Example of Accounting Interorganization Transfers or Intercompany Shipments as Cost Derived Using Periodic Cost
This example illustrates:
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Material moment transactions that are captured in Oracle Inventory Management and interfaced to Oracle Receipt Accounting and Oracle Cost Accounting.
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Accounting entries that Receipt Accounting and Cost Accounting generate for transfers or intercompany shipments for inventory organizations with periodic average costing (PAC) enabled.
Scenario
A transfer order is issued from a PAC-enabled inventory organization to another PAC-enabled destination inventory organization.
The quantity of goods transferred is 10 units. The prior period average cost is $10.00 per unit and the current period average cost is $14 in the source organization. Cost variance is booked for the difference between the prior period average cost or opening period average cost and the current period average cost in the source organization.
Accounting Entries
Here's how the transfer transactions are cost processed. The table lists the accounting distributions in the source and destination PAC-enabled inventory organizations.
Source Organization Accounting Distributions
|
Subledger |
Event |
Accounting Line |
Amount in USD (+Dr/-Cr) |
|---|---|---|---|
|
Cost Accounting |
Transfer Order Interorganization Shipment |
Trade In-Transit |
+140 |
|
Cost Accounting |
Transfer Order Interorganization Shipment |
Inventory |
-140 |
|
Cost Accounting |
Transfer Order Interorganization Shipment |
Cost Variance |
+40 |
|
Cost Accounting |
Transfer Order Interorganization Shipment |
Trade In-Transit |
-40 |
|
Cost Accounting |
Trade In-Transit Issue |
Interorganization Receivable |
+100 |
|
Cost Accounting |
Trade In-Transit Issue |
Trade In-Transit |
-100 |
Destination Organization Accounting Distributions
|
Subledger |
Event |
Accounting Line |
Amount in USD (+Dr/-Cr) |
|---|---|---|---|
|
Cost Accounting |
Trade In-Transit Receipt |
Trade In-Transit |
+100 |
|
Cost Accounting |
Trade In-Transit Receipt |
Trade Clearing |
-100 |
|
Cost Accounting |
Transfer Order Interorganization Receipt |
Inventory |
+100 |
|
Cost Accounting |
Transfer Order Interorganization Receipt |
Receiving Inspection |
-100 |
|
Receipt Accounting |
Trade Receipt Accrual |
Trade Clearing |
+100 |
|
Receipt Accounting |
Trade Receipt Accrual |
Interorganization Payable |
-100 |
| Receipt Accounting |
Transfer Order Receipt |
Receiving Inspection |
+100 |
| Receipt Accounting |
Transfer Order Receipt |
Trade In-Transit |
-100 |