Active Encumbrance Amount Considers the Tax of the Invoiced Amount (Doc ID 2968940.1)

Last updated on OCTOBER 04, 2023

Applies to:

Symptoms

Using Purchasing, when using encumbrance, according to <> R12: AP/PO: How to Troubleshoot Active Encumbrance on Finally Closed/Canceled POs in Payables, the formula for the active encumbrance amount does not take taxes into account:
Encumbered amount = (PO quantity * PO unit price * Currency rate) + (Non Recoverable Tax * Currency rate)
Active Encumbrance = Encumbered amounts - Reversals
It can be seen in version 12.2.12 that Purchase Orders, during a partial or total receipt, that Active Encumbrance Amount considers the tax of the invoiced amount, after accounting the invoice. In addition, Amount Billed doesn’t considers the tax.

STEPS
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1. Login to the E-Business Suite and choose the Purchasing Module.
2. Create and invoice Purchase orders in both 12.2.9 and 12.2.12 - both PO's have tax
3. In 12.2.12, there is still active encumbrance - but in 12.2.9, there is not, using same data for both

Changes

Cause

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