Standard Cost Update Adjusts Wrong Qty For Intransit - Causing Inventory Out-Of-Balance
Last updated on NOVEMBER 05, 2016
Applies to:Oracle Cost Management - Version 12.0.0 and later
Information in this document applies to any platform.
On : 12.0.4 version, Inventory Costing
Find When setting the Cost Cut-Off Date . Cost Update program is picking up pending intransit transaction. the issue is the fact that the Standard Cost Update used the wrong intransit quantity as the adjustment quantity. The adjustment quantity should have been zero, as any subsequent transactions in January were not costed, because the cost cut-off date was set. This is the issue (and bug) with the Standard Cost Update. The month-end balances, as stored in CST_PERIOD_CLOSE_SUMMARY, and as reported on the Period Close Reconciliation Report (see attached report), show a zero intransit balance for 31-Dec-2010 for this item. So by using the wrong adjustment quantity, the intransit valuation accounts are now out-of-balance.
When setting the Cost Cut-Off Date for 1-Jan-2011 in Dec 2010, and running the Standard Cost Update on 4-Jan-2011, the Standard Cost Update calculated the wrong onhand quantities for intransit. For simple Inter-Org transactions, using FOB Shipment settings, where we have done the Intransit Shipment, but not the Intransit Receipt, thus having quantities in Intransit at the time we ran the Standard Cost Update. This was proved by running the Intransit Value Report as of 31-Dec-2010 23:59:59, adding in the standard cost revaluation accounting entries from 4-10 January 2011, and then running the ending balances for the Intransit Value Report. The standard cost revaluation accounting entries are wrong because the calculated adjustment quantities for goods in Intransit are wrong.
The issue can be reproduced at will with the following steps:
1) Set the Cost Cut-Off Date
2) Run Intransit Value Reports to get beginning balances, for the two orgs (263 and 264 in this example). I tried to use Org 260 and 261 but I have unrelated stuck transactions for January 2011.
3) Make sure all prior month transactions are processed and close the inventory accounting periods for the two orgs (263 and 264)
4) Set a new pending cost for item 100020 of $3.00 in Org 264, since FOB shipment is used, Org 263 owns the inventory upon Shipment
5) Do an Intransit Shipment Transaction from Org 263 to 264
6) Run a Material Account Distribution Detail Report for orgs 263 and 264, showing no transactions for Feb-2011
7) Set the Do the Standard Cost Update for org 264
8) Run a Material Account Distribution Detail Report for orgs 263 and 264, showing the standard cost update transactions
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