How to deal with Invoice Price Variance

Dear All,

We are using ORACLE EBS R.12.1.2. DB: 11.1.0.7 For some organizations we are using average costing method. and Landed Cost Management enabled.

If there are differences in unit price between PO and invoice We do the following:

1. Match the PO items with its PO receipt, and change the item unit cost to its actual cost.

Then we use the landed cost management and run the following 2 programs to update item average cost with its actual cost. <Matches Interface Import> and <Submit Pending Shipments>.

Now; since the accounting entry will Dr/Cr IPV account with the difference. The IPV is a little bit confusing for average costing in the following areas: