Oracle Fusion General Ledger Allocations

Abhijit Dhakephalkar
Product Management
Oracle Fusion Cloud ERP Development

Wednesday, November 18, 2015

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Agenda
Allocation - Concepts

Demonstration

Recurring Journals

Training Assets

Questions & Answers

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Allocations

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 Calculation Manager provides an automated solution to flexibly
distribute revenues and costs across the enterprise or to record formulaic
recurring adjustments.

• Define rules to generate formula-based journals.

• Leverage references to pre-aggregated multidimensional balances to
maximize efficiency in executing complex calculations.

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Allocation Rule Sets Structure and Components

Rule Set
Rules Allocation Wizard
Rules Allocations Source Target Allocation Range Basis Offset

Formulas
Formula Source Target Offset

Point of View
Rules Point of View
(POV) Ledger PBSV Accounting
Period
Balance
Type
Currency Etc.

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Concepts
Concept Description

Source •The source refers to the cost or revenue pool which is used for pro-rating across the allocation
range in an allocation component, or the basis for computation in a formula component.
•Source can be a referenced account balance or it can just be a user defined amount.
Target •The target is the receiver of the allocated or calculated amount.
Offset •The offset is the receiver for the offsetting debit or credit to balance out the generated
allocation or formula.
Validation •The Allocation Manager process of checking the validity of the allocation or formula definition,
such as checking for consistency against the outline of the balances cube it references.
Run Time •A variable that user supplies the value for before an allocation rule is run. This is a user-defined
Prompt (RTP) element at the time of the rule definition and makes the rule highly dynamic and reusable.
• Typically RTP’s are Accounting Period or Primary Balancing Segment Value.

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Allocations and Scenario Dimension
For Allocations, there are two specific seeded scenarios for step down
allocations. Use either of:
 Allocated- temporarily holds the allocated values during the rule
generation process
Total for Allocations- the sum of Actual and Allocated amounts

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Step Down Allocation - Using Only Allocated Amounts
Original
Allocation
Initial allocation
Pool $100
1A Existing Actual 1B Existing Actual
Balance- $700 Balance- $60
Allocation 1A- Allocation 1B-
$70 $30
Stepdown
allocation

Allocation Allocation Allocation Allocation

2Aa- $50 2Ab- $20 2Ba- $25 2Bb- $5

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Fusion Allocations

Demonstration
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Use Case 1 – Headcount based Allocation of Cost
Rule 1: Communication OH Distribution based on Headcount
Allocate the Communication Cost recorded in US Primary Ledger in the
Account: 101-10-64510-000-000-000 amongst the service cost centers based
on the headcount of those cost centers for the Accounting Period 04-15.
Headcount Account: 91000. Headcount per cost center:
Cost Center Headcount
710-Finance 22
720-Accounting 7
721-Ledger 5
722-Receivables 122
723-Payables 105
730-Procurement 46
700-Finance 307

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Use Case 2 – Defer Revenue Expenditure
Rule 2: Advertisement Expenses Deferral

Defer 50% of Advertisement Expense for a given accounting period.

Advertisement Expenses are recorded in US Primary Ledger in the Account:
101-10-63180-000-000-000 for the Accounting Period 04-15.
The deferred revenue expense account is 101-10-13500-000-000-000.

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Agenda
Allocation - Concepts

Demonstration

Recurring Journals

Training Assets

Questions & Answers

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 Overview
Recurring Journals
• Recurring journals are transactions that repeat every
accounting period, such as:
– Accruals
– Depreciation charges
– Reserves
– Periodic expenses
– Allocations
• You can create these repeating transactions by creating
rules using the Calculation Manager.
• Your rules can be simple or complex.

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 Recurring Journals
Standard Scheduling Capabilities

• Automatic Journal Scheduling lets you

generate rules and rule sets according to a
schedule you define.
• For example, you can schedule the same
journal to be generated every month as part of
your month-end closing procedures.
• The complete automation accelerates your
period close process.

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 Recurring Journals
Automatic Journal Scheduling

If you have business cycles that do not coincide with monthly calendars, you can define your own
schedule in General Ledger. These schedules are based on your General Ledger calendar.

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Types of Recurring Journals
You normally use three types of recurring journal entries to reduce data entry time and increase
accuracy for journal entries that repeat each period.

Skeleton: Contain the same • Dr Temporary Labor <Variable Amt>

accounts each period, but have
• Cr Salaries Payable <Variable Amt>
different amounts each period.

Standard: Contain the same • Dr Auto Lease Expenses 10000 dollars

accounts and amounts each period. • Cr Accounts Payable 10000 dollars

Formula: Contain formulas created • Dr Bad Debt Expense <Calculated Amt>

to calculate journal amounts that vary
from period to period. • Cr Bad Debt Reserve <Calculated Amt>

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Recommendations
Type Example Recommendation
Skeleton To record statistical journals, such as Create journal entries in spreadsheets or
headcount, units sold, barrels of oil, or other copy existing journals.
statistical factors.

