ERP - FIN - 500 - Accounting Flows

Financial Accounting Flows
Oracle ERP Cloud
Presenter’s Name
Presenter’s Title
Oracle Consulting
Month 00, 2018
Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Agenda
1 Introduction
2 Summary
3 Accounting Flows

Introduction
• Oracle ERP Cloud consists of multiple inter-related modules
• Decisions made in one area can have an impact in other areas e.g.
o HCM Structure – how does it relate to Finance requirements?
o PPM & Order Management with Receivables
o GL Cross-validation rules with everything
• In the presentation we refer to Account. This means the full account code string containing
Entity, Cost Centre, Natural Account, etc. (Also known as the nominal code)
Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 4

Introduction
• As part of the configuration discussions we will ask you to make decisions on accounting, based
on your accounting policies e.g.
– What’s the source of the account value?
– Are these consistent for all transactions?
• The purpose of this presentation is to help you understand those decisions and provide
guidance, enabling you to give us the input required for configuration of the accounting flows

Key
• The following legends are used within this presentation
Accounting flow
Fixed assets An ERP Module Transaction Flow
External External system Lines where the usual destination

systems feeding into the ERP is the P&L are marked in blue
Encumbrance Generates ‘virtual’ Where within a process flow transactions happen in

Accounting transactions different modules, these are flagged in red
Not a standalone module but Invoice Transaction

Intercompany has an accounting impact
Receipt Accounting High Level Process

Agenda
1 Introduction
2 Overview
3 Accounting Flows

External
Overview Accounts Payabl
systems
es
Revenue Manag
ement
Expenses Project Performa Intercompany
nce Managemen
t
Supply Chain M Accounts Receiv External

Procurement anagement able systems
Fixed Assets Cash Manageme

nt
Human Capital
Management
Payroll Subledger Accounting (SLA) Accounting Hub
Encumbrance Ac
External counting
systems General Ledger
Data flow Accounting flow

Agenda
1 Introduction
2 Overview
3 Accounting Flows

Procure to Pay
(Procurement and Account Payables)

Home
Procure to Pay Accounting Flows

Requisition Generates charge account
Approval
Intercompany & Expenses
Purchase Order
Fixed Assets
+
Projects
Cost Accounting
+ Receipt Accounting Invoices/Credit Memo
Projects
Direct coding for non-PO invoices
Multi-Period Accounting
Matching
Prepayments
Payments
Accounting flow
Cash Management Transaction Flow

Key
Module
Procure to Pay with Encumbrance Accounting P&L accounts
Balance Sheet Accounts
Encumbrance accounting is optionally enabled when Budgetary Control is enabled for a ledger. It creates ‘commitment’ and ‘obligation’ journals which
reserve the ‘committed’ cost of a Purchase order from a budget’s funds until such time as costs become actual, either by matching to an invoice or when the
PO is receipted. These transactions are recorded in a separate cube
On Approval
Requisition (Optional)
Dr: Expense (Type ‘Commitment’)
CR: Encumbrance reserve
On Approval
Dr: Encumbrance reserve

Purchase Order CR: Expense (Type ‘Commitment’)
Dr: Expense (Type ‘Obligation’)

CR: Encumbrance reserve
Accrue on Receipt Invoice

Actual Or Accounting on the Invoice or
Dr: Encumbrance reserve Dr: Encumbrance reserve Receipt also happens as
CR: Expense (Type ‘Obligation’) CR: Expense (Type ‘Obligation’) normal
Home

Home
Receipt Accounting for Non-Inventory Transactions

Delivery
Accrue on
Receipt
receipt
Dr: Charge Account* Returns have the opposite

3 Way Match Order accounting
Cr: Receipt Accrual Control
Dr: Receiving Inspection
Cr: Receiving Inspection
Receipt Accounting
Delivery
Accrue at period-
Receipt Period-end Process

