To run the Periodic Acquisition Cost Processor:The following list is the procedure for processing Periodic Costs:
Optionally, for invoices matched to receipts of closed periods, you can submit the Periodic Acquisition Cost Adjustment Processor
Optionally, you can run the Periodic Cost Distributions Processor
Perform any other required activities such as cost copy, item cost inquiry, and Periodic Cost update
Run Reports
Partial Period Runs
You can submit the Periodic Acquisition Cost Processor, the Periodic Acquisition Cost Adjustment Processor, and the Periodic Cost Processor for the whole period or a partial period. A partial period run must always begin with the first day of the period. Any further partial period runs, or a complete run (the whole period) must also start with the first day of the period. Any processing runs after the first one will repeat the others in a specific period.
To enable this option, check the box for Restrict Documents by Process Upto Date on the Org Cost Group/Cost Type Associations window. You can run a partial period by entering the date in the parameter Process Upto Date. In order to complete processing and close the period, The entire period must be run for all cost groups in a legal entity. See: Associating Cost Type with Legal Entity
The Periodic Acquisition Cost Processor computes acquisitions from Oracle Purchasing and Oracle Payables. This concurrent program calculates costs of the receipt using the invoice price, or, if that is not available, the purchase order price.
Acquisition costs are the sum of the costs associated with the acquisition of the goods. They include material costs, freight, special charges, and non-recoverable taxes. The acquisition cost processor processes all receipt transactions that take place within a period for a particular cost group and cost type.
Note: When Landed Cost Management (LCM) is enabled, acquisition cost is based on landed costs computed by LCM product for the corresponding LCM enabled PO receipt.
For each receipt, the net quantity received is frozen at the end of the period. The costs are frozen based on the invoices matched to the receipt at the time of period close.
Resubmitting the Acquisition Processor
Acquisition processing can be resubmitted if additional matching invoices are received, provided the period is still open. If the period is closed, manual updates are made using the Periodic Cost Update program.
Resubmitting the Periodic Acquisition Cost Processor purges prior processing, including cost processor computations, accounting distribution entries, reconciliation information, and write off information.
Exchange Rates and Acquisition Costs
Exchange rates are handled in the following manner:
If the invoice is used, then the exchange rate at the invoice time is used.
If purchase order price is used and the match option is set to Match to PO, then the exchange rate at the time of the purchase order is used.
If purchase order price is used and the match option is set to Match to Receipt, then the exchange rate at the time of the receipt is used.
To run the Periodic Acquisition Cost Processor:Navigate to Periodic Acquisition Cost Processor concurrent window. The Parameters window displays.
Select information in the following parameters:
Legal Entity
Cost Type
Period
Process Upto Date - If you want to create a partial period run, enter the date for limiting records in the submission
Cost Group
The Run Option field is used when you want to regenerate a run that has started. Your options are:
Start - Regenerates the Periodic Acquisition Cost Processor concurrent program.
Resume - This option is only available when the processor is stopped because of errors. It enables you to resume the program from the beginning phase, to the phase where the error began.
Choose OK.
Choose Submit on the Request window to process this request.
You can transfer costs generated in closed accounting periods to your current open period. The invoice for a receipt in a closed period is used to generate a periodic cost update in the open period. Examples of such invoices from previous periods can include invoice price variances, and charges such as freight and tax. The new acquisition cost calculated represents what the acquisition cost would have been if the invoices had been received in the same period. Acquisition cost adjustments enable you to:
Create periodic cost update transactions to adjust the acquisition cost for a closed period
Use invoice accounting date to restrict invoice eligibility, and transaction date for return to vendor eligibility when you run the program
Run the Periodic Acquisition Cost Processor for historical periods
The Acquisition Cost Adjustment Processor can be continually resubmitted for the period that is open. Every time the Acquisition Cost Adjustment Processor is submitted, the amount posted is recalculated and the data for the latest run is retained. The data for previous run is deleted.
Note: The Acquisition Cost Adjustment Processor is not used for LCM enabled Purchase Orders.
