Summary of RMA Accounting

Summary of RMA Accounting:

Note:1.Incase of Case - 4, Standard Cost Adjustment Account will be credited at $2 ( 12-10).

Standard Cost Adjustment is nothing but the difference between the Item cost at the time of Sales order and Referenced RMA Receipt. The COGS account defined in the Organization Parameters window will be used for the Standard Cost Update Adjustment account. 2.Incase of Case - 6(Ship Only Orders), once the line is closed, it insert a line in Cst_Revenue_recognition_lines(CRRL) table with Potentially_unmatched_flag as ‘U’. Once the Generate COGS rec program is run Potentially_unmatched_flag becomes ‘NULL’ and COGS transaction created in Mtl_material_transactions (MMT) and Cst_cogs_events (CCE) tables.

2. COGSDIAG.sql: The COGSDIAG.sql script is a collector script to gather detailed information on COGS and COGS Recognition transactions for a specific Sales Order. It is available in Data Collection Scripts for Cost Management (Doc ID 378348.1). How to Interpret: A. Check the Creation date and Transaction Date of Sales Order Issue, Revenue Recognition, RMA Receipt and COGS transaction. B. Check COGS_PERCENTAGE and PRIOR_COGS_PERCENTAGE columns in CST_COGS_EVENTS table.

C. The TRANSACTION_DATE in MTL_MATERIAL_TRANSACTIONS table for COGS transaction depends on the LAST_EVENT_DATE in CST_REVENUE_RECOGNITION_LINES table. 

When the Collect Revenue Recognition Information program is run, it inserts a line in the CST_REVENUE_RECOGNITION_LINES (CRRL) table. This is populated by Accounts Receivables (AR) code.

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This is the Revenue Recognition date and can be checked from the RA_CUST_TRX_LINE_GL_DIST_ALL table, column name GL_Date.

D. The SO_ISSUE_ACCOUNT_TYPE column in MTL_MATERIAL_TRANSACTIONS table decides whether DCOGS (Deferred Cost of Goods Sold) or COGS (Cost of Goods Sold) account is used. 

Above column is populated by Inventory Code.

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A value of 2 indicates that the Sales Order Issue is done in Release 12, so DCOGS comes into picture.

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A value of 'NULL' indicates that the Sales Order Issue is done in Release 11i and the COGS account is used.

Refer to: Bug 13576673 - COGS RECOGNITION LINES NOT GENERATED AND DEFERRED COGS BALANCE IN GL INCREASES E. Event Types:

Event Type 6 and 2: RMA Place holder and RMA receipt Scenario 1: SO ISSUE = 10 quantity, RMA = 2 quantity Event Type 6 – Event quantity is 10 Event Type 2 – Event quantity as -2 COGS Rec for (10-2) 8 Scenario 2: SO ISSUE = 10 quantity RMA = 2 quantity Event Type 6 – Event quantity is 10 Event Type 2 – Event quantity as -2 RMA for 4 quantity Event Type 6 – Event quantity is 8 (10-2) Event Type 2 – Event quantity as - 4 Event Type 4: COGS Rec % Adj (SO ISSUE-COGS-RMA) The Sales Order Issue is done and the RMA is created with 0% COGS. This means the collect revenue and generate COGS programs have not been run. - To correct the backdated COGS transaction, adjustment event 4 is created.

Event Type 5: COGS Rec Qty Adj(SO ISSUE-RMA-REV and COGS) The Sales Order Issue is done in the month of January. Revenue recognition and COGS recognition is done on April. In February the RMA is created and it is stuck in Material Transaction Interface (MTI) table. In order to adjust this backdated RMA, event type 5 is created.

3. Standard Functionality: A. Distribution is not created for COGS Recognition under the following scenarios: i. The Sales Order Issue quantity and RMA quantity are equal and are in same or different period. [SO ISSUE > RMA > COGS] ii. The Item costs is "ZERO" check the new cost in CST_REVENUE_COGS_MATCH_LINES table. It will be "Null". iii. Both the COGS % and Prior COGS % are same (0 or any value) in CST_COGS_EVENTS table. B. Manual AR invoices linked to a Sales Order are not considered for COGS recognition: Only invoices created through Auto Invoice program are getting considered for COGS recognition. This is not a bug, the matching between Receivables invoice (in AR) and Sales Order shipment is controlled by Order Management (OM). If the AR invoice is not from OM, the link between AR and Inventory (INV) is not maintained. Reference : Bug 14823225 - MANUAL AR INVOICES LINKED TO SALES ORDER ARE NOT CONSIDERED FOR COGS RECOGNITION

4. Known Issues and Recommended Fixes: A. COGS account derivation based on RMA line:

In the Intercompany invoicing scenario (Sales Order and RMA are created in different organizations). The RMA if referenced to the original sales order line, COGS account derivation will be based on the original sales order line attributes and not based on the RMA line attributes For e.g. Order Type, Item, Warehouse et al. With the Patch.14374856:R12.ONT.B (Order Management Patch), a new System Parameter "Source Line for deriving COGS account on referenced RMA” is introduced.

System Parameter

Description

'Return Line to be used as Source'

Current Return Line will be used as Source for COGS account derivation.

NULL or set to 'Referenced Sales Line Referenced Sales Order Line will be to be used as Source' used as source for COGS account derivation. B. Error message = FAILURE IN PROCEDURE CST_REVENUECOGSMATCH_PVT.PROCESS_RMARECEIPT() There are two causes for this error. Case 1: RMA transaction date is earlier than the Sales Order Issue Date. Please log a Service Request with Oracle Support and mention this note number.

Case 2: Duplicate Prior Event ID's in CCE (CST_COGS_EVENTS table). Please log a Service Request with Oracle Support and mention this note number. C. RMA receipt is getting costed prior to when the Sales Order Issue is costed: RMA and SO ISSUE are processed by two different request IDs: Patch 13806719:R12.BOM.C

Reference: BUG 13806719 - COGS RECOGNITION EVENTS QUANTITY ARE WRONG.

5. Recommended Patches: It is recommended to apply the following Patches: R12.0: Patch.12779598:R12.BOM.A CSTRCMVB.pls 120.37.12000000.51 R12.1.X: Patch.14180892:R12.BOM.C CSTRCMVB.pls 120.45.12010000.48 Patch.14656876:R12.BOM.C CSTRCMVB.pls 120.45.12010000.64 Important Note:*Patch 14656876:R12.BOM.C has some issue with Dependencies. Hence, its recommended to first apply Patch 14180892:R12.BOM.C and then apply 14656876:R12.BOM.C in order to upgrade CSTRCMVB.pls