end
Unmatched
3 Way Match Order
No accounting happens Receipts Dr: Charge Account *
Cr: Receipt Accrual Control
Receipt Accounting
Module
*
From PO line
P&L accounts
Key
Account Payables Module
P&L accounts
Supplier Invoice Processing
Payables
Payments
Accrue at period-end Non PO invoice
Approval workflow
Invoices Invoice (Matched to PO) Invoice
Payables
matched to
PO Dr: Charge Account 1 Dr: Charge Account1
therefore Dr: Recoverable Tax2 Dr: Recoverable Tax2
Cr: Trade Creditors Cr: Trade Creditors Payment
approved if
price, Dr: Trade/Intercompany Creditors
ordered Dr/Cr: Realised Gains/Losses3
Accounting might not occur until holds are released and invoice is approved.
quantity Cr: Bank/Bank Clearing
and Accrue on receipt Intercompany
delivered
quantity
Invoice 3
Only if entered currency is not ledger
Invoice (Matched to PO) Invoice
currency
‘match’
Dr: Receipt Accrual Control Dr: Charge Account1
Dr: Recoverable Tax2 Dr: Recoverable Tax2
Cr: Trade Creditors Cr: Intercompany Creditors
1
Credit memo transactions are the reverse of these From PO line
2
Non-recoverable Tax will debit charge account Home

Key
Account Payables Multi-period Accounting Module
P&L accounts
Payables
Period charge is based

on the number of
Invoice periods indicated on
Period End
the invoice at posting
Dr: Prepayment Account time.
Dr: Charge Account (period charge)
Dr: Recoverable Tax [Invoice is updated
Cr: Prepayment Account
Cr: Trade Creditor with period end
accounting for
visibility]
Home

Key
Supplier Prepayment Module
P&L accounts
Invoice
Advance/Pro-forma Invoice
Dr: Charge Account
Dr: Prepayments Dr: Recoverable Tax
Cr: Trade Creditors Cr: Trade Creditors
Advance Payment Invoice Matching

Any outstanding balance
Dr: Trade Creditors Dr: Trade Creditors will be paid using
Cr: Bank/Bank Clearing Cr: Prepayments standard processes
Home

Fixed Assets

Home
Fixed Assets Accounting Flows

Requisition Generates charge account
Construction in Progress (CIP) Projects
Approval
Purchase Order Receipt Accounting
Invoices/Credit Memo Acquisition
Leases
Depreciation Adjustments
Retirement Receivables
Accounting flow
Transaction Flow

Key
Acquire Assets – Owned Assets Module
P&L accounts
Receipt Asset PO Create CIP Asset

Receipt Assets CIP Project
Accounting Dr: Asset Clearing Dr: CIP Control
Acquisition
Cr: Receipt Accrual Control Cr: Asset Clearing Projects Dr: CIP Project
Cr: GRN Control/Trade
Or P2P Creditors/Expenses etc
Direct Purchase
Dr: Asset Clearing

Payables Cr: Trade Creditors
Create Asset
Assets
Asset Lease
Dr: Asset Cost
Cr: Asset Clearing
Home

Key
Acquire Assets – Leased Assets Module
P&L accounts
(IFRS 16) Balance Sheet Accounts
Asset Creation Initial Lease Invoice
Dr: [Lease] Asset Cost (NPV of lease)

Lease
Create Lease Dr: Leased Asset Clearing

Cr: Leased Liability (Balance) Dr: Recoverable Tax
Assets Cr: Lease Asset Clearing (Initial Payment) Cr: Trade Creditors
Payables
These transactions can be

external or system generated
Home

Key
Utilise Assets – Capitalise assets Module
P&L accounts
Create CIP Asset

Assets CIP Project
Dr: CIP Control
Cr: Asset Clearing Projects Dr: CIP Project
Cr: GRN Control/Trade
P2P Creditors/Expenses etc
Capitalise CIP Asset Capitalise CIP Project
Assets Dr: Asset Cost Assets Dr: Asset Cost

Cr: CIP Control Cr: CIP Project
Home

Key
Utilise Assets – Period Charges Module
P&L accounts
Depreciation
Depreciate Asset
Assets Dr: Depreciation Expense

Cr: Accumulated Depreciation
These transactions can be

external or system generated
Lease Expenses
Assets Period End Process

Calculate Lease Expenses Recurring Invoice
Dr: Lease Expense (Period Charge)
Dr: Lease Liability (Principal Reduction) Dr: Leased Asset Clearing
Cr: Lease Asset Clearing (Period Charge) Dr: Recoverable Tax
Cr: Accumulated Depreciation (Principal Reduction) Cr: Trade Creditors
Home

Key
Utilise Assets - Adjustments Module
P&L accounts
Impairment
Impair Asset
Dr: Impairment Loss

Cr: Impairment Reserve
Revalue Assets and Revalue Assets Not Amortization of Revaluation Reserve (Only
Depreciation Depreciation if policy, not mandatory)
Revaluation
Revalue Asset Revalue Asset Depreciation
Dr: Asset Cost Dr: Asset Cost Depreciate revalued asset as

