Understanding Allocations

The Allocations application engine (PF_ALLOC_ENG) that comes with the PeopleSoft EPM generates journal entries to distribute amounts, such as overhead costs, across multiple ChartFields such as book codes or business units, based on the allocation rules that you define. Some examples of reasons why you might need to process allocations against the consolidation ledger are to:

Allocate taxes.

For example, U.S. taxes include paid local taxes but are usually calculated on the consolidated total.
Allocate centralized functions, such as information technology, human resources, and other similar departments.
Charge interest on intercompany balances.
Allocate harmonization entries.

For example, book code is a dimension that you can use as an allocation source, basis, target, and offset amounts as well as the book code ChartField to segregate the journal created from the source.

Note: When you set up allocations that use a consolidation ledger as the target, you must use the delivered value object %GC_ALLOCATION to format the GC_SOURCE field on either the Target, Residual, or Offset pages of the allocation rule. This populates GC_SOURCE with 07, indicating that the source was an allocation entry.

On My Oracle Support, review the red paper entitled"PeopleSoft Global Consolidations Allocations"