To run the Periodic Acquisition Cost Adjustment Processor:Navigate to Periodic Acquisition Cost Adjustment Processor concurrent window. The Parameters window displays.
Select information in the following parameters:
Legal Entity
Cost Type
Period
Process Upto Date - If you want to create a partial period run, then enter the date for limiting records in the submission
Cost Group
Run Option - You can run the program for All Invoices, Particular Invoice, or Particular Receipt
Parent Receipt - This is the original receipt number before corrections were submitted
Invoice Number
Adjustment Account
Choose OK.
Choose Submit on the Request window to process this request.
The Periodic Cost Processor calculates the Periodic Cost for all asset items in asset subinventories. The Periodic Cost processor is run manually, by submission, not automatically.
The Periodic Cost Processor can be run using either the Periodic Average or Incremental LIFO algorithm. You can define different cost types for each and associate them with one appropriate cost method.
To run the Periodic Cost Processor:Navigate to Periodic Cost Processor concurrent window. The Parameters window displays.
Select information in the following parameters:
Legal Entity
Cost Type
Period
Process Upto Date - If you want to create a partial period run, then enter the date for limiting records in the submission
Cost Group
The Run Option field is used when you want to regenerate a run that has started. Your options are:
Start - Regenerates the Periodic Cost Processor concurrent program.
Resume - This option is only available when the processor is stopped because of errors. It enables you to resume the program from the beginning phase, to the phase where the error began.
Choose OK.
Choose Submit on the Request window to process this request.
The Periodic Cost Distributions Processor uses the accounts set up in Periodic Account Assignment to create accounting entries (distributions) which are copied to the manufacturing subledgers.
When Landed Cost Management (LCM) is enabled, accounting entries are generated based on landed costs for LCM enabled PO receipts. Unlike other PO receipt transactions, the difference between acquisition cost (calculated from Landed Cost) and PO price goes into the Landed Cost Absorption account instead of the IPV or ERV account.
Separate accounting events that include PAC Landed Cost Adjustment - Receipt, and PAC Landed Cost Adjustment - Delivery, are created from the perpetual landed cost adjustment transactions when the latest perpetual landed cost adjustment transactions are within the current PAC period for which the parent PO receipts are in the previous PAC period.
PAC Landed Cost Adjustment - Receipt, and PAC Landed Cost Adjustment - Delivery accounting events are not created when perpetual landed cost adjustment transactions are in the current PAC period for which parent PO receipts are also in the same PAC period.
When LCM is enabled, the application creates PAC Accounting Distributions for the new accounting events:
PAC Landed Cost Adjustment - Receipt
PAC Landed Cost Adjustment - Delivery
Options for the distribution processor are set in the Cost Type Associations Accounting Options window, which is chosen from the Cost Type Associations tab of the Org Cost Group/Cost Type Associations window. See: Setting Accounting Options.
Note: To use Periodic Distributions, your ledger for the cost type must be the same as for the perpetual costing method.
To run Periodic Distributions:Navigate to Periodic Cost Distributions concurrent window. The Parameters window displays.
Select the following parameters.
Legal Entity
Cost Type
Cost Group
Period
Choose OK.
Choose Submit on the Request window to process this request.
In the Item Cost Inquiry window, you can list items by the following:
Cost Group
Cost Type
Period
This window includes fields for entering market values and justifying the market values to be used with the Incremental LIFO costing method. These fields still appear when the method is periodic average costing, but are ignored.
Note: You must specify values for Legal Entity, Organization Cost Group, Cost Type, and Period in the Find Window (mandatory). Additionally, you can choose options for Item Category, Item Range, or Particular Item.
Entering Market Values (Incremental LIFO)
You can view the calculated inventory item cost per period in the Item Cost Inquiry window. Also, you can run and review the Incremental LIFO Valuation report.
If the market value of an item is less than the calculated LIFO item cost, then you may manually enter that value along with a mandatory justification. The market values replaces the LIFO item cost. You may update and delete the market value and it's justification while the period is open.
