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DD Allocations

Allocations and Eliminations: Oracle Fusion Cloud

Daisy Dabandan
June 22, 2021

“I see allocations in Oracle Fusion Cloud, but it looks VERY different from R12!”

“I did a search in the task pane, typed Eliminations, but no results found!”

If you have been confused or do not know where to look for answers, this blog hopes to give you a glimpse of how allocations and eliminations are now handled in Oracle Fusion Cloud.

With EBS, users were limited to allocation rules in using the Allocation functionality. However, Fusion Cloud enhances the same functionality; improves efficiency and eliminates extension/ workarounds related to Allocations and Eliminations. A streamlined Allocation and Elimination process affords better transparency and makes financial close smoother. Let’s see how.

First off, here is the high-level comparison view between the two Oracle product versions.

Oracle Fusion Cloud

What’s the difference?

Allocations and Eliminations in EBS have specific allocation and elimination templates within the general ledger application, which handles these two functionalities separately. In Oracle Fusion Cloud, it’s the Oracle EPM technology embedded throughout the Oracle cloud applications used. In addition, a tool called “Calculations Manager” is leveraged using Oracle Essbase. It provides an allocation template that is very different from Oracle EBS and a formula template, an alternative method of defining allocations or eliminations.

Before we proceed, let’s review what most Oracle users see in Oracle EBS.

EBS Mass Allocation

Oracle Fusion Cloud

EBS Elimination

Oracle Fusion Cloud

Fusion Cloud - Calculation Manager Features

  • Essbase/General Ledger Cube
    • Real-Time – Balances become available when a transaction posts in General Ledger
  • Dimensions

    Allocation rules are built upon dimensions. Examples are:

    • Chart of Accounts segments (company, department, account, intercompany, etc.)
    • Ledger/Ledger sets
    • Accounting period
    • Scenario
    • Amount type
    • Currency
  • Allocation Template/Formula

    The calculation manager provides an allocation wizard using templates. An allocation rule can have one or more components, which can be either of the following:

    • Allocations Template only
    • Formula only
    • Allocations and Formula Combination
  • Maintenance

    Calculation Manager provides the ability to maintain rules using:

    • Variable components
    • Reusable components
    • Rulesets – groups similar allocation rules into a rule set
  • Hierarchies
    • Uses Chart of Account (COA) hierarchies to build rules/formula
    • Can use a separate allocation hierarchy apart from COA hierarchies used for reporting

Navigation

To get to the Calculations Manager, Go to General Accounting and click Journals.

Oracle Fusion Cloud

Go to Create Allocation Rules.

Oracle Fusion Cloud

The link will go to the EPM Workspace and will show the General Ledger Balance Cube.

Oracle Fusion Cloud

Expand to go to the COA Structure. In this example, it is USGAAP_USA.

Oracle Fusion Cloud

Go to Rules, right-click and select New to create a rule.

Oracle Fusion Cloud

Enter the name of the allocation rule, select the correct values as required. Typically, the Application Type and Database should have the values as shown below.

Oracle Fusion Cloud

The Allocation Template

Now, let’s discuss the different sections of the allocation template. For illustration purposes, only the first allocation component will be discussed.

  1. Rule Designer

    The rule designer allows you to navigate different allocation blocks and move around sections within the template. It also lets you add multiple components for a more complex allocation rule. This example shows two allocation components.

    Oracle Fusion Cloud
  2. Point of View

    The first step after the Begin icon is the Main Point of View (POV). There is also a POV section in the allocation component itself. For a simple rule, you can use the main POV to select the values you want to be fixed, meaning there is no need to enter the same values in the other parts of the allocation template. For complex rules, you can still do the same, but keeping in mind that fixed values will apply to all allocation components or blocks. In this example, there is a variable component for the accounting period. This means that you can choose to select the period you want to run for the allocation rule at run-time.

    Oracle Fusion Cloud How to select dimension values:

    Click on the member selector icon located on the right side. From the list, select Member. When the member selector opens, select the dimension value from the left side, click the arrow right symbol to move the dimension value to the right side. Finally, click OK to accept the value.

    Oracle Fusion Cloud Oracle Fusion Cloud
  3. Source

    In this section, notice that the other dimensions that have the values populated in the POV are no longer showing up. Instead, enter the dimension values from which the GL Balances will be aggregated and allocated (In EBS, this is your “A” line).

    Oracle Fusion Cloud
  4. Allocation Range

    This is where you tell the system the dimension you want to allocate (or loop as in EBS). In this example, the allocation range is the cost centre dimension. In the background, the calculation manager uses the values populated here as part of “Target” and “Basis”.

    Oracle Fusion Cloud
  5. Target

    Notice that the dimension populated in the allocation range (i.e., cost centre) is not included here. Instead, this section should contain the target dimension values to which the GL balances from the Source section will be allocated. In EBS, this is the “T” line.

    Oracle Fusion Cloud
  6. Offset

    The values here will be used to create the opposite side of the allocation journal. This is the “O” line in EBS.

    Oracle Fusion Cloud
  7. Exclude

    Optionally put exclusions from the allocation range, if any.

    Oracle Fusion Cloud
  8. Basis

    This section is where you put the basis of allocation. Since there is no outright place for looping in Oracle Fusion Cloud, just like in EBS, the allocation range indicates where to loop. Hence, in this section, the Calculation manager uses the allocation range to determine the ratio for the basis (This is “B” and “C” in EBS). Here, the basis is headcount per cost centre. Notice that you do not see the cost centre dimension.

    Oracle Fusion Cloud
  9. Basis Options and Rounding

    Optionally, enter the basis options and rounding sections.

    Oracle Fusion Cloud

The Formula Template

Similar to the allocation template, you can also populate the same fields when creating a new formula.

You can access the formula template in two ways:

  1. GL Balances Cube > COA Structure > db > Formula Oracle Fusion Cloud
  2. When the Rule Designer is Up

    You can drag “Formula” from the rule pallet. You can also do the same if you want to create a rule with a combination of an allocation template and a formula.

    Oracle Fusion Cloud

    The formula template uses the same designer rule, including the main POV. The only difference is that the formula template has a different but simpler format.

    You will see the same designer rule and main POV (this is the only place available for POV).

    Oracle Fusion Cloud

    This is a three-part template: Source, Target and Offset. This is typically used for reclassification, eliminations or simple (i.e. % of a specific GL balance) to complex allocation rules.

    Oracle Fusion Cloud

Tips and Tricks

  • Build your hierarchies, accordingly, considering reporting AND allocation needs.
  • You can have a separate hierarchy for reporting and another one for allocation.
  • One rule can have one or more allocation components/blocks.
  • Do not use the same segment value across segments. It creates Essbase errors.
  • Essbase does not recognize a debit or a credit, but you can use ‘* -1’ to set the opposite side of the allocation journal.
About the Author

Daisy Dabandan, Principal Solution Architect, Enterprise Cloud Apps - Oracle

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