When defining the costing key flexfield structure, three primary considerations are essential for a functional setup. First, every segment within the flexfield structure must be defined with a corresponding value set (A), which governs the format, validation, and list of approved values. Second, the structure must be designed by considering the cost hierarchy levels (B) — such as Cost Organization, Cost Element, and Inventory Organization — that will be used in Subledger Accounting rules to dynamically populate the segments of the cost accounts. Third, the flexfield structure must be comprehensive enough to accommodate all segments required for the full journal entry, including both the primary cost account and its corresponding offset account (D).

C. GL Accounting key flexfield structure.

While it is a highly recommended best practice to align the costing key flexfield with the GL structure, it is not a mandatory constraint. Subledger Accounting (SLA) rules can map a different costing structure to the GL structure.

1. Oracle Fusion Cloud SCM: Using Cost Management (Release 24B)

Chapter: Cost and Profit Center Accounting Setup

Section: Costing Key Flexfield: Explained.

This document supports option A

stating

"The costing key flexfield is an accounting flexfield that you configure to build cost accounts." The configuration of any flexfield fundamentally requires defining segments and assigning value sets. It also supports the reasoning for excluding C by stating

"It is recommended that you configure the costing key flexfield with the same structure as the accounting key flexfield that is used by the primary ledger

" indicating it is a best practice

not a strict requirement.

2. Oracle Fusion Cloud SCM: Using Cost Management (Release 24B)

Chapter: Cost and Profit Center Accounting Setup

Section: Costing Subledger Accounting Rules: Explained.

This source validates option B. It explains how account rules derive account combinations

stating

"For example

you can define a rule to derive a segment of the inventory valuation account from the cost organization

or another segment from the cost element." This shows that the cost hierarchy levels are the intended sources for the segments

making them a critical consideration during the structure's design.

3. Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management (Release 24B)

Chapter: Set Up Cost Management

Section: Cost Accounting Business Process Model.

This guide's process models for transactions like "Transfer Transactions from Inventory to Costing" and "Record Production Activities" implicitly support option D. These processes result in the creation of full accounting distributions (debits and credits)

which necessitates that the underlying key flexfield structure can generate complete entries

including all segments for offset accounts like Inventory Valuation or WIP Valuation.