LCM Accounting Flow with PPV, IPV and ERV

 https://p2pwithlcm.blogspot.com/2024/09/lcm-accounting-flow-with-ppv-ipv-and-erv.html

Purchase price variance (PPV) and Invoice Price Variance (IPV)

https://p2pwithlcm.blogspot.com/2021/08/purchase-price-variance-ppv-and-invoice_8.html

PPV is the difference between Purchase Price and Item's Standard Cost

IPV is the difference between Invoice Price and Purchase Price Standard Cost 100 PO Price 105 Invoice Price 115 PPV: 105 - 100 = 5 IPV: 115-105 = 10 Purchase Order Item's Standard Cost 100 PO Unit Price 105 PO Qty 15 PO Amount 1575 Receipt Qty Received 5 Receive Accounting  DR  CR Inventory Receiving Account/Intransit Inventory Valuation 525   Accrued Expense   525 Run Cost Manager Program Navigate to Inventory>Material Transactions Deliver Accounting  DR  CR Material Value 500   PPV (105-100)*5 25   Inventory Receiving Account/Intransit Inventory Valuation   525 Invoice Invoice Price on Matching 115 Invoice Qty on Matching 5 Invoice Amount 575 Invoice Accounting  DR  CR Accrued Expense 525   IPV (115-105)*5 50   Liability   575

Procure to Pay (P2P) – Accounting Entries

https://p2pwithlcm.blogspot.com/2019/04/as-you-know-there-are-three-types-of.html

As you know there are three types of items:

1. Inventory Expense Item
2. Inventory Asset Item
3. Expense item

Definition of above Items used in Purchasing can be best understood as:


Asset flag means means it is an asset and the items value will show in your inventory valuation.

1. Inventory Item


2. Expense Item

These are one which is used for consumable items purchase for your organization. More importantly , for creating an expense item you have to perform following setup doing in the Master Item form.Go to same path in oracle inventory

Oracle Inventory -> Items -> Master Items

When master items form open Go to Inventory Menu you need to tick followings

1. Inventory item
2. Stock able
3. Transactble
4. Resolvable

And you can also setup in Costing and purchasing menu account code as per your requirement.


3. Asset Item

As discussed above , the following attributes need to be enabled for such an item.

1. Inventory item
2. Stock able
3. transact able
4. Costing flag
5. Inventory asset value

For entering on purchase orders
It should have purchased and purchasable flags enabled and you have to make sure you are assigning this item to the Purchasing org which you have defined at

Oracle Purchasing > Setup > Organizations >
Financial Options > 'Supplier-Purchasing' alternate region 'Inventory Organization' field.

The accounting can be best described for such kind of items is;

LCM Pre-Receiving Setup

http://p2pwithlcm.blogspot.com/2016/01/lcm-pre-receiving-setup.html

Download it from the below Link,

https://drive.google.com/file/d/0B30-kT1pIOm_cDJGZHMyYUNTNWc/view?ts=56a4cc34

http://docs.oracle.com/cd/E18727_01/doc.121/e14299/T528387T528395.htm#pre_view_est_lc

Please send me Email to Inbox2tariq@gmail.com for the File

P2P Cycle Overview

http://p2pwithlcm.blogspot.com/2016/01/blog-post.html

Unable to buy fixed asset in LCM org

http://p2pwithlcm.blogspot.com/2016/01/unable-to-buy-fixed-asset-in-lcm-org.html

Interfacing Transactions from Purchasing To Accounts Payable To Fixed Assets ( Doc ID 787421.1 )

Material Account Distribution Detail Report output is showing 0 Unit Costs And 0 Extended Values

http://p2pwithlcm.blogspot.com/2016/01/material-account-distribution-detail.html

1. Go into the responsibility: 'System Administrator' and query the report to display its parameters. Navigate to Concurrent > Program > Define > Click F11 key. At SHORT NAME write 'INVTRDST' , then click CTRL+F11. Click Button 'Parameters'. Select "Parameters",scroll down to search for <P_EXCHANGE_RATE_CHAR> Exchange rate, check the "Enabled" flag and 'Required'. Press Ctrl+S to save the changes. Also Enable parameters Display Inverse Rate Exchange Rate Type