How to change Valuation Accounts, Cost Variance accounts due to Merger, transformation and dissolutoin of business entities.

What are the options available in Oracle EBS when the material account code, valuation account code etc needs to be changed due to Merger, transformation and dissolutoin of business entities as Standard functionality appears to lock down the valuation accounts on the organization setup form.

This is the intended functionality.The valuation account field defined under costing tab in organization Parameter is not editable and under other accounts . User cannot amend the Material Account, Cost Variance Account and Expense Account through the Organization Parameters form if on-hand or history exists and the Organization is using Average Costing. This is the intended functionality. When using Average Cost method, the Material Valuation Account cannot be changed.

The valuation account field defined under costing tab in organization Parameter is not editable. When needing to change the account information defined for accounts like:- Outside processing. Material overhead. Resource. Expense etc The Accounts cannot be changed once the setup is done and if ANY transactions exist.

As changing the account association will have major repercussions on the distributions that are created for the transactions in the INV Sub-ledger and GL if you changed the accounts after transactions has been made you will not be able to close the accounting period.

When needing to change the account information defined for accounts like:- Outside processing, Material overhead, Resource, Expense, Cost Variance Accounts.
The Accounts cannot be changed once the setup is done and if ANY transactions exist.
As changing the account association will have major repercussions on the distributions that are created for the transactions in the INV Subledger and GL  if you changed the accounts after transactions has been made you will not be able to close the accounting period.

Option1: Create New Organziation standard process:  
1. Standard advice is to create a new Inv Org, with the required valuation accounts ,assign all the items to it that are in the existing org, transfer item quantities to the new org, create a new all POs and sales orders, WIP jobs, etc.

2.When you define the new inventory org, the system will assign all of your organization level valuation accounts to a cost group. If you are not using WMS, this is the only cost group that can be used. Under standard costing your subinventories can have different valuation accounts (and hence different cost groups), but in average costing this is only possible if using WMS . Be sure your client is aware of this restriction if they currently have different accounts for different subinventories.

When WMS is installed or for WMS enabled organization, subinventory valuation accounts get the values from organization level if the costing method is standard costing and does not allow the user to update / modify the accounting segments directly on the subinventory level.

3.The transfer should be planned for ahead of time to close all possible work orders in the old organization and then open new ones in the new average cost organization. Don't try to open a half finished work order in the new org - finish it out in the old.

4.If you have any open sales orders or purchase orders, you will have to update the pick from and deliver to organizations in the SOs and POs. Note that in an average cost org, there will not be any purchase price variances since there are no standards. Invoice price variances will continue to be calculated.

5.Once all activity is transferred, do the month end close process in the old org, and then deactivate it. If you are using Organization Access, be sure to unlink responsibilities from the old org and tie them to the new org when you are ready to commence using it.

6.Be sure that your client is made aware of the need to monitor costing activity in the new org.  Transactions are costed in date/time sequence, and if a transaction is 'stuck' and cannot be costed, no later transactions will be costed until the cork is removed from the bottle.  Transactions should be brought over to the general ledger at least once a week so that uncosted transactions can be caught and resolved early. Having uncosted transactions will prevent them from closing the month.

7. Be sure that if there are any custom program or customization related to that OLD org is pointed to the new Org.

a.There is no on-hand quantity.

- select organization_id, inventory_item_id, primary_quantity 
  from mtl_onhand_quantities_detail
  where organization_id = &orgid and subinventory_code = '&subcode';

b.There are no un-costed transactions.

 - select count(*)  from mtl_material_transactions
   where organization_id = &orgid
   and subinventory_code = '&subcode'
   and costed_flag is not NULL;

  c.There are no pending transactions

-select count(*)
 from mtl_transactions_interface
 where organization_id = &orgid
 and subinventory_code = '&subcode';

- select count(*)
  from mtl_material_transactions_temp
  where organization_id = &orgid
  and subinventory_code = '&subcode';

Option2: Use Copy Inventory Organziation feature and change the Valuation accounts using update script.
1.Unassign the location which is assigned to the eixsting org to copy to a new inventory org, if this is not done prior to running the copy inventory organzation you will not see the location name in the Location name in the maintain Interface form.

Responsibility: US Inventory Super user
Navigation: Setup > Organization > Organization Copy > Maintain Interface

When you define new organizations in the Copy Organization Interface window, new inventory organization records are saved in the Copy Organization Interface table.
The following information describes the required parameters to create new organizations:

• Group Code
• Organization Name
• Organization Code
• Location Name.


