Define Reconciliation Rules

Reconciliation management is the designated level at which the account balances are reconciled in the system. It stores information that specifies the granular level at which account balances are reconciled across one or many entities.

·        GL to PP Reconciliation is performed at the following levels:

§        GL Level Reconciliation: In the GL Level Reconciliation, the difference between the GL System and the Product Processors systems at each reconciliation dimension node level within a GL Code, is identified.

§        Map Level Reconciliation: In the map level reconciliation, the difference between the GL Data and the Product Processor Data at each reconciliation Dimension Node Level across all the Product Processors, are identified.

·         GL to PP Reconciliation can be defined using Manual Reconciliation Definition

For a detailed explanation of GL Level Recon and Map Level Recon, see the Key Terms and Concepts Section.

Topics:

·        Reconciliation Page

·        Search Reconciliation Rule

·        Add a Reconciliation Definition

Reconciliation Rule

Select a method and by using search criteria, you can control the set of reconciliations definition that is displayed.
When you Add, Edit, or View the reconciliations, the corresponding details page is displayed.

The Reconciliation Definition page consists of five tabs:

·       Settings

·       GL Parameters

·       Target Parameters

·       Dimensions

·       Allocations

The Reconciliation Rules Summary Page offers five icons that allow you to perform different functions when a defined reconciliation is selected.

·         Add : Click the Add icon, this begins the process of building new reconciliation rules.

·        View : Select a single reconciliation definition, this enables the View icon. Click the View icon to view the detailed definition of reconciliation in the Read-Only Mode.

·        Edit : Select a single reconciliation definition, this enables the Edit icon. Click the Edit icon to modify an existing reconciliation definition with some restrictions. The Legal Entity and Consolidation Type fields are disabled during an edit.

·         Copy : Select a single reconciliation definition, this enables the Copy icon. Click the Copy icon to copy the detailed definition in a new Definition Screen. You can change any field and save it as a new definition. The Name and the Description fields are enabled on the new definition screen and you can give a unique name and a description.

·        Delete : Select one reconciliation definition, this enables the Delete icon. Click the Delete icon to delete the selected reconciliations definition.

Search Reconciliation Rule

You can search for any reconciliation rule in the Search Pane.

Prerequisites

Predefined Reconciliation Rule

Procedure

To search a reconciliation rule, follow these steps:

1.   Navigate to Reconciliation Summary Window.

2.     Enter the search criteria and click GL Level Recon or Map Level Recon.

3.   The search results are displayed in a tabular format containing all of the entities that meet to search criteria. The Reconciliation Summary Pane offers several icons to perform different functions when a Reconciliation Rule is selected.

Definition List

The Definition List displays a list of all the definitions that match your Search Criteria in two views.

· Thumb Menu

· List Menu

The following options are displayed:

·  Measures: The number of measures defined in the Reconciliation Rule.

·  GL Accounts: The number of GL Codes users have selected in the Reconciliation Definition.

·       Consolidation: The Consolidation Type displays as Solo or Consolidated.

·       Adjustment: The status is displayed either Yes or No if the Adjustment Allocation has been applied to the selected reconciliation definition or not.

Add a Reconciliation Definition

To add the reconciliation definition, follow these steps:

From the menu bar, click the Add icon, the Reconciliation Definition Window with the following tabs is displayed:

§       Settings

§       GL Parameters (Source Ledger Parameters)

§       Target Parameters

§       Dimensions

§       Allocation

Settings

To create the Reconciliation definition enter and select the displayed details in the Settings Tab.

1.     Enter and select the following details in the Settings Tab:

§        Rule Name: Enter the Rule Name to add the Reconciliation Definition.

§        Rule Description: Enter the Rule Description for the defined rule.

§         Reconciliation Type: The Reconciliation Type can be selected as General Ledger to Product Processor.

§         Definition Type: The Reconciliation Definition Type is by default selected as Manual for General Ledger to Product Processor.

§         Legal Entity: Click Hierarchy to select the Legal Entity from the drop-down list.

§         Consolidation Type: Select the Consolidation Type from the drop-down list as Solo or Consolidated. If Consolidated is selected, then only one Parent Legal Entity must be part of the definition.

§         Inherit to Child: Select the Inherit to Child toggle button, consolidation type is disabled if you select this option. If you select this option and the value defaults to Solo.
For more information on Inherit to Child, see the Key Terms and Concepts Section.

§         Balance Type: For General Ledger to Product Processor Reconciliation type, the available Balance Types are:

• End of Period Balance

• Monthly Average

• Yearly Average

§         Reconciliation Definition: Select the level at which the balances must be reconciled, that is, the GL Level Recon or the Map Level Recon.

§         Adjustment Allocation: Select Yes in this field if you want the application to pass an automated adjustment entry for any reconciliation difference found, else select No. If the value is No, then the reconciliation differences are calculated but adjustment entry will not be passed.

2.     Click the Next button, the next tab GL Parameter is displayed.

GL Parameters (Source Ledger Parameters)

Select the displayed details in the GL Parameters Tab.