Standard To record fixed monthly expenses like rent, Create journal entries in spreadsheets or
fixed overhead allocations, etc. create rules using the Calculation Manager if
you need to schedule them.

Formula To calculate journal amounts that vary from Create rules using the Calculation Manager
period to period or to perform simple or formula component.
complex allocations or eliminations.

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Agenda
Allocation - Concepts

Demonstration

Recurring Journals

Training Assets

Questions & Answers

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Fusion Allocations Training Assets

Fusion General Ledger Allocation White Paper

Fusion General Ledger Allocations UPK Demo
Define rules with Calc-Manager in Fusion Applications
Introduction to Recurring Journals
Recurring Journals White Paper

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Customer Connect Discussion Topic
A discussion topic for Fusion General Ledger Allocations has been created on Customer
Connect where you may post any queries you have.
http://appsconnect.custhelp.com/posts/51ea0b57ae

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Questions?

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Appendix

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Comparison to E-Business Suite
What is the equivalent Fusion Allocation Manager functionality vis-à-vis R12 E-
Business Suite features?

EBS Feature Fusion Allocation Manager Feature

MassAllocations Allocation Component with Allocation Wizard

Formula Recurring Journals Formula Component

Auto Allocations Rule Sets

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Power of Calculation Manager
• Complex Step Down Allocations
• Combining Allocations in one Rule and also as Rule set
• Complex Intercompany Allocations
• Complex Formula calculations
• Nullify the balances of range of accounts
• Intercompany Elimination scenario’s
• Customize scheduling capabilities with period increment

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Concepts
Allocation Requirement Solution

Complex formula • Optimally design formulas in a graphical environment with Allocation Wizard
definitions • Real time “spell-check” of rule definitions to validate rules
• Minimize setup and maintenance time with reusable formula components
• Use combinations of available mathematical operators to achieve complex calculations
• Combine formula components to build complex allocations

Enhanced allocation • Use the same allocation rules for similar allocations for different accounting periods or with other determinable
formula scope and variants with run time prompts for accounting period, balancing segment values, ledgers, and user-defined
longevity variables
• Leverage hierarchy versioning with parent account values in formulas

Optimal generation of • Leverage pre-aggregated multidimensional balances to maximize efficiency in executing complex calculations.
allocations • Integration of allocation generation mechanism with enterprise scheduler with flexibility of generating
immediately or in the future
• Seamless process from generation to posting to reversal of allocation
• Creation of rule sets to achieve multi-step cascading allocations
• Audit trail for allocated amounts with well documented rules

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Process Flow
Journal GL Balances
Post

Journal
Import
GL INTERFACE Table

Total for
Actual Allocated Allocations
Journal Entries
Allocation Engine

Allocation
Formula

Allocation Entries Write-back

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Best Practices
Journals- Allocations
Implementation Question
How do I avoid invalid definitions?
How do I automate the allocation
generation process?
Can I use Allocation Manager to
generate elimination entries for
consolidations?
Recommendations and best practices
• Validate the rules and rule sets during definition time and fix the errors flagged.
• Use the enterprise scheduler to schedule the generation of allocation definition at the
optimal time.
• Select option to automatically post the generated allocation and formula journals.
• Leverage reversal criteria sets if there are requirements to reverse the allocation
journals in the future.
• For fully reciprocating eliminations, use a (-1) multiplier against the source elimination
balance to compute the target elimination balance.
• For other types of eliminations, use formulas applying the required math operators
and variables such as ownership percentages to compute the elimination amount.
• Indicate the same account for the source and target if you wish to eliminate the source
balance directly.
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Step Down Allocation - Using Actual and Allocated
Amounts (Total for Allocations)
Original
Allocation
Initial allocation
Pool $100
1A Existing Actual 1B Existing Actual
Balance- $700 Balance- $60
Allocation 1A- Allocation 1B-
$70 $30 Stepdown
allocation

Allocation Allocation Allocation Allocation

2Aa- $550 2Ab- $220 2Ba- $75 2Bb- $15

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Recurring Journal Rules
• Your rules can be simple or complex. Each rule can use:
– Fixed amounts and account balances, including standard, actual amounts,
statistics, and period-to-date or year-to-date balances
– Amounts from the current period, prior period, or same period last year
– Amounts in your formulas, including total balances, entered currency balances,
or statistical balances
• You can quickly create recurring rules by copying and modifying existing
rules:
– Define single ledger or multiple ledger recurring journal batches
– Create a recurring journal batch that contains recurring journal entries for
different ledgers
– Define recurring journals for your ledger currencies, entered currencies, and
statistical currency
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