Allocation Specification

Each allocation is defined by three types of specifications:  definition, accumulation, and distribution.  Definition specifications identify description information about the allocation. Only one definition specification can be entered for each allocation.  This record contains the following fields:

·     Allocation number.  This number is used to define the allocation in the system.  Allocations can be requested based on this number.

·     Allocation amount type fields.  These fields define the type of data to be allocated to the distribution charge and credit account numbers.  These fields are also used to perform validation to ensure that the distribution account numbers are denominated correctly.  Financial amounts must be distributed to financial accounts and statistical amounts to statistical accounts.  The unit of measure code identifies the unit in which the statistical allocation total is defined.  The distribution account numbers must either be defined as having the same unit of measure, or there must be a Unit of Measure Translation (category 006) record on the Reference File for the unit of measure combination.  The user is responsible for ensuring that all statistical amounts accumulated into an allocation total have the same units of measure.

The amount type is used to determine whether to distribute actual or budget amounts.  This field is also used to determine how the allocation is initiated, either through the Actual Allocation Distribution Request or the Budget Allocation Distribution Request Screen.  Actual and budget amounts cannot be distributed in the same allocation distribution run.  A budget year and sequence must be identified to receive budget distribution amounts.

·     Cycle number.  The cycle number is used to group allocations for execution.  Grouping allocations into cycles ensures that related allocations are executed in the same allocation distribution run.

·     Allocation description fields.  These fields are used to define the location for which the allocation journal is created, and the journal number assigned to the journal.  Distribution transactions with a different location than the allocation location generate intercompany transactions.

The fiscal period field is used to define the fiscal period assigned to the distribution journal.  Valid values for this field are blanks, 01 through 13, and 99.  A value of blanks indicates that the generated distribution journal should be assigned the current fiscal period for the specified location.  A blank fiscal period is normally used for standard monthly or periodic allocations.  Allocations can be identified for distribution in a specific fiscal period by entering a value from 01 through 13 in the fiscal period field.  These allocations are bypassed in all fiscal periods except the period identified in the allocation definition.  A fiscal period value of 99 is reserved for budget allocations, and is used to indicate that budget values for all fiscal periods should be allocated in one allocation distribution run.

The budget year and sequence numbers identify the budget records to be updated during the allocation distribution run.  Whereas allocation journals are generated for actual amount distributions, budget allocations are posted directly to the Budget Master File.  Thus, allocated budget values are immediately available for budget review processing.

The intercompany field indicates that locations entered on distribution charge and credit lines can be different from the location on the definition specification.  When intercompany lines are specified, the system ensures that both locations follow the same fiscal calendar and have the same year end. This field is also used to validate that all charge and credit locations are the same as the definition location for non-intercompany allocations.

If you are using the management reporting option (Management Account Reporting flag on Reference File category 133 set to Y), a reporting class may be specified for the journal created by the allocation.  The charge and credit accounts of that journal must have the same reporting class of the allocation journal.

Note:    The balances of all accounts within the range specified on the accumulation screen will be accumulated in the allocation regardless of their reporting class.

Allocation accumulation records are used to define the account amounts to be used as a basis for allocation distribution calculations.  Allocation calculations can be based on up to four total amounts.  The three-position record number is used to determine the total account amounts into which allocations are accumulated.  The first position of the record defines the total, and the last two positions define the sequence of each accumulation record for each total.  This means that one hundred (00-99) accumulation records can be defined for each total.  An example of record number processing is shown in the following figure.

Accumulated Totals for Record Number Processing

The accumulation records define the account amounts accumulated into each of the four totals.  Multiple distribution steps can use the same set of total amounts.  Or individual totals can be reset in the same allocation (this is done by using the suballocation number).  For example, if certain administrative expenses will be allocated to multiple profit centers based on each center's percentage of total sales, two fixed and one variable total are accumulated.  The fixed totals are "total administrative expenses" and "total sales," and the variable total is "total sales for profit center."  From these three totals, the percentage that a cost center contributes to total sales can be calculated, and that value is multiplied by the administrative expenses total to determine the allocation amount for each center.  Multiple allocations, one for each profit center, can be set up to accumulate each total and perform the allocation calculations.  Or one set of accumulations can be performed for the total administrative expenses and total sales, and the sales per center total can be accumulated and reset using the sub-allocation number.  An example of this processing is illustrated in the next figure.

