{"id":7479,"date":"2020-06-11T13:58:30","date_gmt":"2020-06-11T13:58:30","guid":{"rendered":"https:\/\/rax-stg-wp-aws.com\/blogs\/oracle-deferred-cogs-accounting\/"},"modified":"2026-11-03T19:28:41","modified_gmt":"2026-11-03T19:28:41","slug":"oracle-deferred-cogs-accounting","status":"publish","type":"blogs","link":"https:\/\/www.rackspace.com\/de\/blogs\/oracle-deferred-cogs-accounting\/","title":{"rendered":"Oracle Deferred COGS accounting"},"content":{"rendered":"<p><strong>Introduction<\/strong><\/p>\n<p>This post introduces the Deferred Cost of Goods Sold (DCOGS) account&nbsp;functionality in Oracle\u00ae Cost Management release 12.0.0 and later. This&nbsp;enhancement directly matches the Cost of Goods Sold (COGS) to the revenue, which&nbsp;was not possible previously.<\/p>\n<p>\nIn previous versions, the system expensed the value of goods shipped from inventory to COGS even though the shipment might not have earned the revenue. With this enhancement, the system puts the value of goods shipped from inventory in the DCOGS account.<\/p>\n<p>The enhancement makes a change to synchronize the revenue and COGS per the recommendations of generally accepted accounting principles (GAAP). When<br \/>\nthe software recognizes a percentage of revenue, it moves a matching percentage of the value of goods shipped from inventory to the COGS account from the DCOGS<br \/>\naccount.<\/p>\n<p>Accounting practice requires that you must recognize revenue and the associated COGS in the same accounting period. This enhancement automates matching the COGS for a sales order line to the revenue billed for that specific sales order line.<\/p>\n<p>The deferral of COGS applies to the following elements:<\/p>\n<ul>\n<li>Sales orders of both pick-to-order (non-configurable) and assemble-to-order&nbsp;(configurable items).<\/li>\n<li>Sales orders from the customer-facing operating units. The new accounting flow&nbsp;introduced in version 11.5.10 could drop shipments from these orders.<\/li>\n<li>Return merchandise authorizations (RMA) that reference a sales order with a referred COGS. The enhancement accounts for these RMAs by using the original&nbsp;sales order cost to maintain the latest COGS recognition percentage.<\/li>\n<\/ul>\n<p><strong>Note<\/strong>: If an RMA is tied to a sales order, the system accounts for the&nbsp;distribution of credits between DCOGS and the actual COGS to maintain&nbsp;the existing costing proportions. If an RMA has no sales order, there is no&nbsp;DCOGS.&nbsp;<\/p>\n<p><strong>Set up a DCOGS account<\/strong><\/p>\n<p>To set up a DCOGS account, navigate to<br \/>\n<strong>Inventory -&gt; Setup -&gt; Organization -&gt; Parameters -&gt; Other Accounts<\/strong><\/p>\n<p><img decoding=\"async\" src=\"\/wp-content\/uploads\/2026\/blog_article_images\/26423-body-Picture1_33.png\" alt=\"COGS Pic 1\" \/><\/p>\n<p>\nIf you upgrade from an older version, the system populates the DCOGS account with the COGS account if the organization parameter is null. You can change this if needed.<\/p>\n<p><strong>COGS data flow&nbsp;<\/strong><\/p>\n<p>The following image shows the COGS data flow:<\/p>\n<p><img decoding=\"async\" src=\"\/wp-content\/uploads\/2026\/blog_article_images\/26423-body-Picture2_28.png\" alt=\"COGS Pic 2\" \/><\/p>\n<p>The following sections describe how the enhancement handles various situations.<\/p>\n<p><strong>Sales order&nbsp;<\/strong><\/p>\n<p>The system makes the following changes when you issue a sales order:<\/p>\n<p>1. Sets <strong>Cst\\_cogs\\_events.COGS\\_Percentage<\/strong>&nbsp;to <em>0<\/em>.<\/p>\n<p>2. Sets <strong>Cst_cogs\\_events.Mmt\\_Transaction\\_id<\/strong>&nbsp;to the transaction ID<br \/>\n&nbsp; &nbsp;in the <strong>Mtl\\_Material\\_Transactions<\/strong>&nbsp;table for the sales order issue transaction.<\/p>\n<p>3. Sets <strong>Cst_cogs\\_events.costed<\/strong>&nbsp;to <strong>Mtl\\_Material\\_Transactions.costed\\_flag<\/strong>,<br \/>\n&nbsp; &nbsp;which is <em>NULL<\/em>&nbsp;when the sales order transaction is costed.<\/p>\n<p>4. Sets <strong>Cst\\_cogs\\_events.Event Type<\/strong>&nbsp;to <em>1<\/em>&nbsp;(where <em>1<\/em>&nbsp;signifies Sales<br \/>\n&nbsp; &nbsp;Order Issue).<\/p>\n<p>5. In the <strong>cst\\_revenue\\_cogs\\_match\\_lines<\/strong>&nbsp;table, the system populates the<br \/>\n&nbsp; &nbsp;<strong>Deferred\\_COGS\\_Acct\\_id<\/strong>, <strong>COGS\\_Acct\\_id<\/strong>, <strong>Unit\\_cost<\/strong>, and&nbsp;&nbsp;<strong>Original\\_shipped\\_Qty<\/strong>&nbsp;columns.