Perpetual Average Cost and retroactive PO price adjustment
We are using Oracle Fusion Cost Management Cloud with the Perpetual Average Cost method and have encountered an issue related to retroactive purchase order price adjustments:
- When buyers update the PO price after receipt, the system triggers an acquisition cost adjustment.
- However, this adjustment does not correctly update the average cost, even though there is no depletion at the incorrect cost.
- To bring the average cost to the correct level, we perform a manual cost adjustment, which hits the Inventory Valuation Account.
This results in the Inventory Valuation Account being impacted twice:
- Once by the system-generated acquisition cost adjustment
- Again by the manual cost correction
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