The Contract Commitment reports and processes enable users to manage Contract Commitment revaluations, year-end adjustments and payment forecast transfers.
The Internal Release Contract Commitment Completion Process is a concurrent request that completes all internal release contract commitments for a given cover contract commitment. An exception report is generated to list all internal releases that do not complete.
Currency rate fluctuations and the impact of these fluctuations on current and future budgets require functional currency revaluation of contract commitments. Contract commitments must be revalued where there is a change in the exchange rate.
The Contract Commitment Revalue process supports commitment encumbrance accounting and standard encumbrance accounting.
Revaluation compares the current payment forecast for the functional currency with the revalued payment forecast for the functional currency and calculates the variance. The variance is the revalued functional currency minus the original functional currency amount for the contract commitment.
The table below describes the variance types and explains the results for each variance.
| Variance Type | Description | Results |
|---|---|---|
| Positive | Revalued payment forecast functional amount is greater than the current payment forecast functional amount. | An additional encumbrance results from the payment forecast revaluation. The encumbrance adjustment results in a decrease to the standard budget funds available for the year. |
| Negative | Revalued payment forecast functional amount is less than the current payment forecast functional amount. | An encumbrance liquidation adjustment results from the payment forecast revaluation. The encumbrance liquidation adjustment results in an increase to the standard budget funds available for that year. |
A general rule is that if the rate date is greater than the payment forecast date, the rate date overrides the payment forecast date and updates the payment forecast date.
After revaluation, the total commitment must be equal to the total of all related payment forecast amounts. Since revaluation processes encumbrances only, not actuals, the following processing occurs depending on the contract commitment type:
Provisional Contract Commitments
In the case of provisional contract commitments, the account line functional amounts are always considered encumbrances for commitment encumbrance accounting. Because there are no actuals, the account line functional amounts are revalued along with the related payment forecast functional amounts.
Confirmed Contract Commitments
In the case of confirmed contract commitments, the account line functional amounts are considered actuals for commitment encumbrance accounting and are not revalued. With confirmed contract commitments, revaluation processes the related payment forecasts unbilled amounts for the standard budget. The unbilled amount is the payment forecast amount minus any invoices applied against it. The adjustment needed for the payment forecast after revaluation is either an additional encumbrance or a liquidation for standard encumbrance accounting. To keep the payment forecast functional amounts reconciled with the related account line functional amount, there is an adjustment to the account line functional amount. This adjustment is reflected as an additional encumbrance or liquidation for standard encumbrance accounting.
The tables below describe the encumbrance accounting options for revaluation. Users can select an option from each set.
| Encumbrance Status | Description |
|---|---|
| No Encumbrance Accounting | Contract Commitment revaluation is irrelevant and therefore not available. |
| Standard Encumbrance Accounting Only | Only the payment forecast revaluation can result in encumbrance activity. The account lines are only revalued to remain consistent with their respective payment forecast lines. No encumbrances are created for the commitment budget. |
| Standard and Commitment Encumbrance Accounting | The revaluation of account lines can result in commitment encumbrance accounting transactions and their related payment forecast lines can result in standard encumbrance accounting transactions. |
| Encumbrance Status | Description |
|---|---|
| Encumbering Confirmed Contract Commitments Only | The revaluation process varies by contract commitment state. Provisional contract commitments are revalued without encumbrance transactions, and confirmed contract commitments are revalued with encumbrance transactions. |
| Encumbering Provisional and Confirmed Contract Commitments | Provisional and confirmed contract commitments are revalued with encumbrance transactions. |
Date validation rules for Contract Commitment revaluation are as follows:
Rate date is used for the accounting date.
Payment forecast dates earlier than the rate date are changed to the rate date.
If payment forecast dates are greater than the date of revaluation, then the dates are left unchanged.
The Contract Commitment Revalue process identifies contract commitments with an invalid functional amount and places them on the exception list. These contract commitments are not revalued.
Invalid functional amounts occur when invoice matching information is modified after contract commitment revaluation is performed on a related contract commitment because Oracle Payables uses the old exchange rate before revaluation when making these adjustments. Because encumbrance amounts are adjusted using an exchange rate different than the revalued one, the contract commitment encumbrance amount is incorrect, as it consists of amounts with two different exchange rates. Incorrect encumbrance amounts result in misstated funds available amounts.
