FAQs on COGS in Oracle Apps

1 - When does an RMA debit inventory and credit DCOGS account?

A. RMA has created after COGS Recognition. So RMA debits inventory and credits COGS
account. If RMA happens before COGS Recognition then RMA debits inventory and credits
DCOGS account.
2 - Why there is no accounting for COGS recognition?
A. There is no accounting for COGS recognition because it has zero quantity.
Reason:- Customer has created RMA against this Sales Order Line.
3 - No COGS Recognized (COGS will never be recognized as there is no reference to the
original invoice). Why?
A. COGS recognition is designed to match with AR revenue recognition. If you don't have an
invoice yet but only a credit memo, what would be the percentage of revenue recognized
from AR?
Eg:
The COGS recognition is not going to happen at the individual RMA level, it is at the order
line level that has been shipped.
Say you have debited the Deferred COGS for the original shipment at $100, then you have
credited the Deferred COGS for the RMA receipt at $40. The net Deferred COGS is $60, so
far so good. After the credit memo and invoice have gone through, what matters at this
point of time is how much net percentage of revenue is recognized from AR for this order
line. Suppose a 50% revenue recognized, then a distinct COGS recognition transaction is
going to be created that will credit deferred COGS at $30 and debit COGS at $30. The
accounting of original shipment and RMA transactions would not change, but the additional
COGS recognition transaction will make the order line's recognized COGS to be matched
with recognized revenue.
4 - Why Inter company COGS account is not working after completing mandatory setup?
A. There is a difference between the internal order flow and drop shipment or global
procurement flow. The intercompany COGS account defined in the Inter-company Relations
form is only used in drop shipment and global procurement flows. For internal order flows,
the account is driven by the Inventory Cost of Goods Sold Account workflow. In default, the
workflow process uses the item COGS account, but the user can configure the process to
use any other account.
5 - How to diagnose missing COGS Recognition events?
A. Checking whether the COGS events are costed is easy, you just verify mmt.costed_flag.
Checking whether COGS events are created is more functional and less simple. You can use
the R12 Revenue COGS matching report to find out whether the result is expected. If the
expected COGS recognition percentage does not match Revenue percentage, there could be
a potential problem.
6 - Can we close the Inventory period without running the
COGS recognition concurrent programs? If not, what prevents it? If so,
what are the entries that are created when the recognition is run the
following month and the inventory period for the current month is
closed?

A. If the customer is using perpetual Costing Method "Standard", "Average", "Layer" then
the inventory period can be closed prior COGS recognition process. If the customer is using
PAC then the "Collect Revenue" and "AR period" needs to be closed prior PAC period close.
7 - How to derive COGS Account Cost Center using Salesperson Value from Sales Order
form in Order Management thru SLA?
A. Looking at gmf_xla_extract_headers, for the OM issue from stores transaction, the
transaction_id on that row points to a row in mtl_material_transactions and the column
source_line_id in that table points to the line_id in oe_order_lines_all.
8 - Why when generating accounting--the COGS, accounting does not follow the Revenue
Accounting for the Receivable Invoices?
A. COGS account in Oracle EBS is driven and derived from Order Management COGS
account generator workflow. If you need help for that workflow, contact Order Management
team.
9 - Is there a way for Cost Management SLA (Subledger Account) to utilize the same
sources as the AR SLA?
A. Right now, there is no built-in cross reference of sources in SLA between Receivables and
Cost Management. There are two options for the customer:
a - Inside SLA, build a few custom sources for Cost Management Application that the
customer is using for Receivables.
b - Even though the deferred COGS account is a fixed organization parameter, the true
COGS account is derived from Order Management COGS Account Workflow. That is wellknown in 11i and the functionality remains in R12. The logic can be mimicked inside the
workflow.
10 - Trying to generate Deferred COGS but instead the Inventory Accrual account appears
on the Inter-company AP invoice. How can they get this to be a deferred accrual account?
A. There is only deferred COGS, no such a thing called deferred accrual. To do the drop
shipment right, you need to set up the transaction flow and inter-company relations with
advanced accounting, not the shipping network setup.
When the setup is right, you would get one physical transaction out of OU2, one logical
transaction for OU2, and two logical txns for OU1. The logical sales order issue transaction
of OU1 will hit deferred COGS account. The deferred COGS will be transformed into true
COGS after you run the COGS recognition programs. As for the inter-company AP invoice, it
should use the intercompany accrual account defined in the inter-company relations form.
There is no concept of deferred accrual.
11 - COGS account is going 100% into the account instead of getting deferred into 5
groups. Our revenue accounting rule splits the revenue into 5 deferred periods and we
expect the COGS to do the same. I ran the 3 programs under Cost Management (Resp.) ->
COGS accounting and the Material Distributions is still going 100% into a single account,
instead of creating 5 records for 20% each in each period. Why?
A: For a given sales order shipment, it always goes to 100% deferred COGS at first. Then
after you run those programs for each period and assuming AR passes the right percentage
of revenue recognition, we will move from deferred COGS to COGS accordingly. For
example, at period 1, if AR says 20% revenue recognized, then you then programs and you
will have 80% deferred COGS and 20% COGS. And at period 2, if AR says now 40%
revenue recognized, you run the programs and you will have net 60% deferred COGS and
40% COGS.

