WIP
Accounting Class
Maintenance accounting classes are used
to group costs for work orders used in Oracle Enterprise Asset Management
(eAM). For example, if you are creating work orders for plant maintenance activities,
you can define your accounting classes to separately value and report the costs
related to asset. Maintenance accounting classes are automatically defaulted
when you create eAM work orders.
When you define an accounting class, you
must assign valuation and variance accounts to it. When you issue materials to
a work order that uses this accounting class, the appropriate valuation
accounts are charged. When the work order is closed, final costs and variances
are calculated and posted to the variance and valuation accounts. When the
accounting period is closed, these journal entries are automatically posted to
the general ledger.
The WIP Accounting Class is the Class
which is associated with eac Asset Number and then with Work Order. Accounting
distributions for all the Work Order Transactions pertaining to that asset are
posted as per the WIP Accounting Structure.
Generally the WIP Accounting Classes are
Organization Specific i.e. for one Maintenance Organization there will be on
WIP Accounting Class.
However based on accounting and finance
reporting requirements, any number of WIP Accounting classes can be created and
attached to the Asset Numbers and Work Orders.
Here in RGO, the Maintenance expenditure
is posted to Asset Owner Department / Organization and sometimes to the
Maintenance Organization. It depends. This issue needs special attention.
Valuation and Variance Accounts
WIP accounting class valuation accounts
are charged when you issue components, move assemblies, complete assemblies,
and charge resources.
Variance accounts associated with
Standard Discrete and Non-standard Asset accounting classes are charged when
jobs are closed. Variance accounts associated with Expense Non-standard
Discrete, and optionally Repetitive accounting classes, are charged when
accounting periods are closed.
As noted in the following table,
different valuation and variance
accounts are required under standard versus average costing:-
Sl No
|
Account
|
Valuation
|
Variance
|
1.
|
Material
|
Standard and Average
|
Standard and Average
|
2.
|
Material Overhead
|
Standard and Average
|
Standard and Average
|
3.
|
Resource
|
Standard and Average
|
Standard and Average
|
4.
|
Outside Processing
|
Standard and Average
|
Standard and Average
|
5.
|
Overhead
|
Standard and Average
|
Standard and Average
|
6.
|
Standard Cost
|
Standard Only
|
Variance Not Applicable
|
7.
|
Bridging
|
Average Only
|
Variance Not Applicable
|
8.
|
Expense
|
Average Only
|
Variance Not Applicable
|
The screen shot of the WIP Accounting is
appended below
Resource
Accounts
1.
Resource Absorption
Account
2. Variance Account
Sub
Ledger Accounting and EAM
Without SLA, all material on a work
order will debit the same material expense account.
SLA will enable the customer to define
an expense account for each type of category (spares and supplies), so the work
order can debit one expense account for spares, and a different expense account
for supplies.
Valuation Accounts
Material
Account - Normally
an asset account this account tracks material costs. Under standard costing, it
is debited at standard when you issue material to a job or schedule and
credited at standard when you complete assemblies from a job or schedule, close
a job, or close an accounting period. Under average costing, this account is
debited at the average cost in effect at the time of the issue transaction and
is credited when you complete assemblies from a job.
Material Overhead - Normally an asset account this account
tracks material overhead (burden) costs. Under standard costing, it is
charged/debited at standard when you issue material with material overhead to a
job or schedule and relieved at standard when you complete assemblies from a
job or schedule, close a job, or close an accounting period. Under average
costing, this account is debited at the average cost in effect at the time of
the issue transaction.
Resource - An asset account that account tracks resource costs. Under standard
costing, it is charged/debited at standard when resources are charged to a job
or schedule and relieved/credited at standard when you complete assemblies from
a job or schedule, close a job, or close an accounting period. Under average
costing, this account is debited and credited at the resource rate in effect at
the time the resource is charged.
Outside Processing - An asset account that tracks outside
processing costs. Under standard costing it is debited at the standard or purchase
order cost when you receive items for a job or schedule in Oracle Purchasing.
It is credited at standard when you complete assemblies from a job or schedule,
close a job, or close an accounting period. Under average costing when you move
job or repetitive schedule assemblies through an outside processing operation,
it is debited at the resource's predefined rate or at the purchase order cost.
Overhead - Normally an asset account
this account tracks resource or department overhead cost. Under standard
costing it is debited at standard when resources are charged to a job or schedule.
It is relieved at standard when you complete assemblies from a job or schedule,
close a job, or close an accounting period.
Variance
Accounts
Material This account tracks variances that
occur when the previous level material costs charged to the job or schedule do
not equal the previous level material costs that are relieved. This calculation
gives you a net material usage and configuration variance.
Resource This account tracks variances that
occur when the this level resource costs charged to the job or schedule do not
equal the this level resource costs that are relieved. If you charge actual
labor without creating resource rate variances (resource standard rate is set
to No), the resource variance includes any rate, efficiency, and method
variances. If you recognize rate variances or charge resources at standard, the
resource variance includes resource efficiency, and any method variances.
