SECTIONSCross-Company Allocations
Example 1: Allocate Marketing Costs by Set Percentage (Fixed Allocation)
In this example, you have $1,500,000 of marketing costs stored in general ledger account “Marketing”. These costs need to be allocated across your global offices.
Retrieve Source
- Select “Marketing” from the General Ledger Account field in Filter Group #1.
- $1,500,000 is retrieved from the Marketing departments in the specified GLA.
Allocation Method
- For Allocate To select "Cross-Company".
- 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)
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
- Select “6190 - Salaries” from the General Ledger Account field in Filter Group #1.
- $1,250,000 is retrieved from that GLA.
Allocation Method
- For Allocate To select "Cross-Company".
- 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).
- Click Next to continue.
Statistical Basis Configuration
You have stored the following values in a statistical basis called “Global Headcount”:
|
Company |
Dimension 1 |
Dimension 2 |
Headcount Value |
|---|---|---|---|
| Merlin Spain | Madrid | Executive | 175 |
| Merlin Europe | London | Executive | 150 |
| Merlin Australia | Sydney | Executive | 75 |
| Merlin USA | New York | Executive | 95 |
| 495 |
- Select “Global Headcount” from the Statistical Basis picklist.
- Select Dimension 1 and Dimension 2 in Distribution Fields.
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
- Select “Source” from Copy GLAs from.
- "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.