Define Intercompany Organization and its Association to Balancing Segment Values

An intercompany organization is the most granular and operational unit that will record and report inter or intra company transfer of revenue, expenses, and other obligations.

For multitier operations, an intercompany organization can act as a provider, a receiver, or a clearing organization in an intercompany agreement.

The Manage Intercompany Organizations task lets you define intercompany organizations and assign them to a legal entity and to one or more balancing segment values. Optionally, assign a Receivables and Payables business unit to the organization if you require invoice generation. Invoices are generated in Oracle Fusion Receivables and Oracle Fusion Payables for the business units specified.

Associating intercompany organization with one or more balancing segment values

In a multitier flow, an intercompany organization must represent a specific primary balancing segment value or one unique combination of balancing segment values if secondary and tertiary balancing segments are also enabled. Therefore, an organization must have a balancing segment value association for use in an intercompany agreement. However, it is optional to associate an intercompany organization to the secondary or tertiary balancing segment when they are enabled.

The association to the balancing segment value is effective dated and therefore, an organization can only have one association at any time.

Association when only primary balancing segment is enabled

Scenario: Customer Infusion Incorporation is headquartered in the US and also operates in other countries that include UK, Singapore, and Australia. Infusion group has one legal entity in each geography and has only enabled company segment as the primary balancing segment. Each company configured has a 1:1 relationship with the legal entity. This table demonstrates the intercompany organizations and their association with primary balancing segment:

Intercompany Organization Name	Legal Entity	Primary Balancing Segment – Company Segment
Infusion US Operations	Infusion US Capital Inc.	1021 – US Capital Inc.
Infusion UK Operations	Infusion UK Finance	1035 – UK Finance Private Limited

Association when primary and secondary balancing segments are enabled

Scenario: Customer Infusion group is a financial services enterprise and is headquartered in the US and operates in other countries that include UK, Singapore, and Australia. Each country operations are under a single legal entity. This enterprise has enabled both primary and secondary balancing segments considering their reporting requirements at the divisional level. This table demonstrates the intercompany organizations and their association with balancing segments:

Intercompany Organization Name	Legal Entity	Primary Balancing Segment – Company Segment	Secondary Balancing Segment - Division
US Retail	Infusion US Capital Inc.	1021 – US Capital Inc.	2121- Retail
US Commercial	Infusion US Capital Inc.	1021 – US Capital Inc.	2122- Commercial
US Treasury	Infusion US Capital Inc.	1021 – US Capital Inc.	Blank (Optionally associate the organization to only primary balancing segment)

Short code for intercompany organization

Short code is an additional attribute that must be defined for each intercompany organization. Short code is leveraged to derive the auto generated transaction numbers in the multitier flow.