Example of Procurement Flow using Dual Units of Measure with Partial Invoice
This example illustrates the accounting entries for a procurement flow with partial invoice when using dual units of measure.
Scenario
Let's extend the previous example by including a partial invoice. So, the purchase order, receipt transactions and put away transactions are same as that in the previous example.
|
Quantity |
UOM |
Secondary Quantity |
Secondary UOM |
Unit Price |
Pricing UOM |
Amount |
Invoice Match Option |
|---|---|---|---|---|---|---|---|
|
100 |
Ea |
200 |
Lbs |
$1.000 |
Lbs |
$200.000 |
Order |
|
Transaction |
Transaction Quantity |
Transaction UOM |
Secondary Quantity |
Secondary UOM |
|---|---|---|---|---|
|
R1 |
4 |
Ea |
9 |
Lbs |
|
R2 |
2 |
Ea |
4.5 |
Lbs |
|
Transaction |
Transaction Quantity |
Transaction UOM |
Costing Quantity |
Costing UOM |
|---|---|---|---|---|
|
D1 |
2 |
Ea |
4.5 |
Lbs |
|
D2 |
2 |
Ea |
4.5 |
Lbs |
An invoice is raised with the details listed in this table.
|
Invoice |
Invoice Quantity |
Invoice UOM |
Invoice Price |
Invoice Amount |
IPV |
Total Invoice Amount |
|---|---|---|---|---|---|---|
|
I1 |
10 |
Ea |
$0.500 |
$10.000 |
($5.000) |
$5.000 |
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 based on the put away transactions and invoice we have this information:
Uninvoiced Delivered Quantity: -6 Ea
Uninvoiced Delivered Amount: ($6.000)
Therefore, the acquisition amount is ($1.00). We arrive at this value by using this equation:
Acquisition Amount = Total Uninvoiced Delivered Quantity * Latest PO Price + Total Invoice Amount
The total delivered quantity in the costing UOM is 9 Lbs. Therefore, the unit cost in the costing UOM is ($0.111).
($1.000)/9 = ($0.111)
The corresponding entry created in Oracle Receipt Accounting is listed in this table.
|
Accounting Line Type |
Source Document Number |
Quantity |
UOM |
Unit Cost |
Amount |
|---|---|---|---|---|---|
|
Invoice Price Adjustment |
PO1 |
10 |
Ea |
($0.500) |
($5.000) |
The corresponding entries created in Oracle Cost Accounting are listed in this table.
|
Accounting Line Type |
Reference Number |
Costing Quantity |
Costing UOM |
Unit Cost |
Amount |
Document Number |
|---|---|---|---|---|---|---|
|
Acquisition Cost Adjustment |
PO1 |
4.5 |
Lbs |
($0.556) |
($2.500) |
D1 |
|
Acquisition Cost Adjustment |
PO1 |
4.5 |
Lbs |
($0.556) |
($2.500) |
D2 |
The unit cost for the acquisition cost adjustment is the difference between the unit cost after the invoice is raised and the unit cost before the invoice was raised, which is available in the previous example.