The following topics summarize system events when creating GL transactions for adjustments to standard costs.

When you select the option to create an adjustment to standard cost, the system creates a cost adjustment transaction that is based on the comparison of the periodic cost results to the standard cost for the same calendar period. The total cost adjustment transaction impacts inventory account and the adjustment account specified. The system posts the GL transaction for adjustment to standard cost in the official daybook for standard inventory transactions.

With adjustment to standard cost, the system posts calculated periodic costing GL transactions initially to the periodic costing calculation daybook (transient layer) when you execute an intermediate recalculation, and subsequently transfers the transactions to the final daybook (management/official layer) during the month-end close process when posting the PC transactions as a basis for the adjustment to standard costs.

Periodic costing GL transactions in the transient layer, resulting from intermediate PC calculations can only be handled by the periodic costing functions, and security must be implemented to prevent the use of other menu functions that are not periodic costing related to change, move, or transfer to other layers.