Accting in All Modules

Accounting Entries in all modules Inventory , Purchasing ,
Payables , OE , Receivables ,Assets and Projects.

Assets
Work-In-Process
Assets
WIP
Inventory Standard Costing
InventorystandardCosting
Receivables
Receivables
Assets
Depreciation:
Dr. Depreciation Expense
Cr. Accumulated Depreciation
200.00
200.00
Example: The recoverable cost is $4,000 and the method is

straightline 4 years.
Current and Prior Period Addition

You purchase and place the asset into service in Year 1, Quarter 1.
(Payables)
Dr. Asset Clearing
4,000.00
Cr. Accounts Payable Liability
4,000.00
(Fixed Assets)
Dr. Asset Cost
Cr. Asset Clearing
4,000.00
250.00
4,000.00
250.00
You place an asset in service in Year 1, Quarter 1, but you do not enter
it into Oracle Assets until Year 2, Quarter 2. Your payables system
creates the same journal entries to asset clearing and accounts payable
liability as for a current period addition.
(Oracle Assets PRIOR PERIOD ADDITION)
Dr. Asset Cost
Dr. Depreciation Expense(adjustment)
Cr. Asset Clearing
4,000.00
250.00
1250.00
4,000.00
1500.00
Merge Mass Additions

When you merge two mass additions, Oracle Assets adds the asset cost of the mass addition that
you are merging to the asset account of the mass addition you are merging into. Oracle Assets
records the merge when you perform the transaction. Oracle Assets does not change the asset
clearing account journal entries it creates for each line, so each of the appropriate clearing
accounts clears separately.
Payables System
Dr. Asset Cost
(mass addition #2
4,000.00
asset cost account)

Cr. Asset Clearing
(mass addition #1 accounts
payables clearing account)
3,000.00
Cr. Asset Clearing

(mass addition #2 accounts
payables clearing account)
1,000.00
ConstructionInProcess (CIP) Addition

You add a CIP asset. (CIP assets do not depreciate)
Oracle Assets
Dr. CIP Cost
4,000.00
Cr. CIP Clearing
4,000.00
Deleted Mass Additions

Oracle Assets creates no journal entries for deleted mass additions and does not clear the asset
clearing accounts credited by accounts payable.
You clear the accounts by either reversing the invoice in your payables system, or
creating manual journal entries in your general ledger.
Capitalization
A capitalization transaction is similar to an addition transaction: you place the asset in service so
you can begin depreciating it. When you capitalize an asset in the period you added it, Oracle
Assets creates the following journal entries:
Payables System
Dr. CIP Clearing
4,000.00
4,000.00
Oracle Assets CAPITALIZED IN PERIOD ADDED

Dr. Asset Cost
Cr. CIP Clearing
4,000.00
250.00
4,000.00
250.00
Oracle Assets CAPITALIZED AFTER PERIOD ADDED

Dr. Asset Cost
Cr. CIP Cost
4,000.00
250.00
4,000.00
250.00
Asset Type Adjustments

If you change the asset type from capitalized to CIP, Oracle Assets creates journal entries to debit
the CIP cost account and credit the asset clearing account. Oracle Assets does not create
capitalization or reverse capitalization journal entries for CIP reverse transactions.
Oracle Assets CHANGE TYPE FROM CAPITALIZED TO CIP (CURRENT PERIOD)
Dr. CIP Cost
Cr. Asset Clearing
4,000.00
4,000.00
Cost Adjustments to Assets Using a LifeBased Depreciation Method

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000. The
life of your asset is 4 years, and you are using straightline depreciation. In Year 1, Quarter 4, you
receive an additional invoice for the asset and change the recoverable cost to $4,800.
Payables System
Dr. Asset Clearing
800.00
800.00
Oracle Assets
Dr. Asset Cost
Cr. Asset Clearing
800.00
800.00
Expensed
Oracle Assets EXPENSED
(adjustment)
300.00
150.00
450.00
Amortized
Oracle Assets AMORTIZED
311.53
311.53
Cost Adjustments to Assets Using a FlatRate Depreciation Method

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000. You
are depreciating the asset cost at a 20% flatrate. In Year 1, Quarter 4, you change the
recoverable cost to $4,800.
Payables System
Dr. Asset Clearing
800.00
800.00
Oracle Assets
Dr. Asset Cost
Cr. Asset Clearing
800.00
800.00
Expensed
(adjustment)
240.00
120.00
360.00
Amortized
240.00
240.00
Cost Adjustments to Assets Using a Diminishing Value Depreciation

Method
Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000. You
are using a 20% flatrate that you apply to the beginning of year net book value. In Year 2,
Quarter 1, you change the recoverable cost to $4,800.
Payables System
Dr. Asset Clearing
800.00
800.00
Oracle Assets
Dr. Asset Cost
Cr. Asset Clearing
800.00
800.00
Expensed
(adjustment)
192.00
160.00
352.00
Amortized
200.00
200.00
Cost Adjustments to Assets Depreciating Under a Units of Production

Method :
Example: You purchase an oil well for $10,000. You expect to extract 10,000 barrels of oil from
this well. Each quarter you extract 2,000 barrels of oil. In Year 1, Quarter 3, you realize that you
entered the wrong asset cost. You adjust the recoverable cost to $15,000.
Payables System
Dr. Asset Clearing
5,000.00
5,000.00
Oracle Assets
Dr. Asset Cost
Cr. Asset Clearing
5,000.00
5,000.00
Expensed
(adjustment)
3,000.00
2,000.00
5,000.00
Amortized
3,666.67
3,666.67
Cost Adjustments to Capitalized and CIP Source Lines

When you transfer source lines you adjust the recoverable cost of an asset. Because CIP assets
do not depreciate, Oracle Assets does not need to reverse depreciation expense when you
transfer invoice lines between CIP assets. If you transfer source lines from CIP to capitalized
assets, Oracle Assets takes catchup depreciation as for any cost adjustment transaction. If you
transfer source lines from capitalized to CIP assets, Oracle Assets must back out some of the
depreciation from the capitalized asset.
Transfer Source Lines Between Assets (Prior Period)

Oracle Assets creates the following journal entries for an source line transfer between capitalized
assets added in a prior period.
Oracle Assets TRANSFER LINE FROM ASSET #1 TO ASSET #2
Dr. Asset Cost
(from asset #2 category)
Cr. Asset Cost
400.00
400.00
Oracle Assets ADJUST DEPRECIATION ON ASSET #1

Dr. Accumulated Depreciation
70.00
Cr. Depreciation Expense
70.00
Oracle Assets ADJUST DEPRECIATION ON ASSET #2
(adjustment)
55.00
70.00s
125.00
Transfer Source Lines Between Assets (Current Period)

Oracle Assets creates the following journal entries for an source line transfer between assets
added in the current period:
Oracle Assets TRANSFER LINE FROM ASSET #1 TO ASSET #2
Dr. Asset Cost
Cr. Asset Clearing (from accounts
payable for asset #1)
300.00
300.00
Cost Adjustment by Adding a Mass Addition to an Existing Asset

If you add a mass addition to an asset, Oracle Assets creates a journal entry to the asset cost
account of the existing asset. Oracle Assets also credits the clearing account you assigned to the
invoice distribution line in accounts payable to net it to zero.
If you want the existing asset to assume the asset category and description of the mass addition,
Oracle Assets creates a journal entry for the new total asset cost to the asset cost account of the
mass additions category. It also creates journal entries for the clearing account you assigned to
the invoice line in accounts payable, and for the clearing or cost account of the original addition
category.
Oracle Assets creates the following journal entries for a capitalized $2,000 mass addition added
to a new, manually added $500 asset, where the asset uses the category of the mass addition:
Oracle Assets ADD MASS ADDITION TO AN EXISTING ASSET
Dr. Asset Cost
(from asset category of mass
addition)
Cr. Asset Clearing
(from original asset category)
Cr. Asset Clearing
(from accounts payable)
2,500.00
500.00
2,000.00
Depreciation Method Adjustments

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000, the
life is 4 years, and you are using the 200 declining balance depreciation method. In Year 2,
Quarter 1, you change the depreciation method to straightline.
Expensed
(adjustment)
250.00
750.00
1,000.00
Amortized
166.67
166.67
Life Adjustments
Example: You place an asset in service in Year 1, Quarter 1. The asset cost is $4,000, the life is 4
years, and you are using straightline depreciation. In Year 2, Quarter 2, you change the asset
life to 5 years.
Expensed
(adjustment)
200.00
50.00
250.00
Amortized
183.33
183.33
Rate Adjustments FlatRate Depreciation Method

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000 and
you are depreciating the asset cost at a 20% flatrate. In Year 2, Quarter 3, you change the flat
rate to 25%.
Expensed
(adjustment)
250.00
300.00
550.00
Amortized
250.00
250.00
Rate Adjustments Diminishing Value Depreciation Method

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000 and
you are using a 20% flatrate that you apply to the beginning of year net book value. In Year 2,
Quarter 3, you change the flatrate to 25%.
Expensed
(adjustment)
187.50
255.00
442.50
Amortized
200.00
200.00
Capacity Adjustments
Example: You purchase an oil well for $10,000. You expect to extract 10,000 barrels of oil from
this well. Each quarter you extract 2,000 barrels of oil. In Year 1, Quarter 4 you discover that you
entered the wrong capacity. You increase the production capacity to 50,000 barrels.
Expensed
(adjustment)
400.00
4,400.00
4,800.00
Amortized

181.82
181.82
Journal Entries for Transfers and Reclassifications

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000, the
life is 4 years, and you are using straightline depreciation.
Current Period Transfer Between Cost Centers:
Prior Period Transfer Between Cost Centers:
Current Period Transfer Between Balancing Segments
Prior Period Transfer Between Balancing Segments:
Unit Adjustment:
Reclassification:
Current Period Transfer Between Cost Centers

In Year 2, Quarter 2, you transfer the asset from cost center 100 to cost center 200 in the current
period.
Oracle Assets TRANSFER ASSET / CHARGE DEPRECIATION
Cost Center 100
Cr. Asset Cost
1,250.00
4,000.00
Cost Center 200

Dr. Asset Cost
4,000.00
250.00
1,500.00
Oracle Assets TRANSFER ASSET / ADJUST AND CHARGE DEPRECIATION

Cost Center 100
Cr. Asset Cost
(adjustment)
Cost Center 200
Dr. Asset Cost
(adjustment)
2,750.00
4,000.00
250.00
4,000.00
250.00
250.00
3,000.00
Current Period Transfer Between Balancing Segments

