© 2009 Oracle Corporation - Proprietary and Confidential

© 2009 Oracle Corporation – Proprietary and Confidential
1
Oracle Process Manufacturing (OPM)
Day, Date,
Wednesday, 2004
March 16, Upcoming OPM Community Webcasts:
2011 time p.m. ET
11:00 AM ET / 09:00 MT April 20, 2011: Coming soon in Doc Id: 1064676.1.
Teleconference Access: May 18, 2011: Coming soon in Doc Id: 1064676.1.
Teleconference
North Access:
America: xxxx June 15, 2011: Coming soon in Doc Id: 1064676.1.
Conference ID:
International: 18539314
xxxx
Password: Advisor
North America: For complete details OPM Webcast Events, please see Note
1064676.1.
(866) 627-3315
For complete details on All Other upcoming Oracle Advisor
Webcast Events, please Note 398884.1.
International:
Do you have any requests for future Oracle Process
+1-706-679-4880
Manufacturing Advisor Webcast Events? Please email your
suggestions to bonnie.adam@oracle.com, subject: OPM
Other Global Toll Free: Topics of Interest.
Doc ID: 1148600.1

2
<Insert Picture Here>
General Ledger (GL) Expense Allocation in Oracle Process

Manufacturing (OPM) Actual Costing
Thrivikram Duvvuru
Oracle Senior Software Engineer
Safe Harbor Statement
The following is intended to outline our general

product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features
or functionality described for Oracle’s products
remains at the sole discretion of Oracle.

4
<Insert Picture Here>
General Ledger (GL) Expense Allocation in Oracle Process

Manufacturing (OPM) Actual Costing
Thrivikram Duvvuru
Oracle Senior Software Engineer
Setup Involved in Oracle Process
Manufacturing Financials Expense Allocation
This Presentation covers:

Concept of GL expense allocation in OPM.
Setups needed to make this work
Examples with screen shots (Performed test cases)
Accounting impact of Expense allocation
Copyright © 2006, Oracle. All rights reserved.

Theoretical background for Expense allocation
Following are the scenarios where expense allocation can be used:
Expenses that would be incurred at the time of transaction taking place,
however can not be identified/quantified per unit of item at that point of
time:
Example: Transportation costs, Freight.
Expenses that can not be identified with in particular time frame or period,
however after few periods prior period expenses would be known(in this
case budgets would be in place where statistical account balances would
have been used as basis for cost allocation). There is an option in setup
which accommodates allocation based on period to date balance, year to
date balance.
Example:
Expenses which are based on management negotiation in business which
would be finalized at year end for entire year. In this case management
would have kept balance in statistical account(budget journals) whose
balances would be allocated to items. If any difference is there in actual
and budget only differential amount will be quantified and allocated at last
period. One of our customer (Royal ceramics) asked Bonus be distributed
to inventory through expense allocation
7 Copyright © 2006, Oracle. All rights reserved.

Created items:
ALLOC FIXED
ALLOC GLBALANCE LATEST
In Inventory item master.
.
Did PO receipts for both the items 1000000@10
If we observe Opm Financials>Setup> Actual costs>Expense allocations
There will be three sub setups (Codes, Bases and Expenses), which need to be completed before we start
of with expense allocation.
Basis>Allocation definitions can be of two kinds

GL Balances
Fixed %
To test these two scenarios two separate items were created and tested with different options:
Item: ALLOC FIXED (Fixed% option is tested on this)
Item: ALLOC GLBALANCE LATEST (GL Balance option is tested on this)
Here are the screen shots of setup done in

Opm Financials>Setup> Actual costs>Expense allocations>Codes
Opm Financials>Setup> Actual costs>Expense allocations>Basis
Opm Financials>Setup> Actual costs>Expense allocations>Expenses

Next is
Opm Financials>Setup> Actual costs>Expense allocations>Basis
For Fixed% option

BALANCES GL ALLOC is to test GL balances Option

Next
Opm Financials>Setup> Actual costs>Expense allocations>Expenses
For Fixed% option

For GL balances Option:

After this we will have to make sure that Journal in GL to pool the expenses subject to allocate. Make sure that the
respective account showing balance (PTD, YTD)
Here are the screens shots of journal/balances of account that I did in this regard.
For Fixed% related Account

For GL balance option related account

Account balances:
For Fixed% related Account

For GL balance option related account

Ok Let us go ahead and run
A)OPM Cost allocation process

B)OPM Actual cost process
Then review the item costs
For Fixed % related item

1000000 qty, account balance was 1020000 = 1.02 is per unit allocated expense

For GL balance option related item

Reports
GL Expense Allocation Definition report

The GL Expense Allocation Definition Report lists the definitions of the accrued
general ledger expenses to be allocated to specified items. You can list definitions
for all general ledger expense allocation codes, or restrict the report to only desired
ones.
GL Expense Allocation Detail Report

The GL Expense Allocation Detail Report is a detailed list of all of the expense
costs that were allocated to item components from the indirect expense accruals.
You can list allocation detail for all expense allocation codes, or restrict the report to
allocations for only desired ones.

