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PeopleSoft Cost Management
Creating and Reversing Interunit Expensed Issues

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Understanding the Accounting Structure
Defining the Accounting Structure
Defining Location Accounting
Establishing Commitment Control
Defining Interunit Transfers
Setting Up Intraunit Processing
Designing Shipment On Behalf Of
Creating and Reversing Interunit Expensed Issues

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Creating and Reversing Interunit Expensed Issues

An interunit expensed issue is a stock request that issues
material from an Inventory business unit to an internal
department that is not reporting to the same GL unit as the
inventory unit. If you are shipping stock from a centralized
inventory location to various internal departments within
the organization, then interunit expensed issues can create
the proper accounting entries when multiple GL units are
involved. The system creates an interunit expensed issue
when you enter a stock request using the internal issue
request type and then override the GL unit on the order.
You can enter an interunit expense issue using the Material
Stock Request or Express Issue pages in PeopleSoft
Inventory. The system also processes interunit expense
issues when demand is passed from a purchasing
requisition and the GL unit on the requisition line is not the
same as the inventory's GL unit. Use the Stock Request
Maintenance page to add or change the destination GL
unit. Use the Par Location Header page to define a
destination GL unit for issues to a par location. When you
override the GL unit, the system validates the destination
ChartFields against the new GL unit.
Occasionally, the stock from an interunit expensed issue
must be returned to inventory. Use the Expense Issue
Return page to record the receipt of stock originally
shipped as an interunit expensed issue. The stock can be
received into the original sending inventory business unit or
another inventory business unit. If the stock is received into
a different inventory unit than the one from which it was
initially shipped, then both inventory units must share the
same set of items. You can enter the returned items on the
Expense Issue Return page with or without the original
interunit expensed issue stock request. To create an audit
trail that goes back to the original shipment, you must
retrieve and use the original interunit expensed issue
transaction. You can return the full shipment or just part of
the items or quantities shipped that you shipped.
Note: To run an interunit expensed issue, the currency
and ChartFields must be the same for all the GL business
units. For transactions with multiple currencies and
accounting structures, enter an intercompany transaction
(interunit sales approach) described in the "Managing
Interunit Transfer Pricing and Additional Costs" topic.
See Understanding Interunit Transfers.
Costing and Accounting Interunit Expensed Issues
The system uses the transfer price to cost the material
issue. Define the method for interunit transfer pricing in the
sending inventory business unit using the Transfer Pricing
Definition component and the transfer price default
hierarchy.

See Applying Transfer Prices to a Material Stock Request.

See Using Transfer Pricing Definitions.
You can change the transfer price manually on any line of a
material stock request. The sending inventory business
unit reduces its inventory stock based on the deplete cost
method that you selected on the Cost Profiles page. The
system records any difference between the transfer price
and the item's depletion cost as a gain or loss on transfer.
When you create an interunit expensed issue, the
Accounting Line Creation process creates accounting
entries that debit the interunit receivables of the sending
GL unit and credit the interunit payables of the recipient's
GL unit. The system identifies interunit expensed issues
with the transaction group 036 (InterUnit Expensed Issue).
Set up the accounting distribution for this transaction group
in a different manner than the other transaction accounting
rules. With this group, set up the debit for the destination
GL unit and the ChartField validation against the
destination GL unit. You cannot enter a cost element for the
debit side of this entry. Set up the credit side for the
inventory unit, if you are not using location accounting or if
location accounting reports that it is using the function. Any
difference between the transfer price and the item cost
creates an additional entry using the transaction group 300
(Gain/Loss on Transfer Price).
Image: Interunit Expensed Issue transaction
The following diagram illustrates an example of the
accounting entries generated for an interunit expensed
issue transaction. The cost of the item is removed from the
shipping organization's inventory account using the deplete
cost method of the item's cost profile. In this case the item
cost is 1,400 stored in the cost element 100 (materialgeneral). The transfer price for the item is used to record
the interunit accounts receivable in the shipping
organization and the interunit accounts payable and
expense accounts in the receiving organization. In this
case, the transfer price is 1,500 stored in the cost element
100 (material- general). The transfer price is computed by
the Deplete On Hand Qty process and placed in the
IN_DEMAND_TRPC table. In the shipping organization,
any difference between the item cost and the item transfer
price is recorded in a gain/loss account using the
transaction group 300 (Gain/Loss on Transfer Price).