The Correct Revaluation Variances process corrects the invalid functional amount. It can be run only for a single contract commitment.
At the end of the fiscal year, the Contract Commitment Year-End Process adjusts the contract commitment payment forecasts to make them equal to the invoiced amount against the standard budget account concerned. The unbilled payment forecasts must be available in the next year. If the unbilled payment forecasts and related encumbrances are not taken to the next year, it will not be possible to spend the whole contract commitment amount since payments are checked against payment forecasts. Payment forecasts in the new fiscal year are available for matching by running the Year-End process.
In Contract Commitment, the balance must be carried forward to the next year on a transactional level. This means that the total balance carried forward is made up of various adjustments relating to various confirmed contract commitments. The budgets and funds available are not transferred to the next year.
The Contract Commitment Year-End Process is a concurrent process. Each contract commitment must be processed. Users can preview the year-end process by running it in preliminary mode, but the process does not make adjustments until it is run in final mode. A contract commitment that fails year-end processing appears on an exception list. After a contract commitment is processed for year-end, a line is added to the action history and the version number is increased by one. The action type is Year-End.
If encumbrance accounting is enabled, the standard encumbrances must be liquidated in the current fiscal year and re-encumbered in the next fiscal year. To trace the transfer of each individual contract commitment, the existing payment forecast date is adjusted to the first date within the new fiscal year. For example, if January 1 is the first day in the fiscal year, all dates of the processed payment forecasts are adjusted to this date. This date is used to encumber funds in the new fiscal year.
The liquidation of encumbrances made in the old fiscal year uses the last date of the last standard period, excluding any correction periods. All payment forecasts of the old year are processed for year-end, even if the year-end process puts the available funds into a deficit.
The adjusted payment forecasts and the existing payment forecasts for the new fiscal year must be available for matching because it is not possible to match invoices related to the old fiscal year.
If a contract commitment fails the year-end processing, it must be placed on an exception list. The exception list is a standard report generated after the completion of the year-end process. All exceptions must be corrected before running the year-end process in final mode.
The table below describes causes and effects of year-end processing failure.
| Cause | Effect |
|---|---|
| Year-end processed contract commitment periods are not closed except for the last period if the process is run in final mode. | stops process in preliminary and final mode |
| Future contract commitment periods do not exist. | stops process in preliminary and final mode |
| First contract commitment period in new fiscal year is not open. | stops process in preliminary and final mode |
| First General Ledger period in new fiscal year does not have Open or Future Entry status. | stops process in preliminary and final mode |
| Accounting date does not fall in open contract commitment period. | stops process in preliminary and final mode |
| All contract commitment types and contract commitment statuses are Provisional, In Process. | continues process in preliminary mode; stops process in final mode |
| All contract commitment types and contract commitment statuses are Cancelled, In Process. | continues process in preliminary mode; stops process in final mode |
| All contract commitment types and contract commitment statuses are Confirmed, In Process. | continues process in preliminary mode; stops process in final mode |
| All contract commitment types and contract commitment statuses are Completed, In Process. | continues process in preliminary mode; stops process in final mode |
| Cover-rejected releases are rejected. | continues process in preliminary mode; stops process in final mode |
| Release rejected, Cover and Releases are rejected. | continues process in preliminary mode; stops process in final mode |
| Overbilled amount. | continues process in preliminary mode; stops process in final mode |
When provisional contract commitments are encumbered, the year-end process liquidates the commitment encumbrance amounts in the current fiscal year and re-encumbers them in the next fiscal year.
The Contract Commitment Year-End Process steps for a cover commitment and cover commitment releases are as follows:
The cover commitment is adjusted.
The amount to be rolled forward on the cover commitment is the total payment forecast minus the total of all actuals against releases, also referred to as matched invoices, for the same cover contract commitment account information in that year. The total available payment forecast of the cover commitment, which is the unbilled payment forecast, in future years must be kept equal.
The related release lines or payment forecast lines are processed, which means that the payment forecast date is adjusted.
If the release fails, the cover and all related releases fail.
Year-end processing of provisional releases with regard to the commitment budget component is irrelevant since the total release amount must fit in the total cover contract commitment amount. The available amount on the cover contract commitment remains the same unless an increase or decrease adjustment is made on the cover contract commitment. Therefore, the cover contract commitment amount used for releases is independent of any budget period. The only change made to the release contract commitment is adjusting the payment forecast date to the first date of the fiscal year.