1.     In the GL Parameters tab, update the following:

§       GL Hierarchy: Click the Hierarchy  icon, to launch the GL Hierarchy Window.
You can select the values for the GL Hierarchy pane from the available list of values.

You can move the Available Values using the Move, Move All, Remove, Remove All, Move to Top, Move Up, Move Down, and Move to Bottom buttons.

§       Add Filters: You can Add Filters (for example, product, business unit, and so on) defined in the Settings tab. A comparison between the GL system and PPs is based on the filters set on these dimensions.

2.     Click the Next icon, the next tab Target Parameters is displayed.

Target Parameters

This is a configuration page required to configure the target side entities and measures.

Topics:

·       GL Level Reconciliation (If GL Level is selected in the Settings Tab)

·       Map Level Reconciliation (If Map Level is selected in the Settings Tab)

GL Level Reconciliation (If GL Level is selected in the Settings Tab)

This section explains the GL Level Reconciliation in the Target Parameters Tab if the GL Level is selected in the Settings Tab.

1.     Select the following details:

Target Entity

§         Target Entity Name: Select the name of the entity that contains the Data from the drop-down list.

§         GL Reconciliation Column: Select the reconciliation column from the drop-down list.

§         Threshold Currency: Select the Threshold Amount of currency from the drop-down list.

2.     Click the Target Parameters  icon, the Target Parameters pane is displayed.

3.     Select the following details:

Target Parameters

§       Threshold specification: Specify the threshold from this drop-down list. If the value is specified in terms of percentage, then the Threshold Amount Currency Field is disabled.

Specify the threshold from the drop-down list. The threshold value can be in both absolute terms and percentage terms at a PP level. If the selection in all the PP’s is a percentage, then the threshold amount currency field is disabled.

§       Negative Threshold: Specify the Negative Threshold value. These values are used to identify the breach types, categorized as

¾      Negative Percentage Threshold (NPT)

¾      Positive Percentage Threshold (PPT)

¾      Negative Absolute Threshold (NAT)

¾      Positive Absolute Threshold (PAT) and

¾      Not Breached (NB)

The Breach Type is identified at runtime during the reconciliation process and Audit Trail entries are posted with this information. For GL Level reconciliation, values can be updated at different PP levels. For Map Level reconciliation, you have to manually enter only one value for all the PPs.

§        Adjustment Entry Floor: Specify the value required to pass an adjustment entry. If the (GL-PP) difference is less than the Adjustment entry floor specified in the definition, then the calculated difference is not eligible for the adjustment and the entry is not logged in the Adjustment Entry table.

§        Positive Threshold: Specify the Positive Threshold value. These values are used to identify the breach types, categorized as:

¾      Negative Percentage Threshold (NPT)

¾      Positive Percentage Threshold (PPT)

¾      Negative Absolute Threshold (NAT)

¾      Positive Absolute Threshold (PAT) and

¾      Not Breached (NB)

The Breach Type is identified at runtime during the reconciliation process and Audit Trail entries are posted with this information. For GL Level reconciliation, values can be updated at different PP levels.

§       Filter: Select the currency to specify the Threshold Amount. Additionally, click the Filter pane to add more details to the additional dimensions selected.

You can also add filters to the optional dimensions (product, business unit, and so on) defined in the Settings tab. A comparison between the GL source system and PPs is based on the filters set on these dimensions. See the following steps to add filters:

a.       Click the Filters from the drop-down list.

b.      Select the relevant dimension from the Filters pane.

c.       Click the selected dimension, which enables a second drop-down list to select the relevant members for the dimension under consideration.

Click the Next icon, the next tab Dimensions are displayed.

Map Level Reconciliation (If Map Level is selected in the Settings Tab)

This section explains the Map Level Reconciliation in the Target Parameters tab if the Map Level is selected in the Settings tab.

In this window, the GL Reconciliation Column is disabled when the Map Level Reconciliation is selected, click Add to update the PP entity or Target entity details.

For more information to update the Target entity details, see the GL Level Reconciliation (If GL Level is selected in the Settings Tab) Section.

Dimensions

In this tab, the Mandatory Dimensions are displayed. Click the Reconciliation Dimensions drop-down list to add the dimension to the map definition. Click Save to save the changes made, else click Cancel.

The Legal Entity, Currency, and GAAP Code are the mandatory dimensions. These dimensions which are defined in the Settings window appear in the Dimensions window as well, which indicates that a comparison between the GL system and the PP system and any reconciliation difference is populated based on these Dimensions. The Reconciliation Dimensions are optional dimensions that are also populated in this window as defined in the Type Configuration Page.

Click the Next icon, the next tab Allocation is displayed.

Allocation

In the Allocation tab, select the following fields:

·       Adjustment Allocation: Select the Automatic option if you want the application to pass automated adjustment entries or select Manual.

·       Adjustment Posted to: Select the Target table where the adjustments are to be posted that is, select the Product Processor option if the adjustment entry must be posted to the Product Processor selected in the Product Processor Parameter window, or select Other.

