Considerations for Multiperiod Accounting

To achieve a successful implementation of multiperiod accounting, the following points must be taken into consideration.

Deferring the multiperiod end date

When you're deferring the multiperiod end date, then the recognition amount has to be adjusted. As the recognition line isn't generated based on the journal line rule, the switch debit and credit option isn't applicable. The appropriate offsetting entry for the positive or negative amount is generated to offset the extra recognition.

For example, if you're extending for 3 months and have already run the multiperiod accounting for the first 2 months, you would have recognized more than the amount required to offset; hence a negative entry will be generated.

Process the multiperiod accounting

Multiperiod recognition entries are created based on transaction objects data and accounting rule definition at the time the Create Multiperiod Accounting process is executed.

• The entered amount value for the multiperiod journal is calculated by a formula. This formula is assigned to the Entered Amount accounting attribute on the multiperiod journal line rule.

• The accounted amount value for multiperiod journals is calculated by the Create Multiperiod Accounting process, prorating proportionally to the entered amount, including rounding differences.

Multiperiod accounting entries aren't created:

• If any subledger level reporting currency or secondary ledger is disabled, although the multiperiod transaction may not be fully recognized yet.

• If subledger level reporting currency is added after the journal is created in Final status, the multiperiod journal isn't created for the new reporting currency.

• If the transaction accounting date is prior to the first open period of a reporting currency or secondary ledger, the journal isn't created for the reporting currency or secondary ledger.

Multiperiod transactions are processed by the Create Multiperiod Accounting process only once for each accounting period and transaction.

• Don't modify the multiperiod start date for a transaction to a date in a prior accounting period of the last multiperiod journal in primary and secondary ledgers.

• If the multiperiod start date for a transaction is modified to a date in a prior accounting period, accounting periods that were previously processed for the transaction by the Create Multiperiod Accounting process aren't processed, regardless of the period status. Any adjustment in the prorated amount due to change of start date will be accounted in the next accounting period.