |
|
Cost Accounting |
Trade In-Transit Receipt |
Trade In-Transit |
100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Trade In-Transit Receipt |
Trade Clearing |
-100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Trade In-Transit Issue |
Interorganization Receivable |
100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Trade In-Transit Issue |
Trade In-Transit |
-100 |
USD |
Material |
PO Price |
Receipt Accounting and Cost Accounting generate distributions under inventory organization M4-NJ for the change of ownership from M3-NY to M4-NJ.
|
Subledger |
Event Type |
Accounting Line Type |
Amount in Functional Currency +Dr/-Cr |
Functional Currency |
Cost Element |
Basis of Amount |
|---|---|---|---|---|---|---|
|
Cost Accounting |
Transfer to Owned Issue |
Consigned Inventory Offset |
100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Transfer to Owned Issue |
Consigned Inventory |
-100 |
USD |
Material |
PO Price |
|
Receipt Accounting |
Trade Receipt Accrual |
Trade Clearing |
100 |
USD |
Not applicable |
Transfer Price |
|
Receipt Accounting |
Trade Receipt Accrual |
Interorganization Payable |
-100 |
USD |
Not applicable |
Transfer Price |
|
Cost Accounting |
Trade In-Transit Receipt |
Trade In-Transit |
100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Trade In-Transit Receipt |
Trade Clearing |
-100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Transfer to Owned (Receipt) |
Inventory Valuation |
100 |
USD |
Material |
PO Price |
|
Cost Accounting |
Transfer to Owned (Receipt) |
Trade In-Transit |
-100 |
USD |
Material |
PO Price |
Inventory organization M4-NJ returns goods to supplier AND-Fresno. The return of the consignment is executed in two parts:
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An interorganization transfer from M4-NJ to M3-NY. The accounting is the same as simple purchase order return transactions.
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A consignment return from M3-NY to the supplier. The accounting is the same as regular return to supplier transactions.