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Customer Submitted Case Studies

The Case Study briefly discusses the MassAllocation Functionality in R12 across
balancing segments with in the Ledger and also across Ledgers.
Author: Srikanth.Kura Oracle Apps Functional Consultant.
Contributors: Mahindra Satyam (Satyam Computers Services Ltd.)
Skill Level Rating for this Case Study: Intermediate

About Oracle Customer Submitted Case Studies


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Table of Contents
I. Oracle Standard Mass Allocation Functionality.
II. Case Study
- Business Requirement.
- Mapping Business requirements to Oracle MassAllocation Functionality.
III. Setups to Implementing MassAllocation Solution.
IV. Steps to Implementing MassAllocation Solution.
V. Securing MassAllocations Using Definition Access Set.

I. Oracle Standard Mass Allocation Functionality.

Mass Allocation Functionality in Oracle


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.
Use a MassAllocation formula to create journals that allocate expenses/overheads/shared services
costs across a group of cost centers, departments, divisions and so on. By including parent values
in allocation formulas, you can allocate to the child values referenced by the parent without having
to enumerate each child separately.
Enhancement of MassAllocation in R12
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.
II. Case Study
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.

Mapping Requirements to Oracle Mass Allocation Functionality.


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
Balancing Segment Values

Since it is an Insurance company, the company business is divided into Funds.


Therefore fund segment is defined as the balancing segment.
099

Company A

001 - PAR
002 - Non-PAR
003 - SHF- (Shareholders.)
199

Company B

101 - UL (Unit Link).


299

Company C

201 - Class A
202 - Class B
AAA

All Companies

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.
The allocations rule

For Company A

For Company B

For Company C

PAR

Non-PAR

UL (Unit Link)

Class A

Class B

25%

10%

30%

20%

15%

III. Setups to Implementing MassAllocation Solution

1)

Defining Allocation specific accounts.

Have defined the following accounts for the purpose of allocation.


# Accounting Segment

7095 Salary Allocation.


9210 Percentages (Statistical Account).
# Cost Center Segment

710 CEO

2)

Defining Currency Conversions for the allocation period.

Defined Conversion rates for allocating balances


across ledgers since Source Ledger currency is different
than Target Ledgers.
In our example:

Source Ledger currency is SGD


Target Ledger Currencies are GBP and AUD.

3)

Creating Mass Allocation Formula

Navigation Journals > Define > Allocation.

a. Navigate to the Define MassAllocations window.


b. Enter a Name for the MassAllocation batch.
c. Choose Actual from the Balance Type poplist.
d. Enter a Description for the MassAllocation batch.
e. Choose Formulas to enter MassAllocation formulas.

The above MassAllocation batch definition contains following formulas.


Ledger
Name
Ledger 'A'

Formula No
Formula 1

Outcome of the 'Formula'


Allocate the Balances with in the Ledger 'A' Among the PAR
and NON PAR funds.

Converted Amount - General Ledger allocates the full


balance for the account for both the entered and converted
amounts for foreign currency allocations.

Formula Line

Ledger Name

Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C

B
C
T
O

Company Account Cost Center Product


003
C
099
L
AAA
S
099
L
003
C

7095
C
9220
C
9220
C
7621
C
7095
C

710
C
710
C
710
C
710
C
710
C

000
C
000
C
000
C
000
C
000
C

Future
0000
C
0000
C
0000
C
0000
C
0000
C

Ledger
Name
Ledger 'A'

Formula No
Formula 2

Outcome of the 'Formula'


Creates a journal entry for allocating balances To Ledger 'B'

Formula Line

Ledger Name

Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C

B
C
T
O

Company Account
003
C
110
C
AAA
S
003
C
003
C

7095
C
9220
C
9220
C
1822
C
7095
C

Cost Center

Product

Future

710
C
710
C
710
C
710
C
710
C

000
C
000
C
000
C
000
C
000
C

0000
C
0000
C
0000
C
0000
C
0000
C

Ledger
Name
Ledger 'A'

Formula No
Formula 3

Outcome of the 'Formula'


Creates a journal entry for allocating balances To Ledger 'C'

Formula Line

Ledger Name

Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C

B
C
T
O

Company Account
003
C
299
S
AAA
S
003
C
003
C

7095
C
9220
C
9220
C
1823
C
7095
C

Cost Center

Product

Future

710
C
710
C
710
C
710
C
710
C

000
C
000
C
000
C
000
C
000
C

0000
C
0000
C
0000
C
0000
C
0000
C

Ledger
Name

Formula No

Ledger 'B'

