Example of Acquisition Cost Adjustment for Partial Receipts
This example illustrates the accounting entries for an acquisition cost adjustment and the corresponding entries when the ignore invoice variances for inventory destination purchase orders feature is enabled.
Scenario
An organization has a purchase order receipt, for which it subsequently processes an invoice price variance adjustment.
Transaction Details
The details of the transactional data are listed in this table.
|
Transaction Type |
Cost Component |
Quantity |
Price |
Comments |
|---|---|---|---|---|
|
PO |
10 |
$10.00 |
||
|
Receipt Accrual |
PO Price |
8 |
$10.00 |
|
|
Deliver to Inventory |
Standard Cost |
8 |
$8.00 |
|
|
Invoice (Match to PO) |
Invoice Price |
8 |
$12.00 |
Invoice Price Variance: $2.00 |
Analysis
Run the cost processor to cost the initial PO receipt. After entering the receipt cost adjustment for the invoice price variance of $2 per unit, rerun the cost processor.
Resulting Accounting Distributions
The cost distribution processor creates these accounting entries.
|
Application |
Transaction Type |
Accounting Event |
Item |
Line Type |
Cost Element |
Dr. |
Cr. |
|---|---|---|---|---|---|---|---|
|
Receipt Accounting |
Receipt |
PO Receipt |
AS54888 |
Receiving Inspection |
N/A |
$80.00 |
|
|
Receipt Accounting |
Receipt |
PO Receipt |
AS54888 |
Accrual |
N/A |
$80.00 |
|
|
Receipt Accounting |
Invoice Cost Adjustment |
Invoice Cost Adjustment |
AS54888 |
Receiving Inspection |
N/A |
$16.00 |
|
|
Receipt Accounting |
Invoice Cost Adjustment |
Invoice Cost Adjustment |
AS54888 |
Invoice Price Variance |
N/A |
$16.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Inventory |
Material |
$64.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Purchase Price Variance |
Purchase Price Variance |
$16.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Receiving Inspection |
Material |
$64.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Receiving Inspection |
Purchase Price Variance |
$16.00 |
|
|
Cost Accounting |
Acquisition Cost Adjustment |
Acquisition Cost Adjustment |
AS54888 |
Inventory |
Material |
$12.80 |
|
|
Cost Accounting |
Acquisition Cost Adjustment |
Acquisition Cost Adjustment |
AS54888 |
Receiving Inspection |
Material |
$12.80 |
However, when the ignore invoice variances for inventory
destination purchase orders feature is enabled by setting the value
of the ORA_CMR_IGNORE_AP_INV_VAR_ALL profile option to Yes, you will notice that some of the additional
distributions aren't created in receipt accounting or cost accounting.
These are created only when this option is set to No, which is the
default behavior. This table shows the accounting distributions when
the option is set to Yes.
|
Application |
Transaction Type |
Accounting Event |
Item |
Line Type |
Cost Element |
Dr. |
Cr. |
|---|---|---|---|---|---|---|---|
|
Receipt Accounting |
Receipt |
PO Receipt |
AS54888 |
Receiving Inspection |
N/A |
$80.00 |
|
|
Receipt Accounting |
Receipt |
PO Receipt |
AS54888 |
Accrual |
N/A |
$80.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Inventory |
Material |
$64.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Purchase Price Variance |
Purchase Price Variance |
$16.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Receiving Inspection |
Material |
$64.00 |
|
|
Cost Accounting |
Delivery |
Deliver to Inventory |
AS54888 |
Receiving Inspection |
Purchase Price Variance |
$16.00 |