Or normal plus
Cr: Acc. Depreciation Dr: Acc. Depreciation
Cr: Revaluation Reserve Cr: Revaluation Reserve Dr: Revaluation Reserve
Cr: Revaluation Expense
Home

Key
Retire Assets Module
P&L accounts
Asset Cost Asset Depreciation
Assets Dr: Asset Disposal Assets Dr: Accumulated Depreciation

Cr: Asset Cost Cr: Asset Disposal
Disposal Proceeds
Receivables
Dr: Trade Debtors Profit/Loss On Disposal
Cr: Asset Disposal
Home

Expenses

Key
Expenses Accounting Flows Module

P&L accounts
Overhead Expense Entry Project Expense Entry
User selects expense type User selects project, task &
which generates account expense type
segment
HR Record generates the Accounting rules generate

rest of the account string the account string
Payables Payables
Dr: Item Expense Dr: Project Expense

Dr: Recoverable Tax Dr: Recoverable Tax
Cr: Trade Creditors Cr: Trade Creditors
Home

Payroll

Key
Payroll Accounting Flows Module

P&L accounts
Payroll/Timesheet Entry Payment
Payroll
Pay type generates account HR Record generates the
segment rest of the account string Dr: Payroll Control
Cr: Bank
Pension
Payroll Dr: Pension Liability

Cr: Bank
Dr: Salary Expense
Dr: Employer Pension Costs
Dr: Employer Tax Costs Pension
Cr: Payroll Control (Net Salary)
Cr: Pension Liability Payroll costs cannot be Dr: Tax Liability
Cr: Tax Liability directly charged to projects. Cr: Bank
Instead costs are charged
using a blended rate
Home

Order to Cash
Order Management and Account Receivables

Home
Order to Cash (Account Receivables) Accounting Flows

Customer Order Rais
ed
Intercompany,
Revenue
Management,
PPM & External
Invoice/Credit/Debit Mem
o
Adjustments
Receipts
Cash Management

Key
Bill Customers – Non PPM Invoices Module
P&L accounts
Customer Invoice Processing
Receivables
Deferred Revenue
Invoice/Debit Memo Invoice
Dr: Trade Debtors Dr: Trade Debtors

Cr: Recoverable Tax Cr: Recoverable Tax
Cr: Revenue Cr: Deferred Revenue
Revenue recognition criteria achieved
Intercompany Revenue Recognition

Invoice
Invoice Dr: Deferred Revenue GL
Cr: Revenue
Dr: Intercompany Debtors
Cr: Recoverable Tax
Cr: Revenue Also triggers transfer from Deferred COGS* to COGS
Credit memo transactions are the reverse of these *

Cost of Goods Sold Home

Key
Bill Customers – Multifund accounting Module
P&L accounts
Customer Invoice Processing
Receivables
Standard Accounting Multifund Accounting
Dr: BSV1.Trade Debtors

Cr: BSV1.Recoverable Tax
Cr: BSV1.Revenue
Cr: BSV1.Revenue
Cr: BSV2.Revenue
Cr: BSV2.Revenue
Home

Key
Process Customer Payments - Receipts Module
P&L accounts
Unapplied Receipt is
Unidentified Receipt is
where the customer is
where the customer is
identified but not the
not identified
transaction
Applied Receipt Unidentified Receipt Unapplied Receipt On Account Receipt
Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing
Dr: Earned Discount Cr: Unidentified Cash Cr: Unapplied Cash Cr: On Account Cash
Dr: Recoverable Tax*
Cr: Debtors On account cash is a payment in
advance e.g. a deposit.
It forms part of the debtors balance
*
On the discount element Apply Unapplied/On Account for reconciliation purposes but
payment should be considered a creditor for
year end reporting purposes and
Dr: On Account/Unapplied Cash therefore requires a separate natural
Cr: Debtors account
Home

Key
Process Customer Payments – Bills Receivables

Module
P&L accounts
Factored Remittance Factored Remittance

Create Bill Receivable On Remittance
(without recourse) (with recourse)
Dr: Bills Receivable Dr: Remitted Bills Receivable
Dr: Factored Bills Receivable Dr: Factored Bills Receivable
Cr: Trade Debtors Cr: Bills Receivable
Cr: Bills Receivable Cr: Bills Receivable
Applied Receipt Applied Receipt Applied Receipt Applied Receipt
Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing Dr: Bank/Bank Clearing
Cr: Bills Receivable Cr: Remitted Bills Receivable Cr: Factored Bills Receivable Cr: Short Term Debt
Risk Eliminated*
Dr: Short Term Debt

