Cost Management - EBS (MOSC)

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Rental HW and COGS Recognition

edited Dec 26, 2015 10:01AM in Cost Management - EBS (MOSC) 6 commentsAnswered
Good afternoon,

I have this issue.

We are renting HW.

Our BOM is composed by

ATO (ITEM) (HW) and Two Service Items.

We book the order in this way

1) ATO (ITEM) 0 Price     (Ratable Recognition - 1 YEAR)

1.1) SERV1      10 USD  (Ratable Recognition - 1 YEAR)

1.2) SERV2       5 USD (Ratable Recognition - 1 YEAR)

Because is a RENTAL we cannot recognize the REVENUE IMMEDIATLY, so According to US GAAP we need to DEFER THE REVEUE and the GOGS over the rental time.

But Oracle is not doing this.

The System, once the sales order has been invoiced and the Revenue recognition has been run and the COGS process has been performed, instead of deferring the COGS, recognize it immediatly.

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