In Year 3, Quarter 4, you transfer the asset from the ABC Manufacturing Company to the XYZ
Distribution Company.
Oracle Assets TRANSFER ASSET
ABC Manufacturing
Dr. Intercompany Receivables
2,750.00
1,250.00
Cr. Asset Cost

XYZ Distribution
Dr. Asset Cost
Cr. Intercompany Payables
4,000.00
4,000.00
250.00
3,000.00
1,250.00
1
Oracle Assets ADJUST AND CHARGE DEPRECIATION
ABC Manufacturing
Dr. Intercompany Receivables
Cr. Asset Cost
(adjustment)
XYZ Distribution
Dr. Asset Cost
(adjustment)
Cr. Intercompany Payables
2,750.00
1,500.00
4,000.00
250.00
4,000.00
250.00
250.00
3,000.00
1,500.00
Unit Adjustment
A unit adjustment is similar to a transfer, since you must update assignment information when you
change the number of units for an asset. For example, you place the same $4,000 asset in
service with two units assigned to cost center 100. In Year 2, Quarter 3, you realize the
asset actually has four units, two of which belong to cost center 200.
Oracle Assets ADJUST UNITS
Cost Center 100
Cr. Asset Cost
750.00
2,000.00
Cost Center 200

Dr. Asset Cost
2,000.00
750.00
Note: If all units remain in the original cost center, Oracle Assets does not create any journal
entries.
Reclassification
Example: You reclassify an asset from office equipment to computers in Year 1, Quarter 3. The
asset cost is $4,000, the life is 4 years, and you are using straightline depreciation.
When you reclassify an asset in a period after the period you entered it, Oracle Assets creates
journal entries to transfer the cost and accumulated depreciation to the asset and accumulated
depreciation accounts of the new asset category. This occurs when you create journal entries for
your general ledger.. Oracle Assets also changes the depreciation expense account to the default
depreciation expense Account for the new category, but does not adjust for prior period expense.
1
Oracle Assets TRANSFER COST AND ACCUMULATED DEPRECIATION
Office Equipment
Cr. Asset Cost
Computers
Dr. Asset Cost
500.00
4,000.00
250.00
4,000.00
750.00
Journal Entries for Retirements and Reinstatements

When you retire an asset and create journal entries for that period,Oracle Assets creates journal
entries for your general ledger for each component of the gain/loss amount. Oracle Assets
creates journal entries for either the gain or the loss accounts for the following components:
proceeds of sale, cost of removal, net book value retired, and revaluation reserve retired. Oracle
Assets also creates journal entries to clear the proceeds of sale and cost of removal.
Oracle Assets creates journal entries for the retirement accounts you set up in the Book Controls
form. If you enter distinct gain and loss accounts for each component of the gain/loss amount,
Oracle Assets creates multiple journal entries for these accounts. You can enter different sets of
retirement accounts for retirements that result in a gain and retirements that result in a loss.
Depreciation for Retirements

The retirement convention, date retired, and depreciation method control how much depreciation
Oracle Assets takes when you retire an asset. Oracle Assets reverses the yeartodate
depreciation if the assets depreciation method does not depreciate it in the year of retirement. In
this case, when you perform a full retirement, Oracle Assets reverses the yeartodate
depreciation of the asset, and computes the gain or loss using the resulting net book value. For
partial retirements, Oracle Assets reverses the appropriate fraction of the yeartodate
depreciation and computes the gain or loss using the appropriate fraction of the resulting net
book value. If the depreciation method takes depreciation in the year of retirement,
Oracle Assets uses your retirement convention to determine whether the asset is eligible for
additional depreciation in that year or whether some of that years depreciation must be reversed.
When you perform a partial retirement, Oracle Assets depreciates the portion of the asset you did
not retire based on the method you use. If your depreciation method multiplies a flatrate by the
cost, Oracle Assets depreciates the assets cost remaining after a partial retirement. For assets
that use a diminishing value method, Oracle Assets depreciates the remaining fraction of the
assets net book value as of the beginning of the fiscal year.
Depreciation for Reinstatements

The retirement convention, date retired, and period in which you reinstate an asset control how
much depreciation Oracle Assets calculates when you reinstate an asset. When you reinstate a
retired asset, Oracle Assets usually calculates some additional depreciation expense in the period
in which you perform the reinstatement, unless you perform it in the same period that you retired
the asset. This additional depreciation is the depreciation that would have been taken if you had
not retired the asset. Sometimes, however, a reinstatement results in a reversal of
depreciation. This occurs if the retirement convention caused some additional depreciation when
you retired the asset, and then you reinstate the asset before the retirement prorate date. Then
Oracle Assets reverses the extra depreciation that it took at retirement, and waits until the
appropriate accounting periods to take it.
Current Period Retirements

years, and you are using straightline depreciation. In Year 3, Quarter 3, you sell the asset for
$2,000. The cost to remove the asset is $500. The asset uses a retirement convention and
depreciation method which take depreciation in the period of retirement. You retire revaluation
reserve in this book.
Receivables System
Dr. Accounts Receivable
Cr. Proceeds of Sale Clearing
2,000.00
2,000.00
Payables System
Dr. Cost of Removal Clearing
Cr. Accounts Payable
500.00
500.00
Oracle Assets MULTIPLE GAIN/LOSS ACCOUNTS

Dr. Proceeds of Sale Clearing
Dr. Cost of Removal Gain
Dr. Revaluation Reserve
Dr. Net Book Value Retired Gain
Cr. Asset Cost
Cr. Proceeds of Sale Gain
Cr. Cost of Removal Clearing
Cr. Revaluation Reserve Retired Gain
2,500.00
2,000.00
500.00
600.00
1,500.00
4,000.00
2,000.00
500.00
600.00
If you enter the same account for each gain and loss account, Oracle
Assets creates a single journal entry for the net gain or loss.
Book Controls form:
Accounts
Proceeds of Sale
Cost of Removal
Net Book Value Retired
Revaluation Reserve Retired
Gain
1000
1000
1000
1000
Loss
1000
1000
1000
1000
Oracle Assets SINGLE GAIN/LOSS ACCOUNT

Cr. Asset Cost
Cr. Gain/Loss
2,500.00
2,000.00
600.00
4,000.00
500.00
600.00
Prior Period Retirement

years, and you are using straightline depreciation. In Year 3, Quarter 3, you discover that the
asset was sold in Year 3, Quarter 1, for $2,000. The removal cost was $500. The asset
uses a retirement convention and depreciation method which allow you to take depreciation in the
period of retirement.
Receivables System
Dr. Accounts Receivable
2,000.00
2,000.00
Payables System
Cr. Accounts Payable
500.00
500.00
Oracle Assets
Dr. Cost of Removal Loss
Dr. Net Book Value Retired Loss
Cr. Proceeds of Sale Loss
Cr. Asset Cost
2,500.00
2,000.00
500.00
1,750.00
2,000.00
500.00
4,000.00
250.00
Current Period Reinstatement

Example: You discover that you retired the wrong asset. Oracle Assets creates journal entries for
the reinstatement to debit asset cost, credit accumulated depreciation, and reverse the gain or
loss you recognized for the retirement. Oracle Assets reverses the journal entries for
proceeds of sale, cost of removal, net book value retired, and revaluation reserve retired. Oracle
Assets also reverses the journal entries you made to clear the proceeds of sale and cost of
removal. Oracle Assets also creates journal entries to recover the depreciation not charged to the
asset and for the current period depreciation
expense.
Oracle Assets
Dr. Asset Cost
Dr. Gain / Loss
Cr. Revaluation Reserve
4,000.00
500.00
600.00
250.00
2,750.00
2,000.00
600.00
Prior Period Reinstatement

years, and you are using straightline depreciation. In Year 2, Quarter 1, you retire the asset. In
Year 2, Quarter 4, you realize that you retired the wrong asset so you reinstate it.
Oracle Assets
Dr. Asset Cost
Dr. Proceeds of Sale Loss
(adjustment)
Cr. Net Book Value Retired Loss
Cr. Cost of Removal Loss
4,000.00
500.00
2,000.00
250.00
500.00
2,750.00
500.00
2,000.00
2,000.00
Assets Fully Reserved Upon Addition

If you add an asset with an accumulated depreciation equal to the recoverable cost, it is fully
reserved upon addition. When you retire it, Oracle Assets does not back out any depreciation,
even if you assigned the asset a depreciation method that backs out all depreciation in the
year of retirement. However, it creates all the other journal entries associated with retiring a
capitalized asset.
NonDepreciated Capitalized/ConstructionInProcess (CIP) Assets

A nondepreciated capitalized asset or a CIP asset has no accumulated depreciation. Therefore,
Oracle Assets does not create journal entries to catch up depreciation to the retirement prorate
date, and does not remove the accumulated depreciation. However, Oracle Assets creates
all other journal entries associated with retiring a capitalized asset.
Reinstatement Transactions
PENDING Asset Retirement
When you reinstate an asset retired in the current accounting period that the calculate gains and
losses program has not yet processed, the retirement transaction is deleted, and the asset is
immediately reinstated. No journal entries are created.
PROCESSED Asset Retirement
When you reinstate an asset retired in a previous accounting period or already processed in the
current period, the existing retirement transaction gets a new Status REINSTATE, and the asset
is reinstated when you process retirements. Oracle Assets creates journal entries to catch up any
missed depreciation expense.
Journal Entries for Revaluations

The following examples illustrate the effect on your assets and your accounts when you specify
different revaluation rules.
Revalue Accumulated Depreciation

Example 1: You place an asset in service in Year 1, Quarter 1. The asset cost is $10,000, the life
is 5 years, and you are using straightline depreciation.
In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%. Then in Year 4, Quarter
1 you revalue the asset again using a revaluation rate of 10%.
Revaluation Rules:
Revalue Accumulated Depreciation = Yes
Amortize Revaluation Reserve = No
Retire Revaluation Reserve = No
Oracle Assets bases the new depreciation expense on the revalued remaining net book value.
In Year 5, Quarter 4, at the end of the assets life, you retire the asset with no proceeds of sale or
cost of removal.
REVALUATION 1
Year 2, Quarter 1, 5% revaluation
*Accumulated Depreciation =
Existing Accumulated Depreciation +
[Existing Accumulated Depreciation x (Revaluation Rate / 100)]
2,000 + [2,000 X (5/100)] = 2,100
**Revaluation Reserve =
Existing Revaluation Reserve + Change in Net Book Value
0 + (8,400 8,000) = 400
Oracle Assets REVALUATION