Cr: Factored Bills Receivable
*
Customer pays Home
Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 34
Key
Process Customer Payments - Adjustments Module
P&L accounts
Adjustments Processing
Receivables
Invoice/Line Adjustments Invoice Tax Adjustment Receipt Write off

Only
Dr: Revenue Dr: Write off Account
Dr: Recoverable Tax Dr: Recoverable Tax Cr: Trade Debtors
Cr: Trade Debtors Cr: Trade Debtors
Unearned Discount
Dr: Discount
Cr: Trade Debtors
Bad Debts Refund Payment Netting
Dr: Bad Debt Dr: Refund Clearing Account Dr: Netting Clearing Account
Cr: Trade Debtors Cr: Trade Debtors Cr: Trade Debtors
Home

Project Portfolio Management

Home
Project Portfolio Management Accounting Flows

Project costs are charged to a project, a
Requisition Generates charge account task and an expenditure type. Accounting
rules in the appropriate module determine
Approval the appropriate GL account for these.
Purchase Order Receipt Accounting1
Oracle Time and

Supplier Invoices/Credit Memo2 Project Costs
Labor
Project Revenue & Bil

ling Receivables
1
Accrue on receipt
2
Accrue at period end and direct posting
Accounting flow
Transaction Flow

Key
Project Costing Module
P&L accounts
Time Sheet Other Costs (from Payables) Miscellaneous Costs
Dr: Labor Cost Account Dr: Cost Account Dr: Cost Account
Cr: Labor Cost Clearing Account Cr: Receipt Accrual/Trade Creditors Account Cr: Misc Cost Clearing Account
Project Cost accounts can be either P&L or Balance Sheet depending on business requirements
Labor cost clearing account Used for the costing of non-PO or

usually sits within salary/wages in time related charges (labour and
the P&L. Time is charged on the non-labour)
basis of a blended rate
Home
Key
Project Revenue/Invoicing – IFRS 15 Module
P&L accounts
Revenue and Invoicing are two separate processes within PPM and
do not have to be processed at the same time for any given project.
Contract Identification
Dr: Contract Asset (Full Value) GL

Cr: Contract Liability
Revenue
Dr: Contract Liability

Cr: Project Revenue
Billing
Billing transactions are
Dr: Trade/Intercompany Debtors interfaced into AR and use AR
Cr: Contract Asset accounting rules
Home

Key
Project Revenue/Invoicing Module
P&L accounts
Revenue and Invoicing are two separate processes within PPM
and do not have to be processed at the same time for any given
project.
Revenue Billing
Billing transactions are
Dr: Unbilled Receivables Dr: Trade/Intercompany Debtors interfaced into AR and use
Cr: Project Revenue Cr: Deferred Revenue AR accounting rules
Billing Offset
Process to net off Reverses the following
unbilled receivables and Dr/Cr: Unbilled Receivables period until project is
deferred revenue. Cr/Dr: Deferred Revenue complete and contract
Based on the lower of is closed
the two values.
Home
Accounting Hub

Key
Accounting Hub Accounting Flows Module
P&L accounts
External Systems e.g. Payroll
Accounting hub
transforms imported
data from multiple
systems using the SLA AHCS
functionality.
Mapping of source to
ERP is therefore done in
ERP rather than before
import
Subledger Accounting
General Ledger
e.g.
Dr: Charge Account
Cr: Payroll Control Account
Home
Cash Management

Key
Cash Management Accounting Flows Module
P&L accounts
Cash Transactions
Dr/Cr: Bank
Cr/Dr: Charge Account Payables Receivables
Dr: Bank Clearing Dr: Bank

Cr: Bank Cr: Bank Clearing
Bank Transfer
If clearing accounts are used for Payables or [less commonly] Receivables then
on reconciliation the reconciled transactions are journaled from the clearing
Dr/Cr: Bank
account to the bank account
Cr/Dr: Offset Account
Home

Revenue Management

Key
Revenue Management Accounting Flows Module
P&L accounts
IFRS 15 compliance through Revenue Balance Sheet Accounts
Management Cloud
Contract Identification
Dr: Contract Asset (Full Value)