12 - After the COGS generation program is run, COGS entry can be viewed from Material
Transactions Distribution screen in Inventory. The COGS account is wrong as the workflow
was not updated. How to change the cogs account after it is generated?
A. The COGS entry is recorded in material distribution, sub-ledger accounting (SLA) and
general ledger. There is no way to go back to re-cost or re-account for old transactions.
Practically speaking, the best way is to manually adjust them inside GL and move forward
with the correct accounting for new transactions.
13 - How to use COGS Account Relationship to Advanced Pricing?
A. n order to get it working, both profile options INV:Inter-company Invoice for Internal
Orders and CST: Transfer Pricing Option must be set to Yes at site level. Cost manager is at
global level, there is no support at responsibility level. Please study the following white
papers:
14 - RMA Receipt transaction does not credit actual Cogs Account. Why?
A. This is intended behavior in R12.
For RMA receipt Transaction with reference to original Sales Order document will create
below accounting distribution:
Dr.Inv
Cr.Deferred COGS
There will be separate COGS Adjusting entries created for the COGS Adjustment based on
the COGS Recognition percentage.
Dr./Cr.COGS
Cr./Dr.DCOGS
For RMA receipt Transaction without any reference to Sales Order document will create
below accounting distribution:
Dr.Inv
Cr.COGS
This will result in balanced journal entries.
15 - Sales Orders are for a single customer, linked to a single sales rep, and can contain an
item A which, depending on the usage at sales order lines level, has to be linked to two
distinct business lines.
Thus the same item used in the same order and in 2 sales order lines has to generate
revenue account and cogs accounts linked to 2 distinct business lines. How this can be
achieved ? Can we use the order line type for this ? Impacts on the AR and COGS autoaccounting ?
A. COGS and revenue accounts are not built the same way.
For revenue account, the auto-accounting allows to default your business line segment from
the bill to site, the transaction type (AR one, not the OM one), the sales rep or the product.
If the product is not the single driver for your business line segment value, does one of
these other values could be used ? If not, it means the value will have to be corrected
manually in the invoice, or a custom to be built depending on customer rules. For the COGS,
it's generated by the account generator workflow, this can be customized to default the
value expected by the customer.

17 - Can we "Turn Off" DCOGS in Release 12.0.x ?

A. Deferred COGS and Revenue-COGS matching are mandatory new features in R12 to help
customers be legal-compliant. There is no standard way to support disabling this bestpractice feature set.
18 - Why is COGS charged to the incorrect GL account?
A. COGS account is stamped as MMT's (MTL_MATERIAL_TRANSACTIONS table) distribution
account, and it is driven by the Order Management Cost of Goods Sold Account workflow.
Customers can configure the workflow process to achieve their business needs based on
item types.
19 - In 11.5.10.x mtl_material_transactions table and locator_id field was used to get
information on inventory charged to projects. In R12 locator_id field is blank, how to find?
A. In EBS release 12.x.x COGS is a logical transaction --not a material transaction as
11.5.10.x.
COGS transactions will not have project and locator information.
20 - Can COGS Recognition transactions created in a closed inventory period?
A. Refer Oracle Cost Management User Guide ->Revenue and COGS Matching ->Period
Close Considerations Here its clearly mentioned that COGS Recognition transactions can be
created in Closed Inventory Period. If the GL period is closed then COGS Recognition
events/transactions will be created in next open GL period.