If funds in the commitment or standard budget are insufficient in the next year for the transfer of the budget reservation of a contract commitment and budgetary control is enabled, the contract commitment is still processed for the end of the fiscal year, regardless of the severity level. Although the contract commitment is processed for the year-end, the funds available can be put into a deficit. Users must manually adjust the contract commitments to increase the funds available.
Year-end processing date validations for provisional contract commitments are as follows:
Account line amounts are liquidated in the current fiscal year using the last day of the current fiscal year as the accounting date. These account lines are re-encumbered in the new fiscal year using the first day of the new fiscal year as the accounting date.
Payment forecast amounts with a current year fiscal date are liquidated in the current fiscal year using the last day of the current fiscal year as the payment forecast date. These payment forecast line amounts are re-encumbered in the new fiscal year using the first day of the new fiscal year as the payment forecast date. The Contract Commitment payment forecast date after the year-end process is complete reflects the first date of the new fiscal year.
Year-end processing date validations for provisional contract commitments are as follows:
If the unbilled amount in a payment forecast line is 0, then there is no liquidation in the current year or subsequent re-encumbrance in the new fiscal year, and the payment forecast date is left unchanged.
If the unbilled amount in a payment forecast line is greater than 0, then the payment forecast date for the current year liquidation is the last day of the fiscal year, and the payment forecast date used for the subsequent re-encumbrance in the new fiscal year is the first day of the fiscal year. The Contract Commitment payment forecast date after the year-end process is complete reflects the first date of the new fiscal year.
The Contract Commitment Mass Payment Forecast Shift Process automates the transfer of outstanding encumbrances from one payment forecast to another payment forecast within a certain contract. The Contract Commitment Mass Payment Forecast Shift Process enables users to perform these shifts for a range of contracts in a mass update mode by entering the necessary parameters.
The table below describes the parameters for the Contract Commitment Mass Payment Forecast Shift Process.
| Parameter | Type | Description | Validation |
|---|---|---|---|
| Phase | required | can be run in preliminary or final mode to identify contracts to be processed. Payment forecast shift performed in final mode. | Values include Preliminary or Final. |
| Owner | optional | Contract Commitments that have an owner equal to the entered owner are processed. If no owner is provided, there is no validation on the owner. | all possible userids that have an employee name |
| Select Date Range | required | date range of lines to be included in automated mass payment forecast shift | 1. End date must be later or equal to the begin date of the date range. 2. The entered range is limited to only one fiscal year. Only payment forecasts within the same fiscal year can be selected. |
| Transfer Date | required | new payment forecast date for the processed lines if this date is greater than the old payment forecast date. Liquidation of encumbrances occurs on this date, which is the General Ledger date. | 1. If budgetary control is enabled, the General Ledger period must be open or have a status of Future Entry. 2. If the transfer date is earlier than the old payment forecast date, the old date is used. 3. Transfer date must fall in the same fiscal year as the date range; the fiscal year is based on the old payment forecast date. 4. Transfer date overwrites the old payment forecast date in case the old payment forecast date is earlier than the transfer date. |
| Target Date | required | identifies what the target payment forecast is to be. This is the first line with the closest payment forecast dated after the target date. If two lines have the same date, the target date is the line with the smallest line number. | must be later or equal to the transfer date; must be later than the last date of the date range |
| Functional Threshold Amount | required | amount, expressed in functional currency, that identifies the maximum payment forecast sum to be processed; threshold amount validated at the contract commitment level. If the payment forecast sum of a contract commitment is beyond this amount, the contract commitment cannot be processed. | Validation based on the following calculation: (entered amount - billed amount) x exchange rate on contract commitment |
The following validation rules apply to the Contract Commitment Mass Payment Forecast Shift Process:
Only standard contract commitments that are confirmed can be processed.
If encumbrance accounting is enabled, the contract commitment must be fully encumbered.
Funds check is not performed, but the necessary encumbrances are created in final mode.
If one of the payment forecast lines fails a validation, no payment forecast lines for the complete contract can be processed.
There is no validation on matched invoices.
Only positive amounts can be shifted. If an overbill exists, the payment forecast is excluded from the shift.
The complete outstanding encumbrance is processed so that the entered amount of a payment forecast is made equal to the billed amount.
The payment forecast sum of a certain account line must be within the specified range to be within the amount threshold.