Cr: Contract Liability
Performance Satisfaction
Dr: Contract Liability

Cr: Revenue (Appropriate %)
Billing
Accounts Receivable Dr: Debtors (Appropriate Value)
Cr: Contract Asset
Home
Supply Chain Management

Home
Supply Chain Management Accounting Flows

Order Management
(Shipping)
Receiving (PO and RMA)
Drop Ship
Manufacturing Inventory
(WIP)
Inter-Company Transfer
Inter-Org Transfer
Cost Accounting Receipt Accounting
Subledger Accounting
General Ledger

Key
Inventory and Manufacturing Manufacturing Processes Module
P&L accounts
Cost Accounting Balance Sheet Accounts
PO Receipt Work In Progress

Issue to WIP
Receipt Accounting
Dr: Receiving Inspection Dr: Work In Progress
Cr: Receipt Accrual Account Cr: (Raw Material) Inventory
WIP Progression
Delivery (to Stock)

Resource Transaction
Cost Accounting
Dr: Inventory (e.g. Raw Material)
Dr: Work In Progress
Cr: Resource Absorption
WIP Completion
Sale of Stock Finished Goods

Cost Accounting Dr: Cost Of Goods Sold Dr: Inventory
Cr: Inventory Cr: Work In Progress
Home
Receipt and Cost Accounting for Inventory Transactions Key
Receipt Delivery Module
P&L accounts
Receipt and
Delivery
Delivery
Returns have the opposite

Receipt Dr: Inventory Valuation 1 accounting plus
Receipt Cost Cr: Receiving Inspection Cr/Dr: Gain/Loss on Returns
Accounting Dr: Receiving Inspection Accounting Cr/Dr: Purchase Price Variance 2 where PO Line Price <> first
Cr: Receipt Accrual Control Cr/Dr: Overhead Absorption 3 (oldest) FIFO Layer Cost
1 2
This can be split by Cost Element (for For Standard Cost items:
example, when an Overhead is applied; Cr/Dr depending on whether
3
absorbed by this account). The PO line PO line price is less than or
charge account should represent the target greater than Standard Cost
Inventory Material Valuation Account
Invoice Match
3 Way Match Invoice Price Variance Invoice Price Variance

Order
with IPV
Dr: Invoice Price Variance Dr: Inventory Valuation/Write-Off/COGS 3

Receipt Cost
Cr: Receiving Inspection Cr: Receiving Inspection
Accounting Accounting
3
Depending on whether inventory is still
on-hand, and if not, whether
adjustments are posted (propagated) to Home
COGS
Receipt and Cost Accounting for Inventory Accrual Adjustments
Key
Module
P&L accounts
Accrual
Adjustment
Accrual Adjustment Accrual Adjustment

Adjustment
Accrual
Dr: Receipt Accrual Control Dr: Receiving Inspection

Receipt Cost
Cr: Receiving Inspection Dr: Inventory Valuation/Write-Off/COGS*
Accounting Accounting
*
Depending on whether inventory is still
on-hand, and if not, whether
adjustments are propagated to COGS
Home

Global Inventory Procurement: Inter-Company Example Key
Module
P&L accounts
Cost Accounting Receipt Accounting Cost Accounting
Buying Org
Trade in Transit Receipt Trade Receipt Accrual Trade in Transit Issue
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Intercompany COGS
Cr: Trade Clearing Cr: (AP) Accrual Cr: Trade in Transit Valuation
Cost Accounting Receipt Accounting Receipt Accounting Cost Accounting

Receiving Org
Trade in Transit Receipt Trade Receipt Accrual PO Receipt PO Delivery
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Receiving Inspection Dr: Inventory Valuation
Cr: Trade Clearing Cr: Intercompany Accrual Cr: Trade In Transit Valuation Cr: Receiving Inspection
Intercompany AP and AR Invoices produced in line with the Supply

Chain Financial Orchestration Flow clear the Intercompany Accrual and
post Intercompany Revenue, Receivable and Payable
Home