FAQ in COGS / DCOGS (Doc ID 1607921.1)

Modified:28-Jan-2014

Type:FAQ

In this Document
Purpose
Questions and Answers
1 .What is the significance of Account_set_flag in the table

To Bottom

RA_CUST_TRX_LINE_GL_DIST_ALL?
2.What are the different meanings of Potentially Unmatched Flag column
value in Cst_Revenue_Recognition_lines table ?
3.When and how COGS will be recognized for Ship only sales order Type ?
4.What is the functionality of COGS with respect to sales order type "Repair
or Replace" ?
5.What is the role of tolerance amount Parameter in Cogs Revenue
matching Report?
6.Whether Generate cogs Recognition Events program can be run in parallel
for same ledger id ?
7.Why Referenced RMA hits COGS directly instead of DCOGS Account ?
8.How to fix the Rounding off issue occurs with respect to Deferred COGS
Account?
9.Why Cogs revenue matching report has 'Nan' character for both Revenue
and cogs ?
10.Can Inventory period be closed without running the COGS Recognition
Events program ?
11.Is it possible to have COGS Recognition Transaction Date as Shipment
date rather than closure date for ship only sales order lines?
12.From where the Standard Cost adjustment account is picked up when
there is a difference in Item costs?
13.If the AR invoice line is deleted, will it result in Adjusting in Cogs ?
14.How to identify whether RMA is a Referenced or Unreferenced one?
15.What is the accounting treatment for Rejected sales order ?
16.what is the relationship between Cost manager and Generate cogs
Recognition Events Program?

17.Under what circumstances, Distributions will not be created for COGS

Recognition Transaction?
18.Why COGS is not getting recognized when invoice is created manually?
19.How to Generate the COGS Account from the Order Type ?
20.Is it possible to split COGS Account according to Sub-element wise ?
21. How the difference in Item costs is treated in case of Standard costing
and Average costing?
22. Is There A Way To Turn Off Deferred COGS ?
23.If the AR invoice line is deleted, will it result in Adjusting in COGS?
24. Why COGS Transaction Quantity is Zero?
25. Whether "Record Order Management transactions" in Cost Management
- SLA is optional ?
26.Need to change the COGS account on Inventory Organization
parameters, is it allowed?
27.Whether Collect Revenue Information program and Generate cogs
recognition events program run at the Operating Unit level, instead at
ledger level?
28. How COGS functionality works in case of Drop Shipments and
Intercompany Accounting?
29.How the Transaction Date of COGS Transaction is derived ?
30. What is the meaning of column value of so_issue_account_type in the
mtl_material_transactions table with respect to 11i and R12 ?
References

APPLIES TO:
Oracle Cost Management - Version 12.0.0 and later
Information in this document applies to any platform.
Note : Data Content in this document is reviewed and updated periodically. Please keep a track
of this document from My Oracle Support web page.

PURPOSE
Collating commonly asked functional questions in the COGS area.
This will help in:

Lesser time for Issue Identification.

Answering the functionality based questions.

QUESTIONS AND ANSWERS

1 .What is the significance of Account_set_flag in the table
RA_CUST_TRX_LINE_GL_DIST_ALL?
After Revenue Recognition and Revenue Accounting is run from AR responsibility,
Account_Set_flag 'Y' signifies, Revenue recognition is not performed. Account_Set_flag
'N' signifies that Revenue recognition is run.
2.What are the different meanings of Potentially Unmatched Flag column value in
Cst_Revenue_Recognition_lines table ?
'U': Unprocessed. Revenue is completed and program Collect Revenue Recognition
Information is done, but COGS Recognition hasn't been happened yet. This status is
applicable only for Ship only sales orders.
Y': Mismatched. Program found the om line, which has mismatching revenue and
COGS, at the beginning of program Generate COGS Recognition Events.
NULL: Successful. Both COGS Recognition event and transaction are generated
successfully. This will be updated from Y to Null
I': Investigation. This is an abnormal situation. If the COGS Recognition transaction is
not only created but also Generate Cogs recognition Events program errors out, it will
be updated to 'I'.
Have to analyze why the flag is updated to 'I'.

