R12 - MassAllocation Across Ledgers in GL
R12 - MassAllocation Across Ledgers in GL
R12 - MassAllocation Across Ledgers in GL
The Case Study briefly discusses the MassAllocation Functionality in R12 across
balancing segments with in the Ledger and also across Ledgers.
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Mass allocation is functionality in Oracle General Ledger module through which one can distribute
and allocate expenses to various accounts. It is a very useful tool to properly distribute amounts
between accounts.
By including ledgers or ledger sets in the formulas, you can allocate amounts from One ledger to
Another ledger. Hence, a single formula can perform multiple allocations across ledgers.
Alternatively, you can create a MassAllocation formula to be reused for more than one ledger set,
ledger, or balancing segment value.
Business Requirement
Our Client is an Insurance company, operates in Centralized business model which operates and
manages its services in Singapore and supports its life and investment business across the world.
The business requirement is to allocate common management expenses across the respective
Entities and insurance Funds.
All Shared Service expenses i.e. Finance, HR, CEO, etc. are allocated using Predefined
Percentages. At beginning of every year allocation rules are defined for all the entities based upon
the information received from the respective department for the services expected to be provided
for the whole year across entities.
I have used the standard oracle functionality of MassAllocation enhanced in R12 General Ledger
to meet the above business requirement.
In R12, now you are able to allocate financial data from one or more ledgers to a different target
ledger. This enables you to perform cross-ledger allocations, which is useful for purposes such as
allocating corporate or regional expenses to local subsidiaries when each entity has its own ledger.
This is possible even if the target ledger is in a different currency than the source ledger(s) because
you can create allocations in foreign currencies.
Business Structure of client
Ledgers:
1) Ledger A ; with functional Currency of SGD.
2) Ledger B ; with functional Currency of AUD.
3) Ledger C ; with functional Currency of GBP.
Legal Entities
1) Company ‘A’ – Singapore. – Assigned to Ledger ‘A’
2) Company ‘B’ – Australia. – Assigned to Ledger ‘B’
3) Company ‘C’ – UK. – Assigned to Ledger ‘C’
Business Scenario
I have taken CEO Salary as an example to explain MassAllocation Functionality in R12 across
Ledgers
Company ‘A’ Incurred CEO Salary for the Month of Jan09 SGD 10,000 and it has to be
allocated across Company A, Company B and Company C based on predefined percentages
defined below.
# Accounting Segment
710 – CEO
In our example:
Ledger
Name Formula No Outcome of the 'Formula'
Allocate the Balances with in the Ledger 'A' Among the PAR
Ledger 'A' Formula 1
and NON PAR funds.
Formula Line Ledger Name Company Account Cost Center Product Future
A Ledger 'A' 003 7095 710 000 0000
C C C C C C
B Ledger 'A' 099 9220 710 000 0000
C L C C C C
C Ledger 'A' AAA 9220 710 000 0000
C S C C C C
T Ledger 'A' 099 7621 710 000 0000
C L C C C C
O Ledger 'A' 003 7095 710 000 0000
C C C C C C
Ledger
Name Formula No Outcome of the 'Formula'
Ledger 'A' Formula 2 Creates a journal entry for allocating balances To Ledger 'B'
Formula Line Ledger Name Company Account Cost Center Product Future
A Ledger 'A' 003 7095 710 000 0000
C C C C C C
B Ledger 'A' 110 9220 710 000 0000
C C C C C C
C Ledger 'A' AAA 9220 710 000 0000
C S C C C C
T Ledger 'A' 003 1822 710 000 0000
C C C C C C
O Ledger 'A' 003 7095 710 000 0000
C C C C C C
Ledger
Name Formula No Outcome of the 'Formula'
Ledger 'A' Formula 3 Creates a journal entry for allocating balances To Ledger 'C'
Formula Line Ledger Name Company Account Cost Center Product Future
A Ledger 'A' 003 7095 710 000 0000
C C C C C C
B Ledger 'A' 299 9220 710 000 0000
C S C C C C
C Ledger 'A' AAA 9220 710 000 0000
C S C C C C
T Ledger 'A' 003 1823 710 000 0000
C C C C C C
O Ledger 'A' 003 7095 710 000 0000
C C C C C C
Ledger
Name Formula No Outcome of the 'Formula'
Creates a journal entry for allocating balances From Ledger
Ledger 'B' Formula 4 'A'
Formula Line Ledger Name Company Account Cost Center Product Future
A Ledger 'A' 003 7095 710 000 0000
C C C C C C
B Ledger 'A' 110 9220 710 000 0000
C C C C C C
C Ledger 'A' AAA 9220 710 000 0000
C S C C C C
T Ledger 'B' 110 7621 710 000 0000
C C C C C C
O Ledger 'B' 110 2901 710 000 0000
C C C C C C
Ledger
Name Formula No Outcome of the 'Formula'
Creates a journal entry for allocating balances From Ledger
Ledger 'C' Formula 5 'A'
Formula Line Ledger Name Company Account Cost Center Product Future
A Ledger 'A' 003 7095 710 000 0000
C C C C C C
B Ledger 'A' 299 9220 710 000 0000
C L C C C C
C Ledger 'A' AAA 9220 710 000 0000
C S C C C C
T Ledger 'C' 299 7621 710 000 0000
C L C C C C
O Ledger 'C' 299 2901 710 000 0000
C L C C C C
4) Creating Intracompany Balancing rules to create balancing journal lines for allocation of
expenses with in the entity across funds.