Formula 4

Outcome of the 'Formula'


Creates a journal entry for allocating balances From Ledger
'A'

Formula Line

Ledger Name

Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'B'
C
Ledger 'B'
C

B
C
T
O

Company Account
003
C
110
C
AAA
S
110
C
110
C

7095
C
9220
C
9220
C
7621
C
2901
C

Cost Center

Product

Future

710
C
710
C
710
C
710
C
710
C

000
C
000
C
000
C
000
C
000
C

0000
C
0000
C
0000
C
0000
C
0000
C

Ledger
Name

Formula No

Ledger 'C'

Formula 5

Outcome of the 'Formula'


Creates a journal entry for allocating balances From Ledger
'A'

Formula Line

Ledger Name

Ledger 'A'
C
Ledger 'A'
C
Ledger 'A'
C
Ledger 'C'
C
Ledger 'C'
C

B
C
T
O

Company Account
003
C
299
L
AAA
S
299
L
299
L

7095
C
9220
C
9220
C
7621
C
2901
C

Cost Center

Product

Future

710
C
710
C
710
C
710
C
710
C

000
C
000
C
000
C
000
C
000
C

0000
C
0000
C
0000
C
0000
C
0000
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.
The following Screenshots exhibit the Creation of Intracompany Balancing Rules.

Check the Enable Intracompany Balancing


option for Ledger .A.

Next Step is to create the balancing rules.


Click on update for Intracompany
Balancing Rules to define Balancing

Select Company A and Click on Define Rules,


where one can create the balancing rules for a
combination of specific journal source and journal

Than, Click on Create Rule to Define an


Intracompany Rule.

I have defined following Intracompany balancing rules for


the source MassAllocation and the category Allocation
Company A to generate balancing journal lines for
Allocation journals with in Company A.

Once the Balancing Rules successfully created,


select the status as Complete and Click on Done.

IV. Steps to Implementing MassAllocation Solution


1)

Enter Percentages as a statistical Journals Using Standard Journal functionality for the purpose of
using the values in MassAllocation as allocation basis.

Navigation: Journals > Enter.

Specify STAT as Journal Currency.


Enter your journal lines, using statistical
debit and credit amounts. The debits do
not need to equal credits for a statistical
journal.

Journal Entry Status become Posted.

Post the statistical Journal Entry.

2)

Enter a Journal for CEO salary expense for the month of Jan-09 in the books of Ledger A and
Post the Journal.
Journal entry in Ledger A - Singapore

Navigation: Journals > Enter.

9
9

Enter a standard Journal for CEO Salary


Expense using Enter Journals window.
Choose Ledger as Ledger A.

SGD

GL Account Code Combination


003
SHF
003

7095
Salary
Allocation/c
1110

0000

710

000

0000

0000

CEO
000

000

0000

Debit
$10,000

SGD
Credit

$10,000

Journal Entry Status become Posted.

Post the Journal Entry.

3)

Run MassAllocation Program for the period of Jan-09.

Navigation:

Journals > Generate > Allocation.

To generate a journal batch from a MassAllocation formula:

a) Choose Ledger name as Ledger A. (Note: If you have a default ledger assigned for your

b)

c)

d)
e)
f)
g)
h)

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.)
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.)
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.
Select the MassAllocation Batch Name Allocation of CEO Salary Exp.
Select the Period 01-09.
Select the date for the journal 31-Jan-09.
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.)
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.

Query the request using the request number


generated at the time of Run Mass
Allocation. (See the above window for

9
9

Review the validation status and result of ea


MassAllocation formula.
For each allocation formula within a batch,
the report prints the formula name,
description, and status.

5)

Query the MassAllocation journal Batch using Journal window.

6)

Review the generated


MassAllocation journal batches
using the Enter Journals

Review and Post the MassAllocation Journals.

The MassAllocation batch created following


journal entries with unposted across ledgers
based on defined formulas.

Allocation Journal Entries in Ledger A

a) Journal Entry for Allocation Of CEO salary expense from SHF fund to PAR and NON PAR
funds with in the Company A.

Once the Journal is posted as above, It


generates the Balancing journal lines
for each balancing entity as per
Intracompany Balancing Rules.

b) Journal Entry for Allocation Of CEO salary expense from Company A to Company B.

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.

Check the Enable Security.

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.

- Define Definition Access Set.

- Select Definition Type as MassAllocation.


- Check the Valid option in Privileges either Use or View or

References
Oracle General Ledger User Guide.
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