Accounting Entries in PeopleSoft Contracts

When you set up a contract, you associate that contract with a PeopleSoft Contracts business unit. The PeopleSoft Contracts business unit is associated with a PeopleSoft General Ledger business unit; associating a PeopleSoft Contracts business unit with a PeopleSoft General Ledger business unit is a required step in the PeopleSoft Contracts business unit setup. A contract derives its PeopleSoft General Ledger business unit from its PeopleSoft Contracts business unit.

When you select a product onto a contract line, the system writes the distribution codes for that contract line to the line's accounting distribution definition. Distribution codes do not include the PeopleSoft General Ledger business unit. The contract's General Ledger business unit appears by default on the contract line's accounting distributions. You can change the PeopleSoft General Ledger business unit on the revenue accounting distribution. If the line's General Ledger business unit differs from the contract's General Ledger business unit, the system generates interunit accounting entries. However, the PeopleSoft General Ledger business unit for the contract liability and contract asset accounting distributions must be the same as the PeopleSoft General Ledger business unit associated with a PeopleSoft Contracts business unit.