<\/p>\n<p><strong>Note<\/strong>: <strong>Oe\\_order\\_lines\\_all.Invoice\\_Interface\\_Status\\_Code<\/strong>&nbsp;= <em>Yes<\/em><br \/>\n(where <em>Yes<\/em>&nbsp;signifies a standard sales order and <em>Not_Eligible<\/em>&nbsp;signifies&nbsp;ship-only lines).<\/p>\n<p>This section shows how the columns integrate the tables and ensure that the data flows seamlessly after entering the sales order and issuing the material.<\/p>\n<p><strong>Revenue recognition and accounting<\/strong><\/p>\n<p><strong>Note<\/strong>: <strong>RA_CUST\\_TRX\\_LINE\\_GL\\_DIST\\_ALL.account\\_set\\_flag<\/strong>&nbsp;= <em>N<\/em>&nbsp;(where<br \/>\n<em>Y<\/em>&nbsp;signifies that revenue recognition is not performed and <em>N<\/em>&nbsp;signifies that&nbsp;revenue recognition is run).<\/p>\n<p>After you run the process to collect revenue recognition, make the following changes to match costs and revenue:<\/p>\n<p>1. Set <strong>cst\\_revenue\\_recognition\\_lines.potentially\\_unmatched\\_flag<\/strong>&nbsp;= <em>Y<\/em>.<\/p>\n<p>2. Set <strong>cst\\_revenue\\_recognition\\_lines.revenue\\_recognition\\_percent<\/strong>= <em>1<\/em><br \/>\n&nbsp; &nbsp;(where `<em>1<\/em>` signifies 100%).<\/p>\n<p>&nbsp;<\/p>\n<p><strong>COGS recognition<\/strong><\/p>\n<p>After you run the revenue recognition program, the system makes the following changes:<\/p>\n<p>1. Sets <strong>cst\\_cogs\\_events.COGS\\_percentage<\/strong>&nbsp;to `<em>1<\/em>` (where `<em>1<\/em>` signifies 100%).<\/p>\n<p>2. Sets <strong>cst\\_cogs\\_events.mmt\\_transaction_id<\/strong>&nbsp;to the transaction ID in the<br \/>\n&nbsp; &nbsp;<strong>Mtl_Material_Transactions<\/strong>&nbsp;table for the COGS recognition transaction.<\/p>\n<p>3. Sets <strong>cst\\_cogs\\_events.Event Type<\/strong>&nbsp;to `<em>3<\/em>` (where `<em>3<\/em>` signifies COGS recognition).<\/p>\n<p>4. Sets <strong>cst\\_revenue\\_recognition\\_lines.potentially\\_unmatched\\_flag<\/strong>&nbsp;to<br \/>\n&nbsp; &nbsp;<em>Null<\/em>. This indicates successful generation of the recognition event and<br \/>\n&nbsp; &nbsp;the transaction.<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>Hopefully, you found the concept of DCOGS accounting and the backend integration&nbsp;between the tables valuable.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oracle Deferred COGS accounting<\/p>\n","protected":false},"author":2,"featured_media":7481,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"content-type":"","nid":"26423","content_type":"blog","created_by":"10130","authored_on":"2023-12-31T14:58:30+00:00","field_article_industries":"","tag_category":"Technical","field_blog_author_text":"by Rackspace Technology Staff","seo_description":"Explore Deferred Cost of Goods Sold (DCOGS) account functionality in Oracle Cost Management. Sync revenue and COGS efficiently.\r\n","field_featured_image":"","insights_image":"\/wp-content\/uploads\/2026\/blog_technical_images\/26423-insights_image-oracle-technical-blog-1-insights.jpg","field_partners":"","rxt_platforms":"Oracle Commerce","product":"","publisheddate":"2020-06-11T13:58:30","rxt_solutions":"Application Management & Operations","opengraph_tag":"","x_tag":"","teaser_flag":"Technical Blog","seo_titile":"COGS Accounting Oracle | Rackspace Technology","field_topics":"","field_slug":"oracle-deferred-cogs-accounting","footnotes":""},"categories":[178],"tags":[204],"class_list":["post-7479","blogs","type-blogs","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-technical"],"_links":{"self":[{"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/blogs\/7479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/blogs"}],"about":[{"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/types\/blogs"}],"author":[{"embeddable":true,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/comments?post=7479"}],"version-history":[{"count":3,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/blogs\/7479\/revisions"}],"predecessor-version":[{"id":9485,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/blogs\/7479\/revisions\/9485"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/media\/7481"}],"wp:attachment":[{"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/media?parent=7479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/categories?post=7479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rackspace.com\/de\/wp-json\/wp\/v2\/tags?post=7479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}