'P': Pending.
Case 1: If revenue is before sales order issue, even you run Generate COGS
Recognition Events, COGS Recognition transaction won't be created, so the flag will be
updated from 'Y' to 'P'.
Till after shipping the item, then you run Generate COGS Recognition Events again, 'P'
will be updated to 'Y' to further process.
Case 2: If a om line has multiple sales order issue, COGS Recognition will be only
happened when the full quantity issued.
If partial quantity issued, still updated to 'P' from 'Y' and waiting for next COGS
Recognition.
3.When and how COGS will be recognized for Ship only sales order Type ?
In case of Ship Only Orders, once the line is closed, it inserts a line in
Cst_Revenue_Recognition_Lines table with Potentially_unmatched_flag as U.
Once the Generate COGS recognition program is run, Potentially_unmatched_flag
becomes NULL and COGS transaction will be created in Mtl_Material_Transactions and
Cst_Cogs_Events tables.
4.What is the functionality of COGS with respect to sales order type "Repair or Replace"
?
Order Type 'Repair Replace' works like Ship only sales order.
In that case, the sales order line has to be closed in order to recognize the COGS.
5.What is the role of tolerance amount Parameter in Cogs Revenue matching Report?
Display Matched Lines = Yes:Report should display all the lines irrespective of revenue and cogs matching
percentages. So here report displays all the lines irrespective of Tolerance Amount.
Display Matched Lines = No:Here report shows only unmatched lines. This is to find out the mismatched lines. In
this process lines, which have rounded issues,are also coming and which ideally should
not come. To resolve the issue, "Tolerance Amount" parameter is added .So, Once
the Tolerance amount is given as 1, it excludes the lines with rounding off issues.
So the purpose of this parameter is useful only when Display Matched Lines is set as
'No'.

6.Whether Generate cogs Recognition Events program can be run in parallel for same
ledger id ?
If incompatibility is set with Cost Manager,then Generate cogs program can be run in
parallel for different ledger_id but not for same ledger id.
7.Why Referenced RMA hits COGS directly instead of DCOGS Account ?
After performing Sales order issue if user has recognized revenue and user has run
Collect Revenue Recognition Program and Generate COGS Recognition Events Program
and then if user have performed any Referenced RMA Receipt, then RMA hits COGS
Account instead of DCOGS Account Because, while performing Referenced RMA Receipt
there is no balance in DCOGS account.
The accounting entries is as follows:At the time of Sales order Issue:DCOGS Dr.
Inventory Cr.
At the time of COGS Recognition:COGS Dr.
DCOGS Cr.
At the time of Referenced RMA Receipt:Inventory Dr.
COGS Cr.
8.How to fix the Rounding off issue occurs with respect to Deferred COGS Account?
As the issue happens due to current accounting architecture, the workaround is to
perform Manual journal adjustments to balance the DCOGS account.
For a possible standard solution, there is Enhancement Request raised with Oracle Cost
management to modify the COGS Recognition design.
The Enhancement Request id:
10065100 - MODIFY COGS RECOGNITION TRANSACTION GENERATION TO AVOID
DEBIT BALANCE IN DCOGS.
9.Why Cogs revenue matching report has 'Nan' character for both Revenue and cogs ?
For the order lines, which have 'NaN' value for Revenue, user might not have created
invoice for them.
For the order lines, which have 'NaN' value for COGS, user might not have collected

revenue successfully for them.

Following is checklist:
1) Invoice must be created.
2) Revenue Recognition should be completed.
3) Collect Revenue Information program should be completed. Invoice GL date should
be between Start Date and End Date.
4) Generate COGS Recognition Events program should be completed. If above steps are
completed, the report should show correct values.
10.Can Inventory period be closed without running the COGS Recognition Events
program ?
If the costing method is used as "Average", "Standard", "LIFO", "FIFO", then inventory
period can be closed without running the
Generate Cogs Recognition Events program. But GL period must be open. If GL period
is closed then the program creates COGS events in the next open GL period.
But if "Periodic Average Costing" is used then "Collect Revenue Recognition program "
and "AR Period needs to be closed prior closing the PAC period.In periodic Average
costing organizations, only events and transactions that are within the current periodic
periods start and end dates will be processed.
11.Is it possible to have COGS Recognition Transaction Date as Shipment date rather
than closure date for ship only sales order lines?
Yes. It is possible. Costing Development has given an option for user to select the date
on which COGS for a Ship Only Order should recognized.
User can choose the date as closure date or shipment date by config the profile
"CST_SHIP_OR_CLOSURE_DATE"
This Profile option "CST_SHIP_OR_CLOSURE_DATE" is introduced via Patch
17026262:R12.BOM.C
12.From where the Standard Cost adjustment account is picked up when there is a
difference in Item costs?
Standard Cost Adjustment is nothing but the difference between the Item cost at the
time of Sales order issue and Referenced RMA Receipt.
The COGS account defined in the Organization Parameters window will be used for the
Standard Cost Update Adjustment account. This account will be defaulted from the
Inventory Organization which has created referenced RMA Receipt.