Dr. Asset Cost
500.00
400.00
100.00
REVALUATION 2
10% revaluation in Year 4, Quarter 1:
Cr. Asset Cost
420.00
630.00
1,050.00
Retirement in Year 5, Quarter 4:

Oracle Assets RETIREMENT
Dr. Accumulated Depreciation 9,450.00
Cr. Asset Cost
9,450.00
Accumulated Depreciation Not Revalued

is 5 years, and you are using straightline depreciation. In Year 2, Quarter 1 you revalue the
asset using a revaluation rate of 5%. Then in Year 4, Quarter 1 you revalue the asset again using
a revaluation rate of 10%.
Revaluation Rules:
Revalue Accumulated Depreciation = No
Retire Revaluation Reserve = Yes
For the first revaluation, the assets new revalued cost is $10,500. Since you do not revalue the
accumulated depreciation, Oracle Assets transfers the balance to the revaluation reserve in
addition to the change in cost. Since you are also not amortizing the revaluation reserve, this
amount remains in the revaluation reserve account until you retire the asset, when Oracle Assets
transfers it to the appropriate revaluation reserve retired account. Oracle Assets bases the new
depreciation expense on the revalued net book value. For the second revaluation, the assets
revalued cost is $9,450. Again, since you do not revalue the accumulated depreciation, Oracle
Assets transfers the balance to the revaluation reserve along with the change in cost.
You retire the asset in Year 5, Quarter 4, with no proceeds of sale or cost of removal.
REVALUATION 1
Dr. Asset Cost
500.00
2,000.00
2,500.00
REVALUATION 2
Cr. Asset Cost
1,050.00
4,200.00
Retirement in Year 5, Quarter 4:
6,700.00
Cr. Revaluation Reserve Retired Gain
Cr. Asset Cost
6,700.00
9,450.00
Amortizing Revaluation Reserve

is 5 years, and you are using straightline depreciation.
In Year 2, Quarter 1 you revalue the asset using a rate of 5%. Then in Year 4, Quarter 1 you
revalue the asset again using a rate of 10%.
Revaluation Rules:
Amortize Revaluation Reserve = Yes
For the first revaluation, the assets new revalued cost is $10,500. Since you do not revalue the
accumulated depreciation, Oracle Assets transfers the entire amount to the revaluation reserve.
Since you are amortizing the revaluation reserve, Oracle Assets calculates the revaluation
amortization amount for each period using the assets depreciation method. Oracle Assets also
bases the new depreciation expense on the revalued net book value.
For the second revaluation, the assets revalued cost is $9,450. Again, since you do not revalue
the accumulated depreciation, Oracle Assets transfers the entire amount to the revaluation
reserve.
The effects of the revaluations are illustrated in the following table:
REVALUATION 1
Year 2, quarter 1, 5% revaluation
Dr. Asset Cost
500.00
2,000.00
2,500.00
Oracle Assets creates the following journal entries each period to amortize the revaluation
reserve:
Cr. Revaluation Amortization
156.25
156.25
REVALUATION 2
Year 4, quarter 1, 10% revaluation
Cr. Asset Cost
1,050.00
4,200.00
Oracle Assets creates the following journal entries each period to amortize the revaluation
reserve:
Dr. Revaluation Reserve 681.25
681.25
Revaluation of a Fully Reserved Asset

is 5 years, and you are using straightline depreciation. The assets life extension factor is 2 and
the maximum fully reserved revaluations allowed for this book is 3.
In year 5, quarter 4 the asset is fully reserved. In Year 9, Quarter 1 you want to revalue the asset
with a revaluation rate of 5%.
Revaluation Rules:
First, Oracle Assets checks whether this fully reserved asset has been previously revalued as
fully reserved, and that the maximum number of times is not exceeded by this revaluation. Since
this asset has not been previously revalued as fully reserved, this revaluation is allowed.
The assets new revalued cost is $10,500. The life extension factor for this asset is 2, so the
assets new life is 2 _ 5 years = 10 years. Oracle Assets calculates depreciation expense over its
new life of 10 years.
Oracle Assets calculates the depreciation adjustment of $2,000 using the new 10 year asset life.
It transfers the change in net book value to the revaluation reserve account.
Oracle Assets revalues the accumulated depreciation using the 5% revaluation rate. The change
in net book value is transferred to the revaluation reserve account. Since you do not amortize the
revaluation reserve, the amount remains in the revaluation reserve account.
1
Dr. Asset Cost
500.00
1,600.00
2,100.00
Revaluation with Life Extension Ceiling

is 5 years, and you are using straightline depreciation. The assets life extension factor is 3.0
and its life extension ceiling is 2.
In Year 5, Quarter 4 the asset is fully reserved. In year 9, quarter 1 you want to revalue the asset
with a revaluation rate of 5%.
Revaluation Rules:
To determine the depreciation adjustment, Oracle Assets uses the smaller of the life extension
factor and the life extension ceiling. Since the life extension ceiling is smaller than the life
extension factor, Oracle Assets uses the ceiling to calculate the depreciation adjustment. The
new life used to calculate the depreciation adjustment is 2 _ 5 years = 10 years, the life
extension ceiling of 2 multiplied by the original 5 year life of the asset.
Oracle Assets calculates the assets depreciation expense under the new life of 10 years up to
the revaluation period, and moves the difference between this value and the existing accumulated
depreciation from accumulated depreciation to revaluation reserve.
Oracle Assets then determines the new asset cost using the revaluation rate of 5% and revalues
the accumulated depreciation with the same rate. Oracle Assets calculates the assets new life by
multiplying the current life by the life extension factor. The assets new life is 3 _ 5 years = 15
years. Oracle Assets bases the new depreciation expense on the revalued net book value and
the new 15 year life.
1
Depreciation Adjustment (calculated using life extension ceiling)=
2,000
Dr. Asset Cost
500.00
1,600.00
2,100.00
Revaluation with a Revaluation Ceiling

Example 6: You own an asset which has been damaged during its life.
You placed the asset in service in Year 1, quarter 1. The asset cost is $10,000, the life is 5 years,
and you are using straightline depreciation. You entered a revaluation ceiling of $10,300 for the
asset. In year 3, quarter 3 you revalue the assets category with a revaluation
rate of 5%.
Revaluation Rules:
Amortize Revaluation Reserve = Yes
If Oracle Assets applied the new revaluation rate of 5%, the assets new cost would be higher
than the revaluation ceiling for this asset, so instead Oracle Assets uses the ceiling as the new
cost. The ceiling creates the same effect as revaluing the asset at a rate of 3%. Oracle
Assets bases the assets new depreciation expense on the revalued asset cost.
1
Dr. Asset Cost
300.00
5,000.00
5,300.00
Oracle Assets creates the following journal entries each period to

amortize the revaluation reserve:
Dr. Revaluation Reserve 530.00
530.00
Journal Entries for Tax Accumulated Depreciation Adjustments

years, and you are using straightline depreciation. In Year 4, Quarter 1, your tax authority
requests that you change the depreciation taken in Year 2 from $1000 to $800.
Oracle Assets creates the following journal entries for the reserve adjustment:
Oracle Assets
Cr. Depreciation Adjustment
Home
200.00
200.00
Work in Process Accounting Transactions

The following are the basic accounting transactions carried out in WIP
1. Relieve Inventory and charge WIP at standard Cost.
2. Move Assemblies on the shop floor and charge Resources
3. Earn Resources and Overheads into Jobs and Schedules
4. Relieve WIP and Charge Inventory at Standard Cost.
Example
Given below is an example of what transaction and which stage they are generated in
Oracle Application.
The following table details the costs that are used for the accounting flows.
Item Cost At start of Production

Material
This Level
Previous
Level
Total
Material
Overhead
20
15
Resource
OSP
Overhead
Total
65
45
32
0
120
40
237
250
150
35
Previous
32
160
487
Material
110
Level
Costs
Resource
OSP
Overhead
Total
45
40
195
0
150
Component
1
Component
2
Component
3
Total
100
Material
Overhead
10
30
33
20
22
150
Cost
Element
Operation
15
This Level
Units
45
Costs
0
Incurred
cost per
40
250
Standard
Cost /unit
Resource
RS1
Overhead
Resource
Rs2
Overhead
OSP OS1
OSP OS2
Material O/H
Total
10
10
unit
50
10
20
*
5
125
30
100
25
20
30
40
#
10
10
10
10
20
25
20
20
280
20
20
20
20
237
40
* Overhead for operation 10 is applied at 250% of the resource value earned at the operation
# Material overhead is earned when an assembly is completed from a discrete job or
repetitive schedule into inventory. Material Overhead is never earned in the job or schedule.
Transactions
1. Material Transactions , Issue all material Transaction : Push all components at standard
cost into the job 10 units at 250 =2500
Dr. WIP Accounts
2500
Cr. Subinventory Accounts
2.
Material Transactions, Return specific component : Return 2 defective units of component

2 to inventory 2 units at 33 = 66
Dr. Subinventory Accounts
Cr. WIP Accounts
3.
2500
66
66
Material Transactions , Issue Specific Component : Replace defective components with

substitute items
2 units at 40 = 80
Dr. WIP Accounts 80
Cr. Subinventory Accounts 80
Resource charged at Actual Cost and no variance accounted
4.
Shop Transaction, Resource w/o rate variance : Charge resource RS1 at actual for
operation 10.
11 units at 50 = 550
Dr. WIP Accounts 550
Cr. Resource Absorption Account
5.
550
Shop Floor Transaction, Reverse resource charge : Reverse Overcharge

1 unit at 50 = 50
Dr. Resource Absorption Account 50
Cr. WIP Accounts
50
Resource Charged at Standard Cost and variance accounted
6.
Shop Floor Transaction, Resource with rate variance : Charge resource RS2 at standard
for operation 20 5 units at 25 = 125
Cr. Resource Absorption Account
Dr. Rate Variance 25
7.
150 ( Incurred cost of 30 for 5 units = 150 )
Shop Floor Transaction, OSP resource w/o rate variance : Charge OSP OS1 at actual for
operation 30 Receive 11 units at 25 = 275
On pushing the quantity to outside processing operation

Dr. WIP Accounts
275
Cr. Receiving Inspection Account 275
On receiving the material after being processed
Dr. Receiving Inspection Account
275
Cr. Inventory AP Accrual Account
8.
275
Shop Floor Transaction, Reverse OSP overcharge : Reverse Overcharge 1 unit at 25 =

