R12 Inventory - Average Cost variance and relevance of Prior costs in Mtl_material_transactions

Hi,

We are on R12.1.3 and using oracle Purchasing as well as inventory. We are using Average costing for valuation. I have couple of doubts

1. At what point of time account of average cost variance is hit apart from after running average cost update. I have observed that, even though there is a PO receipt or misc receipt, instead of debiting inventory valuation account, system has generated entries hitting 'Average cost Variance account.  As per the inventory guide, it was mentioned that this account will get debited when the inventory quantity /value turns negative. However this is not the case with the above example. Please clarfiy