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What are the accounting entries in a Procure to Pay cycle when the PO shipment is enabled for
Landed Cost Management?
These accounting entries can be viewed from Receiving Transaction summary >
Transactions > Tools > View Accounting
These entries get created in rcv_receiving_sub_ledger
These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts
Once the Actual Landed Cost is calculated, LCM will populate this information in
cst_lc_adj_interface with rcv_transaction_id corresponding to the receipt to which the invoice is
matched. Then the adjustment entries would get created as given below on running the Landed
Cost Adjustment Processor
These accounting entries can be viewed from Receiving Transaction summary >
Transactions > Tools > View Accounting
These entries get created in rcv_receiving_sub_ledger
If this Average cost update happens for updating the item cost with the difference between
Actual and Estimated landed cost for an item which has 0 or negative on-hand quantity, then the
accounting entries would be as follows:
These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts
The link between the Receiving transaction and Average Cost update is done through
txn_source_line_id. Rcv_transaction_id of deliver transaction is stamped as
txn_source_line_id in mtl_material_transactions for the LCM adjustment transaction
which has the transaction type as Average Cost Update.
– Default Charge a/c DR @ invoice price (This charge a/c is defined in Receiving options)
– Liability a/c CR @ invoice price
6. Perform Return transaction or negative correction after invoice is accounted and actual landed
cost is calculated
These accounting entries can be viewed from Receiving Transaction summary >
Transactions > Tools > View Accounting
These entries get created in rcv_receiving_sub_ledger
These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts
Note:
1. Estimated and Actual Landed Cost are always inclusive of PO price and Non-Recoverable tax.
2. Landed Cost Absorption account need not be having zero balance at the end of this procure to
pay cycle in LCM enabled organization. It will be zero only if default charge a/c defined in
Receiving options is same as the landed cost absorption a/c and Actual landed cost is same as the
Estimated landed cost.
3. Accounting entries for Expense POs and Shopfloor destination POs has no impact as Landed
Cost Management is not applicable for Purchase Orders with Expense and Shopfloor destination.
4. Landed Cost Management has no impact on the Encumbrance Accounting as the PO gets
reserved at PO price and it gets reversed at PO price only even though the actual charge account
get hit at landed cost.
5. Retroactive Pricing is not supported in LCM enabled organization and hence retroactive price
update program will not create the retroactive price adjustment entries in Receiving subledger for
the receiving transactions created.