25
Dr. Inventory AP Accrual Account
25
Cr. Receiving Inspection Account
Dr.
9.
Receiving Inspection Account

Cr. WIP Accounts
25
25
25
Shop Floor Transactions, OSP resource with rate variance : Charge OSP OSP2 at
standard for operation 20. Receive 10 units at 12 = 120
Dr.
WIP Accounts
120
Cr. Receiving Inspection Account 100
Dr. Receiving Inspection Account 100

Cr. Inventory AP Accrual Account
100
Cr. Purchase Price Variance 20

10. Shop Floor Transactions, Resource based O/H : Charge 250% on the resource charged
in step 4
550 * 250 % = 1375
Cr. Overhead Absorption Accounts
1375
11. Shop Floor Transaction , Reverse resource based O/H : Reverse overhead for resource
reversed in step 5 50 * 250 % = 125
Dr. Overhead Absorption Accounts
Cr. WIP Accounts
125
125
12. Shop Floor Transactions, Item based O/H : Move through operation 20 and charge item
based overhead 10 units at 20 = 200
Cr. Overhead Absorption Accounts 120
Summary of Transactions
The table below gives a summary of all the transactions at this point.
Work in Process Value

Cost Element
Material
Material OH
Resource
OSP
Overhead
Total
Cost Incurred
This
Previous
Level
Level
1514
150
625
450
370
0
1450
400
2445
2514
Cost Relieved
This
Previous
Level
Level
Balance
This
Previous
Level
Level
1514
150
625
450
370
0
1450
400
2445
2514
Costs are relieved from Work in Process when assemblies are completed to inventory or
scrapped at an operation. Costs are always relieved from Jobs and Schedules at Standard.
13. Shop Floor Transaction : Scrap 2 assemblies at operation 40. 2 units at 467 = 934
Dr.
Scrap Account
934
Cr. WIP Accounts
934
14. Shop Floor Transaction : Return repaired unit from scrap. 1 unit at 467 = 467
Dr. WIP Accounts
467
Cr. Scrap Account
467
15. WIP Completion Transaction : Complete 9 assemblies from WIP to inventory. 9 units at
467 = 4203 + 9 units at 20 for Material Overhead.
Dr. Subinventory Accounts
4383
Cr. WIP Accounts
Cr. Material O/H Abs Account
4203
180
The table below gives a summary of all the transactions at this point.
Work in Process Value

Cost Element
Material
Material OH
Resource
OSP
Overhead
Total
Cost Incurred
This
Previous
Level
Level
1514
150
625
450
370
0
1450
400
2445
2514
Cost Relieved
This
Previous
Level
Level
(1500)
(150)
(650)
(450)
(320)
(1200)
(400)
(2170)
(2500)
Balance
This
Previous
Level
Level
14
0
(25)
0
50
0
250
0
275
14
Variances are recognised when you close your jobs and schedules.
16. Close Job or Schedule : Recognise this and previous level variances.
Dr. Variance Accounts 289
Cr. WIP Accounts
289
Cost Update in WIP

The Cost update revalues your discrete and asset non-standard jobs.
Example
Carrying from the previous example
Update Previous level Costs
1. Material cost increases by 50.
2. Material overhead rate remains at 10% but the cost increases by 5 due to increase in material
cost.
3.
4.
5.
6.
Resource cost decreases by 15.

Overhead rate increases from 100% to 150% of resource cost./
Overhead cost remains at 45 due to decrease in resource costs
Quantity in job = 10
Bill of Material Cost

Material
Old Cost
New Cost
Increase/
Decrease
Material
OH
15
20
5
150
200
50
Resource
OSP
Overhead
Total
45
30
(15)
0
0
0
45
45
0
255
295
40
Update this Level Costs

1.
2.
3.
4.
5.
Resource RS1 amount decreases by 5

Outside processing OSP1 amount per item increases by 20.
Overhead rate increases from 200% of RS1 value to 400% of RS1 value.
10 hours of RS1 charged to the job.
10 units received for OSP1

Resource
35
30
(5)
Old Cost
New Cost
Increase/ Decrease
OSP
100
120
20
Overhead
70
120
50
Total
205
270
65
Adjusting Accounting Entries

Dr. Material
Dr. Material OH
Dr. OSP
Dr. Overhead
500
50
200
500
Cr. Resource
Cr. Standard Cost Variance Account
200
1050
Adjustment Recorded in the Job
This Level
Previous Level
Increase/
Material
Material
OH
500
500
50
50
Resource
OSP
Overhead
Total
(50)
(150)
(200)
200
0
200
500
0
500
650
400
1050
Decrease
Home
Purchase Orders and Releases

PO Accrual Account Generator
PO Budget Account Generator
PO Charge Account Generator
PO Variance Account Generator
Requisitions
PO Requisition Accrual Account Generator
PO Requisition Budget Account Generator
PO Requisition Charge Account Generator
PO Requisition Variance Account Generator
PO Accrual Account Generator and
PO Requisition Accrual Account Generator
Accrual Account for Expense Item
Accrual Account from Organization
PO ProjectRelated? (You can customize this function if you
want to build projectrelated accounts using your own rules and
if Oracle Projects is installed.)
Purchase Order FlexBuilder Upgrade
Work Item Destination Type
PO Budget Account Generator and
PO Requisition Budget Account Generator
Build Inventory Charge Account
Get Budget Account from Item/Sub
Get Charge Account
Get Item Level Budget Account
Get Org Level Budget Account
Item PreDefined?
PO Charge Account Generator and
PO Requisition Charge Account Generator
Build Inventory Charge Account
Expense Account
Job WIP Account
Schedule Account
Type of WIP
PO Variance Account Generator and
PO Requisition Variance Account Generator
Get Charge Account
Variance Account from Organization
Inventory - Standard Costing

Prerequisites
Define Organization Parameters
Costing Method is set to Standard

Transfer Detail to GL is appropriately set
Default Material SubElement account (Required)
Define cost types are defined.
Define activities and activity costs are defined.
Define material overhead defaults are defined
Define item, item costs, and establish item cost controls.
Launch transaction managers are launched
Inventory Standard Cost Transactions

The following transctions can be performed in distribution
organizations.
Purchase Order Receipt To Receiving Inspection:

Delivery From Receiving Inspection To Inventory:
Purchase Order Receipt To Inventory:
Return To Supplier From Receiving:
Return To Supplier From Inventory:
Sales Order Shipments:
RMA Receipts:
RMA Return:
Miscellaneous Transactions:
InterOrganization Transfers:
Subinventory Transfers:
Internal Requisitions:
Cycle Count and Physical Inventory:
Purchasing related transactions with inventory destinations are also discussed, but not those with
expense destinations such as office supplies and noninventory purchases.
Purchase Order Receipt to Receiving Inspection

You can use the Receipts window in Oracle Purchasing to receive material from a supplier into a
receiving location. You can also use this window to receive material directly to inventory. Please
note that this section addresses Inventory destinations only.
When you receive material or outside processing items from a supplier into receiving
inspection, the Receiving Inspection account is debited and the Inventory A/P Accrual
account is credited based on the quantity received and the purchase order price.
Account
Debit
Receiving Inspection account @ PO price
XX
Inventory A/P Accrual account @ PO price
Credit
XX
Delivery From Receiving Inspection to Inventory

You can use the Receiving Transactions window to move material from receiving inspection to
inventory. The system uses the quantity and the purchase order price of the delivered item to
update the receiving inspection account and quantity.
The system uses the standard cost of the delivered item to update the subinventory balances.
Account
Debit
Subinventory accounts @ standard cost
XX

Debit/Credit
Credit
XX
Purchase Price Variance
If your item has material overhead associated with it, the subinventory account is debited for the
amount of the material overhead and the material overhead absorption account(s) are credited.
Purchase Price Variance (PPV)

Purchase price variances (PPV) occur when there are differences between the standard cost and
the purchase order cost of an item.
Expense Subinventories and Expense Items
When you receive inventory expense items into expense subinventory locations, the following
accounting entry is generated:
Account
Subinventory Expense account @ PO price
Debit
XX
Credit
XX
When you receive an expense (nonasset) inventory item, or into an expense subinventory, the
subinventory expense account instead of the valuation account is debited. Because the expense
account is debited at the purchase order price, there is no purchase price variance.
Purchase Order Receipt to Inventory

When you receive material from a supplier directly to inventory, the receipt and delivery
transactions are performed in one step.
First, the Receiving Inspection account is debited and the Inventory A/P Accrual account credited
based on quantity received and the purchase order price.
Account
Debit
XX
Credit
XX
Next, the Subinventory and Receiving Inspection accounts are, respectively, debited and credited
based on the transaction quantity and standard cost of the received item.
Account
Debit
XX
Credit
XX
Debit/Credit Purchase Price Variance

If your item has material overhead(s), the subinventory entry is debited for the material overhead
and the material overhead absorption account(s) is credited.
Account
Debit
Subinventory accounts
Material Overhead Absorption account
XX
Credit
XX
Attention: If the subinventory account is combined with the above entry, the material overhead
absorption account adds one additional entry.
Return To Supplier From Inventory

When you do not use receiving inspection, the return to supplier transaction updates the same
accounts as the direct receipt to inventory, with reverse transaction amounts. The Inventory A/P
Accrual account is debited and the Receiving Inspection account is credited based on quantity
received and the purchase order price.
Foreign Currencies
As with the purchase order receipt to inventory transaction, the system converts the purchase
order price to the functional currency and uses this converted value for the return to supplier
accounting entries.
Sales Order Shipments

