In this Document

Applies to:

Purpose

 The purpose of this document is to provide detailed Cost of Goods Sold (COGS) accounting information for various Return Material Authorizations (RMA) scenarios. Common and known issues are reviewed.

Scope

This document is for functional and technical users of Oracle Cost Management module who would want to understand the COGS dataflow and its accounting entries related to various RMA scenarios.

Details

1. Summary of RMA Accounting:

 Note:-

1.In case of Case  - 4, Standard Cost Adjustment Account will be credited at $2 ( 12-10). 

Standard Cost Adjustment is nothing but the difference between the Item cost at the time of Sales order and Referenced RMA Receipt.

The COGS account defined in the Organization Parameters window will be used for the Standard Cost Update Adjustment account.

2.Incase of Case  - 6(Ship Only Orders), once the line is closed, it insert a line in Cst_Revenue_recognition_lines(CRRL) table with Potentially_unmatched_flag as ‘U’. Once the Generate COGS rec program is run

  Potentially_unmatched_flag becomes ‘NULL’ and COGS transaction created in Mtl_material_transactions (MMT) and Cst_cogs_events (CCE) tables.

2. COGSDIAG.sql:

 The COGSDIAG.sql script is a collector script to gather detailed information on COGS and COGS Recognition transactions for a specific Sales Order. It is available in Data Collection Scripts for Cost Management (Doc ID 378348.1).

How to Interpret:

A. Check the Creation date and Transaction Date of Sales Order Issue, Revenue Recognition, RMA Receipt and COGS transaction.

B. Check COGS_PERCENTAGE and PRIOR_COGS_PERCENTAGE columns in CST_COGS_EVENTS table.

C. The TRANSACTION_DATE in MTL_MATERIAL_TRANSACTIONS table for COGS transaction depends on the LAST_EVENT_DATE in
   CST_REVENUE_RECOGNITION_LINES table.

• When the Collect Revenue Recognition Information program is run, it inserts a line in the CST_REVENUE_RECOGNITION_LINES (CRRL) table. This is populated by Accounts Receivables (AR) code.
• This is the Revenue Recognition date and can be checked from the RA_CUST_TRX_LINE_GL_DIST_ALL table, column name GL_Date.

D. The SO_ISSUE_ACCOUNT_TYPE column in MTL_MATERIAL_TRANSACTIONS table decides whether DCOGS (Deferred Cost of Goods Sold) or COGS (Cost of Goods Sold) account is used.

• Above column is populated by Inventory Code.
• A value of 2 indicates that the Sales Order Issue is done in Release 12, so DCOGS comes into picture.
• A value of 'NULL' indicates that the Sales Order Issue is done in Release 11i and the COGS account is used.

Refer to: 

Bug 13576673 - COGS RECOGNITION LINES NOT GENERATED AND DEFERRED COGS BALANCE IN GL INCREASES 

E. Event Types:

  Event Type 6 and 2: RMA Place holder and RMA receipt

      Scenario 1:  SO ISSUE = 10 quantity, RMA = 2 quantity
                        Event Type 6 – Event quantity is 10
                        Event Type 2 – Event quantity as -2
                        COGS Rec   for (10-2) 8

      Scenario 2:   SO ISSUE = 10 quantity RMA = 2 quantity
                         Event Type 6 – Event quantity is 10
                         Event Type 2 – Event quantity as -2
                         RMA for 4 quantity
                         Event Type 6 – Event quantity is 8 (10-2)
                         Event Type 2 – Event quantity as - 4 

Event Type 4: COGS Rec % Adj

The Sales Order Issue is done and the RMA is created with 0% COGS.
This means the collect revenue and generate COGS programs have not been run.
- To correct the backdated COGS transaction, adjustment event 4 is created.   

COGS adjustment event is created when,
- RMA is created for partial quantity of ordered/issued quantity.
- There are some cogs recognition event newly created with transaction date (event date) prior than RMA date . 

Run All 3 COGS programs before creating the partial quantity RMA receipt transaction inorder to avoid the issue if RMA is referenced to original sales order.   

Event Type 5: COGS Rec Qty Adj(SO ISSUE-RMA-REV and COGS)

The Sales Order Issue is done in the month of January.
Revenue recognition and COGS recognition is done on April.
In February the RMA is created and it is stuck in Material Transaction Interface (MTI) table.
In order to adjust this backdated RMA, event type 5 is created.                     

3. Standard Functionality:

A. Distribution is not created for COGS Recognition under the following scenarios:

i. The Sales Order Issue quantity and RMA quantity are equal and are in same or different period. [SO ISSUE > RMA > COGS]

ii. The Item costs is "ZERO" check the new cost in CST_REVENUE_COGS_MATCH_LINES table. It will be "Null".

iii. Both the COGS % and Prior COGS % are same (0 or any value) in CST_COGS_EVENTS table.

B. Manual AR invoices linked to a Sales Order are not considered for COGS recognition:

Only invoices created through Auto Invoice program are getting considered for COGS recognition.
This is not a bug, the matching between Receivables invoice (in AR) and Sales Order shipment is controlled by Order Management (OM).
If the AR invoice is not from OM, the link between AR and Inventory (INV) is not maintained.

4. Known Issues and Recommended Fixes:

   RMA and SO ISSUE are processed by two different request IDs:
     Patch 13806719:R12.BOM.C
  

Reference:

  BUG 13806719 - COGS RECOGNITION EVENTS QUANTITY ARE WRONG.

5. Recommended Patches:

It is recommended to apply the following Patches:

R12.0:

    Patch.12779598:R12.BOM.A CSTRCMVB.pls 120.37.12000000.51

R12.1.X:

    Patch.14180892:R12.BOM.C CSTRCMVB.pls 120.45.12010000.48

    Patch.14656876:R12.BOM.C CSTRCMVB.pls 120.45.12010000.64

Important Note:-