Overview of Oracle Periodic Costing

Categories: ERP,Other

As an option to the mandatory perpetual costing system, which uses
either the standard or average costing methods, Cost Management
provides support for two methods of Periodic Costing:
• Periodic Average Costing (PAC)
• Periodic Incremental LIFO (Last–In First–Out)
Periodic Costing is an option that enables you to value inventory on a
periodic basis. There are three principal objectives of Periodic Costing:
• To capture actual acquisition costs based on supplier invoiced
amounts plus other direct procurement charges required by
national legislation or company policy
• To capture actual transaction costs using fully absorbed resource
and overhead rates
• To average inventory costs over a prescribed period, rather than
on a transactional basis
You must set up a perpetual costing method (standard or average) for
each inventory organization that you establish in Oracle Inventory. In
addition, you have the option to use Periodic Costing.
You can choose to create Periodic Costing distributions and send them
to the General ledger after a Periodic Costing run. You can also disable
the perpetual costing General Ledger transfer, electing instead to
produce accounting entries only after a Periodic Costing run.
Oracle maintains the perpetual system and the periodic system (if one
is enabled) separately and produces separate reports.

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