Understanding Allocations

Allocations can serve many purposes, such as distributing expenses, creating annual or periodic budgets, and calculating currency conversions. Use allocations to redistribute amounts from one or more business units to accounts in other business units or variables, or from one ledger type to another.

You can create model journal entries to work as allocations, regardless of whether the amounts change, or create recurring journal entries if the amounts never change.

The JD Edwards EnterpriseOne General Accounting system provides three types of allocations:

• Recurring journal entries

  Create a recurring journal entry for an entry that recurs on a regular basis.

• Indexed allocations

  Create an indexed allocation to allocate amounts from one company or business unit to another or to create annual or monthly budgets.

• Advanced variable numerator allocations

  Create advanced variable numerator allocations to allocate amounts from one business unit to other business units, as well as to allocate amounts from one business unit to variables such as basis ratios for category codes 01–50 and business unit types. Using the advanced variable numerator allocations method requires additional setup to handle the complex, but dynamic functionality.

  See Setting Up Advanced Variable Numerator Allocations.

  Note: The advanced variable numerator allocations method replaces the variable numerator allocations method, which was not as flexible. The variable numerator allocations method enabled allocations from one business unit to other business units with a common category code value only, and the method required that the basis ratio always be the destination business unit. The advanced variable numerator allocations method does not have those limitations.

The following frequency intervals can be used with all three types of allocations:

• Weekly

• Monthly

• Quarterly

• Semiannually

• Annually

You can create reversing journal entries for accrual accounting or year-to-date performance calculations for all allocations. Companies often reverse allocations to create estimated distributions that are reversed on the first or last day of the next period. When you reverse an allocation and process it in final mode, the system reverses the journal entry that was created initially. When you post the allocation journal entry, the system creates the reversing journal entry on the first or last day of the next accounting period, based on a setting in the General Accounting constants.

For all three types of allocations, the system uses the original document number of an allocation for the journal entries that are created each time that you run the allocation. Even though the journal entries have the same document number, they are not considered duplicates because each journal entry has a different general ledger date. You can use the document number to follow the audit trail back to the original allocation.

When you create allocations, these dates affect the allocation types:

• General ledger date: The date that determines the accounting period to which the journal entry posts.

• Special period/year: The date that determines the source balances for the allocation. The system selects amounts from the F0902 table based on this date if the based-on period or year is different from the current period or year.

• Stop date: The date when the allocation becomes ineligible for processing by the computations programs.