EBS - Receipt Accounting R12

7/2/2021 Receipt Accounting R12 | Enterprise Resource Planning and Integrations BlogSpot
Enterprise Resource Planning

and Integrations BlogSpot

Receipt Accounting R12

 by Yogesh Pachpute
 December 29, 2017
 Purchasing
Brief Overview of Receipt Accounting

The following is a brief overview of the Receipt Accounting flow for either Perpetual Accruals (Online)
or Periodic Accruals (Period End). This overview does not contain information associated with
Encumbrance accounting. This overview is a brief summarization of the receipt accounting processes
and flow.
Receiving Flow
Receiving is essentially a two-step process – you receive onto your receiving dock and then the second
step is to deliver to either an Expense destination (like an office supply room) or to an Inventory
destination (like a subinventory in a warehouse). There are also intermediate steps in the receiving
flow process after receipt for Inspection capability to inspect the received items before delivering.
The accounting transactions essentially mirror the above receiving flow, to allow visibility of the various
liabilities as products, goods and services essentially flow through the receiving business processes
you will encounter accounting entries in various accounts for each step in each process.
Basic Definitions
The following are basic definitions which should be understood prior to analysis of the receipt
accounting flow:
Perpetual Accruals (Online)
This transaction is automatically recorded in your general ledger at the time of receipt (unless you
specified otherwise when setting up periodic costing). The inventory expense is recorded at delivery if
you use Standard Delivery and at receipt if you use Direct Delivery.
Inventory items are always accrued Online; expense items can be setup to accrue either Online or at
Period End as Purchasing optionally provides you with the ability to accrue non-inventory liabilities at
the time of receipt. If you choose at time of receipt, Purchasing records and accrued liability and
charges your receiving inspection account for each non-inventory receipt. This transaction is
automatically recorded in your general ledger at the time of receipt.
Periodic Accruals (Period End)
https://erp-integrations.com/2017/12/29/receipt-accounting-r12/ 1/15
Purchasing optionally accrues uninvoiced receipts of non-inventory items when you close a period. You can
choose which periods to process. At period end, Purchasing automatically creates a balanced journal entry
for each uninvoiced receipt.
When the Receipt_Accruals_Period-end is run it will generate accruals for all eligible distributions where
the following criteria is met:
a) quantity_received > quantity_billed
b) accrued_flag=’N’
c) shipment_closed_date not populated
Accrual Reconciliation and Write-Off
Purchasing and Inventory provide you with a complete reconciliation report of all of your accounts
payable accrual transactions. You can quickly identify any mismatched items and write-off accrual
transactions from your receiving, accounts payable, inventory, and work in process subledgers.
Expense Accrual Reporting
You can use the Uninvoiced Receipts Report to analyze your uninvoiced receipt liabilities for non-
inventory purchases when you create accrual entries for them in your general ledger. You can control
the amount of expenses you accrue by supplier and purchasing category. You can obtain detailed
information about the purchase order receipts you accrued during your accounting period.
Defining Default Accounts
Prior to implementing a receipt accounting model and entering transactions in Purchasing and
Inventory, you need to define the following accounts:
Receiving Account
Enter the general ledger account to record the current balance of material in receiving and inspection.
You define this in either the Define Organization or Receiving Options window (Nav > Setup >
Organizations > Receiving Options) to set up this account.
Note: This account was referred to previously as the Receiving Inspection Account in earlier releases.
It is considered the same account just the name has changed in later release. In the Oracle Purchasing
User’s Guide they use both account names interchangebly.
Inventory A/P Accrual Account
Enter a general ledger account to accumulate the inventory accounts payable accrual for this
organization. This is the account used by Purchasing to accrue your payable liability when you
receive your items.
This account represents your uninvoiced receipts and is usually part of your accounts payable
liabilities in the balance sheet.
Payable relieves this account when the invoice is matched and approved.
You define this in the Define Organization (Nav > Setup > Organizations > Organizations) in the
Other Accounts tab in the Organization Parameters form
Expense A/P Accrual Account
Enter a general ledger account to accumulate the expense accounts payable accrual for your
purchasing installation.
This is the account used by Purchasing to accrue your accounts payable liability for expense
items at time of receipt when your Expense Accrual Option is At Receipt, or at period-end when
your Expense Accrual Option is Period End.
This account represents your uninvoiced receipts and is usually part of your accounts payable
liabilities in the balance sheet.
Use the Purchasing Options window (Nav > Setup > Organizations > Purchasing Options) to set
up this account.
Purchase Price Variance Account
Enter a general ledger account to accumulate purchase price variance for this organization. The
purchase price variance account is usually an expense account.
This is the variance that you record at the time you receive an item in inventory, and is the
difference between the purchase order cost and an item’s standard cost. Purchasing calculates
purchase price variance as:
PPV = (PO unit price – standard unit cost) X quantity received
Other Accounts tab in the Organization Parameters form
Invoice Price Variance Account
Enter a general ledger account to accumulate invoice price variance for this organization. This is
usually an expense account.
Invoice price variance is the difference between the purchase order price for an inventory item
and the actual invoice price multiplied by the quantity invoiced:
Invoice Quantity x (Invoice Price – PO Price) x Invoice Exchange Rate.
Purchasing uses this account on the PO distribution when the requisition or purchase order is
created. When Payables creates accounting entries for the invoice, it uses the invoice price
variance account from the purchase order to record invoice price variance entries.
Other Accounts tab in the Organization Parameters form.
Exchange Rate Gain or Loss Accounts
Enter general ledger accounts to accumulate exchange rate gains or losses for this organization.
These are usually expense accounts.
Exchange rate gain or loss accounts are used to record the difference between the exchange
rate used for the purchase order and the exchange rate used for the invoice.
The exchange rate is taken from the purchase order only if the Invoice Match Option in the
purchase order Shipments window is Purchase Order.
If the Invoice Match Option is Receipt, the exchange rate is taken from the receipt.
These accounts can also be used in Payables to record gains and losses at payment time and
clearing time.
Use the Financial Options window (Nav > Setup > Organizations > Financial Options) to set up
this account.
Receipt Accounting Flows:
The following illustrates the accounts involved for the specific receiving and delivery transactional
accounting flow for typical receiving transactions.
Receive For Inventory
The receiving accounting entries for inventory destination receipts (Inventory) are:
