Setting Up Interunit and Intraunit Allocations

The PeopleSoft Allocations process creates what are initially unbalanced allocation journal entries between legal entities (interentity), between business units (interunit), and among balancing ChartFields within a particular business unit (intraunit).

The PeopleSoft Allocations process does not create the interunit and intraunit balancing journal lines as a part of the process. The interunit and intraunit balancing transaction lines are created by the Inter/IntraUnit Processor, which is run from journal edit.

In the following example, business unit JP001 is allocating rent expense that is accumulated in its account 640000 in the amount of 1000000 JPY to JP001, JP002, and JP003 on a fixed basis of 50 percent, 20 percent, and 30 percent, respectively.

The following illustrates a simple allocation of this expense across multiple business units:

You create an interunit and intraunit allocation much as you would any other, except that you must select an appropriate transaction code on the Allocation Type page. The PeopleSoft Allocations process populates this value on each journal entry line.

The transaction code is a means to categorize interunit and intraunit transactions. This example illustrates the delivered System Transaction for General Ledger journals (GLJ) and the Transaction Code JOURNALS.

If you want to distinguish the allocated interunit and intraunit rent receivables and payables from all others, you can create a transaction code (such as AllocJrnl) and map it to the GLJ System Transaction. You must also create interunit templates and intraunit templates that associate the new transaction code with accounting entry types for which you provide ChartField values that are used by the system to complete the partial interunit and intraunit entries.

The PeopleSoft Allocations process supplies the following information for the journal header:

The PeopleSoft Allocations process creates the following journal line information:

The anchor is the business unit or ChartField value around which the system completes the entry and determines such things as the balancing method and organizes the related journal lines in the same IU group (interunit group).

For intraunit allocation steps, the process always defines a unique IU group for each balancing ChartField value that is defined in the pool. For interunit, the process always uses an IU group number of 1.

The PeopleSoft Allocations process derives the anchor business unit based on the definition setup.

The process first checks to determine if the business unit is defined in the offset as a fixed value. If this condition is the case, the process uses the offset fixed value as the anchor.

If not, the business unit is not in the offset as a fixed value, the process checks if the business unit is defined in the target as a fixed value. If this condition is true, the process uses the target fixed value as the anchor.

If the business unit is not defined in the target or offset as a fixed value, then the process uses the business unit from the pool as the anchor.

At this point, the rent expense is allocated but the journal is not in balance because you have not yet created the due to and due from interunit or intraunit payables and receivables lines. When you run the Inter/IntraUnit Central Processor, it provides the following information or additional lines to balance the journal entry (lines 5 through 8):