13.If the AR invoice line is deleted, will it result in Adjusting in Cogs ?

Deleting of an Invoice line after a Sales Order is Shipped and Invoiced and revenue is
recognized, there would not be any adjustment to the COGS account and this would
most likely cause reconciliation issues and a manual adjustment would be required.
Functionally, A invoiced line cannot be deleted once the revenue is recognized, it will
corrupt Accounts Receivables module.
14.How to identify whether RMA is a Referenced or Unreferenced one?
Navigate to Order Management Responsibility > Sales orders form > Query the Sales
Order Number> Line Items(Tab) > Returns (Tab).
Here, check Line Type and Reference columns. If it is a referenced RMA, then Sales
order Number will be populated in the Reference column.
SQL to identify:
1)Select reference_line_id from oe_order_lines_all
where line_id=&rma_line_id;
2) Select trx_source_line_id from mtl_material_transactions
where transaction_id=&transaction_id; /* Use RMA Receipt */
15.What is the accounting treatment for Rejected sales order ?
There is no accounting when a sales order line is rejected.
Cost Management only creates accounting when the rejected items are received and
then either delivered to a regular or a scrap asset sub-inventory.
16.what is the relationship between Cost manager and Generate cogs Recognition
Events Program?
1st procedure creates COGS Recognition events/transactions and commit the database.
2nd procedure pick up those uncosted events/transactions and create their accounting
in Mtl_Transaction_Accounts table.
If by any chance, if these transactions error out, then they can be resubmitted, so in
that case if Cost Manager runs prior to Generate cogs program, it will pick up and do
accounting.
In the older code, if cost manager is running after 1st phase of Generate COGS

Recognition program then it will pick up those uncosted transactions and do accounting.
But as per the latest code, if Generate COGS program is running then cost manger
won't pick up those uncosted COGS records.
(so if they error out and submitted using cost manager then cost manager processes
those records).
17.Under what circumstances, Distributions will not be created for COGS Recognition
Transaction?
Distribution will not be created for COGS Recognition under the following scenarios:
i. The Sales Order Issue quantity and RMA quantity are equal and are in same or
different period. [SO ISSUE > RMA > COGS]
ii. The Item costs is "ZERO" check the new cost in
CST_REVENUE_COGS_MATCH_LINES table. It will be "Null".
iii. Both the COGS % and Prior COGS % are same (0 or any value) in
CST_COGS_EVENTS table.
18.Why COGS is not getting recognized when invoice is created manually?
Manual AR invoices linked to a Sales Order are not considered for COGS recognition.
Only invoices created through Auto Invoice program are getting considered for COGS
recognition.
This is not a bug, the matching between Receivables invoice (in AR) and Sales Order
shipment is controlled by Order Management (OM).
If the AR invoice is not from OM, the link between AR and Inventory (INV) is not
maintained.
Bug 14823225 - MANUAL AR INVOICES LINKED TO SALES ORDER ARE NOT
CONSIDERED FOR COGS RECOGNITION
19.How to Generate the COGS Account from the Order Type ?
In order to generate the COGS account from the Cost of Goods Sold account assigned
to the order type (A.K.A. OM Transaction Type) of the order, the seeded COGS
workflow needs to be modified to change the default node from Get CCID for a line to
Get CCID from the Order Type ID.

Refer Doc ID 414314.1- How to Generate the COGS Account from the Order Type
20.Is it possible to split COGS Account according to Sub-element wise ?
No.This is not possible through Oracle standard functionality.
The fundamental feature of EBS Costing is to do accounting at cost element level
(Material, Material Over head, resource, over head etc..)
We don't do accounting at sub-elemental level. It may be possible if you design and
implement a major SLA customization with your own accounting template and account
derivation rules.
21. How the difference in Item costs is treated in case of Standard costing and Average
costing?
Let us explain with a small example.
Eg. Current average cost as on 11-JAN - $10, Then Sales Order Issue - $10
Current average cost as on 15-JAN - $15
In case of Standard costing, the Sales Order Issue is hit at Item costs $10.
Incase of RMA, Inventory account is hit at $15, DCOGS/COGS Account is hit at $ 10 and
the difference of $2 is captured as "Standard Cost Adjustment account.