Key
Inventory - Adjustments Module

P&L accounts
Adjustments Processing
Inventory
Inventory Adjustments :
Miscellaneous Transactions, Physical Subinventory Transfers 4 Cost Adjustments :
Inventory and Cycle Count Adjustments Perpetual, Actual and Standard Cost
Source Subinventory Adjustments
Cr: Inventory Valuation 1
Cr: Inventory Valuation
Dr: Offset Dr: Offset (Valuation Unit Transfer Gain Loss) Cr: Inventory Valuation
Cr: Cost Variance 2 Destination Subinventory Dr: Standard Cost Adjustment/Offset 6
Cr/Dr: Misc Issue/Receipt Variance 3 Cr: Offset (Valuation Unit Transfer Gain Loss) assuming a negative cost adjustment;
assuming a negative adjustment; Cr/Dr Dr: Inventory Valuation Cr/Dr reversed for a positive adjustment
reversed for a positive adjustment Cr/Dr: Valuation Unit Transfer Variance 5
1
Inventory Valuation may be split by Cost Element
e.g. where Overheads have been applied, or from
Manufacturing.
4
where the transfer is across Valuation 6
Depending on whether the cost adjustment
2
where the transaction’s cost (where specified) is Units, or where the Cost Profile has is for a Standard Cost, or a Perpetual
greater than the value of average or actual costed “Account Intravaluation Unit Transfers“ = Yes (Average)/Layer (Actual) Cost item.
inventory, or where inventory on-hand is negative
and transaction cost <> current cost 5
Where the Standard Cost is different in the
Source and Destination Subinventories
3
Where an item Standard Cost is different to the
transaction’s unit cost (where specified)
Home
Intra-Entity (Interorganization) In-Transit Inventory Transfer
Key
Cost Accounting @ Shipment Cost Accounting @ Shipment Module
P&L accounts
Shipping Org
Interorg In-Transit Shipment Trade In Transit Issue Balance Sheet Accounts
Dr: Trade in Transit Valuation Dr: Inter Org Receivables

Cr: Inventory Valuation Cr: Trade In Transit Valuation
Cost Accounting @ Shipment Receipt Accounting @ Receipt Receipt Accounting @ Receipt Cost Accounting @ Receipt
Receiving Org
Trade in Transit Receipt Trade Receipt Accrual In-Transit Receipt In-Transit Receipt
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Receiving Inspection Dr: Inventory
Cr: Trade Clearing Cr: Inter Org Payables Cr: Trade in Transit Valuation Cr: Receiving Inspection
Cr/Dr: Transfer Price Variance 1
1
Where the standard cost is different between
shipping and receiving organisations
Home
Intra-Entity (Interorganization) Direct Inventory Transfer
Key
Shipping Org
P&L accounts
Interorg In-Transit Shipment Trade In Transit Issue
Dr: Trade in Transit Valuation Dr: Inter Org Receivables
Cr: Inventory Valuation Cr: Trade In Transit Valuation
Cost Accounting @ Shipment Receipt Accounting @ Receipt Cost Accounting @ Receipt

Receiving Org
Trade in Transit Receipt Trade Receipt Accrual In-Transit Receipt
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Inventory

Cr: Trade Clearing Cr: Inter Org Payables Cr: Trade in Transit Valuation
Cr/Dr: Transfer Price Variance 1
1
Where the standard cost is different between
shipping and receiving organisations
Home
Inter-Company Inventory Transfer: Transfer Order Example
Key
P&L accounts
Shipping Org
Transfer Order Trade In Transit Issue Balance Sheet Accounts

Interorganization Shipment
Dr: Intercompany COGS
Dr: Trade in Transit Valuation Cr: Trade In Transit Valuation
Cr: Inventory
Cost Accounting @ Receipt

Cost Accounting @ Shipment Receipt Accounting @ Receipt Receipt Accounting @ Receipt
Receiving Org
Transfer Order
Trade in Transit Receipt Trade Receipt Accrual Transfer Order Receipt Interorganization Receipt
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Receiving Inspection Dr: Inventory Valuation
Cr: Trade Clearing Cr: Intercompany Accrual* Cr: Trade in Transit Valuation Dr/Cr: Transfer Price Variance
*
Intercompany Receipt Accrual Control
Home
Key
Supplier Drop Shipment (no intercompany flow*) Module

P&L accounts
Cost Accounting Cost Accounting Cost Accounting

Drop Shipment Delivery (Drop Shipment ) Trade Sales COGS Recognition
Supplier shipment Issue
confirmed by ASN
Dr: Drop Ship Inventory Dr: Deferred COGS Dr: Cost Of Goods Sold
creation or AP Invoice Revenue
Match Cr: Receipt Accrual Account Cr: Drop Ship Inventory Recognition Cr: Deferred COGS
in AR
* Where a Supplier Drop Shipment includes an Intercompany Flow, the Accounting will
combine (but not duplicate) these events with the Internal Drop Ship events described on the
following page.
Home
Key
Internal Drop Shipment: Inter-Company Example Module
P&L accounts
Cost Accounting Cost Accounting