Ship material on a sales order using Order Entry/Shipping. The accounting entries generated by a
sales order shipment are:
Account
Cost of Goods Sold account
Debit
XX
Credit
XX
Based on the rules you define in Order Entry/Shipping, the Account Generator dynamically
creates the cost of goods sold account.
Attention: You do not create any accounting information when you ship from an expense
subinventory or ship an expense inventory item.
RMA Receipts
You can receive items back from a customer using the RMA (return material authorization)
Receipts window.
Account
Cost of Goods Sold Account
Debit
XX
Credit
XX
This uses the same account as the original cost of goods sold transaction.
Attention: You do not create any accounting entries when you receive material for an RMA
for an expense item or expense subinventory.
RMA Returns
You can return items received into inventory through an RMA back to the customer using RMA
Returns window.
For example, you can send back return an item that was returned by the customer to you
for repair.
This transaction reverses an RMA receipt. It also mimics a sales order shipment and updates the
same accounts as a sales order shipment.
Account
Cost of Goods Sold Account
Debit
XX
Credit
XX
Attention: Do not create any accounting entries when you return material for an RMA for an
expense item or expense subinventory.
Miscellaneous Transactions
Using the Miscellaneous Transaction window, you can issue material from a subinventory to a
general ledger account (or account alias) or receive material to a subinventory from an account or
alias. An account alias identifies another name for a general ledger account.
Suggestion: Use account aliases for account numbers you use frequently. For example, use the
alias SCRAP for your general ledger scrap account.
Issuing material from a subinventory to a general ledger account or alias generates the following
accounting entries:
Account
Entered General Ledger Account @ standard cost
Debit
XX
Credit
XX
Receiving material to a subinventory from an account or an alias generates the following

accounting entries:
Account
Entered General Ledger Account @ standard cost
Debit
XX
Credit
XX
Expense Subinventories and Expense Items When you receive into an expense location or
receive an expense item, you have expensed the material. If you use the miscellaneous
transaction to issue from an expense location,
You can issue to an account or to an asset subinventory of the
INV:Allow Expense to Asset Transfer profile option in Oracle Inventory is set to Yes.
If issued to an account the system assumes the material is consumed at the expense
location and moves the quantity without any associated value. If transferred to an asset
subinventory, the material moves at its current cost.
When you perform a miscellaneous transaction to receive an expense item to either an asset or
expense subinventory, no accounting occurs. Since the account balance could involve different
costs over time, The system assumes that the cost of the expense item is unknown.
InterOrganization Transfers
You can transfer material from one inventory organization to another either directly or through
intransit inventory. Intransit inventory represents material that has not yet arrived at the receiving
organization.
Using Intransit Inventory You can move material from the shipping organization to intransit
inventory using the Transfer Subinventories window. You can use the Receipts window to move
material from intransit invenotry to the receiving organization.
Issue Transaction
Depending upon the Freight On Board (FOB) point defined in the inventory organization
relationship, the shipment to intransit inventory creates the following accounting entries:
FOB Point is set to Receiving:
Account Organization
Intransit inventory account Sending
Debit
XX
Subinventory accounts Sending
Credit
XX
FOB Point is set to Shipment:

Account Organization Debit Credit
InterOrganization Receivable Sending
XX

Intransit Inventory account Receiving
XX
XX
InterOrganization Payable Receiving
XX
Receipt Transaction
Depending upon the FOB point defined in the organization relationship, the receipt from intransit
inventory creates the following accounting entries:
FOB Point is set to Receiving:
Debit
XX
Intransit Inventory account Sending

Subinventory accounts Receiving
XX
XX

FOB Point is set to Shipment:
Credit
XX
Debit
XX
Credit
XX
In addition to accounting for the movement of the material, these transactions also update the
interorganization receivable and payable accounts. These interorganization clearing accounts
represent interorganization receivables and payables for the respective shipping and receiving
organizations.
Direct InterOrganization Transfer

When your organization relationship is set to directly transfer material, Inventory performs both
the issue and the receipt transaction at the time of the issue. Any difference between the cost of
items in the two organizations is recognized as variance in the receiving organization.
The accounting entries created are as follows:
Debit
XX

Credit
XX
XX
XX
Use the Transfer Subinventories window for direct transfers. Material Overhead and Inter
Organization Transfers If your item has material overhead(s), you earn material overhead on
interorganization transfers. The subinventory entry is increased for the material overhead with a
credit to the material overhead absorption account(s) in the receiving organization.
Account
Debit
Subinventory accounts
Material Overhead Absorption account
XX
Credit
XX
Attention: The subinventory account is combined with the above entry. The material overhead
absorption transaction adds one additional account to the entry.
The FOB Point changes the accounting for freight. With FOB receiving, freight is accrued on the
receipt transaction by the sending organization. With FOB shipment, freight is accrued on the
shipment transaction by the receiving organization. For direct transfers, the receipt and shipment
transaction occur at the same time.
When the FOB Point is set to Receiving, the transfer creates the following freight and transfer
charge entries at time of receipt:
Debit
XX
Freight Expense account Sending

Credit
XX
XX
InterOrg. Transfer Credit Sending

Org. Material account Receiving
XX
XX
XX
For the receiving organization, the interorganization payable account is increased for freight and
transfer charges. These charges are included in the comparison to the standard cost.
When the FOB Point is set to Shipment, the transfer creates the following freight and transfer
charge entries at shipment:
Debit
XX
InterOrg. Transfer Credit Sending

Credit
XX
XX
Freight Expense account Receiving
XX
XX
Intransit inventory includes both freight and transfer charges. The interorganization payable is
only increased for transfer charges.
Expense Subinventories and Expense Items:
When you receive an interorganization transfer into an expense subinventory or receive an
expense inventory item, you have expensed the material and cannot directly issue it. The system
assumes the material cost is consumed at the expense location.
Using the direct or intransit method, you can receive material to an expense subinventory or
receive an expense inventory item. When you receive to expense locations or receive expense
inventory items, the subinventory expense account is debited for the receiving organization,
instead of the valuation accounts. The subinventory expense account is charged the total
transaction value from the other organization.
InterOrganization Transfers and Sets of Books
The InterOrganization Direct Transfer transaction also supports transfers from any set of books,
even if the currency is different. However, you cannot use the InterOrganization Intransit with
multiple sets of books. These transactions use receiving functions from Purchasing, which only
supports one set of books. To perform an interorganization intransit transfer from one set of
books to another, you need to perform a combination of two transactions: a direct
transfer and an intransit transfer.
Subinventory Transfers
This transaction increases the accounts of the To Subinventory and decreases the From
Subinventory, but has no net effect on overall inventory value.If you specify the same
subinventory as the From and To Subinventory, you can move material between locators within a
subinventory.
Account Subinventory
Debit
Credit
Subinventory accounts To
XX
Subinventory accounts From
XX

You can issue from an asset to an expense subinventory, and you can issue from an expense
subinventory if the Oracle Inventory
INV:Allow Expense to Asset Transfer profile option is set to Yes.
The system assumes the material is consumed at the expense location.
Internal Requisitions :
You can use the internal requisitions to replenish inventory. You can source material from a
supplier, a subinventory within your organization, or from another organization. Depending upon
the source you choose, the accounting entries are similar to one of the proceeding scenarios.
However, unlike interorganization transfers, internal requisitions do not support freight charges.
Cycle Count and Physical Inventory :

Use cycle counting and physical inventory to correct inventory onhand balances. A cycle count
updates the accounts of the affected subinventory and offsets the adjustment account you
specify.
If you physically count more than your onhand balance, the accounting sentries are:
Account
Debit
XX
Adjustment account @ standard cost
Credit
XX
If you count less than your onhand balance, the accounting entries are:
Account
Debit
Adjustment account @ standard cost
XX
Credit
XX
Like a cycle count, a physical inventory adjustment also updates the accounts of the affected
subinventories and the physical inventory adjustment account you specify.
Suggestion: Since the standard cost is not stored as you freeze the physical quantities, you
should not perform a standard cost update until you have adjusted your physical inventory.

The system does not record accounting entries for expense subinventories or expense items for
either physical inventory or cycle count adjustments. However, the onhand balance of an
expense subinventory is corrected if you track the quantities.
Work in Process Standard Cost Transactions

The following cost transactions can occur when Oracle Work in Process is installed:
Component Issue and Return Transactions:

Move Transactions:
Resource Charges:
Outside Processing Charges:
Overhead Charges:
Assembly Scrap Transactions:
Assembly Completion Transactions:
Job Close Transactions:
Period Close Transactions:
Work in Process Cost Update Transactions:
Component Issue and Return Transactions

Component issue and return transactions can be launched in a variety of ways. See: Component
Issue and Return Transaction Options, Oracle Work in Process Users Guide and Backflush
Transactions, Oracle Work in Process Users Guide.
Costing Issue and Return Transactions
Issue transactions increase the work in process valuation and decrease the inventory valuation.
The accounting entries for issue transactions are:
Account
WIP accounting class valuation accounts
Debit
XX
Subinventory elemental accounts
XX
The accounting entries for return transactions are:

Account
Debit
XX
Credit
Credit
XX
Subinventory accounts are defined in the Define Subinventories window in Oracle Inventory. WIP
elemental accounts are defined in the WIP Accounting Classes window in Work in Process. See:
Defining Subinventories, Oracle Inventory Users Guide, Subinventory General Ledger Account
Fields, Oracle Inventory Users Guide, and WIP Accounting Classes, Oracle Work in Process
Users Guide.
Move Transactions
A move transaction moves assemblies within an operation, such as from Queue to Run, or from
one operation to the next. Move transactions can automatically launch operation completion
backflushing and charge resources and overheads.
You can perform move transactions using the Move Transactions window, Open Move
Transaction Interface window, or the Enter Receipts window in Purchasing.
Backflush Material Transactions

With backflushing, you issue component material used in an assembly or subassembly by
exploding the bills of material, and then multiplying by the number of assemblies produced.
Move transactions can create operation pull backflush material transactions that issue component
material from designated WIP supply subinventories and locators to a job or repetitive schedule.
For backflush components under lot or serial number control, you assign the lot or serial numbers
during the move transaction.
When you move backward in a routing, Work in Process automatically reverses operation pull
backflush transactions.
The accounting entries for move transactions are:
Account
Debit
XX

The accounting entries for return transactions are:
Account
Credit
XX
Debit
XX
Credit
XX
Moved Based Resource Charging

