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UnderstandingRetroactivePricing(DocID303758.1)

PURPOSE

ThisarticleisintendedtohelpinunderstandingthefunctionalityofRetroactive
PriceChange.

SCOPE&APPLICATION

Thisfeatureintroducedfrom11.5.10.Priorto11.5.10,thepricecanbechanged
onlyPO'swhichhavenotbeenreceived/invoiced.
11.5.10henceforth,CostManagementsupportsretroactivepricechangesinOracle
Purchasing.Overthelifeofpurchasingdocuments,pricescanchange.The
RetroactivePriceUpdateonPurchasingDocumentsconcurrentprogramautomatically
updatespurchaseordersandblanketreleasesretroactivelywithpricechanges.
ThisfunctionalityhelpsyoutochangethepriceinthePOevenafterthePO
isreceivedorinvoiced.

RETROACTIVEPRICING

TouseRetroactivePricingfeaturesetthefollowingprofileoptiontoYes.

PO:AllowRetroactivePricingofPOs

Theprofilecanbesettothefollowingoptions:

1.ALLRELEASES
2.NEVER(ornotset)
3.OPENRELEASES

TousethisfeatureitshouldbesettoALLRELEASES.
In11.5.9,youonlyhavetheoptionsasNeverandOpenReleases.

TheRetroactivePriceUpdateonPurchasingDocumentsconcurrentprogram
(POXRPDP)isaConcurrentprogramrunfromthePurchasingresponsibilitywhich
automaticallyupdatespurchaseordersandblanketreleasesretroactivelywith
pricechanges.

Theparamtersinthisconcurrentprogramcanbethefollowing:
1.BasedonSupplier
2.BasedonBlanketAgreementNumber
3.BasedonrangeofItems
4.BasedonDateFrom(Datestartingfrom)

Theaccountingentriescreatedare:

ForInventoryDestinationtype:
DebitRetroactivePriceAdjustmentAccount
CreditAPAccrual

ForExpenseDestinationtype:
DebitChargeAccount
CreditAPAccrual

ForpurchaseorderswithadestinationtypeofInventory/Shopfloor,the
adjustmentaccountispostedtotheRetroactivePriceAdjustmentaccount.This
accountisdefinedattheorganizationlevelintheReceivingOptionswindow
inOraclePurchasing.

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Thefollowingaccountsandcostsarenotadjusted:

1.InventoryandWorkinProcessvaluationaccounts
2.CostsarenotrecalculatedinAverageandLIFO/FIF0costorganizations.
3.Purchasepricevariance

ForInventoryandShopFloordestinationtypes,InventoryandWIPvaluation
accountsarenotadjusted.Instead,thebalanceispostedtoRetroactivePrice
AdjustmentAccount.

Considerthefollowingscenario:

ForanItemA
POCreatedprice=10
Quantity=10

CostPrice=15.
Accountshit:

Theaccountshitwouldbethefollowing:

Receiving:
CreditAPAccrualAccount100
DebitReceivingAccount100

Delivery
CreditReceivingAccount100
DebitInventoryValuationAccount150
CreditPurchasepricevariance50

ThispurchasepricevarianceisbecauseofthedifferenceinthePOpriceand
theItemCost.

NowthePOpriceischangedto12.

Theaccountshitwouldbe

Receiving:
CreditAPAccrualAccount120
DebitReceivingAccount120

Delivery
CreditReceivingAccount100
DebitInventoryValuationAccount150
CreditPurchasepricevariance50
CreditReceivingaccount20
DebitRetroactivepriceadjustmentaccount20

TechnicalInformation:

ImportantTable:

RCV_ACCOUNTING_EVENTS
RCV_Accounting_EventsstoresaccountingeventsfortheReceivingSubledger.
ThecorrespondingaccountingentriesarestoredintheRCV_Receving_Sub_Ledger
table.Accountingentriesmaybegeneratedwhenareceivingtransactionis
performed,whenaretroactivepricechangeisapprovedonaPO,andwhen
InvoicesarevalidatedforperiodendaccrualsinaSharedServices
procurementscenario.YoucanonlydeleterowsfromthistableusingthePurge
featureofOraclePurchasing.

FormsModified:

RCVSTDRO.fmbPurchasingSetupOrganizationReceivingOptions
CSTFDFCA.fmbCostPeriodicCostingSetupPeriodicCostAssignment

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Note271655.1PriceChangesOfAContractAreRetroactiveForBilledPeriods

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