Update project owning organization after labour cost accounted –reversal entries not created correct

Summary:

We are encountering a situation in which projects are initiated with minimal information before work begins, and employees subsequently record their labour costs against these projects. At a later stage, when a new organization is created or shared by the finance team, the project team updates the owning organization to this new entity. As a result, previously created accounting entries are not reversed to reflect the old cost centre, leading to inaccurate accounting records and an impact on balances.

Could anyone please advise on how best to address and manage such cases?

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