The process of Oracle COGS and DCOGS.doc

在ORACLE R12中OM改进了销货成本与收入确认的流程一般来说，根据成本收入确认原则，收入与销售成本都必须记录在相同的期间。以前版本中，Oracle对此没有强制性的要求，COGS分录产生是货物发运前，但收入在发票登记后生成，一般情况下，发出货到登记发票这个期间很短，所以一般对于成本和收入都会同时生成。但实际可能会是，发票登记后，并不一定就产生收入了（一般记到未得收入），另外，货物发运后，也不一定就可以马上确认为销货成本（COGS），可能需要等到客户收到并接受了这个货物后才能确认。基于上述情况，R12对于这个收入与成本确认流程进行了一些调整。首先，新增加了一个科目，即：deferred COGS Account（递延成本科目），设置位置在组织参数的other accounts底下。大家可能会发现这个设置其实在11中也有，但11中是灰的。这个科目什么时候发挥作用呢？当我们在执行完成shipping后，在11中会生产：借：COGS 贷：子库存物料成本12中就记到：借：deferred COGS 贷：子库存物料成本那什么时候发deferred COGS结转到COGS上呢？一会我们再看。接下来的流程，我们会去生成invoice，那生成invoice时，如何产生收入的分录？说到这，R12中又引入了一个新的流程，这个流程里的设置会决定如果生成收入。这个流程叫Customer Acceptance（客户接受），这个流程图如下：Customer Acceptance实际上就是你的对于你的发运货物如果确认，是说一发出去就默认客户就确认了（一般情况如此），还是说需要再手工去记录一下客户确认流程（可以由客户自己登陆self-service界面确认或由销售方手工输入确认信息），前一种叫Post-billing，后一种叫pre-billing，即： * Pre-billing：SO shipping后，需要由客户接受，然后 invoice和revenue一起产生 * Post-billing：SO shipping后，可以马上运行开票程序，此时产生invoice和unearned revenue，然后在客户接受后，生成收入关于Customer Acceptance如何设置，以后再单独叙述。最后，运行三个请求： * Record Order Management Transactions 获得事务处理信息 * Collect Revenue Recognition Information 获得收入确认信息 * Generate COGS Recognition Event 结转deferred COGS到COGS运行成功后，可以在material transaction中找到这笔结转的分录R12 : Deferred COGS ConceptSubmitted by Anonymous on Thu, 07/01/2010 - 21:53 The deferred COGS of goods account is the new feature introduced in Release 12. The basic fundamental behind the enhancement is that the COGS is now directly matched to the Revenue. The same was not possible till now.Prior to this enhancement, the value of goods shipped from inventory were expensed to COGS upon ship confirm, despite the fact that revenue may not yet have been earned on that shipment. With this enhancement, the value of goods shipped from inventory will be put in a Deferred COGS account. As percentages of Revenue are recognized, a matching percentage of the value of goods shipped from inventory will be moved from the Deferred COGS account to the COGS account, thus synchronizing the recognition of revenue and COGS in accordance with the recommendations of generally accepted accounting principles.The Matching Principle is a fundamental accounting directive that mandates that revenue and its associated cost of goods sold must be recognized in the same accounting period. This enhancement will automate the matching of Cost of Goods Sold (COGS) for a sales order line to the revenue that is billed for that sales order line.The deferral of COGS applies to sales orders of both non-configurable and configurable items (Pick-To-Order and Assemble-To-Order). It applies to sales orders from the customer facing operating units in the case of drop shipments when the new accounting flow introduced in 11.5.10 is used. And finally, it also applies to RMAs that references a sales order whose COGS was deferred. Such RMAs will be accounted using the original sales order cost in such a way that it will maintain the latest known COGS recognition percentage. If RMAs are tied to a sales order, RMAs will be accounted for such that the distribution of credits between deferred COGS and actual COGS will maintain the existing proportion that Costing is aware of. If RMAs are not tied to a sales order, there isno deferred COGS.SETUP: To set the deferrred COGS account.Inventory - Setup - Organization - Parameters - Other Accounts A new account is added which is referred as the Deffered COGS accounts.No other setup is required.Now when you ship the material, systemll automatically create the deferred cogs account.The COGS to deferred COGS accounting can be created by running Collect Revenue Recognition Information & Generate COGS Recognition Events after recognizing the revenue.NEW ACCOUNTING : When a Sales order is shipped the following accounting takes place:Deferred COGS account : Debit Inventory Valuation Account : Credit.Once the revenue is recognised, you would need to decide the percentage you wish to recognize the Revenue. A COGS recognition transaction will be created to reflect a change in the revenue recognition percentage for a sales order line.The steps to generate such transactions are as follows: 1. Run the Collect Revenue Recognition Information program. This program will collect the change in revenue recognition percentage based on AR events within the user specified date range. 