Work Order Accounting Flow in Oracle eAM

You specify two accounts in WIP A/C class in front of Material and Resource TAB. One is Valuation and another is Variance A/C.

When Inventory issues the Material, transactions that happen are as follows:

INV valuation A/C credit
WIP Material Valuation A/C debit

And when you close the WO 
Transactions are :

WIP Material Valuation A/C credit
WIP Material Variance A/C debit

WO Closing fires these transactions so unless and until the WO is closed these transactions are not fired.

And costing cycle still remains uncompleted and while closing INV period it shows the number of WO of whose status is not closed as pending.

Note that: These transactions will hit the GL only when you run the GL transfer from Inventory for the month for which these transactions are for.

 So you can specify same A/Cs in both the TABs, it will not be wrong either but specifying different A/Cs will give a proper clarity of accounting of Material.

Also it depends upon scenario to scenario.

Example for Two different accounts at WIP Accounting:

 Main Stores is used to store all the raw material, spares and engineering material. Maintenance have there own stores known as Equipment side Sub Inventory [where all the material required in maintenance activity is piled].

So when a requisition of material comes from Maintenance, the material is transferred from Main Store to Equipment side sub inventory. [Note that this material is still not consumed, but, lying at different store. So tracking of this is necessary]. This transaction in system is captured at issuing of material from inventory to Work Order.

 And before closing of the Work Order, you can return the excess material.

 So at Work Order Close, the material lying in Equipment side sub inventory is consumed, and transactions happen as they are listed above.

 So Valuation Account becomes an Clearing Account.

And Variance Account becomes a P&L Account.

Any doubts still?

Introduction to Oracle eAM

I am crap at writing introductions, but there are few available on net.

Read on Oracle’s site:

http://www.oracle.com/applications/maintenance/eam.html

And another good article on it:

http://applearn.blogspot.com/2008/12/oracle-enterprise-asset-management-eam.html

I will directly start to explain the few things which i feel are not properly understood in eAM.