8/13/2019 Intercompany Accounting Oracle

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Internal Order Cycle Accounting

Transaction

Sending Org Receiving Org

Option1

Internal OrderShipment

Dr Intransit @ Current AvgCr InventoryCost Inventory

Internal OrderReceipt

Dr Cost of Goods Sold(COGS) @ Current Avg CostCr Intransit Inventory

Dr Inventory@ Transfer PriceCr Accrual

Intercompany ARInvoice

Dr I/C Receivable @Transfer PriceCr I/C Revenue

Intercompany APInvoice

Dr Accrual @ TransferPriceCr I/C Payable

Profit in Inventory (PII) account captures the difference between the TransferPrice (TP) and cost in sending org (COSO) and is accounted always in receiving

organization. This accounting is required only if there is a need to track theintercompany profits from accounting perspective.

8/13/2019 Intercompany Accounting Oracle

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Internal Order Cycle Accounting

Type Account Dr Cr Type Account Dr CrOption1 Option2

Item2Inv valuation 01.0000.15100.000 121.30 Inv valuation 01.0000.15100.000 121.30

Inv valuation 01.0000.15100.000 121.30 Inv valuation 01.0000.15100.000 121.30

Intransit Inventory 01.0000.15100.000 121.30 Intransit Inventory 01.0000.15100.000 121.30Inv valuation 01.0000.15100.000 121.30 Inv valuation 01.0000.15100.000 121.30

Account 01.9100.50210.799 121.30 Account 01.9100.50210.799 121.30Inv valuation 11.0000.15100.000 120.00 Inv valuation 11.0000.15100.000 121.30Inv valuation 11.0000.99999.000 - Inv valuation 11.0000.99999.000 -Intransit Inventory 01.0000.15100.000 121.30 Intransit Inventory 01.0000.15100.000 121.30Account 11.0000.24500.000 120.00 Account 11.0000.24500.000 120.00

Profit in inventory 11.9100.40000.799 1.30Item2Inv valuation 01.0000.15100.000 -Inv valuation 01.0000.15100.000 - Receivable 01.0000.11000.000 120.00

Revenue 01.9100.40000.799 120.00Intransit Inventory 01.0000.15100.000 - Tax 01.0000.99999.000 -Inv valuation 01.0000.15100.000 -

Charge 11.0000.24500.000 120.00Inv valuation 11.0000.15100.000 1,000.00 Nonrecoverable Tax 11.0000.24600.000 -Account 01.9100.50210.799 - Liability 11.0000.20000.000 120.00Account 11.0000.24500.000 1,000.00Intransit Inventory 01.0000.15100.000 -

Receivable 01.0000.11000.000 1,120.00Revenue 01.9100.40000.799 1,000.00Revenue 01.9100.40000.799 120.00Tax 01.0000.99999.000 -Tax 01.0000.99999.000 -

Charge 11.0000.24500.000 1,000.00Nonrecoverable Tax 11.0000.24600.000 -Charge 11.0000.24500.000 120.00Liability 11.0000.20000.000 1,120.00