Example of Generating Intercompany Receivables and Intercompany Payables Accounts for Manual Transactions
The receivables (AR) and payables (AP) accounts for manual intercompany transactions are generated automatically by Oracle Fusion Intercompany. Enter distributions for the transaction and intercompany generates the receivables and payables accounts, based on the intercompany balancing rules setup.
Intercompany uses the transaction type, provider legal entity, receiver legal entity, primary balancing segment value of the first provider distribution and the primary balancing segment value of the first receiver distribution to ascertain which rule to apply. Intercompany then uses the rule, and the balancing segment values of the first provider distribution to build the intercompany receivable account combination for the provider side of the transaction. Similarly, intercompany builds the intercompany payables account for the receiver side of the transaction, based on the first receiver distribution account.
Intercompany will evaluate the rules in the following order.
-
Primary balancing segment rules
-
Legal entity level rules
-
Ledger level rules
-
Chart of accounts rules
If there is no matching rule at the lower levels, then intercompany will use the chart of accounts rule. It is therefore recommended that you set up a chart of accounts rule for every chart of accounts structure you have. This will ensure that intercompany will always find a rule to use to generate the intercompany receivables and intercompany payables accounts for transactions.
Intercompany will then evaluate the transaction type in determining which rule to use to generate the receivables or payables account. A rule with a specific transaction type takes precedence over a rule defined for the All Other transaction type.
Example
In this scenario you choose to track your intercompany sales for the farming and textile companies separately from other intercompany activities. Separate intercompany accounts are used for these two companies. A chart of accounts rule is created for all other intercompany activity.
Setup
InFusion USA Chart of Accounts as shown in the following table.
|
Segment Qualifier |
Primary Balancing Segment |
Balancing Segment 2 |
Segment |
Segment |
Intercompany Segment |
|---|---|---|---|---|---|
|
Segment Name |
Company (CO) |
Cost Center (CC) |
Product (PROD) |
Account (ACCT) |
Intercompany (IC) |
Ledger, Legal Entity, and Primary Balancing Segment Value Assignments as shown in the following table.
|
Ledger |
Legal Entity |
Primary Balancing Segment Value |
|---|---|---|
|
InFusion USA |
InFusion Farms |
3100, 3200, 3300, 3400, 3500 |
|
InFusion USA |
InFusion Textiles |
4000 |
|
InFusion USA |
InFusion Production |
5000 |
|
InFusion USA |
1000, 9000 |
Chart of Accounts Rule
Rule No. 1 as shown in the following table.
-
Chart of Accounts: InFusion USA
-
Source: None
-
Category: None
-
Transaction Type: All Other
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13020 |
0000 |
|
AP Account |
1000 |
000 |
000 |
21020 |
000 |
Legal Entity Rules.
Rule No. 2 as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Legal Entity: InFusion Farms
-
To Legal Entity: InFusion Textiles
-
Source: None
-
Category: None
-
Transaction Type: Intercompany (IC) Sales
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13011 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21011 |
0000 |
Rule No. 3 as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Legal Entity: InFusion Farms
-
To Legal Entity: InFusion Production
-
Source: None
-
Category: None
-
Transaction Type: Intercompany (IC) Sales
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13012 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21012 |
0000 |
Rule No. 4 as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Legal Entity: InFusion Textiles
-
To Legal Entity: InFusion Farms
-
Source: None
-
Category: None
-
Transaction Type: Intercompany (IC) Sales
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13013 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21013 |
0000 |
Rule No. 5 as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Legal Entity: InFusion Textiles
-
To Legal Entity: InFusion Production
-
Source: None
-
Category: None
-
Transaction Type: Intercompany (IC) Sales
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13014 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21014 |
0000 |
Intercompany Accounts Generated for Intercompany Debit Transactions
Provider Distribution and Intercompany Receivable Account
This table displays the Provider side of the transaction.
|
Transaction |
Transaction Type |
Provider LE |
Receiver LE |
Provider Distribution |
Provider AR Account Generated |
Uses Rule No. |
|---|---|---|---|---|---|---|
|
1 |
IC Sales |
InFusion Farms |
InFusion Textiles |
3100- 100- 1200- 52330- 0000 |
3100- 100- 0000- 13011- 4000 |
2 |
|
2 |
IC Adjustments |
InFusion Farms |
InFusion Textiles |
3100- 100- 1200- 52330- 0000 |
3100- 100- 0000- 13020- 4000 |
1 |
|
3 |
IC Sales |
InFusion Production |
InFusion Farms |
5000- 120- 1300- 52345- 0000 |
5000- 120- 0000- 13020- 3200 |
1 |
Receiver Distribution and Intercompany Payable Account
This table displays the Receiver side of the transaction.
|
Transaction |
Transaction Type |
Receiver LE |
Provider LE |
Receiver Distribution |
Receiver AR Account Generated |
Uses |
|---|---|---|---|---|---|---|
|
1 |
IC Sales |
InFusion Textiles |
InFusion Farms |
4000- 110- 1200- 41111- 0000 |
4000- 110- 0000- 21013- 3100 |
4 |
|
2 |
IC Adjustments |
InFusion Textiles |
InFusion Farms |
4000- 110- 1200- 41111- 0000 |
4000- 110- 0000- 21020- 3100 |
1 |
|
3 |
IC Sales |
InFusion Farms |
InFusion Production |
3200- 130- 1200- 41112- 0000 |
3200- 130- 0000- 21012- 5000 |
3 |
Intercompany Accounts Generated for Intercompany Credit Transactions as shown in the following table.
Provider Distribution and Intercompany Receivable Account
|
Transaction |
Transaction Type |
Provider LE |
Receiver LE |
Provider Distribution |
Provider AR Account Generated |
Uses Rule No. |
|---|---|---|---|---|---|---|
|
4 |
IC Sales |
InFusion Farms |
InFusion Textiles |
3100- 100- 0000- 52330- 0000 |
3100- 100- 0000- 13011- 4000 |
2 |
|
5 |
IC Adjustments |
InFusion Farms |
InFusion Textiles |
3100- 100- 1200- 52330- 0000 |
3100- 100- 0000- 13020- 4000 |
1 |
|
6 |
IC Sales |
InFusion Production |
InFusion Farms |
5000- 120- 1300- 52345- 0000 |
5000- 120- 0000- 13020- 3200 |
1 |
Receiver Distribution and Intercompany Payable Account
This table displays the Receiver side of the transaction.
|
Transaction |
Transaction Type |
Receiver LE |
Provider LE |
Receiver Distribution |
Receiver AP Account Generated |
Uses Rule No. |
|---|---|---|---|---|---|---|
|
4 |
IC Sales |
InFusion Textiles |
InFusion Farms |
4000- 100- 1200- 41111- 0000 |
4000- 100- 0000- 21013- 3100 |
4 |
|
5 |
IC Adjustments |
InFusion Textiles |
InFusion Farms |
4000- 100- 1200- 41111- 0000 |
4000- 100- 0000- 21020- 3100 |
1 |
|
6 |
IC Sales |
InFusion Farms |
InFusion Production |
3200- 130- 1200- 41112- 0000 |
3200- 130- 0000- 21012- 5000 |
3 |