Outside Processing Tracks the variances that are occur
when the this level outside processing costs charged to the job or schedule do not
equal the this level outside processing costs that are relieved. If you do not
calculate purchase price variance (resource standard rate is set to No), the
outside processing variance includes any rate, efficiency, and method variances.
If you recognize purchase price variance, this account includes efficiency and
any method variances.
Overhead Tracks the variances that are occur
when the this level overhead costs charged to the job or schedule do not equal the
this level overhead costs relieved from the job or schedule. These variances
include both efficiency and method variances.
Standard Cost Applies only to standard discrete
and non-standard asset. This account is charged for the sum of all the
elemental standard cost adjustments when you perform a standard cost update
that impacts an active job. Cost updates are not performed for repetitive
schedules or expense non-standard jobs.
Estimated Scrap Applies only to lot based jobs in
Oracle Shop Floor Management enabled inventory organizations when Estimated
Scrap Accounting is enabled. If this feature is enabled, both Estimated Scrap
accounts are required. The scrap account field is required when defining a
department on the Departments window. Additionally when you define this
account, you can also track operation yield and estimated scrap absorption when
creating transactions for lot based jobs.
Sub
Inventory – Accounts
Accounts
Required for Subinventory
1.
Material
Account
2.
Outside
Processing
3.
Material
Overhead
4.
Overhead
5.
Resources
6.
Expense
7.
Encumbrance
OSP (Outside
Service Processing) Transactions – Accounts
1.
AP
Accruals
2.
Receiving
Accrual
Direct Items –
Accounts
1.
AP
Accrual
2.
Receiving
Inspection
Invoice Variance
Transferring – Accounts
1.
Invoice
Variance Adjustment Account
Configuration
History
1.
Maintenance
Offset Account
Work Order
Closing and Capitalization - Accounts
1.
Asset
Clearing Account / Offset Account / Variance Account
2.
Asset
Cost Account
Inventory
Organization – Valuation Accounts
1
|
Material
|
An
asset account that tracks material cost. For average costing, this account
holds your inventory and intransit values. Once you perform transactions, you
cannot change this account.
|
2
|
Material
Overhead
|
An
asset account that tracks material overhead cost.
|
3
|
Resource
|
An
asset account that tracks resource cost.
|
4
|
Overhead
|
An
asset account that tracks resource and outside processing overheads.
|
5
|
Outside
processing
|
An
asset account that tracks outside processing cost.
|
6
|
Expense
|
The expense account used when tracking a non-asset item.
|
Inventory
Organization – Other Accounts
1
|
Sales
|
The
profit and loss (income statement) account that tracks the default revenue
account.
|
2
|
Cost
of Goods Sold
|
The
profit and loss (income statement) account that tracks the default cost of
goods sold account.
|
3
|
Purchase
Price Variance
|
The
variance account used to record differences between purchase order price and
standard cost. This account is not used with the average cost method.
|
4
|
Inventory
A/P Accrual
|
The
liability account that represents all inventory purchase order receipts not
matched in Accounts Payable, such as the uninvoiced receipts account.
|
5
|
Invoice
Price Variance
|
The
variance account used to record differences between purchase order price and
invoice price. This account is used by Accounts Payable to record invoice price
variance.
|
6
|
Encumbrance
|
An
expense account used to recognize the reservation of funds when a purchase
order is approved.
|
7
|
Project
Clearance Account
|
When
performing miscellaneous issues to capital projects, the project clearance
account is used to post the distributions.
|
8
|
Average
Cost Variance
|
Under
average costing with negative quantity balances, this account represents the
inventory valuation error caused by issuing your inventory before your
receipts.
|
Inter
Organization Transfer Account
1.
Transfer
Credit
2.
Purchase
Price Variance
3.
Receivable
4.
Payable
5.
Intransit
Inventory
Category
Accounts
1. Material: A
default general ledger account to accumulate material costs for this
category/subinventory combination. This is usually an asset account.
2. Outside Processing: A
default general ledger account to accumulate outside processing costs for this
category/subinventory combination. This is usually an asset account.
3. Material Overhead: A
default general ledger account to accumulate material overhead or burden costs
for this category/subinventory combination. This is usually an asset account.
4. Overhead: A
default general ledger account to accumulate resource or department overhead
costs for this for this category/subinventory combination. This is usually an
asset account.
5. Resource: A
default general ledger account to accumulate resource costs for this
category/subinventory combination. This is usually an asset account.
6. Encumbrance:
A default general ledger account to hold the value of encumbrances against
subinventory items belonging to this category set.
Purchasing –
Receiving Options – Accounts
1.
Receiving
Inventory Account
2.
Retroactive
Price Adjustment Account
3.
Clearing
Account
Purchasing –
Purchasing Options
1.
Expense
AP Accrual Account