As the assemblies you build pass through the operations on their routings, move transactions
charge all preassigned resources with an autocharge type of WIP Move at their standard rate.
You can charge resources based upon a fixed amount per item moved in an operation (Item
basis) or based upon a fixed lot charge per item moved in an operation (Lot basis). For resources
with a basis of Lot, Work in Process automatically charges the lot cost upon completion of
the first assembly in the operation.
You can also enter manual resource transactions associated with a move, or independent of any
moves. You can manually charge resources to a job and repetitive schedule provided the job and
repetitive schedule has a routing. You can also transact resources through the Open Resource
Transaction Interface.
Resource Charges
Work in Process supports four resource autocharging methods:
Manual, WIP Move, PO Move, and PO Receipt.
You can charge resources at an actual rate.
You can also charge resource overheads automatically as you charge resources.
WIP Move Resource Charges You can automatically charge resources at their standard rate to a
job or repetitive schedule when you perform a move transaction using either the Move
Transactions window or the Open Move Transaction Interface. When you move assemblies from
the Queue or Run intra operation steps forward to the To move, Reject, or Scrap intraoperation
steps, or to the next operation, Work in Process charges all preassigned resources with an
charge type of WIP Move at their standard rate. For resources with a basis of Item, Work in
Process automatically charges the resources usage rate or amount multiplied by the
resources standard cost upon completion of each assembly in the operation. For resources with
a basis of Lot, Work in Process automatically charges the resources usage rate or amount
multiplied by the resources standard cost upon completion of the first assembly in the operation.
You can undo the WIP Move resource charges automatically by moving the assemblies from
Queue or Run of your current operation to Queue or Run of any prior operation, or by moving the
assemblies from the To move, Reject, or Scrap intraoperation steps backward to the Queue or
Run intraoperation steps of the same operation, or to any intraoperation step of any prior
operation.
Work in Process applies WIP Move resource transactions to multiple repetitive schedules on a
line based on how the assemblies being moved are allocated. Work in Process allocates moves
across multiple repetitive schedules based on a first infirst out basis.
Manual Resource Charges
You can charge manual resources associated with a move transaction or independent of any
moves. Manual resource transactions require you to enter the actual resource units applied rather
than autocharging the resources usage rate or amount based on the move quantity. You can
charge resources using that resources unit of measure or any valid alternate. You can manually
charge resources to a job or repetitive schedule provided the job or repetitive schedule has a
routing. If you use the Move Transactions window to perform moves and manual resource
transactions at the same time, Work in Process displays all preassigned manual resources with
an charge type of Manual assigned to the operations completed in the move. If the resource is a
persontype resource, you can enter an employee number. In addition to the resources
displayed, you can manually charge any resource to a job or repetitive schedule, even if you have
not previously assigned the resource to an operation in the job or repetitive schedule.
You can also manually charge resources to an operation added ad hoc by entering any resource
defined for the department associated with the operation. Work in Process applies Manual
resource transactions to the first open repetitive schedule on the line. You can correct or undo
manual resource transactions by entering negative resource units worked.
Costing Resource Charges at Resource Standard
Resource charges increase work in process valuation. The accounting entries for resource
transactions are:
Account
WIP accounting class resource valuation account
Debit
XX
Resource absorption account
Credit
XX
If Autocharge is set to WIP Move, work in process and labor are charged at standard. There are
no resource rate or efficiency variances.
The accounting entries for negative Manual resource transactions and backward moves for WIP
Move resources are:
Account
Debit
XX
WIP accounting class resource valuationaccount
Credit
XX
Costing Labor Charges at Actual

You can charge labor charges at actual in two ways. You can enter an actual rate for the
employee using the Open Resource Transaction Interface or when you define employee rates.
For labor charges using an actual or employee rate for a resource for which charge standard
rate is turned off, the accounting entries are:
Account
Debit
XX
Credit
XX
Any difference between the total labor charged at actual and the standard labor amount is
recognized as an efficiency variance at period close.
If the Standard Rates check box is checked and you enter an actual rate for a resource, the
system charges the job or repetitive schedule at standard. If Autocharge is set to Manual and
actual rates and quantities are recorded, a rate variance is recognized immediately for
any rate difference. Any quantity difference is recognized as an efficiency variance at period
close.
The accounting entries for the actual labor charges are:
Account
Debit
XX
Credit
Resource rate variance account (Debit when actual

rate is greater than the standard rate. Credit when
the actual rate is less than the standard rate.)
XX
XX
XX
PO Receipt and PO Move Transactions

You can receive purchased items associated with outside resources from an outside processing
operation back into work in process in Oracle Purchasing. For these items, Work in Process
creates resource transactions at the standard or actual rate for all outside resources with
an autocharge type of PO receipt or PO move. For outside resources with an autocharge type of
PO move, Work in Process also moves the assemblies from the Queue or Run intraoperation
step of the outside processing operation into the Queue intraoperation step of the next
operation or into the To move intraoperation step if the outside processing operation is the last
operation on the routing.
If you assigned internal resources to an outside operation with an autocharge type of Manual,
charge the resources using the Resource Transactions window or the Open Resource
Transaction Interface.
If you return assemblies to the supplier using the Enter Returns and Adjustments window in
Oracle Purchasing, Oracle Purchasing automatically reverses the charges to all automatic
resources associated with the operation. You must manually reverse all manual resource charges
using the Resource Transactions window. For outside resources with an autocharge type of PO
move, Oracle Purchasing automatically moves the assemblies from the Queue intraoperation
step of the operation immediately following the outside processing operation into the Queue
intraoperation step of your outside processing operation.
If the outside processing operation is the last operation on the routing, the assemblies
automatically move from the To move intraoperation step to the Queue intraoperation step. PO
move resource transactions are applied to multiple repetitive schedules on a line based on how
the assemblies being moved are allocated. Moves are allocated across multiple repetitive
schedules on a first infirst out basis. PO receipt resource transactions are allocated across
schedules on a first in first (FIFO) out basis.
Outside Processing Charges

Work in Process automatically creates resource transactions at the standard or actual rate for all
outside processing resources with an charge type of PO Receipt or PO Move when you receive
assemblies from an outside processing operation back into work in process, using the Enter
Receipts window in Purchasing. For outside processing resources with an charge type of PO
Move, Work in Process also performs a move of the assemblies from the Queue or Run
intraoperation step of your outside processing operation into the Queue intraoperation step of
your next operation or into the To move intraoperation step if the outside processing operation is
the last operation on your routing.
If you assigned internal resources to an outside operation with an charge type of Manual, you use
the Move Transactions window or the Open Resource Transaction Interface to charges these
resources.
If you return assemblies to the supplier, Work in Process automatically reverses the charges to all
automatic resources associated with the operation. You must manually reverse all manual
resource charges using the Move Transactions window. For outside processing resources
with an charge type of PO Move, Work in Process automatically moves the assemblies from the
Queue intraoperation step of the operation immediately following the outside processing
operation into the Queue intraoperation step of your outside processing operation.
If the outside processing operation is the last operation on your routing, Work in Process
automatically moves the assemblies from the To move intraoperation step to the Queue
intraoperation step. Work in Process applies PO Move resource transactions to multiple repetitive
schedules on a line based on how the assemblies being moved are allocated. Work in Process
allocates moves across multiple repetitive schedules based on a first infirst out basis. Work in
Process applies PO Receipt resource transactions to the first open repetitive schedule
on the line.
Costing Outside Processing Charges at Standard
When you receive the assembly from the supplier, Purchasing sends the resource charges to
Work in Process at either standard cost or actual purchase order price, depending upon how you
specified the standard rate for the outside processing resource.
If the Standard Rates option is enabled for the outside processing resource being charged, the
system charges Work in Process at the standard rate and creates a purchase price variance for
the difference between the standard rate and the purchase order price. The accounting entries for
outside processing items are as follows:
Account
Debit
WIP accounting class outside processing valuationaccount
XX
Purchase price variance account (Debit when the

actual rate is greater than the standard rate. Credit
when the actual rate is less than the standard rate.)
XX
Organization Receiving account
Credit
XX
XX
Any quantity or usage difference is recognized as an outside processing efficiency variance at

period close.
The accounting entries for return to supplier for outside processing are:
Account
Debit
XX
Purchase price variance account (Debit when
actual rate is less than the standard rate. Credit
when the actual rate is greater than the standard
rate.
WIP accounting class outside processing valuation account
XX
Credit
XX
XX
Costing Outside Processing Charges at Actual Purchase Order Price

If the Standard Rates option is disabled for the outside processing resource being charged, the
system charges Work in Process the purchase order price and does not create a purchase price
variance.
The accounting transactions for outside processing charges at purchase order price are as
follows:
Account
WIP accounting class outside processing valuation
account
Debit
XX
Credit
XX
Any difference from the standard is recognized as a resource efficiency

variance at period close.
Overhead Charges
Move Based Overhead Charging
Work in Process automatically charges appropriate overhead costs as you move assemblies
through the shop floor. You can charge overheads directly based on move transactions or based
on resource charges. For overheads charged based on move transactions with a basis of Item,
Work in Process automatically charges overheads upon completion of each assembly in the
operation. Work in Process automatically reverse these charges during a backward move
transaction.
For overheads based on move transactions with a basis of Lot, Work in Process automatically
charges overheads upon completion of the first assembly in the operation. Work in Process
automatically reverses these charges during a backward move transaction if it results in zero
net assemblies completed in the operation.
Resource Based Overhead Charging
Work in Process automatically charges appropriate overhead costs as you charge resources. You
can charge overheads based on resource units or value. Work in Process automatically reverses
overhead charges when you reverse the underlying resource charge.
Costing Overhead Charges
Overhead charges increase work in process valuation. The accounting entries for overhead
charges are:
Account
WIP accounting class overhead account
Overhead absorption account
Debit
XX
Credit
XX
You can reverse overhead charges by entering negative Manual resource charges or performing
backward moves for WIP Move resources. The accounting entries for reverse overhead charges
are:
Account
Overhead absorption account
Debit
XX
WIP accounting class overhead account
Credit
XX
Assembly Scrap Transactions

You can move partially completed assemblies that you consider unrecoverable to the Scrap
intraoperation step of that operation. (If necessary, you can recover assemblies from scrap by
moving them to another intraoperation step.) By moving into the Scrap intraoperation step, you
can effectively isolate good assemblies from bad.
Work in Process considers a move into the Scrap intraoperation step from the Queue or Run of
the same operation as an operation completion, and thus updates operation completion
information, backflushes components, and charges resource and overhead costs
according to the elemental cost setup.
You can also move assemblies back to the Scrap intraoperation step of the previous operation for
Queue or Run if no work has been completed at the current operation.
Costing Assembly Scrap Transactions
When you define Work in Process parameters, you can specify whether moves into the Scrap
intraoperation step require a scrap account. If you enter a scrap account or alias when you move
assemblies into Scrap, the scrap account is debited and the job or repetitive schedule elemental
accounts for the standard cost of the assembly through the scrap operation are credited. This
removes the cost of the scrapped assemblies from the job or repetitive schedule. If you do not
enter a scrap account or select an alias, the cost of the scrap remains in the job Or schedule until
job or period close. If you recover assemblies from scrap, the scrap account is credited and the
job or repetitive schedule elemental accounts for the standard cost of this assembly through this
operation are debited.
The accounting entries for scrap transactions are:
Account
Debit
Credit
Scrap account
XX
WIP accounting class valuation
accounts@standard
XX
The accounting entries for reverse scrap transactions are:

Account
Debit
WIP accounting class valuation accounts@standard
XX
Scrap account
Credit
XX
Assembly Completion Transactions

