Cross Charge

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 Objectives

After completing this lesson, you should be able to do the

following:
• Describe the use of borrowed and lent processing for
cross charged transactions
• Process borrowed and lent cross charges
• Define borrowed and lent implementation setup steps

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 Agenda

• Overview of Cross Charge

• Process Borrowed and Lent Cross Charges
• Implement Borrowed and Lent Cross Charge
Processing

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 Overview of Cross Charge

Provider Organization Receiver Organization

Expenditure Organization: Task Organization:
Services-East Cleveland Mfg

Example: Timecard

A cross charge is the act of entering a transaction

where the expenditure organization and the task
owning organization are different.

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Cross Charge Terminology

Cross Charge Terminology

Borrowed and Lent

Cross Charge
Cross Charge Transaction
Cross Charge Type
Intercompany Billing
Provider Operating Unit
Provider Organization
Receiver Operating Unit
Receiver Organization
Transfer Price

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 Cross Charge Types Example

United
States Business Group

US US
Services Corp. Legal Entities

Inter-Operating New
Dallas Denver Operating Units
Unit York

Cross Charge Types

Intra- Intercompany
Operating
Unit

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 Processing Methods

Borrowed and Lent Accounting

Inter-operating unit and intra-operating
unit cross charges

Intercompany Billing Accounting

Intercompany and inter-operating unit
cross charges

None: No Additional Processing

Intercompany, inter-operating unit, and
intra-operating unit cross charges

Processing methods and the cross charge

types with which you can use them

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 Agenda

• Overview of Cross Charge

• Process Borrowed and Lent Cross Charges
• Implement Borrowed and Lent Cross Charge
Processing

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 Borrowed and Lent Processing

US Legal
Services Entity

Dallas Denver Operating

Units

Lent To Borrowed From

For example, the Denver (Provider) Operating Unit

owns the resource and the Dallas (Receiver)
Operating Unit owns the project.

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 Project and Task Setup

Project

Task 1 Task 2

Task 1.1 Task 1.2 Task 2.1 Task 2.2

Define whether to allow charges from other operating units

and specify whether to process labor and non-labor cross
charge transactions.

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Subledger Accounting Process Flow: Cross
Charge

Enter or import cross charge transactions

Distribute costs of cross charges

PRC: Distribute Borrowed and Lent Amounts

PRC: Generate Cross Charge Accounting Events

PRC: Create Accounting

PRC: Transfer Journal Entries to GL (optional)

Journal Import (Oracle General Ledger)

Processing flow for cross charges (provider operating unit)

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 Borrowed and Lent Accounting

Process Accounting Debit (DR) Amount

Credit (CR)

Cost Labor Expense DR 500.00

01-490-5020-000

Cost Labor Clearing CR 500.00

01-000-2410-000

Borrowed and Lent DR 2,000.00

Lent 01-422-7050-000

Borrowed and Borrowed CR 2,000.00

Lent 01-490-7050-000

Example of Borrowed and Lent Accounting

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 Cross Charge Adjustments

Perform Reprocess cross

adjustments charges

Use the Expenditure Items window to

perform cross charge adjustments.

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 Processing Cross Charge Adjustments

Mark a cross charged transaction for

reprocessing

Run PRC: Distribute Borrowed and Lent

Amounts

Recalculates Reconverts Regenerates Reverses

transfer price transfer price accounting existing
amount entries distributions

Processing adjustments to borrowed and lent cross charges

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 Agenda

• Overview of Cross Charge

• Process Borrowed and Lent Cross Charges
• Implement Borrowed and Lent Cross Charge
Processing

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 Borrowed and Lent Cross Charge Processing
Implementation Steps
Step Required? Setup Level
Define transfer price rules Yes Site
Define transfer price schedules Yes Site
Define cross charge implementation Yes Operating Unit
options (for all operating units using
borrowed and lent processing)
Define provider and receiver controls Yes Operating Unit
Define accounting for borrowed and Yes Operating Unit
lent transactions
Implement cross charge client No Site
extensions

Borrowed and Lent Cross Charge Implementation Steps

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 Transfer Price Rules

Cross Charge

Resource Project

Provider Receiver

Transfer
Price
Credit Debit
Borrowed and
Lent Processing

Transfer price rules determine how Oracle Project Costing

calculates the transfer price for cross charged transactions.

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 Transfer Price Schedule

Provider Receiver
Services-East Cleveland Mfg

Labor Rule = Cost + 50%

Non-Labor Rule = Cost + 25%

Specify which rules determine the transfer price amount

for transactions charged from a provider organization to
a receiver organization.

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 Cross Charge Implementation Options

Cross Charges within Cross Charges to

Operating Unit Operating Units with
in Same Legal Entity

Allow?

Default Processing Method Default Processing Method

– None – None
– Borrowed and Lent – Borrowed and Lent

Select default processing methods and transfer

price currency conversion options.

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Provider and Receiver Controls for Borrowed and
Lent Accounting

US Legal
Services Entity

Dallas Denver Operating

Units

Allow Cross Charges

Borrowed and Lent Processing

Define Provide and Receiver Controls to control cross

charging and to override default processing methods.

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AutoAccounting Rules for Borrowed and Lent
Transactions

AutoAccounting Function Business Activity

Borrowed Account Determines default borrowed

account, which is the credit side
of the borrowed and lent
transaction
Lent Account Determines default lent account,
which is the debit side of the
borrowed and lent transaction

Implement AutoAccounting to generate default borrowed

and lent accounts.

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 Implement Cross Charge Extensions

Client Extensions for Borrowed and Lent Cross Charges

Provider and Receiver Organizations Override Extension
Cross Charge Processing Method Override Extension
Transfer Price Determination Extension
Transfer Price Override Extension
Transfer Price Currency Override Extension

Define extensions to further enhance borrowed and lent cross

charge processing.

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 Summary

In this lesson, you should have learned how to:

• Explain the cross charge processing methods
• Enter and process borrowed and lent cross charges
• Implement borrowed and lent cross charge processing

Copyright © 2007, Oracle. All rights reserved.