The Incremental LIFO Valuation report calculates the Inventory Value using the formula:
| Inventory Value = Total Item Quantity x LIFO item cost |
If you enter a market value, the report uses this calculation:
| Inventory Value = Total Item Quantity x Market Value |
For that particular point in time, this market value is applied to accumulated items. The totals for that point in time will be carried forward and calculated using the previous formula, considering the market value as if it were an item cost.
To perform an item cost inquiry or enter a market value:Navigate to the Item Cost Inquiry window.
Query for desired cost item information, including LIFO item cost for possible entry of market value in the current period.
Enter a market value in place of the LIFO item cost if it is appropriate.
Save if you have entered a market value.
See: Periodic Incremental LIFO and Periodic Incremental LIFO Business Example
The Viewing Material and Receiving Transactions window enables you to view those transactions, per cost type, that have been:
Processed by the Periodic Cost processor and the Periodic Acquisition processor
Distributed using the Periodic Costing Transfer to General Ledger. See: Transferring to General Ledger.
Transactions that have not been processed and distributed cannot be viewed.
These same transactions are viewable in the perpetual system.
Note: This feature differs from the corresponding feature in perpetual costing, in that you view transactions by organization and cost type. Perpetual costing is limited to the default cost type for the costing method (standard or average). For a discussion of the perpetual system feature, See: Viewing Material Transaction Distributions.
A transaction from receiving to inventory appears twice since it is both a receiving and an inventory transaction.
To view Material and Receiving Transactions:Navigate to Material and Receiving Transactions. The Find Transactions window appears.
Enter search criteria in the Find Transactions window.
Choose Find to initiate the search.
The Material and Receiving Transactions window displays six tabs:
Location
Intransit
Reason, Reference
Transaction ID
Transaction Type
Receipt Transaction
Note: You can view the accounting debits and credits, and the T-accounts from the Tools menu.
You can view WIP transactions from the Periodic Costing View WIP Transactions window.
If distributions were run, view by cost type.
For a discussion of the corresponding perpetual system feature, See: Viewing WIP Transaction Distributions.
To view WIP transactions:Navigate to WIP Transactions. The Find WIP Transactions window appears.
Select the following required criteria:
Legal Entity
Cost Group
Enter any additional optional criteria.
Choose Find to initiate the search.
The WIP Transactions window displays five tabs:
Job or Schedule Header
Operation, Quantities
Resource Information
Transaction Comments
Project
Note: You can view the accounting debits and credits, and the T - accounts from the Tools menu.
Periodic Accounting Periods displays accounting periods for the legal entity and the cost type, along with the status of the periods.
Unopened periods are labeled future. A period can be changed to open only if there are no other open periods. The current period is the open period in the Periodic Costing calendar for the cost type. Before the period can be closed, all cost groups associated with a legal entity must be processed by the acquisition cost processor and the Periodic Cost processor.
Before closing a period validate that:
All cost groups have been successfully processed up to the last phase (either the cost processing phase or the distribution phase, as the case may be).
No backdated transactions have been performed in any cost group since the last time the cost group was processed.
There are no pending transactions for the period in Inventory, Work in Process, or Receiving for the cost group.
There are no pending Landed Cost Adjustment interface records if any of the inventory organization is enabled with LCM.
The perpetual periods are closed.
The A/P period is closed.
Note: A period cannot be closed if only a partial period has been processed.
The A/R period is closed.
Note: The A/R period must be closed before the Costing period can be closed. The period cannot be closed until the concurrent request Create COGS Recognition Events is run to clear all events that may fall into the period you are trying to close.
For those periods with a status of open, processing status can be viewed from a window on the Periodic Accounting Periods window.
Accounting Period Status
The available statuses for a period are:
Future: Can not be changed back.
Open: Can only be opened if the previous period is closed and there are no other open periods. Can only be changed to closed.
Closed: Can only be changed to closed if the previous period is closed. Can only be changed to closed if the perpetual period has been closed. Cannot be changed.
