C

Multiple Reclassifications

In Chapter 7 we went over the business scenarios for reclassifying financial data including the calculation of cash flow and reclassifying annual net income into retained earnings. In this section, we will explain how to carry out multiple reclassifications as separate jobs.

C.1

Multiple Reclassification Business Scenario

In this case well assume that we still want to run the cash flow reclassification. However, lets assume that we also need to calculate annual net income (ANI) and current year retained earnings (CYRE) as well. If you have performed these tasks you probably realize that these two are not related especially if we assume that the cash flow calculation is not using the ANI and CYRE accounts. Also, in situations when the corporation imports raw data from ECC, reclassification can be used to calculate annual net income and post it to retained earnings. Thats because ECC does not store annual net income and so it must be calculated in BPC. In addition, reclassification can also be used to book subsidiary finished goods inventory (FGI) into corporate work in process inventory (WIP). This may be necessary in cases where a company (lets refer to them as Company A) produces semi-finished goods for another company in the same corporation. At the end of the month, Company A has completed units in their FGI. However, from a group perspective, the corporation does not sell semi-finished goods and therefore they reclassify Company As FGI into WIP.

C.2

Reclassification Components

The components are the same as in our cash flow calculation so all we need to do is identify how to use them differently. There are three components we need to discuss: First lets discuss the logic file. The logic file we used for the cash flow calculation was called Calcaccount. You might recall that it references the reclassification business rule id CF. For the calculation of ANI and CYRE, I have created a new

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Multiple Reclassifications

logic file called ANIRE and it is referenced to ANIRE as you can see in Figure C.1. See the line of code in row 8: CALC = ANIRE.

Figure C.1 ANI & CYRE Script Logic

Second: The next component is the reclassification business rule table which is referred to as the Account-based Calculation Rule. Since we have already discussed how this rule works, now we can focus on what is different from before. First, the ID we will use is ANIRE and thats why we needed a script logic file that references it. Second, lets talk about what row 1 and 2 are doing. In Figure C.2, the rows are performing the following two functions: 1. The first row will calculate annual net income and post it into the 39000000 annual net income account. In the Source Account field we are using a property in the account dimension called ANI which is being used to select all P&L accounts. In essence, by using the ANI property in the Source Account field, we are totalling up the P&L. 2. The second row will calculate annual net income and post it into the 25712000 current year retained earnings account. Again, it is using the property called ANI in the Source Account field to total the P&L.

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Reclassification Components

C.2

Figure C.2 ANI & CYRE Reclassification Business Rule

3. The Runcalcaccount data manager package that we used for the cash flow calculation normally refers to the Calcaccount.LGF logic file. In order to calculate ANI and CYRE separately from cash flow we will therefore need a new package which references the script logic file ANIRE.LGF. In Figure C.3 you can see in the last line of code that ANIRE.LGF has been added. I called the new package Calc ANI & CYRE.

Figure C.3 ANI & CYRE Data Manager Package Parameters

In summary, we have now been over the components required to calculate cash flow separately from ANI and CYRE. This includes: 1. We added a new script logic file called ANIRE.LGF that is referenced in the ANIRE reclassification business rule. 2. We added a reclassification business rule called ANIRE that calculates ANI and CYRE. 3. We added a data manager package called Calc ANI & CYRE that is referenced to the ANIRE.LGF file.

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Multiple Reclassifications

C.3

Reclassification Results

To simulate the calculation of ANI and CYRE well use just a Revenue and Cost Of Goods Sold account. In this scenario the data imported from ECC does not include ANI or CYRE. See Figure C.4 in the results before the calculation. After the calculation, you can see that both the 39000000-Annual Net Income and 25712000-Retained Earnings Current Year have been successfully calculated. The values are year to date.

Figure C.4 ANI & CYRE Reclassification Result

C.4

Summary

In summary, we have discussed the business scenario, the components, and the results for performing multiple reclassifications.

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