3 Replies Latest reply: Aug 26, 2014 8:28 AM by 970870 RSS

    Can I define a variance account when I create an Inventory Miscellaneous Transaction?

    Jon632

      Hi!

      In our business requirement, we need to reduce inventory then increase the same after some business processing. In order to reduce inventory, we use the inventory interface tables (miscellaneous issue )and call mtl_online_transaction_pub.process_online to process it online. After some business processing, we need to increase the same inventory by doing the same, add to interface tables (miscellaneous receipt) and call same procedure but a problem arises for costing, the cost may have been adjusted already during the time of miscellaneous receipt. Below is the GL entries:

      During miscellaneous issue

                                           Db       Cr

      Distribution Acct.               1

      Inventory Valuation                       1

       

      During miscellaneous receipt

      Inventory Valuation             2

      Distribution Acct.                         2

       

      Can we alter this to become like this?

      During miscellaneous receipt

      Inventory Valuation              1

      Variance Acct.                    1

      Distribution Acct.                          1

      Variance Acct.                              1

       

      Probably some parameters may be passed to the interface table to tell Create Accounting that a variance account will be used in this adjustment.

       

      Any idea or suggestion?

       

      Thanks.

        • 1. Re: Can I define a variance account when I create an Inventory Miscellaneous Transaction?
          970870

          Hi,

           

          Which costing method is set up? (Average costing I guess).

          At which cost do you want to receive material to Inventory in a given example? 1 OR 2? If it is 1, then just specify unit cost at receiving transaction, so cost at receiving transaction would not be dependent of current item cost. In that case you would have this accounting:

           

                                               Db       Cr

          Distribution Acct.               1

          Inventory Valuation                       1

           

          During miscellaneous receipt

          Inventory Valuation             1

          Distribution Acct.                         1

           

          Hope it helps.

           

          Regards,

          Marko

          • 2. Re: Can I define a variance account when I create an Inventory Miscellaneous Transaction?
            Jon632

            Marko,

             

            Thanks for the reply. We are using average cost.We should be receiving it at the current item cost (2) because if we receive it as 1, as you are explaining, this should trigger a change (i guess) in the cost of the item (current cost is 2, receiving cost is 1) and we certainly don't want that to happen.

             

            thanks.

            • 3. Re: Can I define a variance account when I create an Inventory Miscellaneous Transaction?
              970870

              Hi,

               

              First, it would be much easier to help if you would provide business case - why you issue and receive quantity.

               

              But - if you said - you want to receive item at cost 2 (since it is current average cost), that you MUST NOT have accounting as you described - Debit Inventory Valuation 1 + Debit Variance 1 since that would cause discrepancy between accounted value at Inventory valuation account (1) and onhand cost (2).

               

              Please describe the business case and I would be able to help you with a proper solution.

               

              Marko