What are the accounting entries in a Procure to Pay cycle when the PO shipment is enabled for Landed Cost

Man

Solution
1. Receive the PO with estimated landed cost calculated
- Receiving Inspection a/c DR @ Estimated Landed Cost
- AP Accrual a/c CR @ PO Price + Non Recoverable Tax
- Landed Cost Absorption a/c CR @ (Estimated Landed cost {PO Price+Non-Recoverable tax})

These accounting entries can be viewed from Receiving Transaction summary > Transactions > Tools > View Acc
These entries get created in rcv_receiving_sub_ledger
2. Deliver the PO to Inventory destination
For Average Costing organization
- Material Valuation a/c DR @ Estimated Landed Cost
- Receiving Inspection a/c CR @ Estimated Landed Cost
These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts

3. Invoice validated and actual landed cost calculated

Once the Actual Landed Cost is calculated, LCM will populate this information in cst_lc_adj_interface with rcv_tran
Landed cost Adjustment Receiving
- Receiving Inspection a/c DR @ difference between Actual LC and Estimated LC
- Landed Cost Absorption a/c CR @ difference between Actual LC and Estimated LC

These accounting entries can be viewed from Receiving Transaction summary > Transactions > Tools > View Acc
These entries get created in rcv_receiving_sub_ledger
CAN BE VIEWED FROM COST MANAGEMENT SLA>SLA>INQUIRY>ACCOUNTING EVENT and set paramete
4 for this inquiry event class is Landed Cost Adjustment Receiving
Landed cost Adjustment Delivery (Average Costing)
- Receiving Inspection a/c CR @ difference between Actual LC and Estimated LC
- Landed Cost Absorption a/c DR @ difference between Actual LC and Estimated LC
CAN BE VIEWED FROM COST MANAGEMENT SLA>SLA>INQUIRY>ACCOUNTING EVENT and set paramete
for this inquiry event class is Landed Cost Adjustment Delivery
Average Cost Update (Average Costing)
- Material Valuation a/c DR @ difference between Actual LC and Estimated LC
- Landed Cost Absorption a/c CR @ difference between Actual LC and Estimated LC

These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts
The link between the Receiving transaction and Average Cost update is done through txn_source_line_id. Rcv_tra

5 4. Create accounting for item invoice

- AP Accrual a/c DR @ PO Price
- Tax a/c DR @ tax rate
- Liability a/c CR @ Invoice Price including tax
- Invoice Price Variance a/c DR @ difference between PO Price and Invoice Price
5. Create accounting for charge invoice
- Charge a/c DR @ invoice price
- Liability a/c CR @ invoice price

6. Perform Return transaction after invoice is accounted and actual landed cost is calculated
Return to Vendor
- Receiving Inspection a/c CR @ Actual Landed Cost
- AP Accrual a/c DR @ PO Price + Non-Recoverable Tax
- Landed Cost Absorption a/c DR (Actual Landed Cost - {PO Price+Non-Recoverable Tax})

These accounting entries can be viewed from Receiving Transaction summary > Transactions > Tools > View Acc
These entries get created in rcv_receiving_sub_ledger
Return to Receiving (Average Costing)
- Material Valuation a/c CR @ Actual Landed Cost
- Receiving Inspection a/c DR @ Actual Landed Cost
These entries can be viewed from Inventory > Material Transactions > Distributions
These entries get created in mtl_transaction_accounts

7. Raise a Debit Note

- AP Accrual a/c CR @ PO Price + Non-Recoverable Tax
- Liability a/c DR @ Invoice Price including tax
- Invoice Price Variance a/c CR @ difference between ({PO Price+Non-Recoverable Tax}+PO Price) and Invoi

Note:
1. Estimated and Actual Landed Cost are always inclusive of PO price and Non-Recoverable tax.
2. Accounting entries for Expense POs and Shopfloor destination POs has no impact as Landed Cost Manageme
3. Landed Cost Management has no impact on the Encumbrance Accounting as the PO gets reserved at PO price
4. Retroactive Pricing is not supported in LCM enabled organization and hence retroactive price update program w

s enabled for Landed Cost Management?

-Recoverable tax})

ansactions > Tools > View Accounting

t_lc_adj_interface with rcv_transaction_id corresponding to the receipt to which the invoice is matched. Then the adjustment entries would g

ansactions > Tools > View Accounting

NG EVENT and set parameters as per requirement.

NG EVENT and set parameters as per requirement.

gh txn_source_line_id. Rcv_transaction_id of deliver transaction is stamped as txn_source_line_id in mtl_material_transactions for the LCM

erable Tax})

ansactions > Tools > View Accounting

rable Tax}+PO Price) and Invoice Price

coverable tax.
ct as Landed Cost Management is not applicable for Purchase Orders with Expense and Shopfloor destination.
e PO gets reserved at PO price and it gets reversed at PO price only even though the actual charge account get hit at landed cost.
oactive price update program will not create the retroactive price adjustment entries in Receiving subledger for the receiving transactions cr

the adjustment entries would get created as given below on running the Landed Cost Adjustment Processor in COst Management Respons

terial_transactions for the LCM adjustment transaction which has the transaction type as Average Cost Update.

get hit at landed cost.

or the receiving transactions created.

in COst Management Responsibility.