Material Transaction Distribution Concepts

1. Basic Data Objects

1.1. Material Transactions
ORACLE supports close to 150 Material Transactions and generates one Material Distributions for
each of them. Example of Material Transactions follows:
TRANSACT
ION TYPE
ID
1
2
3
4
5
32
42

Transaction Types
TRANSACTION TYPE NAME

Account issue
Subinventory Transfer
Direct Org Transfer
Cycle Count Adjust
Cycle Count Transfer
Miscellaneous issue
Miscellaneous receipt

2.2. Cost Elements

Item Costs may have the following components:
Cost Elements
COST
COST ELEMENT
ELEMENT
ID
1
Material
2
Material Overhead
3
Resource
4
Outside Processing
5
Overhead
For example an Item may have the standard cost as follow:
COST
ELEMENT
Material
Resource
Overhead
Total Costs

Cost
10
2
3
15

Each subinventory has associated one account combination per cost element to reflect the
valuation of the onhand quantity. For example in a particular subinventoty Onhand Quantities
may be associated to the following account combinations:
COST ELEMENT

Account Combination
100-0000-1410-00000000
100-0000-1450-00000000
100-0000-1420-00000000
100-0000-1430-00000000
100-0000-1440-00000000

Material
Material
Overhead
Resource
Outside
Processing
Overhead

2.2. Accounting Line Types

Every material transaction has an associated distribution. At execution time the cost manager
replace the Distribution Accounting Line Types by actual accounts combinations. Example of
Accounting Line Types are:
CODE
1
2
3
4
5
6
7
8

Accounting Line Type

MEANING
Inv valuation
Account
Overhead absorption
Resource absorption
Receiving Inspection
Purchase price variance or rate
variance
WIP valuation
WIP variance

2.3. Distributions
Every Material Transaction has an associated distribution that describe the GL Journal that will be
generated by the cost manager. Distributions are usually shown using Accounting Line Types.
An example. Miscellaneous Issue transactions are used to decrease item inventory quantities
against some account. For example it can be used to post a 100 Units free sample of the above
item given to charity. In this case the company probably wants post the value of those samples
to some expense account.
Material Distribution for the Miscellaneous Issue Transaction is as follow:
Accounting Line
Type
Inventory
Valuation
Account

Debit

Credit
XXX

XXX

Comment
Account Combination will be taken
from the Subinventory
Account Combination is Entered by

the User

For the example of 100 Units of the above items, with the above cost and Cost Element account
combinations, the Cost Manager will generate the following distribution.
Accounting Line
Type
100-0000-1410-00000000
100-0000-1420-00000000
100-0000-1440-00000000
100-0000-1234-0000000

Debit

1500

Credit

Comment

Inventory Valuation Material

1000 (100x10)
Inventory Valuation Resource
200 (100x2)
Inventory Valuation Overhead
300 (100x3)
Account Combination Entered by
the User

3. Another Example
3.1.

Item XX Test has the following costs

3.2.

Subinventory TEST has the following setup

3.3.

Miscellaneous Receipt Distribution is as follows

Miscellaneous Receipt
Accounting Line Type
Inventory Valuation
Account

Debit
XXX

Credit
XXX

3.4.

User enters the following Miscellaneous Receipt Transactions

3.5.

Miscellaneous Receipt Distribution is as follows:

Miscellaneous Receipt
Accounting Line Type
Inventory Valuation
Account

Debit
XXX

Credit
XXX

3.6.

Expected Miscellaneous Receipt Distribution is as follows:

Miscellaneous Receipt
Accounting Line Type
100-0000-1410-0000-0000
100-0000-1420-0000-0000
100-0000-5380-0000-0000
3.7.

Actual Distribution is:

Debit
1000
100

Credit

1100

4. Receiving Accounting Example

4.1.

Item XX Test has the following costs

4.2.

PO Receipt/Delivery Distributions follows

Material Item Receiving
Accounting Line Type
Debit

Receipt
Material Receiving Account
PO Accrual Account
Delivery
Inventory Valuation
Material Receiving Account
Purchase Price Variance
4.3.

Credit

XXX
XXX

XXX
XXX
XXX

Accounting Setup Follows:

4.3.1. Subinventory TEST has the following setup

4.3.2. Material Receiving Account (Operating Unit Receiving Options)

4.3.3. PO Accrual Account/Purchase Price Variance

4.3.4. Material Overhead

Material Overhead is Debit or Credit vs the Material Overhead Absortion Account

4.3.4. Accounting Setup Summary
Accounting Line Type
Material Receiving Account
PO Accrual Account
Purchase Price Variance
Material Overhead Absorption
TEST Subinventory Accounts
Inventory Valuation (Material)
Inventory Valuation (Material Overhead)
Inventory Valuation (Outside Processing)
Inventory Valuation (Overhead)
Inventory Valuation (Resource)

Value
100-0000-1411-00000000
100-0000-1470-00000000
100-0000-5210-00000000
100-0000-7880-00000000
100-0000-1410-00000000
100-0000-1420-00000000
100-0000-1450-00000000
100-0000-1430-00000000
100-0000-1440-00000000

5. User creates the following Purchase Order

Above PO has a Standard Receipt Route

6. PO is Received

7. PO is Delivered to Subinventory Test

8. Distributions
8.1. PO Receipt Expected Distributions
Material Item Receiving
Accounting Line Type
Account
Receipt
Material Receiving Account (10x15)
100-0000-14110000-0000
PO Accrual Account
(10x15)
100-0000-14700000-0000

Debit

Credit

150
150

8.2.

PO Receipt Actual Distributions

8.3.

PO Delivery Expected Distributions

Material Item Receiving

Accounting Line Type
Account
Delivery
Inventory Valuation (Material) (10x10)
100-0000-14100000-0000
Inventory Valuation (Material Overhead) 100-0000-1420(10x1)
0000-0000
Material Overhead Absorption (10x1)
Material Receiving Account (10x15)
100-0000-14110000-0000
Purchase Price Variance
100-0000-52100000-0000
8.4.

PO Delivery Expected Distributions

Debit

Credit

100
10
10
150
50