The following fields determine the type of data to be accumulated, and the master file accounts for which the amounts are to be accumulated:

·     Accumulation amount type fields.  These fields are used to determine the type of data to be accumulated into the allocation totals.  Both actual and budget data for financial and statistical accounts can be accumulated.  The user must ensure that statistical values that have the same units of measure are accumulated into each total, or incorrect total values may be used for distribution calculations.

The fiscal period code is used to specify the master file amounts to be accumulated into each total.  Four amounts can be defined:

CP - Current period

LP - Last period (not valid for budget accumulations)

QD - Quarter-to-date (quarter-to-date change for balance sheet accounts; quarter-to-date for income statement accounts)

YD - Year-to-date (year-to-date change for balance sheet accounts; year-to-date for income statement accounts)

Allocation Total Accumulation Processing

Debit amounts are accumulated as positive values, and credit amounts as negative values.

·     Processing sequence.  This code is used to determine the order in which amounts within a range of accounts are accumulated.  Processing in account sequence might be used for accumulating amounts from all sales accounts regardless of center.  Processing in center sequence might be used for accumulating all sales accounts within a center.  An example of each processing sequence is shown below.

           Account Sequence                Center Sequence

                  Sample Processing Sequence

·     Location and account and center number range fields.  Identify the accounts for which amounts are extracted.

·     Description field.  Used for reporting purposes to identify each accumulation specification.

Allocation distribution records are used to define the calculations performed on the accumulated allocation totals and to prepare the allocation journal transactions.  Three calculations steps can be defined on each record.  Allocation distribution records are sequenced by the distribution record number (distribution record numbers must start with 500 and end with 599).  This allows multiple sets of calculations to be performed for each distribution.  Multiple sets of calculation steps can also be specified for each suballocation.  The description field is used for reporting purposes to identify each distribution record.

Each step in the calculation portion of the distribution record should be visualized as a factor (factor 1), an operation, and another factor (factor 2).  The first factor is a static total accumulator (total 5).  Total 5 can be initialized with a value or total by using the zero and add operation code (Z). The operation code defines whether to add (A) total 5 to, subtract (S) total 5 by, multiply (M) total 5 by, or divide (D) total 5 by the second factor.  The resulting value of a calculation step is placed back into total 5.  An account might be used in factor 2 when total 5 will be modified by one specific account amount instead of amounts for a range of accounts.  A total might be used in factor 2 when total 5 will be modified by the accumulation of amounts from a range of accounts.  A constant might be used in factor 2 when a fixed portion of total 5 will be allocated each run, for example a straight line depreciation allocation.  Factor 2 can be either a master file account, one of the accumulation totals, or a constant.  The account amounts used in factor 2 are identified using the same amount type fields described for accumulation records.  Constant values can be up to 999.99.

If an accumulated total will be allocated based on fixed percentages, only the allocation percent field needs to be completed.  The user must ensure, for allocations based on fixed percentages and other calculations where a portion of an allocation total is distributed to a number of accounts, that the allocation amounts do not exceed the amounts to be allocated.  This can be done by reviewing the accumulation and distribution specifications for each allocation to ensure that amounts are not accumulated twice, distribution specifications exist only for those accounts to receive allocation amounts, and the sum of allocation percent values does not equal greater than 100 percent.

The charge and credit account lines define the accounts affected by the allocation and the reference information assigned to generated transactions.  The charge account receives the distribution amount.  The credit account receives an amount of equal value but with the opposite sign.  Multiple sets of charge and credit accounts can be entered for each suballocation.  Both a charge and a credit account must be entered when actual amounts are allocated to financial accounts.  The other allocations do not require entry of both the charge and the credit account.  A sample of a complete allocation is shown in the next figure.