Intracompany balancing rules are used when more than one balancing segment value exists
on a transaction or journal entry, as long as you have selected the Balance Intracompany
Journals option for the ledger. You cannot post a journal in general ledger when the debit
and credit amounts for each balancing segment value do not net to zero. These journals can
be balanced automatically if you setup balancing rules and enable the option to balance
cross-entity journals.
1) Enter Percentages as a statistical Journals Using Standard Journal functionality for the purpose of
using the values in MassAllocation as allocation basis.
SGD SGD
GL Account Code Combination
Debit Credit
003 7095 0000 710 000 0000 $10,000
Salary
SHF Allocation/c CEO
003 1110 0000 000 000 0000 $10,000
9 Post the Journal Entry.
a) Choose Ledger name as “Ledger A”. (Note: If you have a default ledger assigned for your
data access set, it is automatically defaulted. If the MassAllocation formula does not have
any unspecified ledger segment values in the formula, the ledger or ledger set value you
enter is ignored. This entry is only applicable when the ledger segment value is left
unspecified in the MassAllocation formula.)
b) Enter a Balancing Segment Value as “003 (SHF)”.(Note: If the MassAllocation formula
does not have any unspecified balancing segment values in the formula, the balancing
segment value you enter is ignored. This entry is only applicable when the balancing
segment value is left unspecified in the MassAllocation formula.)
c) Select the ‘Allocation Method’ – ‘Full.’ You can select ‘Full’ to run allocations a single
time or ‘Incremental’ to reallocate an adjusted cost pool without reversing the posted
journal batches created by the previous MassAllocation journal entry.
d) Select the MassAllocation Batch Name “Allocation of CEO Salary Exp”.
e) Select the Period “01-09”.
f) Select the date for the journal “31-Jan-09”.
g) Select the date for the calculation “31-Jan-09”. (Note: If the calculation should include all
days in the current month, you must change this date to the last calendar day of the month.)
h) Choose Generate to submit a concurrent process that creates an unposted journal batch for
the period you specify. General Ledger names the MassAllocation batch MA: <Request
ID> <Batch Name> <Period>.
4) Review the MassAllocations Execution Report.
a) Journal Entry for Allocation Of CEO salary expense from ‘SHF’ fund to PAR and NON PAR
funds with in the Company ‘A’.
c) Journal Entry for Allocation Of CEO salary expense from Company ‘A’ to Company ‘C’.
Allocation Journal Entry in Ledger ‘B’
d) Journal Entry for Allocation Of CEO salary expense from Company ‘A’ to Company ‘B’.
Allocation Journal Entry in Ledger ‘C’
e) Journal Entry for Allocation Of CEO salary expense from Company ‘A’ to Company ‘C’.
V. Securing MassAllocations Using Definition Access Set.
In R12, now you can secure MassAllocation definitions using definition access sets.
Definition access sets are an optional security feature that enables you to control, view, and
modify access to your General Ledger definitions.
The following describes what Use, View, and Modify access mean as it pertains to MassAllocations:
• Use Access: Enables you to generate the MassAllocation and assign them to Auto
Allocation Sets and also you can schedule MassAllocations from the Define
MassAllocation window if you have View access. If you have Use privileges only, you will
not be able to view or make changes to the MassAllocation definition.
• View Access: Enables you to view the MassAllocation definition from the Define
MassAllocation window. You will not be able to generate or make changes to the
MassAllocation definition.
• Modify Access: Enables you to view and make changes to the MassAllocation definition
from the Define MassAllocation window. You will not be able to generate the
MassAllocation definition.
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