General Ledger & Intercompany

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    Yasmin
    Intercompany accountingAnswered
    Topic posted September 11, 2017 by YasminSilver Trophy: 7,500+ Points, last edited January 30, 2019, tagged Accounting Hub Cloud Service, Allocations, Configuration, Financials, General Ledger, Intercompany, Payables, Receivables, Reports, Security, Setup / Administration, Subledger Accounting 
    179 Views, 7 Comments
    Title:
    Intercompany accounting
    Summary:
    intercompany accounting issue
    Content:

    We have the following business requirements 

    Company A (BU and LE)

    Company B (Different BU and Different LE), has 2 subsidiaries C and D

    what we are looking for is 

    Line #   Account #                                    Dr.                        Cr. 

    1          A.000.Cash.000.000              $1000

    2          B.C.AP.000.000                                                     $200

    3          B.D.AP.000.000                                                     $800

    the above to be entered manually

    and the auto-entered automated accounting lines to be created 

    Line #   Account #                                    Dr.                            Cr. 

    4          A.000.I/C AP.000.000                                                 $1000

    5          B.C.I/C AR.000.000                 $200

    6          B.D.I/C AR.000.000                 $800

     

    so the full journal will be 

     

    Line #   Account #                                    Dr.                        Cr. 

    1          A.000.Cash.000.000              $1000

    2          B.C.AP.000.000                                                     $200

    3          B.D.AP.000.000                                                     $800

    4          A.000.I/C AP.000.000                                           $1000

    5          B.C.I/C AR.000.000                 $200

    6          B.D.I/C AR.000.000                 $800

     

    BUT what we usually get is something totally different (screenshots attached)

     

    can someone help, please 

     

    Document:

    Best Comment

    Wendy Ware

    Hi Yasmin, we reported similar behavior and submitted an ER.  I can't locate my ER at the moment but I was initially referred to this document which may be related to the behavior you are seeking.  I can no longer find this document (Doc ID 2031237.1) online in the knowledge base so I will post it, in full, here.  When I locate our ER (very similar) I will reference it here as well.  Best, Wendy

     

    Intercompany Balancing For Many-to-Many (M-M) type of transactions? (Doc ID 2031237.1) 
     _______________________________________

    This document is being delivered to you via Oracle Support's Rapid Visibility (RaV) process and therefore has not been subject to an independent technical review.
    APPLIES TO:
    Oracle Fusion Financials Common Module - Version 11.1.8.0.0 and later
    Information in this document applies to any platform.
    GOAL
    On : 11.1.8.0.0 version, Close Accounting Period-Reconcile Accounts
    Question with regard to Intercompany Balancing

    The fallowing is the scenario:
    For an Intercompany Segment in COA there are Intercompany Balancing Rules. The Primary Balancing segment values (PBSVs) are not assigned to Legal Entities( LEs).There are only 1 COA & 1 Ledger.
    A default value of '9999' is set up at the Intercompany Segment for any transaction. For Many-to-Many (M-M) type of transactions, Fusion goes about balancing the largest net debit with the largest net credit and then remainder with the next largest net debit or credit as the case may and so on.

    However the way Fusion calculates M-M type of transactions does not meet the following requirement:
    Many lot of inter-company transactions (store related) exist where the stores are not supposed to interact with each other, but only through the Company (value 0000).
    Hence to take care of this requirement ,Ledger Balancing Options are setup with a default clearing company 0f '0000' for Many-to-Many type of transactions.

    However there are also lot of M-M situations where the stores need to interact with each other and not necessarily through the clearing company or by the seeded Fusion logic.
    Can we populate the trading partner value in the Intercompany Segment at the time of creating the M-M type of journal ?
    Will the system balance against that trading partner whose value is present in the Intercompany Segment on the original journal lines, in place of using the seeded logic or clearing company value?

    Does Fusion have this this functionality ?
    SOLUTION
    The above functionality is not available in the current product.
    An Enhancement request (ER) exists for this .
    Please review the following ER .

    Bug 20884879 - SUPPORT CLEARING COMPANY FOR BALANCING LINES IN AGIS TRANSACTIONS

    Comment

     

    • MShrini

      Seems multiple rules are defined for the BSV 101.  Please correct and try.  If it is not resolved,  pls share the screenshots of   i/c rules configuration.

