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Purpose
Questions and Answers
1 .What is the significance of Account_set_flag in the table
RA_CUST_TRX_LINE_GL_DIST_ALL?
2.What are the different meanings of Potentially Unmatched Flag column value
in Cst_Revenue_Recognition_lines table ?
3.When and how COGS will be recognized for Ship only sales order Type ?
4.What is the functionality of COGS with respect to sales order type "Repair or
Replace" ?
5.What is the role of tolerance amount Parameter in Cogs Revenue matching
Report?
6.Whether Generate cogs Recognition Events program can be run in parallel for
same ledger id ?
7.Why Referenced RMA hits COGS directly instead of DCOGS Account ?
8.How to fix the Rounding off issue occurs with respect to Deferred COGS
Account?
9.Why Cogs revenue matching report has 'Nan' character for both Revenue and
cogs ?
10.Can Inventory period be closed without running the COGS Recognition
Events program ?
11.Is it possible to have COGS Recognition Transaction Date as Shipment date
rather than closure date for ship only sales order lines?
12.From where the Standard Cost adjustment account is picked up when there is
a difference in Item costs?
13.If the AR invoice line is deleted, will it result in Adjusting in Cogs ?
14.How to identify whether RMA is a Referenced or Unreferenced one?
15.What is the accounting treatment for Rejected sales order ?
16.what is the relationship between Cost manager and Generate cogs Recognition
Events Program?
17.Under what circumstances, Distributions will not be created for COGS
Recognition Transaction?
18.Why COGS is not getting recognized when invoice is created manually?
19.How to Generate the COGS Account from the Order Type ?
20.Is it possible to split COGS Account according to Sub-element wise ?
21. How the difference in Item costs is treated in case of Standard costing and
Average costing?
22. Is There A Way To Turn Off Deferred COGS ?
23.If the AR invoice line is deleted, will it result in Adjusting in COGS?
2.What are the different meanings of Potentially Unmatched Flag column value in
Cst_Revenue_Recognition_lines table ?
'U': Unprocessed. Revenue is completed and program Collect Revenue Recognition Information
is done, but COGS Recognition hasn't been happened yet. This status is applicable only for Ship
only sales orders.
Y': Mismatched. Program found the om line, which has mismatch between revenue and COGS,
at the beginning of program Generate COGS Recognition Events.
NULL: Successful. Both COGS Recognition event and transaction are generated successfully.
This will be updated from Y to Null.
I': Investigation. This is an abnormal situation. If the COGS Recognition transaction is not only
created but also Generate Cogs recognition Events program errors out, it will be updated to
'I'. Have to analyze why the flag is updated to 'I'.
'P': Pending.
Case 1: If revenue is before sales order issue, even you run Generate COGS Recognition
Events, COGS Recognition transaction won't be created, so the flag will be updated from 'Y' to
'P'. After shipping the item, 'P' will be updated to 'Y' for further process. After running Generate
COGS Recognition Events, 'Y' will be updated to 'NULL' .
Case 2: If a om line has multiple sales order issue, COGS Recognition will happen only when
full quantity is issued. If partial quantity issued, still column value will be updated to 'P' from
'Y' and waiting for next COGS Recognition.
3.When and how COGS will be recognized for Ship only sales order Type ?
In case of Ship Only Orders, once the line is closed, it inserts a line in
Cst_Revenue_Recognition_Lines table with Potentially_unmatched_flag as U.
Once the Generate COGS recognition program is run, Potentially_unmatched_flag
becomes NULL and COGS transaction will be created in Mtl_Material_Transactions and
Cst_Cogs_Events tables.
4.What is the functionality of COGS with respect to sales order type "Repair or
Replace" ?
Order Type 'Repair Replace' works like Ship only sales order.
In that case, the sales order line has to be closed in order to recognize the COGS.
5.What is the role of tolerance amount Parameter in Cogs Revenue matching
Report?
Display Matched Lines = Yes:Report should display all the lines irrespective of revenue and cogs matching percentages. So
here report displays all the lines irrespective of Tolerance Amount.
Display Matched Lines = No:Here report shows only unmatched lines. This is to find out the mismatched lines. In this
process, order lines which have rounding off issues will also be displayed and ideally should not
appear. To resolve the issue, "Tolerance Amount" parameter is added .So, Once the Tolerance
amount is given as 1, it excludes the lines with rounding off issues. So the purpose of this
parameter is useful only when Display Matched Lines is set as 'No'.
6.Whether Generate cogs Recognition Events program can be run in parallel for
same ledger id ?
If incompatibility is set with Cost Manager,then Generate cogs program can be run in parallel for
different ledger_id but not for same ledger id.
7.Why Referenced RMA hits COGS directly instead of DCOGS Account ?
