Valuation Accounts

The five Valuation Accounts are:-

1. Material
2. Material Overhead
3. Resource
4. Outside Processing
5. Overhead

Material:  

(a)    Normally an asset account this account tracks material costs.

(b)   Under Standard Costing: Under standard costing, it is debited at standard when you issue material to a job or schedule and credited at standard when you complete assemblies from a job or schedule, close a job, or close an accounting period.

(c)    Under Average Costing: Under average costing, this account is debited at the average cost in effect at the time of the issue transaction and is credited when you complete assemblies from a job.

Material Overhead: 

(a)    Normally an asset account this account tracks material overhead (burden) costs.

(b)   Under standard costing, it is charged / debited at standard when you issue material with material overhead to a job or schedule and relieved at standard when you complete assemblies from a job or schedule, close a job, or close an accounting period.

(c)    Under average costing, this account is debited at the average cost in effect at the time of the issue transaction.

(d)   Note: When a job is completed and material overhead is earned, this account is not charged /credited. Instead, the material overhead account for the completion subinventory is debited.

Resource:

(a)    An asset account that account tracks resource costs.

(b)   Under standard costing, it is charged/debited at standard when resources are charged to a job or schedule and relieved/credited at standard when you complete assemblies from a job or schedule, close a job, or close an accounting period.

(c)    Under average costing, this account is debited and credited at the resource rate in effect at the time the resource is charged.

Outside Processing:

(a)    An asset account that tracks outside processing costs.

(b)   Under standard costing it is debited at the standard or purchase order cost when you receive items for a job or schedule in Oracle Purchasing. It is credited at standard when you complete assemblies from a job or schedule, close a job, or close an accounting period.

(c)    Under average costing when you move job or repetitive schedule assemblies through an outside processing operation, it is debited at the resource's predefined rate or at the purchase order cost.

Overhead:

(a)    Normally an asset account this account tracks resource or department overhead cost.

(b)   Under standard costing it is debited at standard when resources are charged to a job or schedule. It is relieved at standard when you complete assemblies from a job or schedule, close a job, or close an accounting period.