Use the Completion Transactions window, Move Transactions window, and Inventory Transaction
Interface to move completed assemblies from work in process into subinventories. Completion
transactions relieve the valuation account of the accounting class and charge the subinventory
accounts (for example, finished goods) based upon the assemblys elemental cost structure.
Costing Assembly Completion Transactions Completions decrease work in process valuation and
increase inventory valuation at standard costs.
The accounting entries for completion transactions are:

Account
Debit
XX
Credit
XX
Earning Assembly Material Overhead on Completion

You can assign overheads based on Item, Lot or Total Value basis. For standard discrete jobs
and repetitive schedules, you can earn these overheads as you complete assemblies from work
in process to inventory.
The accounting entries for material overhead on completion transactions for standard
discrete jobs and repetitive schedules are:
Account
Subinventory material overhead account
Debit
XX
Credit
Inventory material overhead absorption

Account
XX
Use nonstandard expense jobs for such activities as repair and maintenance. Use nonstandard
asset jobs to upgrade assemblies, for teardown, and to prototype production. Nonstandard
discrete jobs do not earn overhead on completion. Since you have already earned overhead to
produce the assemblies as you are repairing or reworking, Work in Process prevents you from
double earning material overhead on these assemblies.
The accounting entries for material overhead on completion transactions for non
standard expense and nonstandard asset jobs are:
Account
Debit
Credit
Subinventory material overhead account
WIP accounting class material overhead account
XX
XX
Job Close Transactions

Until you close a job, or change the status of the job to Complete No Charges, you can make
material, resource, and scrap charges to the job. Closing a discrete job prevents any further
activity on the job.
Costing Job Close Transactions
Work in Process recognizes variances when you close a job. The actual close date you specify
determines the accounting period Work in Process uses to recognize variances. You can back
date the close to a prior open period if desired. The close process writes off the balances
remaining in the WIP elemental valuation accounts to the elemental variance accounts you
defined by accounting class, leaving a zero balance remaining in the closed job.
If there is a positive balance in the job at the end of the close, the accounting entries for a
job close are:
Account
Debit
Credit
WIP accounting class variance accounts
XX
XX
Period Close Transactions

The period close process in Inventory recognizes variances for nonstandard expense jobs and
repetitive schedules. It also transfers the work in process period costs to the general ledger.
Costing NonStandard Expense Job Period Close Transactions
You can close discrete jobs and recognize variances for nonstandard expense jobs at any time.
In addition, the period close process automatically recognizes variances on all nonstandard
expense job charges incurred during the period. Therefore, open nonstandard expense jobs
have zero WIP accounting balances at the start of a new period.
If there is a positive balance in the job at the end of the period, the accounting entries for non
standard expense jobs at period close are:
Account
Debit
XX
Credit
XX
Costing Repetitive Schedule Period Close Transactions

You do not close a repetitive schedule. However, you do recognize variances on a period basis
that result in zero WIP accounting balances at the start of the new period. You should check your
transactions and balances using the Repetitive Value Report before you close a period.
When you define Work in Process parameters, you can specify which repetitive schedule
variances you recognize when you close an
accounting period. You can either recognize variances for all repetitive schedules when you close
an accounting period, or recognize variances for those repetitive schedules with statuses of either
Complete No Charges or Cancelled.
Assuming positive balances in the repetitive schedules at the end of the period, the accounting
entries for repetitive schedules at period close are:
Account
Debit
Credit
XX
XX
Work in Process Standard Cost Update Transactions

The standard cost update process revalues standard and nonstandard asset discrete jobs and
updates pending costs to frozen standard costs. Repetitive schedules and nonstandard expense
jobs do not get revalued by the cost update.
The cost update creates accounting transactions by job and cost element valuation account.
Each standard and nonstandard asset discrete job is updated using the following formula:
Standard cost update adjustment = [new costs in (material, resource, outside processing,
and overhead charges)- new costs out (scrap and assembly completion charges)] - [old
costs in (material, resource, outside processing, and overhead charges) - old costs out
(scrap and assembly completion charges)]
If the result of the cost update is an increase in the standard cost of the job, the accounting
entries for a cost update transaction are:
Account
Debit
XX
WIP Standard cost adjustment account
Credit
XX
If the result of the cost update is a decrease in the standard cost of the job, the accounting entries
for a cost update transaction are:
Account
WIP Standard cost adjustment account
Debit
XX
Credit
XX
When the cost update occurs for open jobs, standards and WIP balances are revalued according
to the new standard, thus retaining relief variances incurred up to the date of the update.
Standard Cost Valuation

Inventory and Work in Process continually update inventory value with each transaction. Work in
Process balances are updated with each related accounting transaction. Inventory subinventory
values may be reported when the quantity movement occurs.
Value by Cost Element

Inventory or work in process value is maintained and reported on by distinct cost element (such
as material, material overhead, and so on), even if you assign the same general ledger valuation
account to each cost element. You can also report work in process value by cost element within
specific WIP accounting classes.
Standard Costing
Under standard costing, the value of inventory is determined using the material and material
overhead standard costs of each inventory item. If you use Bills of Material, Inventory maintains
the standard cost by cost element (material, material overhead, resource, outside processing,
and overhead).
Unlimited Cost Types

You can define an unlimited number of cost types and use them with any inventory valuation and
margin analysis reports. This allows you to see the potential effects of a cost rollup/update. You
can also update your standard costs from any of the cost types you have defined. When you use
Bills of Material with Inventory, you can specify the cost type in explosion reports and report these
costs for simulation purposes
Inventory and Work in Process Standard Cost Variances

This section describes Inventory standard cost variances and Work in Process standard cost
variances.
Inventory Standard Cost Variances

In general, Inventory records purchase price variance (PPV) and recognizes cycle count and
physical inventory adjustments as variances.
Purchase Price Variance (PPV)

During a purchase order receipt, Inventory calculates purchase price variance. In general, this is
the difference between what you pay the supplier and the items standard cost. Inventory
calculates this value as follows:
PPV = (PO unit price standard unit cost) - quantity received.
Inventory updates the purchase price variance account with the PPV value. If the purchase order
price is in a foreign currency, Inventory converts it into the functional currency of the inventory
organization and calculates the purchase price variance. Purchasing reports PPV using the
Purchase Price Variance Report. You distribute this variance to the general ledger when you
perform the general ledger transfer, or period close.
Invoice Price Variance (IPV)

In general, invoice price variance is the difference between the purchase price and the invoice
price paid for a purchase order receipt. Purchasing reports invoice variance. Upon invoice
approval, Payables automatically records Invoice Price Variance, to both invoice price
variance and exchange rate variance accounts.
Cycle Count and Physical Inventory

Inventory considers cycle count and physical inventory adjustments as variance. You distribute
these variances to the general ledger when you perform the general ledger transfer or period
close.
Work in Process Standard Cost Variances

Work in Process provides usage, efficiency, and standard cost adjustment variances.
Usage and Efficiency Variances

Usage and efficiency variances result when the total costs charged to a job or schedule do not
equal the total costs relieved from a job or schedule at standard. Charges occur from issues and
returns, resource and overhead charges, and outside processing receipts. Cost relief occurs from
assembly completions, scrap transactions, and close transactions.
You can view these variances in the Discrete Job Value report, the Repetitive Value report, and
by using the WIP Value Summary window.
Work in Process reports usage and efficiency variances as you incur them, but does not update
the appropriate variance accounts until you close a job or period. Work in Process updates the
standard cost adjustment variance account at cost update.
Usage and efficiency variances are primarily quantity variances. They identify the difference
between the amount of material, resources, outside processing, and overheads required at
standard, and the actual amounts you use to manufacture an assembly. Efficiency variance can
also include rate variance as well as quantity variance if you charged resources or outside
processing at actual.
You can calculate and report usage and efficiency variances based on planned start quantity or
the actual quantity completed. You can use the planned start quantity to check potential variances
during the job or repetitive schedule. You can use the actual quantity completed to
check the variances before the job or period close. Your choice of planned start quantity or actual
quantity completed determines the standard requirements. These standard requirements are
compared to the actual material issues, resource, outside processing, and overhead charges to
determine the reported variance.
Work in Process calculates, reports, and recognizes the following quantity variances:
Material Usage Variance

The material usage variance is the difference between the actual material issued and the
standard material required to build a given assembly, calculated as follows:
standard material cost - (quantity issued - quantity required)
This variance occurs when you over or under issue components or use an alternate bill.
Resource and Outside Processing Efficiency Variance

The resource and outside processing efficiency variances is the difference between the resources
and outside processing charges incurred and the standard resource and outside processing
charges required to build a given assembly, calculated as follows:
(applied resource units X standard or actual rate) - (standard resource units at standard resource
rate)
This variance occurs when you use an alternate routing, add new operations to a standard
routing during production, assign costed resources to No direct charge operations skipped by
shop floor moves, overcharge or undercharge a resource, or charge a resource at
actual.
Move Based Overhead Efficiency Variance

Move based overhead efficiency variance is the difference between overhead charges incurred
for move based overheads (overhead basis of Item or Lot) and standard move based overheads
required to build a given assembly, calculated as follows:
applied move based overheads - standard move based overheads
This variance occurs when you use an alternate routing, add operations to a standard routing
during production, or do not complete all the move transactions associated with the assembly
quantity being built.
Resource Based Overhead Efficiency Variance

Resource based overhead efficiency variance is the difference between overhead charges
incurred for resource based overheads (overhead basis of Resource units or Resource value)
and standard resource based overheads required to build a given assembly, calculated as
follows:
applied resource based overheads - standard resource based overheads
This variance occurs when you use an alternate routing, add new operations to a standard
routing during production, assign costed resources to No direct charge operations skipped by
shop floor moves, overcharge or undercharge a resource, or charge a resource at actual.
Standard Cost Adjustment Variance

Standard cost adjustment variance is the difference between costs at the previous standards and
costs at the new standards created by cost update transactions.
Standard and Average Costing Compared