After performing Sales order issue if user has recognized revenue and user has run Collect
Revenue Recognition Program and Generate COGS Recognition Events Program and then if
user have performed any Referenced RMA Receipt, then RMA hits COGS Account instead of
DCOGS Account Because, while performing Referenced RMA Receipt there is no balance in
DCOGS account.
The accounting entries are as follows:At the time of Sales order Issue:DCOGS
Dr.
Inventory Cr.
At the time of COGS Recognition:COGS Dr.
DCOGS Cr.
At the time of Referenced RMA Receipt:Inventory Dr.
COGS
Cr.
8.How to fix the Rounding off issue occurs with respect to Deferred COGS
Account?
As the issue happens due to current accounting architecture, the workaround is to perform
Manual journal adjustments to balance the DCOGS account.
For a possible standard solution, there is Enhancement Request raised with Oracle Cost
management to modify the COGS Recognition design.
The Enhancement Request id:
10065100 - MODIFY COGS RECOGNITION TRANSACTION GENERATION TO AVOID
DEBIT BALANCE IN DCOGS.
9.Why Cogs revenue matching report has 'Nan' character for both Revenue and
cogs ?
For the order lines, which have 'NaN' value for Revenue, user might not have created invoice for
them.
For the order lines, which have 'NaN' value for COGS, user might not have collected revenue
successfully for them.
Following is the checklist:
1) Invoice must be created.
2) Revenue Recognition should be completed.
3) Collect Revenue Information program should be completed. Invoice GL date should fall
between Start Date and End Date.
4) Generate COGS Recognition Events program should be completed. If above steps are
completed, the report should show correct values.
10.Can Inventory period be closed without running the COGS Recognition Events
program ?
If the costing method is used as "Average", "Standard", "LIFO", "FIFO", then inventory period
can be closed without running the
Generate Cogs Recognition Events program. But GL period must be open. If GL period is closed
then the program creates COGS events in the next open GL period.
But if "Periodic Average Costing" is used then "Collect Revenue Recognition program " and
"AR Period needs to be closed prior closing the PAC period.In periodic Average costing
organizations, only events and transactions that are within the current periodic periods start and
end dates will be processed.
11.Is it possible to have COGS Recognition Transaction Date as Shipment date
rather than closure date for ship only sales order lines?
Yes. It is possible. Costing Development has given an option for user to select the date on which
COGS for a Ship Only Order should recognized.
User can choose the date as closure date or shipment date by config the profile "CST: Ship Only
Order COGS on Shipment or Closure Date"
This Profile option "CST: Ship Only Order COGS on Shipment or Closure Date" set at Site
level is introduced via Patch 17026262:R12.BOM.C .
12.From where the Standard Cost adjustment account is picked up when there is
a difference in Item costs?
Standard Cost Adjustment is nothing but the difference between the Item cost at the time of Sales
order issue and Referenced RMA Receipt.
The COGS account defined in the Organization Parameters window will be used for the Standard
Cost Update Adjustment account. This account will be defaulted from the Inventory
Organization which has created referenced RMA Receipt.
13.If the AR invoice line is deleted, will it result in Adjusting in Cogs ?
Functionally, A invoiced line cannot be deleted once the revenue is recognized, it will corrupt
Accounts Receivables module.
Deleting of an Invoice line after a Sales Order is Shipped and Invoiced and revenue is
recognized, there would not be any adjustment to the COGS account and this would most likely
cause reconciliation issues and a manual adjustment would be required.
14.How to identify whether RMA is a Referenced or Unreferenced one?
Navigate to Order Management Responsibility > Sales orders form > Query the Sales Order
Number> Line Items(Tab) > Returns (Tab).
Here, check Line Type and Reference columns. If it is a referenced RMA, then Sales order
Number will be populated in the Reference column.
SQL to identify:
1)Select reference_line_id from oe_order_lines_all
where line_id=&rma_line_id;
2) Select trx_source_line_id from mtl_material_transactions
where transaction_id=&transaction_id; /* Use RMA Receipt */
15.What is the accounting treatment for Rejected sales order ?
There is no accounting when a sales order line is rejected.
Cost Management only creates accounting when the rejected items are received and then either
delivered to a regular or a scrap asset sub-inventory.
16.what is the relationship between Cost manager and Generate cogs
In case of Standard costing, the Sales Order Issue is hit at Item costs $10.
Incase of RMA, Inventory account is hit at $15, DCOGS/COGS Account is hit at $ 10 and the
difference of $2 is captured as "Standard Cost Adjustment account.
In Case of Average costing, FIFO, LIFO, the Sales Order Issue is hit at the current Average cost
$10.
RMA cost will be decided based on whether it is referenced or unreferenced.