Can be from Invoice charge accounts Can be accounted through
where expenses were accounted manual JV
EXP Account in Which Expenses are Pooled
Will be part of Opm Inventory (Item Cost) post

to Opm Cost allocation process and Actual cost
process
Accounting distribution between INV, ALC

Post to Cost update, accounting
preprocessor, and create accounting
Opm Cost allocation journals moved to GL. When you map Expense account (in which
expenses are pooled) the allocation journal clear out the balance in expense account
and move the impact to Inventory

Account balance is 1000000, Qty purchased is 1000000, and allocated cost per unit is 1
OPM sub ledger does Expense allocation journal as follows
Inv------------------------------------Dr.
Exp(ALC)------------------------------------Cr.
Recommended account mapping:
While we accrue or pool expense in GL
The Journal will be say

Exp-------------------------------------Dr
Cash/Bank------------------------------------Cr.
It is advisable to map/use the same expense account in GL (while pooling the expense) and at the time
of opm sub ledger's Allocation journal so that the net impact can be
Inv---------------------------------------Dr
Cash/Bank-------------------------------------Cr

SLA related

SLA related

SLA Related

35
Visit My Oracle Communities
Collaborate with a large network of your industry peers, support professionals, and Oracle
experts to exchange information, ask questions & get answers. Find out how your peers
are using Oracle technologies and services to better meet their support and business
needs.
• Exchange Knowledge
• Resolve Issues
• Gain Expertise
Visit the Process Manufacturing
Support Community now!!
1. Log into My Oracle Support.
2. Select the Community link.
3. Select the Enter Here button.
4. Select the Process
Manufacturing link under the
E-Business Suite section of
the My Communities Menu on
the left side of the window.

36
OPM Advisor Webcast Calendar and
Archive (Doc Id 1064676.1)

37
Discrete/Process Manufacturing News
(Doc Id 354000.1)
• Established in January 2006.
• Oracle Support Newsletters bring you
• News
• Technical Content
• Technical Updates
from the various Oracle Support teams.
• Can be viewed in My Oracle Support.
• Subscribe to receive email distribution.
• Go to My Oracle Support Doc Id 354000.1

38
Feedback
Please let us know how we are doing by providing the following:
1. Based on the webcast description, how did your learning experience

compare to what you expected when you began the webcast?
2. Would you recommend the recording for this webcast to your
colleagues?
3. What topics specifically would you like to see covered in the Demantra
Solutions Webcasts?
4. Will you attend future Advisor Webcasts?
Email your feedback to me at bonnie.adam@oracle.com provide feedback

in the survey you will receive in a few days.

39
THANK YOU

40
My Oracle Support Search Top 5
1. Find and use the name of the form, report, or concurrent program whenever possible.
Doc Id 121916.1
2. Use exact error strings and the name of the code to get the best search results. For
example, 'ORA-1400: mandatory (NOT NULL) column'.
3. Refine your search results to fit the situation and narrow your results. On the right side
of the search results, you'll see a number of Refine Search options. Here you may
narrow the search results by Product Category, Task/Intent, Document Type, and
Updated (date range).
4. Avoid entering full sentences with punctuation that describe your issue, and remove
unnecessary words and characters that may unintentionally restrict search results from
being returned. This includes words similar to "the", "and", and “with" and symbols like
number(#), dashes(-), colons(:), semi-colons(;), etc.
5. Recommended Links, Support Recommended, and Targeted notes are documents

identified by Oracle Support Services to specifically address issues based on the
keywords, navigation, or service request templates you select. It is highly
recommended that you review these documents.
Learn More… Visit My Oracle Support Doc ID 1082829.1
© 2009 Oracle Corporation – Proprietary and Confidential 41

42 42

© 2009 Oracle Corporation - Proprietary and Confidential

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

© 2009 Oracle Corporation - Proprietary and Confidential

Uploaded by

Copyright:

Available Formats

© 2009 Oracle Corporation – Proprietary and Confidential