The deferred COGS account is the new feature introduced in Release 12.
The key fundamental behind the feature is that the COGS is now directly
matched to the Revenue. In simple terms, this means, COGS for an order
line will be recognized only if the revenue is recognized for that line
making sure that the revenue and COGS are posted in the same month.
Matching percentage is also taken care which ensures that revenue and
cost are always in sync.
SETUP > Inventory Resp > Setup > Organization > Parameters > Other Accounts
Here Enter Deferred COGS Account
STEP:
==========
1. Create Sales Order and do Pick Confirm
2. Complete Shipping Confirm Process and run interface trip stop Program.
Below two Accounts Will hit.
Cr > Inventory Valuation accoun
Dr > Deferred COGS Accoun
Go To Inventory responsibility and Review the Accounts in Material Transactions form.
3. Run Workflow Background Process and AutoInvoice Master Program to Create Invoice in AR.
Now AR invoice Got Created, But Revenue not yet Recognized.
Go To AR Resp > Control > Accounting And Search with Sales Order Number.
Revenue Not Yet Recognized.
4. Recognize the revenue in AR.
NAV > Accounts Receivables Resp > Control > Run "Revenue Recognition" Program.
After running the program, again check for Revenue.
5. Now we have to accept the Revenue.
Click on "Manage Revenue".
6. Run Below Set Of Concurrent Programs.
Record Order Management Transactions: records new sales order transaction activity such as shipments and RMA returns in Oracle Order Management.
Collect Revenue Recognition Information: determines the percentage of recognized or earned revenue related to invoiced sales order shipment lines in Oracle Receivables.
Generate COGS Recognition Events: creates and costs COGS recognition events for new sales order shipments/returns and changes in revenue recognition and credits for invoiced sales order shipment lines.
After Running ABove Programs, Verify "Material Transaction" Form. A non-physical transaction has been generated Transaction Type= COGS Recognition
Click on "Distributions" Button and verify Accounts.
Deffered COGS : Credit
COGS : Debit.
SETUP > Inventory Resp > Setup > Organization > Parameters > Other Accounts
Here Enter Deferred COGS Account
STEP:
==========
1. Create Sales Order and do Pick Confirm
2. Complete Shipping Confirm Process and run interface trip stop Program.
Below two Accounts Will hit.
Cr > Inventory Valuation accoun
Dr > Deferred COGS Accoun
Go To Inventory responsibility and Review the Accounts in Material Transactions form.
3. Run Workflow Background Process and AutoInvoice Master Program to Create Invoice in AR.
Now AR invoice Got Created, But Revenue not yet Recognized.
Go To AR Resp > Control > Accounting And Search with Sales Order Number.
NAV > Accounts Receivables Resp > Control > Run "Revenue Recognition" Program.
After running the program, again check for Revenue.
5. Now we have to accept the Revenue.
Click on "Manage Revenue".
Record Order Management Transactions: records new sales order transaction activity such as shipments and RMA returns in Oracle Order Management.
Collect Revenue Recognition Information: determines the percentage of recognized or earned revenue related to invoiced sales order shipment lines in Oracle Receivables.
Generate COGS Recognition Events: creates and costs COGS recognition events for new sales order shipments/returns and changes in revenue recognition and credits for invoiced sales order shipment lines.
After Running ABove Programs, Verify "Material Transaction" Form. A non-physical transaction has been generated Transaction Type= COGS Recognition
Click on "Distributions" Button and verify Accounts.
Deffered COGS : Credit
COGS : Debit.
Hi,
ReplyDeleteIs COGS relates to depletion of stock ?
You Mean Company Stock Price, Yes it well effect Stock.
DeleteNice doc and nicely made..Appreciated
ReplyDeleteits very nice doc for understanding the concept
ReplyDeleteWhat would be the business scenerio of Deffered CoGS and COGS
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