1. Enter a Group Code to identify your new organization records.
The Group Code is used by the Copy Inventory Organization concurrent program to identify and group together all the individual organization records that will be processed in a single concurrent request.

2. Enter an Organization Name for the new organization. The Organization Name is the name of the organization that will be created by the Copy Inventory Organization concurrent program.

3. Enter an Organization Code to identify your new organization. The Organization Code is a code that the Copy Inventory Organization concurrent program will use to uniquely identify the new organization.

4. Name an existing location for each organization that you want to create, or define new locations in the XML template. If you are using existing locations, they must not already be assigned to an organization. If you create a new location in the XML template, the location definition must precede the related organization definition.
for more information please go through the copy inventory organzation implementation guide.

Note: Cost type and cost sub-element data in the Inventory Organization parameters. Copy of Process enabled, WMS enabled, and cost sharing organization entities are not supported.
 Copy inventory organization: Execute the Copy Inventory Organization Concurrent Program to create the new inventory organizations that you previously defined.

Model Organization:Choose an inventory organization from the list of values as your model organization. This organization is used to derive all inventory parameters that you wish to copy.

Group code:Choose a Group Code from the list of values. The group is a collection of individual inventory organization records that you wish to process in a single concurrent request.

Assign to Existing Hierarchies:If yes, all new organizations will be assigned to the same hierarchies as the model organization.
If no, the organizations will not be assigned to the model organization’s hierarchies.
You can run the Hierarchy Exceptions Report to list organizations that have not been assigned to hierarchies.

Copy Shipping Networks: If yes, all the model inventory organization’s Shipping Network setup information will be copied to the new organization.
If no, the shipping network setup will not be copied.

Copy items:If yes, all items activated in the model organization will be copied and activated in the new organizations If no, no items will be copied. Item assignment is a one time process and can not be undone. There is a separate concurrent program that can be run to assign items.

Copy BOM:If yes and if Bills of Material have been created in the model organization, all BOMs will be copied to the new organizations. If no, Bills of Material will not be copied.

Copy Rountings: If yes and if routings exist in the model organization, all routings are copied to the new organizations. If no, routings are not copied.

Purge:If yes, all records from the Interface Table will be purged.
If no, the records will not be purged. Records with Fail will not be purged even if you have selected yes.

How to change Inventory  Valuation accounts for an old inventory organization that were are no longer used for inventory.
Please do appropriate backup procedures. Retest the issue in a test instance; verify if the issue was resolved before promoting to Production.

1. For the organization which doesn't use any inventory but has invalid account use the following update sql statement to update the accounts:

update mtl_parameters
set MATERIAL_ACCOUNT = &new_material_account_id,
MATERIAL_OVERHEAD_ACCOUNT = &new_moh_account_id,
OUTSIDE_PROCESSING_ACCOUNT = &new_osp_account_id,
RESOURCE_ACCOUNT = &new_resource_account_id,
OVERHEAD_ACCOUNT = &new_overhead_account_id,
EXPENSE_ACCOUNT = &new_expense_account_id where organization_id = &organization_id;


2. For the cost group accounts for the organization in question, please use the following update sql statements to update the accounts if the accounts are invalid :

update cst_cost_group_accounts
set MATERIAL_ACCOUNT = &new_material_account_id,
MATERIAL_OVERHEAD_ACCOUNT = &new_moh_account_id,
OUTSIDE_PROCESSING_ACCOUNT = &new_osp_account_id,
RESOURCE_ACCOUNT = &new_resource_account_id,
OVERHEAD_ACCOUNT = &new_overhead_account_id,
EXPENSE_ACCOUNT = &new_expense_account_id
where organization_id = &organization_id and cost_group_id = &cost_group_id ;

The cost group ids can be retrieved from the cost group accounts form. Before doing this change make sure that no values exist in GL for the old accounts .

3 If you want the new cost variance account to be used in costing of future transactions, using a simple SQL statement to update mtl_parameters & cst_cost_group_accounts tables should be fine.

update mtl_parameters
set AVERAGE_COST_VAR_ACCOUNT=&your_ccid
where organization_id=&your_org_id;

update cst_cost_group_accounts
set AVERAGE_COST_VAR_ACCOUNT=&your_ccid
where cost_group_id=&your_group_id;

commit;

Reference: support.oracle.com ,#158720.1,#565995.1,#1469836.1,#746326.1,#1056675.1,#1144105.1,# 568078.1.