For transaction group 036 (InterUnit Expensed Issue), use

these pages to derive the ChartField combinations for each
accounting line. Use different pages based on the choice of
interunit method (that you selected on the Installation
Options - Overall/GL page) and location accounting (that
you selected on the Inventory Options page):
InterUnit
Method

Location
Accting

Page for DR to
Source BU

Page for CR to
Source BU

Page for DR to
Dest BU

Page for CR to Dest

BU

Direct

Off

InterUnit Template
(defined on the
source GL)

Accounting
Rules

Accounting Rules
(no cost element)

InterUnit Template
(defined on the
destination GL)

Direct

On

InterUnit Template
(defined on the
source GL)

Storage Area
Accounting

Accounting Rules
(no cost element)

InterUnit Template
(defined on the
destination GL)

Indirect

Off

InterUnit Template
(defined on the
destination GL)

Accounting
Rules

Accounting Rules
(no cost element)

InterUnit Template
(defined on the
source GL)

Indirect

On

InterUnit Template
(defined on the
destination GL)

Storage Area
Accounting

Accounting Rules
(no cost element)

InterUnit Template
(defined on the
source GL)

Pair

Off

InterUnit Pair

Accounting
Rules

Accounting Rules
(no cost element)

InterUnit Pair

Pair

On

InterUnit Pair

Storage Area
Accounting

Accounting Rules
(no cost element)

InterUnit Pair

Costing and Accounting InterUnit Expensed Issue

Returns

Returns are completed using the Expense Issue Return

page in PeopleSoft Inventory. To reverse the original
interunit expensed issue transaction, the system uses the
transfer price from the original stock request (if you have
identified the interunit expensed issue transaction), or the
value that you entered in the Transfer Price field on the
Expense Issue Return page. The inventory business unit
costs the receipt based on the receipt cost method that you
selected on the Cost Profiles page. The system records
any difference between the transfer price and the item's
putaway cost as a gain or loss on transfer. For the GL unit
that rejected the shipment, the system reverses the original
entry by using the transfer price or you may override the
price. When you use the original stock request (interunit
expensed issue transaction), the system uses the transfer
price stored in the IN_DEMAND_TRPC table where the
transfer price is stored by cost elements. This granular
detail is used to record the putaway. If you override the
transfer price on the Expense Issue Return page, then the
system uses the override transfer price and the Default
Cost Element field defined on the Define Business Unit
Item - General: Common page.
When you create an expensed issue return, the Accounting
Line Creation process creates accounting entries that debit
the interunit payables of the returning GL unit and credit
the interunit receivables of the receiving inventory's GL
unit, thereby reversing the original transaction. The system
uses the transaction group 026 (Expensed Issue Return) to
identify the ChartField combinations for the inventory
account receiving the stock and the expense account to be
reversed in the returning GL unit. Set up the accounting
distribution for this transaction group in a different manner
than the other transaction accounting rules. With this
group, set up the credit to validate ChartFields against the
returning GL unit. You cannot enter a cost element for the
credit side of this entry. Set up the debit side for the
inventory unit receiving the return, if you are not using
location accounting or if location accounting reports that it
is using the function. Any difference between the transfer
price and the item's putaway cost creates an additional
entry using the transaction group 300 (Gain/Loss on
Transfer Price).
Image: Interunit Expensed Issue Return transaction
The following diagram illustrates an example of the
accounting entries generated for an interunit expensed
issue return transaction. The transfer price for the item is
used to reverse the original entries in the returning
organization's interunit accounts payable and expense
accounts and the receiving organization's interunit
accounts receivable account. In this case, the transfer
price is 1,500 stored in the cost element 100 (materialgeneral). The cost of the item is entered in the receiving
organization's inventory account using the receipt cost
method of the item's cost profile. In this case the item cost

is 1,600. In the receiving organization, any difference

between the item cost and the item transfer price is
recorded in a gain/loss account using the transaction group
300 (Gain/Loss on Transfer Price).

