Anchor Entity
The following information describes an anchor entity and its purpose.
Interunit
Anchor Business Unit typically refers to what is termed the source, sending, initiating, or charging entity. For example, if business unit US001 pays rents for US002 and US003, US001 can be designated as the Anchor Business Unit.
Intraunit
Anchor values for balancing ChartFields serve a similar purpose. For example, within business unit US001, if cash from Fund 100 is used to pay expenses attributable to funds 200 and 300, Fund 100 can be designated the anchor.
Purpose of the Anchor Entity
When transactions involve three or more entities, the anchor designation is essential for determining which entity serves as the central hub for the inter and intraunit balancing entries. The anchor designation also affects the transaction currency in a multicurrency situation for the due to and from lines that are generated by the processor.
Designating an Anchor Entity
In most of the subsystem applications, the anchor entity is determined by the nature of the transaction. For example, for an accounts payable voucher the anchor entity is always the entity to which the supplier liability is recorded. If there are distribution lines that are booked to different business units, these trigger the generation of interunit balancing entries.
In general ledger journal entry, the anchor business unit is the unit entered on the journal header.
Unless you select the IntraUnit Balancing Entries check box on the Detail Ledger Group − Balancing page, inter and intraunit processing does not create IntraUnit balancing entries for balancing ChartFields, such as Fund, even if different fund values appear in the same journal.
The Anchor Business Unit is readily apparent in interunit transactions; however, determining which is the Anchor Fund and how journal lines should be grouped when a transaction involves multiple funds requires additional steps. You can indicate on the journal entry which fund values are Anchors and assign a Group Number to journal lines to assist the inter and intraunit processor in creating the balancing lines.
For General Ledger Allocations, the pool values are used as the anchor values.