2. Run the Generate COGS Recognition Events. This program will create the COGS recognition transaction for each sales order line where there is a mismatch between the latest revenue recognition percentage and the current COGS recognition percentage.Note that users can choose how often they want to create the COGS Recognition Events.Navigation to run the COGS recognition request : - Cost COGS Recognition Collect Revenue Recognition Information - Cost COGS Recognition Generate COGS Recognition Events - Cost View Transactions Material TransactionsThe distribution for the COGS Recognition transaction associated with the Sales Order transaction now would be as follows:Deffered COGS : Debit y revenue percentage COGS : Credit (Actual revenue percentage )Thus, essentially the recognized COGS balance is to move the value from Deferred COGS to COGS.This particular COGS recognition transaction actually correspond to a revenue recognition percentage change.You can view the transactions as : Navigation: - Cost View Transactions Material Transactions DistributionsA new COGS Revenue Matching Report shows the revenue and COGS information of sales order that fall within the user specified date range by sales order lineSIMPLER TERMS ( Table level details ) :Once the whole cycle is complete we will have 2 transactions lines in mtl_material_transactions.1. Sales Order 2. COGS Recognition transactionAccounting will be in mtl_transaction_accounts and the Subledger accounting tables as follows:Transaction 1: Inventory Valuation Account : Credit. (item_cost) Deferred COGS account : Debit (item_cost)Transaction 2:Deffered COGS : Credit (Actual revenue percentage) COGS : Debit (Actual revenue percentage )COGS and DCOGS WorkflowThe following scenario illustrate a short example of a Revenue / COGS matching for a sales order where Accounting rule used is: 3 Months, Deferred1.Define new Item Navigate to : InventoryItem MasterDefine item MM-ITEM65 (Purchase Item)Assign to Organization M32. Do a Miscellaneous Receipt in Organization M3.Navigate to : Navigation: Miscellaneous TransactionsReceive MM-ITEM65 in Subinventory Store.Qty 10015USD3. Check Item cost : Navigate to : CostsItem CostsEnter ItemMM-ITEM65 : Unit cost =15 USD4. Define Accounting Rules in Account ReceivablesNavigate to : Account ReceivablesSetupTransactionsAccounting RulesThere are two Predefined Accounting rulesa-3 Months , Deferredb-Immediately5.Navigate to : Sales Order screen Enter a SO Order Type =Mixed, Customer=A.C NetworksOrdered item MM-ITEM65/qty=5/ price=15/ Accounting rule=3 Months, Deferred, Date Ordered: 04-AUG-2009 , Total Value =75Shipping warehouse=M3(eg 63849) 6. Book the SO: SO 63849 booked 7. Navigate to: Order Management ShippingTransactions Enter SOa. Pick Release the SOb.Ship Confirm the SO Item is shippedLine is closed8. Review the Material Transactions form9. Distribution of the SO issueWhen a Sales order is shipped the following accounting takes place: Inventory Valuation Account: Credit. Deferred COGS account: Debit 10. Run the Workflow Background Process request11. Create the Invoice with the Autoinvoice requestNavigate to : Sales Order Accounts ReceivablesInterfacesAutoinvoice12.Check the Invoice in AR Navigate to : Accounts ReceivablesControlRevenueAccountingEnter reference number: SO (ie.63849)13. Invoice generated:Invoice= 1003370814. Recognize the revenue in AR Navigate to : Accounts ReceivablesControlRun Revenue Recognition request15. After recognizing the revenue. We need to accept it.Navigate to : Accounts ReceivablesControlRevenueAccountingEnter reference number: SO (ie.63849)Manage RevenueSchedule Revenue16. Now the revenue has been recognized according to our accounting rule: 3 Months, DeferredGL Date Amount50% August 37.525%September 18.825%October 18.7For August: 50% of the revenue has been recognized17. Now we run a set of concurrent processes to record sales order and revenuerecognition transactions and to create and cost COGS recognition transactions.These COGS recognition transactions adjust deferred and earned COGS in anamount that synchronizes the % of earned COGS to earned revenue on salesorder shipment lines.18. Record Order Management Transactions: records new sales order transactionactivity such as shipments and RMA