Cross-Company Allocations

Allocation Method

1. For Allocate To select "Cross-Company".
2. For Method of Allocation select "Fixed". This means that you are going to use set percentages as the basis of your allocation.

Fixed Distribution

Complete each field that will be used to calculate the distribution of the $1,500,000:

Company	General Ledger Account	Dimension 1	Percentage	Amount
Merlin Spain	Marketing	Madrid	25	375,000
Merlin Europe	Marketing	London	25	375,000
Merlin Australia	Marketing	Sydney	25	375,000
Merlin USA	Marketing	New York	25	375,000
			100	1,500,000

At this stage, you are ready to create the allocation.

When the allocation journal is posted, transactions are created in the source company and the corresponding intercompany transfers are sent to the destination companies.

Example 2: Allocating Executive Salaries by Headcount (Statistical Allocation)

Note: You must have already configured your intercompany definitions. For more information, see Intercompany Definitions.

In this example, you have $1,250,000 of salaries stored in GLA 6190 - Salaries. These need to be allocated to executive level staff across your global offices.

Dimension 1 analyzes your head office (Merlin Holdings in this example) and Dimension 2 is an additional analysis level (Executive in this example). You have already set up a statistical basis that contains your global headcount for all locations.

Company	General Ledger Account	Dimension 1	Dimension 2	Amount
Merlin Holdings	Salaries	Head Office	Executive	1,250,000

Retrieve Source

1. Select “6190 - Salaries” from the General Ledger Account field in Filter Group #1.
2. $1,250,000 is retrieved from that GLA.

Allocation Method

1. For Allocate To select "Cross-Company".
2. For Method of Allocation select "Statistical". This means that you are going to use a set of statistical values as the basis of your allocation (headcount).
3. Click Next to continue.

Statistical Basis Configuration

The following percentages are calculated using your selected Distribution Fields and the “Global Headcount” statistical basis:

Company	Dimension 1	Dimension 2	Headcount Value	Percentage
Merlin Spain	Madrid	Executive	175	35.35
Merlin Europe	London	Executive	150	30.30
Merlin Australia	Sydney	Executive	75	15.15
Merlin USA	New York	Executive	95	19.19
			495	100.00

Distribution

1. Select “Source” from Copy GLAs from.
2. "GLA 6190 - Salaries" is copied from the source data and will be used for the allocation distribution.

The percentages calculated on the Statistical Basis Configuration page are used to work out the distribution of the $1,250,000:

Company	General Ledger Account	Dimension 1	Dimension 2	Value	Percentage
Merlin Spain	GLA 6190 - Salaries	Madrid	Executive	441,919	35.35
Merlin Europe	GLA 6190 - Salaries	London	Executive	378,788	30.30
Merlin Australia	GLA 6190 - Salaries	Sydney	Executive	189,394	15.15
Merlin USA	GLA 6190 - Salaries	New York	Executive	239,899	19.19
				1,250,000	100.00

At this stage, you are ready to preview the allocation and enter the details.

Create

When you complete the cross-company statistical allocation, transactions are created in the source company and the corresponding intercompany transfers are sent to the destination companies. The journal entries are as follows:

Line Type	Company	General Ledger Account	Dimension 1	Dimension 2	Debit	Credit
General Ledger Account	Merlin Holdings	GLA 6190 - Salaries	Head Office	Executive		1,250,000
Intercompany	Merlin Spain	GLA 6190 - Salaries	Madrid	Executive	441,919
Intercompany	Merlin Europe	GLA 6190 - Salaries	London	Executive	378,788
Intercompany	Merlin Australia	GLA 6190 - Salaries	Sydney	Executive	189,394
Intercompany	Merlin USA	GLA 6190 - Salaries	New York	Executive	239,899
					1,250,000	1,250,000

When the allocation journal is posted, transactions are created in the source company and the corresponding intercompany transfers are sent to the destination companies.