Cost Management offers two costing methods: standard costing and average costing.
Average costing is used primarily for distribution and other industries where the product cost
fluctuates rapidly, or when dictated by regulation and other industry conventions.
Average costing allows you to:
value inventory at a moving average cost
track inventory and manufacturing costs without the requirement of having predefined
standards
determine profit margin based on an actual cost method
measure the organizations performance against historical costs
include all direct costs of manufacturing an item in that items inventory cost
Use standard costing for performance measurement and cost control. Standard costing
allows you to:
value inventory at a predetermined cost
determine profit margin based on projected costs
record variances against expected costs
update standard costs from any cost type
evaluate production costs relative to standard costs
measure the organizations performance based on predefined product costs
evaluate product costs to assist management decisions
Under average costing, you cannot share costs. Average costs are maintained separately in each
organization. Under standard costing if you use Inventory without Work in Process,you can define
your item costs in the organization that controls your costs and share those costs across
organizations. If you share standard costs across multiple organizations, all reports, inquiries, and
processes use those costs. You are not required to enter duplicate costs.
Note: The organization that controls your costs can be a manufacturing organization that uses
Work in Process or Bills of Material. Organizations that share costs with the organization that
controls your costs cannot use Bills of Material.
Valuation Accounts and Cost Elements with Average Costing

The system maintains the average unit cost at the organization level; it does not use any
subinventory valuation accounts. If you had separate valuation accounts by subinventory, total
inventories would balance, but account balances by subinventory would not match the inventory
valuation reports.
Note: Cost Management enforces the same account number for organization level material and
intransit accounts. Otherwise the balances of inventory valuation reports do not
equal the sum of accounting transactions.
Changing from Standard to Average Costing

Once transactions have been performed you cannot change the costing method of an
organization in the Organization Parameters window in Oracle Inventory.
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Receivables
Accounting for Transactions
This essay describes the accounting entries created when you enter transactions in Receivables
using the Accrual method of accounting.
Invoices
When you enter a regular invoice through the Transaction window, Receivables creates the
following journal entry:
DRReceivables
CRRevenue
CRTax(Ifyouchargetax)
CRFreight(Ifyouchargefreight)
If you enter an invoice with a Bill in Arrears invoicing rule, Receivables creates the following
journal entry:
In the first period of Rule:
DRUnbilledReceivables
CRRevenue
In all periods of Rule:

DRReceivables
CRUnbilledReceivables
If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following
journal entries:
DRReceivables
CRUnearnedRevenue
DRUnearnedRevenue
CRRevenue
Receivables uses the Freight, Receivable, Revenue, Suspense, Tax, Unbilled Receivable, and
Unearned Revenue accounts that you specified in your AutoAccounting structure.
Credit Memos
When you credit an invoice, debit memo, or chargeback through the Credit Memos window,
Receivables creates the following journal entry:
DRRevenue
DRTax(ifyoucredittax)
DRFreight(ifyoucreditfreight)
CRReceivables
When you credit a commitment, Receivables creates the following journal entries:
DRRevenue
CRReceivables
When you enter a credit memo against an installment, Receivables lets you choose between the
following methods: LIFO, FIFO, and Prorate.
When you enter a credit memo against an invoice with invoicing and accounting rules,
Receivables lets you choose between the following methods:
LIFO, Prorate, and Unit.
If the profile option Use Invoice Accounting for Credit Memos is set to Yes, Receivables
credits the accounts of the original transaction. If this profile option is set to No, Receivables
uses AutoAccounting to determine the Freight, Receivables Revenue, and Tax accounts.
Receivables uses the account information for onaccount credits thatyou specified in your
AutoAccounting structure. Receivables let you update accounting information for your credit
memo after it has posted to your general ledger.
Receivables keeps the original accounting information as an audit trail while it creates an
offsetting entry and the new entry.
Commitments
Deposits
When you enter a deposit, Receivables creates the following journal entry:
DRReceivables(Deposit)
CRUnearnedRevenue
These accounts come from the deposits transaction type. When you enter an invoice against this
deposit, Receivables creates the following journal entries:
DRReceivables(Invoice)
CRRevenue
DRUnearnedRevenue
CRReceivables(Invoice)
When you apply an invoice to a deposit, Receivables creates a receivable adjustment against the
invoice. Receivables uses the account information you specified in your AutoAccounting
structure. When cash is received against this deposit, Receivables creates the
DRCash
CRReceivables(Deposit)
Guarantees
When you enter a guarantee, Receivables creates the following journal entry:
DRUnbilledReceivables
CRUnearnedRevenue
These accounts come from the guarantees transaction type.When you enter an invoice against
this guarantee, Receivables creates the following journal entry:
CRRevenue
DRUnearnedRevenue
CRUnbilledReceivables
When you apply an invoice to a guarantee, Receivables creates a receivable adjustment against
the guarantee. These accounts come from your guarantees transaction type.
When cash is received against this guarantee, Receivables creates the following journal entry:
DRCash
Receipts
When you enter a receipt and fully apply this receipt to an invoice, Receivables creates the
DRCash
CRReceivables
When you enter an unapplied receipt, Receivables creates the following journal entry:
DRCash
CRUnapplied
When you enter an unidentified receipt, Receivables creates the following journal entry:
DRCash
CRUnidentified
When you enter an onaccount receipt, Receivables creates the following journal entry:
DRCash
CROnAccount
When your receipt includes a discount, Receivables creates the following journal entry:
DRReceivables
CRRevenue
DRCash
CRReceivables
DREarned/UnearnedDiscount
CRReceivables
Receivables uses the default Cash, Unapplied, Unidentified, OnAccount, Unearned, and Earned
accounts that you specified in the Remittance Banks window for this receipt class. When you
enter a receipt and combine it with an onaccount credit, Receivables creates the following
journal entry:
DRCash
DROnAccount
When you enter a receipt and combine it with a negative adjustment, Receivables creates the
following journal entries:
DRCash
DRWriteOff
You set up a Write Off account when defining your Receivables Activity.
When you enter a receipt and combine it with a positive adjustment, Receivables creates the
following journal entries:
DRCash
CRWriteOff
When you enter a receipt and combine it with a Chargeback, Receivables creates the following
journal entries:
DRCash
DRReceivables(Chargeback)
DRChargeback
CRReceivables(Chargeback)
You set up a Chargeback account when defining your Receivables Activity.
Remittances
When you create a receipt that requires remittance to your bank, Receivables debits the
Confirmation account instead of Cash. An example of a receipt requiring remittance would be a
check before it was cashed. Receivables creates the following journal entry when you enter such
a receipt:
DRConfirmation
CRReceivables
You can then remit the receipt to your remittance bank using one of the two remittance methods:
Standard or Factoring. If you remit your receipt using the standard method of remittance,
Receivables creates the following journal entry:
DRRemittance
CRConfirmation
When you clear the receipt, Receivables creates the following journal entry:
DRCash
DRBankCharges
CRRemittance
If you remit your receipt using the factoring remittance method, Receivables creates the following
journal entry:
DRFactor
CRConfirmation
When you clear the receipt, Receivables creates a short term liability for receipts which mature at
a future date. The factoring process let you receive cash before the maturity date, and assumes
that you are liable for the receipt amount until the customer pays the balance on maturity
date. When you receive payment, Receivables creates the following journal entry:
DRcash
DRBankCharges
CRShortTermDebt
On the maturity date, Receivables reverses the short term liability and creates the following
journal entry:
DRShortTermDebt
CRFactor
Adjustments
When you enter a negative adjustment against an invoice, Receivables creates the following
journal entry:
DRWriteOff
When you enter a positive adjustment against an invoice, Receivables creates the following
journal entry:
CRWriteOff
Debit Memos
When you enter a debit memo in the Transaction window, Receivables creates the following
journal entries:
DRReceivables
CRRevenue(Ifyouenterlineamounts)
DRReceivables
CRFinanceCharges
OnAccount Credits
When you enter an onaccount credit in the Credit Memo or the Transaction window, Receivables
creates the following journal entry:
DRRevenue(Ifyoucreditlineamounts)
DRTax(Ifyoucredittax)
DRFreight(Ifyoucreditfreight)
CRReceivables
Receivables use the Freight, Receivable, Revenue, and Tax accounts that you specified in your
AutoAccounting structure.
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Accounting Entries in all modules Inventory , Purchasing ,

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Inventory Standard Costing

Example: The recoverable cost is $4,000 and the method is

Current and Prior Period Addition

Merge Mass Additions

asset cost account)

Cr. Asset Clearing

ConstructionInProcess (CIP) Addition

Deleted Mass Additions

Oracle Assets CAPITALIZED IN PERIOD ADDED

Oracle Assets CAPITALIZED AFTER PERIOD ADDED

Asset Type Adjustments

Cost Adjustments to Assets Using a LifeBased Depreciation Method

Cost Adjustments to Assets Using a FlatRate Depreciation Method

Cost Adjustments to Assets Using a Diminishing Value Depreciation

Cost Adjustments to Assets Depreciating Under a Units of Production

Cost Adjustments to Capitalized and CIP Source Lines

Transfer Source Lines Between Assets (Prior Period)

Oracle Assets ADJUST DEPRECIATION ON ASSET #1

Transfer Source Lines Between Assets (Current Period)

Cost Adjustment by Adding a Mass Addition to an Existing Asset

Depreciation Method Adjustments

Rate Adjustments FlatRate Depreciation Method

Rate Adjustments Diminishing Value Depreciation Method

Oracle Assets AMORTIZED

Dr. Depreciation Expense

Journal Entries for Transfers and Reclassifications

Current Period Transfer Between Cost Centers

Cost Center 200

Oracle Assets TRANSFER ASSET / ADJUST AND CHARGE DEPRECIATION

Current Period Transfer Between Balancing Segments

Cr. Asset Cost

Cost Center 200

Journal Entries for Retirements and Reinstatements

Depreciation for Retirements

Depreciation for Reinstatements

Current Period Retirements

Oracle Assets MULTIPLE GAIN/LOSS ACCOUNTS

Dr. Accumulated Depreciation

Oracle Assets SINGLE GAIN/LOSS ACCOUNT

Prior Period Retirement

Current Period Reinstatement

Prior Period Reinstatement

Assets Fully Reserved Upon Addition

NonDepreciated Capitalized/ConstructionInProcess (CIP) Assets

Journal Entries for Revaluations

Revalue Accumulated Depreciation

Oracle Assets REVALUATION

Retirement in Year 5, Quarter 4:

Accumulated Depreciation Not Revalued

Amortizing Revaluation Reserve

The effects of the revaluations are illustrated in the following table:

Revaluation of a Fully Reserved Asset

Revaluation with Life Extension Ceiling

Revaluation with a Revaluation Ceiling

Oracle Assets creates the following journal entries each period to

Journal Entries for Tax Accumulated Depreciation Adjustments

Work in Process Accounting Transactions

Item Cost At start of Production

Material Transactions, Return specific component : Return 2 defective units of component

Material Transactions , Issue Specific Component : Replace defective components with

Shop Floor Transaction, Reverse resource charge : Reverse Overcharge

Resource Charged at Standard Cost and variance accounted