    • Linda Wong

      The system first balances the legal entities (company 101 and 102 in your screenshot - the lines with the description 'Intercompany Balancing').  And then it balances the BUs within each legal entity - the lines with the description 'Ledger Intercompany Balancing'.  That is the designed behavior.

      • Yasmin

        Thanks Linda,

        but we want to balance A to C and A to D, not A to C and then C to D

        as there is no relation between C and D to be balanced together,

        and if "designed behavior" can we change it to make it as highlighted above?

         

    • Wendy Ware

      Hi Yasmin, we reported similar behavior and submitted an ER.  I can't locate my ER at the moment but I was initially referred to this document which may be related to the behavior you are seeking.  I can no longer find this document (Doc ID 2031237.1) online in the knowledge base so I will post it, in full, here.  When I locate our ER (very similar) I will reference it here as well.  Best, Wendy

       

      Intercompany Balancing For Many-to-Many (M-M) type of transactions? (Doc ID 2031237.1) 
       _______________________________________

      This document is being delivered to you via Oracle Support's Rapid Visibility (RaV) process and therefore has not been subject to an independent technical review.
      APPLIES TO:
      Oracle Fusion Financials Common Module - Version 11.1.8.0.0 and later
      Information in this document applies to any platform.
      GOAL
      On : 11.1.8.0.0 version, Close Accounting Period-Reconcile Accounts
      Question with regard to Intercompany Balancing

      The fallowing is the scenario:
      For an Intercompany Segment in COA there are Intercompany Balancing Rules. The Primary Balancing segment values (PBSVs) are not assigned to Legal Entities( LEs).There are only 1 COA & 1 Ledger.
      A default value of '9999' is set up at the Intercompany Segment for any transaction. For Many-to-Many (M-M) type of transactions, Fusion goes about balancing the largest net debit with the largest net credit and then remainder with the next largest net debit or credit as the case may and so on.

      However the way Fusion calculates M-M type of transactions does not meet the following requirement:
      Many lot of inter-company transactions (store related) exist where the stores are not supposed to interact with each other, but only through the Company (value 0000).
      Hence to take care of this requirement ,Ledger Balancing Options are setup with a default clearing company 0f '0000' for Many-to-Many type of transactions.

      However there are also lot of M-M situations where the stores need to interact with each other and not necessarily through the clearing company or by the seeded Fusion logic.
      Can we populate the trading partner value in the Intercompany Segment at the time of creating the M-M type of journal ?
      Will the system balance against that trading partner whose value is present in the Intercompany Segment on the original journal lines, in place of using the seeded logic or clearing company value?

      Does Fusion have this this functionality ?
      SOLUTION
      The above functionality is not available in the current product.
      An Enhancement request (ER) exists for this .
      Please review the following ER .

      Bug 20884879 - SUPPORT CLEARING COMPANY FOR BALANCING LINES IN AGIS TRANSACTIONS

      • Yasmin

        Hi Wendy,

        This is exactly the answer i'm looking for (that it's not supported "yet"),

        as i got this statement from the documents  

        • For many-to-many primary balancing segment journals, a clearing company is used if it is available. If no clearing company is available, balancing is done using a default rule that matches the largest debit with the largest credit and so on.

        • For many-to-many legal entity journals, a clearing company is required to balance a journal.

        SO the only option we have is to create a "dummy" BSV Company (balancing segment value) ZZ to act as the clearing company between companies A ,C and D 

        so it will be like this

        A to ZZ (the full amount) 

        then ZZ to C (based on its allocated amount for C) and ZZ to D (based on the allocated amount for D)  

         

        Thanks again for your help

         

        Yasmin

        • Wendy Ware

          Hi Yasmin, you are very welcome.  It may be beneficial for your company to open an Enhancement Request (ER) too.

          My ER is still open:  bug 22387553  Intercompany Balance at Legal Entity Level

          Intercompany journals are not being balanced at each LE level, instead it’s summarizing across all the LEs and then netting off the balances.
          In the given example of journal lines, though there is no activity between the LEs HIC and HMW but still system is generating an intercompany journal line between these two LEs, which is incorrect.
          This impacts the subsidiary balances and regulatory reports. The validity and veracity of the account balances is lost due to incorrect intercompany journal lines.

          Best, Wendy