Transition from Standard Costing to Actual (FIFO) Costing Impact on t... https://community.oracle.com/customerconnect/discussion/comment/5...

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Transition from Standard Costing to Actual (FIFO)

Costing Impact on the Enterprise Structure
Received Response 14 Views 6 Comments

Mohsin Patel-Oracle Member

Sep 17, 2021 12:03AM 6 comments

Summary:

Customer has Standard cost already implemented on their current System, they have plans in the future to
change the costing method to Actual(FIFO) Costing, will this have any impact on the current Enterprise
Structure, if so then how can this be managed?

Content (required):

Customer has Standard cost already implemented on their current System, they have plans in the future to
change the costing method to Actual(FIFO) Costing, will this have any impact on the current Enterprise
Structure, if so then how can this be managed?

1 of 6 18/11/22, 08:19
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Tagged: Cost Management, White Paper, Fusion, Implementer

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Answers

Srini Raghavan-Oracle Silver Trophy

Sep 17, 2021 12:25AM

The choice of cost method should not aLect the enterprise structure, ideally. Can you share
some additional details on the business rationale, use case, some details on your current setup,
and timelines by email to srini.raghavan at oracle.com?

Regards,

Srini

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Sam Napoli Bronze Trophy

Sep 17, 2021 2:12AM

A word of warning. Once you go live with Oracle Cloud, and an item has been costed in Oracle
Cloud, the item cost proPle (which determines the cost method) is locked. It cannot be
changed. In other words, you cannot change the cost method of an item once it's costed. You
have to create a new item.

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Thierry Lamote Silver Crown

Sep 17, 2021 2:27AM

Unless a new cost org/cost book association (enterprise structure) can be leveraged in
customer implementation context so that existing items have a diLerent cost method (Actual)
on a new cost book (?)...

This is possibly why Srini requested more details about current setup and timelines

Not that easy however...

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Srini Raghavan-Oracle Silver Trophy

Sep 17, 2021 3:56AM

@Sam - You are right. Once a cost proPle has been used in a transaction, one cannot change
cost method in that cost proPle. Creating a new set of items is an option, or like Thierry
suggested, we can create a new cost book with new set of cost proPles and reprocess all the
existing transactions in the new cost book. Depending on the business requirement, number of
items, and how long the customer has been using standard, we can devise an action plan for
this.

Srini

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Mohsin Patel-Oracle Member

Sep 17, 2021 4:04AM

3 of 6 18/11/22, 08:19
Transition from Standard Costing to Actual (FIFO) Costing Impact on t... https://community.oracle.com/customerconnect/discussion/comment/5...

@Srini

It is completing a transition that customer started in previous project to fully move from legacy
system into INV Cloud.

As part of initial conPguration and process, they enabled Standard cost (loaded into inv cloud
from legacy) to support intercompany ^ows (worth to mention that txns are mirrored from
legacy), so now they want to move into a more accurate costing (Actual/FIFO) to also start
doing inventory valuation at INV Cloud without impacting enterprise structure and PIM (eg. No
need of new inv or item orgs or new items)

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Srini Raghavan-Oracle Silver Trophy

Sep 17, 2021 4:16AM

Since there are transactions created for these items with standard cost, you will not be able to
change the cost method for these items. There is no out of the box capability to support such
changes, though it is in the roadmap (idea reference: h_ps://community.oracle.com
/customerconnect/discussion/comment/281579).

Srini

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