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Revenue Recognition - Change in GL Account type for Cost of Goods Sold

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A customer wants to change the expense account used during revenue recognition run from Expenses - Services (Internal) to Cost of Goods Sold. To make this change, the GL Account type of the Cost of Goods Sold needs to change from Cost fo Sales to Allocated Costs.

Is this the right way of doing it? Would this not affect other account determinations using this GL Account? If so, what is the best way of doing this?


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Answers (1)

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Hi Pierre,

Be it from any account type where the GL Account belongs to, but if you want to assign to the original expense account or replace a GL account resulting from revenue recognition then
the account type is Allocated Costs.

Note: if there are any postings that are already done, then you will not be able to change the account type of the gl account.

You can change the account type for a G/L account under the following conditions:

  • The account is unposted.
    An account is unposted if no postings have been made to it or if all postings have been reversed.
    •If the account is posted, you can change the account type except under the following conditions:
    ◦One of the two account types (source or target) is an account type for balance carryforwards.
    ◦One of the two account types (source or target) is an account type for profit center or segment clearing.
    ◦You want to switch between a balance sheet account type and an income statement account type.
    ◦You want to switch from a cost and revenue element to a non-cost and revenue element.
    ◦The account was posted with transactions for subledgers. That is, the journal entries contain line items that debit or credit subledger accounts.
  • This information is documented in the help document < Display and Edit Chart of Accounts > from this help document click on the link for <Account Type>


    Lokesh Sharma