Receive For Expense
The receiving accounting entries for expense destination receipts (Expense) are:
For expense destinations, the PO distribution accrual account is the Expense A/P Accrual Account set in
the Purchasing Options window. – VIMP
For inventory destinations, the purchase order distribution accrual account is the Inventory A/P accrual
account for the receiving organization. – VIMP
Delivery From Receiving Inspection to Inventory
With the Receiving Transactions window, you can move material from receiving inspection to
inventory.
Delivery From Receiving Inspection to Expense Destinations
With the Receiving Transactions window, you can also move material from receiving inspection to
expense destinations. The accounting entries are:
Purchase Order Receipt to Inventory
You can use the Receipts window to receive material directly from a supplier to inventory. This is referred to
as Direct Delivery.
Even though it is one step process to the user, it still consists of a receive and deliver transaction, it is just
isn’t transparent to the user.
Inventory uses the quantity and standard cost of the received item to update the receiving inspection
and subinventory balances. Here is the deliver portion of the Direct Delivery:
Purchase Order Receipt to Expense Destinations
You can use the Receipts window to receive material directly from a supplier to the expense destination.
This is referred to as Direct Delivery.
Even though it is one step process to the user, it still consists of a receive and deliver transaction, it is just
transparent to the user.
Here is the receive portion of the Direct Delivery:
Here is the deliver portion of the Direct Delivery:
Accounting Flow For Receiving Returns
Return to Supplier From Receiving
You use the Returns window to return material from receiving inspection or from inventory to a
supplier.
If you use receiving inspection and you have delivered the material into inventory, you must first
return the goods to receiving before you can return to your supplier.
For a return from inspection, Purchasing decreases the receiving inspection balance, and reverses the
accounting entry created for the original receipt.
For example, for Return to Supplier from receiving for Expense Destination the accounting entries
would be:
Return To Supplier From Inventory or Expense Destinations
When you do not use receiving inspection, the return to supplier transaction updates the same
accounts as the direct receipt to the inventory or expense destination, with reverse transaction
amounts.
For example, for Return To Receiving for Expense Destination the accounting entries would be:
Accounting Flow For Receiving Corrections
Correction From Receiving
You use the Corrections window to correct transactions from receiving inspection or from inventory to
a supplier.
For a Correction, Purchasing places negative accounting entries to correct the original receiving
accounting against the receiving inspection balance and negative accounting entries against the A/P
accrual account created for the original receipt.
For negative Corrections against receiving for Inventory Destination the accounting entries would be
Correction From Inventory or Expense Destinations
When you do not use receiving inspection, the Correction transaction updates the same accounts as
the direct receipt to the inventory or expense destination, with negative transaction amounts for
negative corrections being made.
For example, for negative Corrections for Expense Destination the accounting entries would be:
For negative Corrections for Inventory Destination the accounting entries would be:
Note: Noted Correction Differences Between 11i and R12 Accounting
As per Oracle development : R12-RECEIPT CORRECTION DOES NOT CREATE NEGATIVE ACCOUNTING
ENTRIES, please note that, although in 11i the accounting data is directly posted to GL and the negative
correction transactions are displayed with negative values, in R12 the accounting is first posted to SLA
and then to GL. While posting to SLA, the accounting values are considered to be debit or credit merely
by their nature with respect to the account.
So a -ve credit from an account is basically a positive debit value with respect to that account. Thus,
when posted to SLA it gets posted as positive debit value. Similar is the case for -ve debit being posted
as +ve credit. This is the reason positive accounting entries can be seen in SLA. Only in base tables is it
seen the negative accounting entries. Please note that the accounting is by no means erroneous in this
case. As compared to 11i, this is not really a design change per se, its just how the accounting logic is
and how it is displayed in SLA.
If it is desired to recognize a negative correction txn in SLA, this can be done very easily by either
drilling down to the transaction or referring the primary quantity being displayed for that transaction
in the SLA report. For a negative correction txn, this value will be negative.
Note:
Positive corrections (essentially adding quantity to an existing receipt or delivery transaction) would
essentially be accounted similar to as being like a new receipt, the difference (delta) in the new
quantity would be newly accounted similarly to a receipt and delivery as noted above in the first
sections of this paper concerning receipt and delivery accounting flows.
Note:
If statutory or legislative requirements in your country or locale do not allow negative accounting
entries, you must seek relief via either localization support team or via customization. It is long
established functionality for negative corrections to yield negative accounting entries with Oracle
Applications.
Receipts Accruals-Period End
Use the Receipt Accruals – Period End process to create period-end accruals for your uninvoiced
receipts for expense distributions. Purchasing creates an accrual journal entry in your general ledger
for each uninvoiced receipt you choose using this form.
Each time you create accrual entries for a specific uninvoiced receipt, Purchasing marks this receipt as
accrued and ignores it the next time you run the Receipt Accrual -Period End process. Purchasing
creates accrual entries only up to the quantity the supplier did not invoice for partially invoiced
receipts.
As soon as you open the next period, Purchasing reverses the accrual entries using the following
accounting entries:
Match, Approve, and Create Accounting Entries for an Invoice
When you enter an invoice in Payables, you match each invoice distribution to a specific purchase
order distribution or to a purchase order distribution for a receipt transaction in Purchasing. You can
set up Payables to ensure that you pay only for the quantity you received.
If you accrue your uninvoiced receipts at period-end, Payables records the expense transactions part of
the accounting transactions.
Ref 1 : Oracle Purchasing User’s Guide, Chapter Overview Of Receipt Accounting.
Ref 2 : Doc ID 563100.1
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This entry was posted in Purchasing, Receiving Subledger and tagged Delivery From Receiving Inspection to
Expense Destinations, Delivery From Receiving Inspection to Inventory, Exchange Rate Gain or Loss Accounts,
Expense A/P Accrual Account, Inventory A/P Accrual Account, Invoice Price Variance Account, Purchase Price
Variance Account, Receipt Accounting R12, Receipts Accruals-Period End, Receive For Expense, Receive For
Inventory, Receiving Inspection Account, Return to Supplier From Receiving. Bookmark the permalink.
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7/2/2021 Receipt Accounting R12 | Enterprise Resource Planning and Integrations BlogSpot