·       Target Entity: As per the selections made in the preceding two fields, the fields in the Target Entity is disabled or enabled accordingly.

·  Adjustment Rule: Select the Adjustment Rule from the drop-down list.    

·        Allocation Amount column: Balance Attribute.

·    Allocation Ratio: If adjustment entry is to be passed to more than one PP Entity, then the ratio at which this entry is to be passed is updated in the Allocation Ratio Field.

·   Adjustment Attributes: You can use this field to split the adjustments further based on the non-dimension columns of the Target Table. The Reconciliation definition differences that arise from the definition execution can be adjusted back to the target table, based on the values of non-dimension columns. This can be done apart from the dimension columns.

For post adjustments with more granularity, perform the following steps:

a.       Click on the Selector  under Adjustment Attributes.
A right pane is displayed.

b.      Select the Attributes from the Attribute List and click the Done icon.

c.       Click the Save icon to save the selected attributes.

The following types of Attributes should not be selected in the field list of Adjustment Attributes:

a.       Reconciliation Dimensions

b.      Number Data Type Columns

c.       Date Data Type Columns

NOTE:   

Reconciliation differences are created based on reconciliation dimensions alone but not on Adjustment Attributes selected.

Adjustment attributes play their role when creating adjustments with the differences that are observed. The applications read the values in the selected adjustment attributes of the participating columns of aggregation and based on the unique combination of values in these attribute columns, the number of adjustments is created and the same values default in the respective adjustments. The reconciliation definition differences are split among the adjustments based on the weighted average ratio of the participating target balance values.

For more information about Adjustment Attributes and Defaulting Account Level with an example, see Adjustment Attributes and Defaulting Account Level.

Topics:

·       Map Level Reconciliation (if Map Level Reconciliation is selected in the Settings tab)

·       GL Level Reconciliation (if GL Level Reconciliation is selected in the Settings tab)

GL Level Reconciliation (if GL Level Reconciliation is selected in the Settings window)

This section explains the GL Level Reconciliation in the Allocation tab if the GL Level is selected in the Settings Tab.

In the Allocation pane, the following fields must be selected:

·       Adjustment Allocation: If the GL Level Reconciliation is selected, then the Adjustment Allocation is by default considered as Automatic.

·  Adjustment Posted to Select the Target table where the adjustments are to be posted that is if the adjustment entry is to be posted to PP selected in the Product Processor Parameter Window then select Product Processor or else select Others.

·       Target Entity Details: As per the selections made in the preceding two fields, the fields in the Target Entity is disabled or enabled accordingly. See the following cases for more details:

Case 1: If the Target table is the Product Processor

The Default Values is the only column that is updated. This is the mandatory column to be updated for populating the Target Entity results.

Case 2: If the Target table is Other

The Target Entity, the Default Values, the Allocation GL Column, and the Allocation Ratio are updated. If the adjustment entry is to be passed to more than one Product Processor entity, then the ratio at which the entry is passed is updated in the Allocation Ratio field.

Map Level Reconciliation (if Map Level Reconciliation is selected in the Setting Pane)

This section explains the Map Level Reconciliation in the Allocation tab if the Map Level is selected in the Settings tab.

In the Allocation pane, the following fields must be selected:

·       Adjustment Allocation: If you want the application to pass automated adjustment entries, then select Automatic, or select Manual.

·       Adjustment Posted to: Select the Target table where the adjustments are to be posted that is, if the adjustment entry is to be posted to PP selected in the Product Processor Parameter window, then select Product Processor or select Other.

·       Target Entity: As per the selections made in the preceding two fields, the fields in the Target Entity is disabled or enabled accordingly. See the following cases for more details:

§  Case 1: If the Adjustment Allocation is Automatic and the Target table is the Product Processor

The Default Values is the only column that is updated. This is the mandatory column to be updated for populating the Target Entity results.

§  Case 2: If the Adjustment Allocation is Manual and the Target table is the Product Processor

The Default Values and the Allocation Ratio are the only two columns to be updated. If the adjustment entry is to be passed to more than one Product Processor entity, then the ratio at which the entry is to be passed is updated in the Allocation Ratio field.

§  Case 3: If the Adjustment Allocation is Automatic and the Target Table is Other

If the Other option is selected as the Target table, then the corresponding Target Entity, Default Values have to be updated.

§  Case 4: If the Adjustment Allocation is Manual and the Target table is Other

The Target Entity, the Default Values, and the Allocation Ratio columns must be updated.

Adjustment Attributes

The following is an example that briefly explains the ADJUSTMENT ATTRIBUTES functionality.

Sample data has dimensions lv code, ccy code, and gaap code. The ownership type attribute is used as an Adjustment Attribute.

Assuming the source balance is 9300, the following are the differences that are created.

The following are the adjustments that are posted considering the ownership type column into the granularity.

Two unique values, IND and JOINT are used to split the differences and create adjustments.

Adjustment 1 has the value IND for ownership type and the balance is (4000/9000)*300.

Adjustment 2 has the value JOINT for ownership type and the balance will be ((2000+3000)/9000)*300.