PPV From OSP Deliveries Hit Resource Variance Account Instead of Organization PPV Account
(Doc ID 551214.1)
Last updated on MARCH 13, 2023
Applies to:Oracle Cost Management - Version 22.214.171.124 to 12.2.12 [Release 11.5 to 12.2]
Information in this document applies to any platform.
Accounting distributions created for purchase price variance of OSP items are created for the
Variance Account from the OSP resource, not from the Organizational PPV Account. Example:
TXN_ID REF_ACCT WIP_ENTITY ACCTING_LINE_TYPE BTV
8006 1064 7002 4 Resource Absorption -795
8006 1068 7002 Valuation 530
8006 1165 7002 or Rate Variance 265
The REF_ACCT for the 3rd distribution line, PPV or Rate Variance, should be 1061 (acct 5221)
instead of 1165 (acct 5025).
Per Oracle_ Cost Management User’s Guide, Release 11i, Part No. A75088–04, March 2004, Page 4
– 59, the Purchase Price Variance Account is to be Debited/Credited for the difference between
the standard rate and the purchase order price (if the OSP Standard Rates option is enabled).
STEPS TO REPRODUCE
1) Set up OSP Resource with OSP Item. Enable Standard Rates and a Frozen Standard. Ensure the
Variance Account is not the same as the Organization PPV account.
2) Create Lot-Based job using the OSP Resource.
3) Move job to routing step that will drop OSP requisition.
4) Create PO from OSP requisition. Ensure PO price is different from the Resource standard.
5) Receive the entire PO line.
6) Observe that the account hit for the purchase price variance is the Resource Variance Account,
not the Organization PPV account.
- OSP Resource = 1834ASFS1
- OSP Item = ASM1834ASF-T-S1
- Costed with Standard Rate checked on
- Resource Variance natural account = 5025 (account_id = 1165).
- Organization PPV account = (5221) (account_id = 1061).
- Frozen Standard = .002
Lot Based Job Requirements:
- Job OACS06-1, Qty = 265,000
- Resource 1834ASFS1: Requirements = 265,000
- PO OACS080107A, Line 1
- Item ASM1834ASF-T-S1, Qty = 265,000, Price = .003 (.001 higher than Standard of .002)
PO Receipt Delivery
- Full quantity of 265,000 delivered to Job OACS06-1
WIP Account Distribution
- WIP Account Distributions reveals that the Resource Variance account (5025) was hit for $265
(265,000 x .001) rather than Org PPV account (5221).
It is expected that the Org PPV account will be hit by differences between Resource Standard and
PO Price. It is expected that the Resource Account will be used for tracking quantity or usage
differences (i.e. efficiency variances)
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