Enterprise Resource Planning

Receipt Accounting R12

Brief Overview of Receipt Accounting

Perpetual Accruals (Online)

a) quantity_received > quantity_billed

c) shipment_closed_date not populated

Accrual Reconciliation and Write-Off

Expense Accrual Reporting

Inventory A/P Accrual Account

Expense A/P Accrual Account

Purchase Price Variance Account

PPV = (PO unit price – standard unit cost) X quantity received

Invoice Price Variance Account

Invoice Quantity x (Invoice Price – PO Price) x Invoice Exchange Rate.

Exchange Rate Gain or Loss Accounts

Receipt Accounting Flows:

Receive For Inventory

Receive For Expense

Delivery From Receiving Inspection to Inventory

Delivery From Receiving Inspection to Expense Destinations

Purchase Order Receipt to Inventory

Purchase Order Receipt to Expense Destinations

Here is the receive portion of the Direct Delivery:

Here is the deliver portion of the Direct Delivery:

Accounting Flow For Receiving Returns

Return to Supplier From Receiving

Return To Supplier From Inventory or Expense Destinations

Accounting Flow For Receiving Corrections

Correction From Receiving

Correction From Inventory or Expense Destinations

Note: Noted Correction Differences Between 11i and R12 Accounting

Receipts Accruals-Period End

Match, Approve, and Create Accounting Entries for an Invoice

Ref 1 : Oracle Purchasing User’s Guide, Chapter Overview Of Receipt Accounting.

Ref 2 : Doc ID 563100.1

Payroll Journal Entries

 Oracle Fusion HCM 2-Way, 3-Way and 4-Way PO- 

Enter your comment here...

Cash Management (4)

Concurrent Processing in R12 (4)

Fixed Asset (23)

General Ledger (19)

Linux Server Security and Maintenance (1)

Microsoft Windows Configurations (6)

Oracle Cloud Fusion Financial (11)

Oracle Database (2)

Oracle Fusion HCM (9)

Oracle Fusion HCM Technical (4)

Oracle Fusion Technical (9)

Oracle Installations (3)

Oracle Inventory (1)

Oracle SQL (4)

Order Management (1)

Payables Period Close (10)

Payables Reconciliation (10)

Perl and Unix Scripting (1)

Receivables Period Close (15)

Receiving Subledger (3)

SubLedger Accounting (25)

Supply Chain Managment (1)

TCA – DQM (1)

Useful SQL Scripts (4)