Liquidation Method

Liquidate method is a document schedule control option that instructs the Commitment Control Budget Processor process how to accurately calculate and relieve outstanding pre-encumbrance and encumbrance balances from the budget ledger. You can selectively determine how to liquidate an encumbrance or pre-encumbrance at the document schedule level. To enable this functionality, configure your system to liquidate by quantity. Otherwise, all transactions liquidate by amount. Use the Purchasing Definitions - Business Unit Options page to determine whether a purchase order business unit liquidates by quantity and determine the default liquidate method. You can then modify the liquidate method on the requisition or purchase order, and change it to the desired liquidation method. If you choose to distribute by amount, you can not liquidate by quantity.

When liquidating your balances by quantity, the budget processor must adhere to the following rules:

• Calculate the unit price by using the amount of the preceding document.

• Calculate the liquidate amount by using the predecessors unit price and multiplying it by the standard quantity of the current document.

• Use the newly derived amount to relieve the pre-encumbrance and encumbrance of the preceding document.