Action history is updated with the action type Adjust.
An exception report displays all contracts that fail and the reason for the failure.
No new lines are created in the target payment forecast. The line that receives the additional amount must exist before the process is run. The amount that is added must be equal to the sum of all processed lines.
The payment forecast date of the receiving payment forecast must fall within an Open or Future Contract Commitment period. If encumbrance accounting is enabled, the payment forecast date must fall within an Open or Future Entry General Ledger period.
The transfer date must fall within an Open or Future Contract Commitment period. If encumbrance accounting is enabled, the transfer date must fall within an Open or Future Entry General Ledger period.
Contract Commitment periods and General Ledger periods that are included in the shift must be open.
All General Ledger calendar periods for the fiscal year must be permanently closed. See: Opening and Closing Accounting Periods, Oracle General Ledger User Guide.
Ensure that previously archived data is exported to an operating system file and that the file is saved to a tape.
To submit the Contract Commitment Complete Cover Commitment Program:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Complete Cover Commitment Program.
In the Operating Unit field, select the operating unit.
In the Cover Commitment Number field, select a cover contract commitment from the list of values.
In the Complete Unmatched Releases select Yes or No from the list of values.
In the Complete Cover field, select Yes or No from the list of values.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests
To complete the Contract Commitment Complete Cover Commitment Exception Report:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Complete Cover Commitment Exception Report.
In the Operating Unit field, select the operating unit.
In the Parameters field, enter a Process Phase parameter value.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests
To run the Contract Commitment Revalue process:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Revalue process from the list of values.
In the Operating Unit field, select the operating unit.
In the Process Phase field, select a process type from the list of values.
Note: Preliminary mode can be run multiple times to view contract commitments that pass and fail validation. In Final mode, contract commitments are revalued and the necessary encumbrances created and posted as a result of revaluation.
In the Currency field, select a currency code from the list of values.
In the Rate Type field, select a rate type from the list of values.
Note: In the case of rate types other than User, the exchange rate is stored in the exchange rate table.
If the rate type is User, in the RATE field, enter an exchange rate.
Optionally, in the CC Num field, enter a contract commitment number from the list of values.
Note: If a contract commitment is entered in this field, the process revalues the selected contract commitment only. If the field is left blank, the process revalues all contract commitments that match the selected criteria.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests
To run the Correct Revaluation Variances process:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Correct Revaluation Variances from the list of values.
In the Operating Unit field, select the operating unit.
In the CC NUM field, enter a contract commitment number from the list of values.
In the Revaluation Fix Date field, enter the date of the revaluation fix.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
To view the request, select the appropriate Request ID and click View Output.
To generate the Contract Commitment Revaluation Fix Exception Report:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Revaluation Fix Exception Report from the list of values.
In the Operating Unit field, select the operating unit.
In the Process Phase field, enter the process phase from the list of values.
In the Process Type field, enter the process type.
In the Request Id field, enter the request identification number for the Correct Revaluation Variances request.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests
To run the Contract Commitment Year-End Process:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Year-End Process from the list of values.
In the Operating Unit field, select the operating unit.
In the Process Phase field, select a process type from the list of values.
Note: Preliminary mode can be run multiple times to view contract commitments that pass and fail validation. In final mode, encumbrances are created for contract commitments passing validations.
In the Year field, select the fiscal year from the list of values.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests
To run the Contract Commitment Mass Payment Forecast Shift Process:
In the Contract Commitment responsibility, navigate to the Submit Request window as follows:
Reports - Run
Select Single Request.
In the Name field, select Contract Commitment Mass Payment Forecast Shift Process from the list of values.
In the Operating Unit field, select the operating unit.
In the Process Phase field, select a process type from the list of values.
Optionally, in the Owner field, select an owner from the list of values.
In the Range Start Date field, enter a begin date for the range of lines to be included in the mass payment forecast shift.
In the Range End Date field, enter an end date for the range of lines to be included in the mass payment forecast shift.
In the Transfer Date field, enter a new payment forecast date for the processed lines if this date is greater than the old payment forecast date.
In the Target Date field, enter the target payment forecast date.
In the Threshold Value field, enter the maximum payment forecast sum to be processed.
To apply the parameters, click OK.
To send the request to the concurrent manager, click Submit.
View the request in the concurrent manager as follows:
View - Requests