In Case of Average costing, FIFO, LIFO, the Sales Order Issue is hit at the current
Average cost $10.
RMA cost will be decided based on whether it is referenced or unreferenced.
If a Referenced RMA is done on 15-JAN - Treated as Cost Owned Transaction $10
If an Unreferenced RMA is done on 15-JAN - Treated as Cost Derived transaction
$15
22. Is There A Way To Turn Off Deferred COGS ?
No,but consider the following workaround that mimics the 11i (pre-DCOGS
functionality).

The R12 Revenue-COGS matching functionality requires not only the new DCOGS
account, but also a series of concurrent programs to be run at regular basis. The
DCOGS account is set up at inventory organization level only, while the COGS account is
usually defined at item level. Unless you have the same COGS account for all items,
hence doing something simple like making the DCOGS account and the COGS account
the same does not make sense.
You need a custom trigger on mtl_material_transactions table to make the
so_issue_account_type column to be null whenever a record is created. This will forgo
the DCOGS functionality.
In this way, the transaction will be costed hitting COGS directly just like 11i
transactions.
23.If the AR invoice line is deleted, will it result in Adjusting in COGS?
'Deleting of an Invoice line after a Sales Order is Shipped and Invoiced and revenue is
recognized, there would not be any adjustment to the COGS account and this would
most likely cause reconciliation issues and a manual adjustment would be required
Functionally, A invoiced line cannot be deleted once the revenue is recognized, it will
corrupt AR.
24. Why COGS Transaction Quantity is Zero?
If sales order Issue and RMA Receipt is performed for the full quantity and after RMA
Receipt if user has run Collect Revenue Recognition Program and Generate COGS
Program, then the Transaction Quantity for COGS Transaction will be ZERO.
Since, transaction quantity is ZERO, there won't be any distributions for the same.
25. Whether "Record Order Management transactions" in Cost Management - SLA is
optional ?
Record Order Management transactions is optional because Cost Manager does the
same job as what record order management transactions request will do for COGS
related transactions.
Record Order Management transactions is required only for 'OPM' enabled Inventory
organizations.

26.Need to change the COGS account on Inventory Organization parameters, is it

allowed?
Once the account is defined in Inv Org Parameters form, then the field will be grayed
out.
COGS account is set in Inv > Org > Parameters form/ Items form / Workflow / ADR
Rules.
27.Whether Collect Revenue Information program and Generate cogs recognition
events program run at the Operating Unit level, instead at ledger level?
Currently the functionality is that these programs run at Ledger level and not at OU
Level.
28. How COGS functionality works in case of Drop Shipments and Intercompany
Accounting?
For internal drop shipments to customers, Cost Management only synchronizes revenue
and COGS in the customer facing Operating Unit (OU) when advanced accounting is
enabled. Revenue/COGS synchronization is not performed in the non-customer facing
operating units. Costing books the entire sales order shipment amount to COGS.
29.How the Transaction Date of COGS Transaction is derived ?
The TRANSACTION_DATE in MTL_MATERIAL_TRANSACTIONS table for COGS
transaction depends on the LAST_EVENT_DATE in
CST_REVENUE_RECOGNITION_LINES table.
When the Collect Revenue Recognition Information program is run, it inserts a line in
the CST_REVENUE_RECOGNITION_LINES (CRRL) table. This is populated by Accounts
Receivables (AR) code.
This is the Revenue Recognition date and can be checked from the
RA_CUST_TRX_LINE_GL_DIST_ALL table, column name GL_Date.
30. What is the meaning of column value of so_issue_account_type in the
mtl_material_transactions table with respect to 11i and R12 ?
For 11i transactions, so_issue_account_type is Null in the Mtl_material_transactions
table, which means No deferred COGS.
For R12 transactions, so_issue_account_type is 2 in the Mtl_material_transactions
table, which means to use the new deferred COGS functionality.

REFERENCES
NOTE:1307906.1 - COGS Dataflow and Diagnostics [Video]
NOTE:414314.1 - How to Generate the COGS Account from the Order Type
NOTE:1565831.1 - DCOGS Balance Analyzer Diagnostic
NOTE:1528307.1 - COGS Accounting From RMA Perspective(How to interpret COGSDIAG.sql,
Not a bug, Known Issues and Recommended Patches)