What is profitability? How do you map 'segment wise profitability' in Oracle?

Answer The Accounting standards in various countries # 1 expects the organization earning revenue from multiple product segments to show the segment wise profitability information as a part of the Financial Reporting. Here is how you can set up the same in R11i. 1. Set up an item category as 'Product Segment'. 2. In the GL Set of books, create a chart of account segment as 'Product Segment'. Give validation as table, and link it to the product segment field in the item category table. 3. Set up the cost of goods sold account in such a way that for each item, the corresponding 'Product Segment' value is debited during a shipment. 4. In the item attributes for invoicing, change the 'Product Segment' value in the 'Revenue Account' field to the corresponding value for each item. 5. In AR, set up the auto accounting to pick the 'Product Segment' Value from the 'Standard Lines' for Revenue Account. 6. Create an FSG report to capture Total Revenue, Total Cost and the Profitability for each Product Segment.

In R12 there is a feature called 'Supporting Reference' which can provide you with the same information. This means that you need not create a chart of account segment called 'Product Segment' in your ledger. However you will need to create a custom report to provide you with

the profitability since segment wise revenue information is available in AR and segment wise cost information is available in 'Cost Management' for Discrete inventory and 'OPM Financials' for OPM
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