For the transaction group 026 (Expensed Issue Return),

use these pages to derive the ChartField combinations for
each accounting line. Use different pages based on the
choice of interunit method (that you selected on the
Installation Options - Overall/GL page) and location
accounting (that you selected on the Inventory Options
page). In this table, thereceiving GL refers to the GL unit
tied to the inventory unit that originally issued the stock.
The returning GL refers to the GL unit returning the stock.
InterUnit
Method

Location
Accting

Page for DR
Receiving Inv
BU

Page for CR
Receiving Inv BU

Page for DR
Returning GL BU

Page for CR
Returning GL
BU

Direct

Off

Accounting
Rules

InterUnit Template
(defined on the
receiving GL)

InterUnit Template
(defined on the
returning GL)

Accounting Rules
(no cost element)

Direct

On

Storage Area
Accounting

InterUnit Template
(defined on the
receiving GL)

InterUnit Template
(defined on the
returning GL)

Accounting Rules
(no cost element)

Indirect

Off

Accounting
Rules

InterUnit Template
(defined on the
returning GL)

InterUnit Template
(defined on the
receiving GL)

Accounting Rules
(no cost element)

Indirect

On

Storage Area
Accounting

InterUnit Template
(defined on the
returning GL)

InterUnit Template
(defined on the
receiving GL)

Accounting Rules
(no cost element)

InterUnit
Method

Location
Accting

Page for DR
Receiving Inv
BU

Page for CR
Receiving Inv BU

Page for DR
Returning GL BU

Page for CR
Returning GL
BU

Pair

Off

Accounting
Rules

InterUnit Pair

InterUnit Pair

Accounting Rules
(no cost element)

Pair

On

Storage Area
Accounting

InterUnit Pair

InterUnit Pair

Accounting Rules
(no cost element)

Setting Up Interunit Expensed Issues

To enable Interunit Expensed Issues:
1. Enable interunit expense issues for PeopleSoft
Inventory by selecting the Display GL BU
Override check box on the Inventory Display
Options page.
This option displays the GL BU Override field on the
Material Stock Request, Express Issue and Stock
Request Inquiry pages. On the Stock Request
Maintenance page, the GL BU override is visible,
but you cannot enter values if this option is not
selected.
2. Define the interunit receivables and payables
accounts.
Where you define these accounts depends on the
value that you selected in the InterUnit Method field
on the Installation Options - Overall page. If the
value is:

Direct: the interunit receivables or payables

accounts are entered on the InterUnit
Template page defined for both GL business
units.

Indirect: the interunit receivables or payables

accounts are entered on the InterUnit
Template page defined for both GL business
units.

Pairs: the interunit receivables or payables

accounts are entered on the InterUnit Pair
page. The sending GL unit must be entered in
the From GL Unit field and the receiving unit
must be defined in the To GL Unit field. A
separate pair is defined for every combination
of GL units using the interunit expensed
issues feature.

3. Enter the interunit template ID on the General

Ledger Definition - Inter/IntraUnit page, if you use
direct or indirect methods.
4. Define the interunit transfer pricing using the
Transfer Pricing Definition page.

InterUnit expensed issues are costed using the

sending inventory business unit's transfer pricing
structure.
5. Use the Accounting Rules page to define the
expense account (or accrued liability) to debit and
the inventory account to credit using the transaction
group 036 (InterUnit Expensed Issue).
If you are using location accounting, the inventory
account (credit side) is derived from the Storage
Area Accounting page. With this transaction group,
the debit is set up for the returning GL business unit;
you cannot enter a cost element for the debit side of
this entry.
6. Use the Accounting Rules page to record the gain or
loss account to debit or credit when the item's cost
differs from the transfer price using the transaction
group 300 (Gain/Loss on Transfer Price).
7. Use the Accounting Rules page to define the
expense account (or accrued liability) to credit and
the inventory account to debit using the transaction
group 036 (Expensed Issue Return).
If you are using location accounting, the inventory
account (debit side) is derived from the Storage
Area Accounting page. With this transaction group,
the credit is set up for the GL business unit returning
the stock; you cannot enter a cost element for the
credit side of this entry.
8. Add reason codes for return.
On the Reason Codes page, define reason codes to
describe the reason that the stock was returned,
such as over stocked, damaged in shipment, and so
on. When defining the reason codes, use the Return
Type of Expense Issue Return. This allows you to
select the reason code on the Expense Issue Return
page.
Pages Used to Create and Reverse Interunit Expensed Issues
Page Name

