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Department 999 is a parent that includes all departments except 100. Department 100 is the department that stores all rent expenses. Account 5740 is the rent expense account. SQFT is the statistical account used to record square footage for each department.
Co | Dept | Acct | Balance Type | Relative Period | Currency | Amount Type | |
C | C | C | |||||
A | 01 | 100 | 5740 | A | Current Period | USD | PTD |
* | C | L | C | ||||
B | 01 | 999 | SQFT | A | Current Period | STAT | YTD |
/ | C | S | C | ||||
C | 01 | 999 | SQFT | A | Current Period | STAT | YTD |
C | L | C | |||||
T | 01 | 999 | 5740 | A | Current Period | USD | PTD |
C | C | C | |||||
O | 01 | 100 | 5740 | A | Current Period | USD | PTD |
Assume there are three other departments besides 100 in the company, 101, 102 and 103 that occupy 45%, 30% and 25% of the company's floor space, respectively. These departments are children to the parent department 999. When you run this MassAllocation formula for an accounting period with $100,000 of rent expense, you produce a journal entry that looks like the following:
debit 01 - 101 - 5740.......45,000 Rent Expense - Dept 101
debit 01 - 102 - 5740.......30,000 Rent Expense - Dept 102
debit 01 - 103 - 5740.......25,000 Rent Expense - Dept 103
credit 01 - 100 - 5740.......100,000 Rent Expense - Dept 100
You can use more than one looping segment in your formula. For example, you can perform the previous allocation for all companies in your organization. First, define a parent Company segment value (for example, 99) that is associated with all detail company values. Then use Company value 99 instead of 01 in all five rows of the formula above. Finally, use the Looping segment type for company 99 in each row.
Co | Dept | Acct | Balance Type | Relative Period | Currency | Amount Type | |
C | C | C | |||||
A | 01 | 100 | 5740 | A | Current Period | USD | PTD |
* | C | L | C | ||||
B | 01 | 999 | SQFT | A | Current Period | STAT | YTD |
/ | C | S | C | ||||
C | 01 | 999 | SQFT | A | Current Period | STAT | YTD |
C | L | C | |||||
T | 01 | 999 | 5740 | A | Current Period | USD | PTD |
C | C | C | |||||
O | 01 | 100 | 5740 | A | Current Period | USD | PTD |
debit 01 - 101 - 5740.......45,000 Rent Expense - Dept 101
debit 01 - 102 - 5740.......30,000 Rent Expense - Dept 102
debit 01 - 103 - 5740.......25,000 Rent Expense - Dept 103
credit 01 - 100 - 5740.......100,000 Rent Expense - Dept 100
Now, assume that later you want to reallocate a rent cost pool increased by $10,000 to a total of $110,000. When you run the same MassAllocation formula in incremental mode for an accounting period with a cost pool of $110,000, General Ledger only allocates the adjustment to the cost pool, or $10,000. This produces the following journal entry:
debit 01 - 101 - 5740.......4,500 Rent Expense - Dept 101
debit 01 - 102 - 5740.......3,000 Rent Expense - Dept 102
debit 01 - 103 - 5740.......2,500 Rent Expense - Dept 103
credit 01 - 100 - 5740.......10,000 Rent Expense - Dept 100
After you post this journal entry, the balances in your rent expense accounts are:
01 - 101 - 5740.......49,500 Rent Expense - Dept 101
01 - 102 - 5740.......33,000 Rent Expense - Dept 102
01 - 103 - 5740.......27,500 Rent Expense - Dept 103
01 - 100 - 5740.......110,000 Rent Expense - Dept 100
Now assume that later you want to reallocate a rent cost pool decreased by $30,000 to a total of $80,000. When you run the same MassAllocation formula in incremental mode for an accounting period with $80,000 of rent expense, General Ledger produces the following journal entry:
debit 01 - 100 - 5740.......30,000 Rent Expense - Dept 100
credit 01 - 101 - 5740.......13,500 Rent Expense - Dept 101
credit 01 - 102 - 5740.......9,000 Rent Expense - Dept 102
credit 01 - 103 - 5740.......7,500 Rent Expense - Dept 103
After you post this journal entry, the new balances in your rent expense accounts are:
01 - 101 - 5740.......36,000 Rent Expense - Dept 101
01 - 102 - 5740.......24,000 Rent Expense - Dept 102
01 - 103 - 5740.......20,000 Rent Expense - Dept 103
01 - 100 - 5740.......80,000 Rent Expense - Dept 100
Posting the resulting incremental MassAllocation journal entry has a net effect of replacing the existing target balance with the allocated amounts from A*B/C.
Warning: When using MassAllocations or MassBudgeting, use accounts that receive all of their activity solely from incremental and regular MassAllocations and MassBudgeting. This ensures that General Ledger uses an accurate target balance for the incremental allocation.
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