Processing: Cannot be changed until processing is completed.
Error: Cannot process until the error is corrected.
Processing Status
The Process Status window shows any organization cost groups that are unprocessed by either the acquisition processor, Periodic Cost processor, or periodic distributions processor. Possible process statuses are:
Unprocessed: Unprocessed.
Complete: Fully processed.
Error: Cannot process until the error is corrected.
To view or change the status of periodic accounting periods:Navigate to the Periodic Accounting Periods window.
Select the legal entity and cost type.
Choose Change Status and select one of the following options:
Change future to open
Change open to closed
This activates the period close program.
Choose Process Status to view the current processing status of the period.
If necessary, close Periodic Accounting Periods, complete any necessary processing, and begin again.
Save your work.
Note: If the distribution option is enabled for a legal entity cost type, the General Ledger transfer should be run after period close.
The application performs a validation to check for pending Landed Cost Adjustment interface records. The PAC period cannot be closed until the inventory period is closed. Inventory period can be closed only when all pending transactions, including landed cost adjustment interface records, are cleared.
You can transfer your cost distributions to the General Ledger if you have checked the Post Entries to GL check box in the Cost Type Associations Accounting Options window. You have the option of transferring your cost distributions to the General Ledger for either Periodic or perpetual costing, or both.
However, Cost Management warns you of the possibility of inadvertently transferring both distributions to the General Ledger. The warning displays if there is at least one legal entity-cost type combination that has the Periodic Cost Post Entries to GL option checked, where the organization under that legal entity also has the perpetual cost GL transfer enabled.
For a discussion of General Ledger transfers in perpetual costing, See: Transfer Transactions to General Ledger.
To transfer Periodic Cost distributions to the General Ledger:Navigate to Transfer to General Ledger.
Select Transfer Periodic Cost Distributions to GL.
Select the following parameters:
Legal Entity
Cost Type
Period
Batch Name (Optional)
The system generates a batch name from the journal entry source, the Request ID, the group ID, and the Actual Flag (A (actual), B (budget), or E (encumbrance). If you wish, you can enter a name for your journal entry for easy identification. The system uses this name as the prefix to the generated name.
GL Transfer Mode
There are three choices:
In Detail
Summarized by Accounting Date
Summarized by Accounting Period
Submit Journal Import
Select Yes or No to determine whether the Journal Import is submitted during posting or later.
Choose Submit.
You can use the Periodic Accrual Write-Off window to write off entries that have accrued but have not been removed from the Periodic Accrual Reconciliation report because of problems such as:
Differences in quantities between receipts and invoices
Discrepancies in Supplier billing
Errors in Purchase Order to Purchase Order line matching
Inventory or WIP transactions posted to incorrect accrual accounts
You should run and review the Periodic Accrual Reconciliation Report and determine which transactions need to be written off. This report is run for a legal entity, cost type, cost group, period, and source. See: Periodic Accrual Reconciliation Report
The Accrual Write-Off function permits you to list a reason for the write-off and change the date from the system default to any date in the current accounting period.
To make an accrual write-off:Navigate to Accrual Write - Off.
(N) Cost > Periodic Costing > Periodic Close Cycle > Accrual Write Off
In the Find Write - Off Transactions form, select the following required criteria:
Legal Entity
Cost Type
Cost Group
Enter additional search parameters (optional).
Enable the following, if desired:
Include Write-Offs
Matched to Purchase Order
Click the Find button to initiate the search. The Accrual Write-Offs form appears.
In the Accrual Write-Offs form, select the Write-off checkboxes for those transactions that you want to write off.
Enter any reasons and comments.
Save your work.
You can copy costs from one Periodic Cost type to a destination perpetual cost type. For instance, you can copy your Periodic Cost ending balances to your standard cost beginning balances of the following period.
Requirements
In order to use the copying Periodic Costs feature, the following conditions must be met:
The destination cost type must be multi-org.
The period for which costs are being copied has been processed successfully.