Definition Name

Navigation

Usage

Stock Request
Summary

EZ_ISSUE_INV

selectInventory, then selectFulfill

Stock Orders, then selectStock
Requests, then
selectCreate/Update Stock
Request

Enter an interunit expensed

issue by using the internal
issue request type and then
override the GL unit on the
order.

Express Issue

EXPRESS_ISSUE1_INV

selectInventory, then selectFulfill

Stock Orders, then selectStock
Requests, then selectExpress
Issue

Enter an interunit expensed

issue by using the internal
issue request type and then
override the GL unit on the
order.

Expense Issue

PUTAWAY_EXP_INV

selectInventory, then

Enter a return of stock

Page Name

Definition Name

Return

Navigation

Usage

selectPutaway Stock, then

selectExpense Issue Return

originally issued as an
interunit expensed issue
transaction.

Inventory
Display Options

BUS_UNIT_DSP_IN

selectSet Up Financials/Supply
Chain, then selectBusiness Unit
Related, then selectInventory, then
selectInventory Display Options

Select the Display GL BU

Override check box to
enable interunit expense
issues for the inventory
business unit.

Accounting
Rules page

CM_ACCTG_DIST

selectSet Up Financials/Supply
Chain, then selectProduct
Related, then selectCost
Accounting, then
selectTransaction Accounting
Rules, then selectAccounting
Rules

Create the debit and credit

lines for accounting entries
based on the business unit,
transaction group,
distribution type, item or item
group, and cost element.

Transfer Pricing
Definition

CM_TRAN_PRICE_DEFN

selectCost Accounting, then

selectItem Costs, then
selectDefine Rates and
Costs, then selectTransfer Pricing
Definition

Define the transfer prices to

be used for a shipping
business unit.

Installation
Options Overall/GL

INSTALLATION_FS1

select Set Up Financials/Supply

Chain, then selectInstall, then
selectInstallation Options, then
selectOverall

Select an interunit method.

General Ledger
Definition Inter/IntraUnit

BUS_UNIT_TBL_GL1

selectSet Up Financials/Supply
Chain, then selectBusiness Unit
Related, then selectGeneral
Ledger, then selectGeneral Ledger
Definition, then selectDefinition

If using interunit templates,

define the template for both
receiving and sending GL
units.

InterUnit
Template

IU_INTER_TMPLT

selectSet Up Financials/Supply
Chain, then selectCommon
Definitions, then selectInter/Intra
Unit, then selectInterUnit Template

If you selected the direct or

indirect method on the
Installation Options Overall/GL page, then enter
the interunit receivables and
payables.

InterUnit Pair

IU_INTER_PR_BASIC

selectSet Up Financials/Supply
Chain, then selectCommon
Definitions, then selectInter/Intra
Unit, then selectInterUnit Pair

If you selected the pairs

method on the Installation
Options - Overall/GL page,
then enter the interunit
receivables and payables for
the GL pair.

Reason Code

REASON_CD

selectSet Up Financials/Supply
Chain, then selectCommon
Definitions, then selectCodes and
Auto Numbering, then
selectReason Codes

Enter reason codes to

describe the various reasons
that stock was returned. Use
the Reason Type of
Expense Issue Return.

Related Links
Using Transaction Group Codes
Accounting Rules Page
Applying Transfer Prices to a Material Stock Request

Installation Options - Overall Page

Understanding PeopleSoft Interunit and Intraunit Functionality

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