8/29/2014

AR Adjustments : Details,setup, Flow, Accounting and API | OracleApps Epicenter

Recent Posts
Oracle E-Business Suite 12.2.4 is Now Available!
R12.2 :Modulus Check Validations for Bank Accounts
Revert R12.1.3 Homepage Layout to Link Style as in R12.1.1 or 11i
R12.2 : Transforming EBS Financials with Fusion Accounting Hub
Payment Acknowledgement Import : R12.2 out-of-box Feature
Blogroll
David Haimes
Floyd Teter
Steven Chan
Tim Dexter
Trioragroup Blog
Total Page View

News & Views

MCMC LLC Announces PPO Fusion Product Offering SYS-CON Media (press release)
Global Optical Fiber Fusion Splicer Industry Report 2014 SYS-CON Media (press release)
From the archive, 2006: Oracle takes on difficult balancing act as rivals rev up San Jose Mercury News
Oracle CEO Larry Ellison turns 70 with no retirement in sight PC Advisor
User Onlines
297 Users

AR Adjustments : Details,setup, Flow, Accounting and API

Posted on September 5th, 2008 by Sanjit Anand |

Print This Post |

Email This Post

Have you tried OracleappsHub in ipad/iphone/smart Phone? Don't wait. try it today

An Adjustment in AR is an amount added or subtracted from the amount due of an Invoice, Debit Memo, Chargeback, Deposit, or
Guarantee.
Oracle AR lets you create Automatic or Manual Adjustments.
Receivables lets you make either Positive or Negative Adjustments to your Invoices, Debit Memos, Chargebacks, Onaccount Credits,
Deposits, and Guarantees.
http://www.oracleappshub.com/accounts-receivable/ar-adjustments-detailssetup-flow-accounting-and-api/

5/11

8/29/2014

AR Adjustments : Details,setup, Flow, Accounting and API | OracleApps Epicenter

You can approve Adjustments that are within your approval limits and give pending statuses to Adjustments that are outside your
approval limits.
You can also automatically write off debit items that meet your selection criteria.
Business need for Adjustment
Its very similar to write-off. If there is any unapplied balance in invoice after application of receipt in small value for rounding off purpose
, that will be adjusted while making receipt application.
Or sometime, when Invoice amount is wrongly entered you can also add a line by adding or reducing amount.
These are very common across all industry.Telecom, Health care and retail sectors the need is very high for such functionality.
Prerequisites
To enable this Functionality you need to perform these step-up
You need to define adjustment activity

You need to define approval limits

Defining the Approval limits for Adjustments
Setup > Transactions > Approval Limits

You need to define adjustment reason lookups

How AR adjustment works
Lets try to understand how adjustment works in Oracle.

While Creation
http://www.oracleappshub.com/accounts-receivable/ar-adjustments-detailssetup-flow-accounting-and-api/

6/11

8/29/2014

AR Adjustments : Details,setup, Flow, Accounting and API | OracleApps Epicenter

When you create an adjustment activity an accounting segments is required.This is GL account that will be used as the
offset account. The other account used will be the Receivable REC account of the transaction being adjusted.As mention
above, you are allowed to adjust Invoices, Debit Memos and Credit Memos.
AR_ADJUSTMENTS_ALL table contains code_combination_id.
This is the code_combination_id of the Receivable account of the Invoice,Debit Memo, or Credit Memo the adjustment is
against.
The table contains the receivables_trx_id which identifies as adjustment transaction type.
When you create an adjustment the account that exists on the adjustment transaction type, at the moment the transaction is
created, is the one that will be used as the offset account.
Adjustments can be either negative or positive, and there should be always one and only row created on the
ar_adjustments_all table for each adjustment. On posted to GL this one row is used to create two transactions passed to
GL_INTERFACE table.
During Approvals
Approval required for adjustment , as part of pre-requsite setup.
You can create your own approval statuses, and they work as if they were interim approval steps.
The only approval that is recognized is the final one, which results in an 'A' in the status field on this table.
You must assign approval limits to users by currency.The limit should be in the range of negative adjustments amount to
positive adjustments amount on AR_ADJUSTMENTS_ALL table, there is a field named 'postable'. When you set the
status of an adjustment to 'A' for approved, this field should automatically be set to 'Y' for postable.
Once an adjustment is approved, it can be selected for posting to General Ledger.
This would be selected in a normal AR Gl transfer program posting run, providing it met the qualifications of being
approved, with a GL_date within the posting range, and had not been posted before (posting_control_id = -3).
During posting, the Receivable and offset transactions are created and passed to General Ledger table GL_INTERFACE.
On apply with a transaction
When you create an adjustment against a transaction, the customer_trx_id and payment_schedule_id on
AR_ADJUSTMENTS_ALL associates the adjustment with the transaction.
If an adjustment is approved with a status of 'R' for rejected, No impact on invoice balance and cann't proceed for GL
posting .
If an adjustment has not been approved with a status of 'A', it is a pending adjustment. The total of all pending adjustments
is stored in the amount_adjusted_pending on AR_PAYMENT_SCHEDULES_ALL, and is not reflected in a transaction
balance.
If an adjustment has been approved with a status of 'A', it is reflected in the amount_adjusted and the balance on
AR_PAYMENT_SCHEDULES_ALL.
Ways to Create Adjustment in Oracle
Creating Adjustment in Oracle can be performed by 3 options
1. Adjustment via Transaction Window
2. Adjustment via Receipt Application Window
3. Adjustment via API's Call
http://www.oracleappshub.com/accounts-receivable/ar-adjustments-detailssetup-flow-accounting-and-api/

7/11

8/29/2014

AR Adjustments : Details,setup, Flow, Accounting and API | OracleApps Epicenter

Option 1
Follow the path above to display the Account Details window. A Find window will appear on
top of the Account Details window. This will allow you to search for transactions based on a
number of criteria (including Transaction Number, Customer Name, and Amounts):
Navigation: Transactions > Transactions > Click Toolbar Find
Once you have entered your search criteria
click Find. Records matching you search will
be displayed in the Account Details window:

Select the invoice you wish to do adjustment (by clicking on the line) and click the Adjust
button. This will display the Adjustments screen:

Click in the Activity Name field and open the list of values and choose any one of them and then save the record.

http://www.oracleappshub.com/accounts-receivable/ar-adjustments-detailssetup-flow-accounting-and-api/

8/11

8/29/2014

AR Adjustments : Details,setup, Flow, Accounting and API | OracleApps Epicenter

Options 2 : Adjustment via Receipt Application Window

You can create customer Receipt and after finishing the Application of Invoice then click (B) Adjustments and system will
show same Adjustment windows and rest is similar to option 1.
Options 3 : By API Call
Public API Exist as third options which allows users to create, approve, update, and reverse adjustments for invoices using
simple calls to PL/SQL functions.
The Adjustment API has the following basic functionality via different API calls:
1.
2.
3.
4.
5.

Creating an adjustment (R11i & R12)

Modifying an adjustment (R11i & R12)
Approving an adjustment (R11i & R12)
Reversing an adjustment (R11i & R12)
Create line level adjustment (This is only applicable in case of R12)

We will take details of API's in Next Post.

http://www.oracleappshub.com/accounts-receivable/ar-adjustments-detailssetup-flow-accounting-and-api/

9/11