Shipping Org
Sales Order Issue

(Drop Shipment) Trade In Transit
Issue
Dr: Trade in Transit Valuation
Dr: Intercompany COGS
Cr: Inventory
Cr: Trade In Transit Valuation
Cost Accounting Receipt Accounting Cost Accounting

Selling Org
Trade in Transit Receipt Trade Receipt Accrual Drop Ship Trade Sales Issue
Dr: Trade in Transit Valuation Dr: Trade Clearing Dr: Deferred COGS
Cr: Trade Clearing Cr: Intercompany Accrual* Cr: Trade in Transit Valuation

*
Intercompany Receipt Accrual Control Home

Order Management: Sales Order Shipments in Inventory
Inventory/Cost Management Key
Order Management Order Raised Module
Sales Order Pick P&L accounts
Pick Transfer From: Balance Sheet Accounts
Dr: Offset (Pick Clearing)
Order Picked Pick Transfer To:
Dr: Inventory Valuation
Cr: Offset (Pick Clearing)
Order Management/Shipping
Sales Order Issue
Order Shipped Dr: Deferred COGS

Revenue Recognition COGS Recognition
Receivables Dr: Deferred Revenue Dr: COGS

Cr: Revenue Cr: Deferred COGS
Home

Key
Order Management Module
P&L accounts
Order Raised
Order Shipped
Intercompany Invoice External Invoice

Receivables
Dr: Intercompany Debtors Dr: Trade Debtors

Cr: Intercompany Revenue/ Deferred Cr: Revenue/ Deferred Revenue
Revenue
Revenue Recognition
Dr: Deferred Revenue

Cr: Revenue
GL
Home
Intercompany

Key
Manage Intercompany Transactions Module
P&L accounts
GL Journal Payables
Provider Entity Receiving Entity
Dr: Intercompany Recharge Dr: Intercompany Costs
Cr: Charge account Cr: Intercompany Creditors
Payables or
receivables Intercompany Balancing Rules
Transactions which
cross LE will use
balancing rules to Intercompany Workbench/
ensure the Allocations
journals balance in
both entities
Receivables GL Journal
Provider Entity Dr: Intercompany Debtors Dr: Charge Account Receiving Entity
Cr: Intercompany Revenue Cr: Intercompany Recharge


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Financial Accounting Flows

Oracle ERP Cloud

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 4

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 5

External External system Lines where the usual destination

Encumbrance Generates ‘virtual’ Where within a process flow transactions happen in

Not a standalone module but Invoice Transaction

Receipt Accounting High Level Process

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 6

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Supply Chain M Accounts Receiv External

Fixed Assets Cash Manageme

Payroll Subledger Accounting (SLA) Accounting Hub

Data flow Accounting flow

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 8

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 10

Procure to Pay Accounting Flows

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 11

Dr: Encumbrance reserve

Dr: Expense (Type ‘Obligation’)

Accrue on Receipt Invoice

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 12

Receipt Accounting for Non-Inventory Transactions

Dr: Charge Account* Returns have the opposite

Receipt Period-end Process

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 14

Period charge is based

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 15

Advance Payment Invoice Matching

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Copyright © 2019, Oracle and/or its affiliates. All rights reserved. | 17

Fixed Assets Accounting Flows

Purchase Order Receipt Accounting

Invoices/Credit Memo Acquisition

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Receipt Asset PO Create CIP Asset

Dr: Asset Clearing

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Asset Creation Initial Lease Invoice

Dr: [Lease] Asset Cost (NPV of lease)

Create Lease Dr: Leased Asset Clearing

These transactions can be

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Create CIP Asset

Capitalise CIP Asset Capitalise CIP Project

Assets Dr: Asset Cost Assets Dr: Asset Cost

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Assets Dr: Depreciation Expense

These transactions can be

Assets Period End Process

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Dr: Impairment Loss

Revalue Asset Revalue Asset Depreciation

Dr: Asset Cost Dr: Asset Cost Depreciate revalued asset as

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Asset Cost Asset Depreciation

Assets Dr: Asset Disposal Assets Dr: Accumulated Depreciation

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Expenses Accounting Flows Module