Appropriate unit of measure conversions must be made for copying cost from master item organization to individual child organization, since costs in CPIC are stored based on master item organization's primary unit of measure.
To copy costs from a Periodic Cost type to a managerial cost type:Navigate to Copy Periodic Costs.
Select Copy Item Period Cost.
Select the following parameters:
Legal Entity
Cost Type
Cost Group
Period
To Organization
To Cost Type
Material Subelement
Material Overhead Subelement
Resource Subelement
Outside Processing Subelement
Overhead Subelement
Copy Option
Range
Specific Item (Optional)
Category Set (Optional)
Specific Category (Optional)
Submit request.
Oracle Periodic Cost Open Interface provides an open interface for you to load Periodic Costs transactions from external applications or legacy systems and then import them into Cost Management.
If you have entered beginning balances for Periodic Costs using the Periodic Cost Open Interface, you can then import those costs using the Import Periodic Cost feature.
Note: This feature is only available for importing beginning balances and does not work after new transactions have been entered.
To import Periodic Costs:Navigate to Import
Select Period Cost Import Manager
Select a parameter for:
Delete Interface Rows After Import
Submit the request
Update Periodic Costs must be run for any items that have been updated using the average cost update. The main use of the Periodic Cost update is to update Invoice Price Variances (IPVs) that have been updated by average cost update.
Periodic Costing provides the same three types of updates as average costing, but with more restrictions on when the updates may be performed, as described below:
Percent Change: changes the periodic item cost by a given percentage. Performed at the beginning of the period.
New Periodic Cost: replaces the periodic item cost with the specified amount. Performed at the beginning of the period.
Inventory Value Change: changes the inventory values with a specified amount. Performed after all cost owned transactions and before any cost derived transactions.
Changes in the Update Periodic Cost window for all three types of updates is applied only against the Material Cost Element, and is not automatically proportioned across all cost elements and levels.
The first two types of updates are performed as the first transaction of the period. These types of updates overwrite beginning balances. The % change is mainly used in the event of a currency fluctuation. The new Periodic Cost is generally used to bring in beginning balances or where a legacy system did not come up with good results.
The inventory value change is performed after all cost owned transactions and before any cost derived transactions. It is generally performed to allow for unmatched invoices or for additional overhead or resources for a make item.
Note: You can also create Periodic Cost Update transactions using the following open interface tables:
MTL_TRANSACTIONS_INTERFACE
MTL_TXN_COST_DET_INTERFACE
Periodic cost updates for New Periodic Cost, Percent Change, and Inventory Value Change transactions are supported and are valid transactions that are created using Oracle open interface tables.
For additional detail on updating Periodic Costs, review the section on Average Cost Update (even if you are a standard cost user). See: Updating Average Cost.
To update Periodic Costs:Navigate to the Update Periodic Cost window.
Enter the following parameters:
Legal Entity
Cost Type
Org Cost Group
Transaction Date
Item Master Organization
In the Transaction Change tab, enter the following:
New Periodic Cost
% Change
Inventory Value Change
Adjustment Quantity
You can enter the adjustment quantity for Periodic Cost Update - Value Change.
If the on-hand at the time of cost processing is greater than the user-entered Adjustment Quantity, then the entire value change is applied to inventory valuation.
If the on-hand is less than the user-entered Adjustment Quantity, then only the proportionate value change is applied to the on-hand quantity. Inventory valuation is performed for the on-hand quantity based on proportionate value change. The left-off value goes to the Expense account that you specify.
Adjustment Quantity can be entered only for Periodic Cost Update - Value Change transactions. Adjustment Quantity cannot be entered for Periodic Cost Update - New Cost or percentage transactions.
Select the Accounts tab and enter the following accounts:
Material
Material Overhead
Resource
Outside Processing
Overhead
Expense - enter if Adjustment Quantity is specified
Enter a change in item cost or value.
Enter an Adjustment Quantity for Landed Costs.
Click the Cost Elements button to view Update Periodic Cost Details.
Save your work.