returns in Oracle Order Management.19. Collect Revenue Recognition Information: determines the percentage ofrecognized or earned revenue related to invoiced sales order shipment linesin Oracle Receivables.20. Generate COGS Recognition Events: creates and costs COGS recognitionevents for new sales order shipments/returns and changes in revenuerecognition and credits for invoiced sales order shipment lines.21. A non-physical transaction has been generatedTransaction Type= COGS RecognitionThe distribution for the COGS Recognition transaction associated with the Sales Order transaction now would be as follows: Deferred COGS : Debit y revenue percentage COGS : Credit (Actual revenue percentage ) Thus, essentially the recognized COGS balance is to move the value from Deferred COGS to COGS. This particular COGS recognition transaction actually corresponds to a revenue recognition percentage change.For additional information, please review the following Notes: DCOGS AND COGS RECOGNITION ACCOUNTING USEFUL TIPS R12 : Deferred COGS account Unprocessed Events On The Subledger Period Close Exception Report COGS and DCOGS Workflow COGS Dataflow and DiagnosticsCOGS AND DCOGS RECOGNITION ACCOUNTING USEFUL TIPS ID 1060202.1Modified 08-OCT-2011Type FAQStatus PUBLISHEDIn this DocumentPurposeQuestions and AnswersApplies to: Oracle Cost Management - Version: 12.0.0 to 12.1.3 - Release: 12 to 12.1Information in this document applies to any platform.Cost Managemenft SLA Create AccountingSales Order Issue - COGS Recognition PurposeThe purpose of this document is to explain how COGS Recognition works on Create Accounting engine.There is no Deferred COGS functionality in 11i, this functionality was introduced in R12 to be compliant with the Sarbanes-Oxley legislation, hence before R12 there is no Cogs Recognition process. In 11i a sales order issue will be costed hitting the COGS account directly hence there is no Cogs recognition process, the normal accounting template for Sales order issue (no intercompany) will be Debit Cogs and Credit the Inventory valuation from where the item is being issued from.Questions and Answers1 - When does an RMA debit inventory and credit DCOGS account?A. RMA has created after COGS Recognition. So RMA debits inventory and credits COGS account. If RMA happens before COGS Recognition then RMA debits inventory and credits DCOGS account.2 - Why there is no accounting for COGS recognition?A. There is no accounting for COGS recognition because it has zero quantity.Reason :- Customer has created RMA against this Sales Order Line.3 - No COGS Recognized (COGS will never be recognized as there is no reference to the original invoice). Why?A. COGS recognition is designed to match with AR revenue recognition.If you dont have an invoice yet but only a credit memo, what would be the percentage of revenue recognized from AR?Ej:The COGS recognition is not going to happen at the individual RMA level, it is at the order line level that has been shipped.Say you have debited the Deferred COGS for the original shipment at $100, then you have credited the Deferred COGS for the RMA receipt at $40. The net Deferred COGS is $60, so far so good. After the credit memo and invoice have gone through, what matters at this point of time is how much net percentage of revenue is recognized from AR for this order line. Suppose a 50% revenue recognized, then a distinct COGS recognition transaction is going to be created that will credit deferred COGS at $30 and debit COGS at $30. The accounting of original shipment and RMA transactions would not change, but the additional COGS recognition transaction will make the order lines recognized COGS to be matched with recognized revenue.4 - Why Inter company COGS account is not working after completing mandatory setup?A. There is a difference between the internal order flow and drop shipment or global procurement flow. The intercompany COGS account defined in the Inter-company Relations form is only used in drop shipment and global procurement flows. For internal order flows, the account is driven by the Inventory Cost of Goods Sold Account workflow. In default, the workflow process uses the item COGS account, but the user can configure the process to use any other account.Other references:Note 747638.1 - R12 Where To Define Inventory Cost Of Goods Sold Account WorkflowTransfer Price Accounting in Oracle SCM, Feb 2006 (Metalink Note: 360106.1).5 - How to diagnose missing COGS Recognition events?A. Checking whether the COGS events are costed is easy, you just verify mmt.costed_flag. Checking whether COGS events are created is more functional and less simple. You can use the R12 Revenue COGS matching report to find out whether the result is expected. If the expected COGS recognition percentage does not match Revenue percentage, there could be a potential problem.6 - Can we close the Inventory period without running the COGS recognition concurrent programs? If not, what prevents it? If so, what are the entries that are created when the recognition is run the following month and the inventory period for the current month is closed? A. If the customer is using perpetual Costing Method Standard, Average, Layer then the inventory period can be closed prior COGS recognition process. If the customer is using PAC then the Collect Revenue and AR period needs to be closed prior PAC period close.7 - How to derive COGS Account Cost Center using Salesperson Value from Sales Order form in Order Management thru SLA?A. Looking at gmf_xla_extract_headers, for the OM issue from stores transaction, the transaction_id on that row points to a row in mtl_material_transactions and the column source_line_id in that table points to the line_id in oe_order_lines_all. 8 - Why when generating Accounting-the COGS , accounting does not follow the Revenue Accounting for the Receivable Invoices?A. COGS account in Oracle EBS is driven and derived from Order Management COGS account generator workflow. If you need help for that workflow, contact Order Management team. 9 - Is there a way for Cost Management SLA (Subledger Account) to utilize the same sources as the AR SLA?A. Right now, there is no built-in cross reference of sources in SLA between Receivables and Cost Management. There are two options for the customer:a - Inside SLA, build a few custom sources for Cost Management Application that the customer is using for Receivables.b - Even though the deferred COGS account is a fixed organization parameter, the true COGS account is derived from Order Management COGS Account Workflow. That is well-known in 11i and the functionality remains in R12. The logic can be mimicked inside the workflow. 10 - Trying to generate Deferred COGS but instead the Inventory Accrual account appears on the Inter-company AP invoice. How can they get this to be a deferred accrual account? A. There is only deferred COGS, no such a thing called deferred accrual. To do the drop shipment right, you need to set up the transaction flow and inter-company relations with advanced accounting, not the shipping network setup.When the setup is right, you would get one physical transaction out of OU2, one logical transaction for OU2, and two logical txns for OU1. The logical sales order issue transaction of OU1 will hit deferred COGS account. The deferred COGS will be transformed into true COGS after you run the COGS recognition programs. As for the inter-company AP invoice, it should use the intercompany accrual account defined in the inter-company relations form. There is no concept of deferred accrual.Please see Inventory documentation about transaction flow setup and Cost Management Users Guide on Revenue and COGS Matching for more details. 11 - COGS account is going 100% into the account instead of getting deferred into 5 groups. Our revenue accounting rule splits the revenue into 5 deferred periods and we expect the COGS to do the same. I ran the 3 programs under Cost Management (Resp.) - COGS accounting and the Material Distributions is still going 100% into a single account, instead of creating 5 records for 20% each in each period. Why?A: For a given sales order shipment, it always goes to 100% deferred COGS at first. Then after you run those programs for each period and assuming AR passes the right percentage of revenue recognition, we will move from deferred COGS to COGS accordingly. For example, at period 1, if AR says 20% revenue recognized, then you then programs and you will have 80% deferred COGS and 20% COGS. And at period 2, if AR says now 40% revenue recognized,