Considerations for Offset Segments

You can use the Offset Segments option on the Manage Common Options page to create balanced accounting entries for invoice and payment transactions. You can select the segments to override on the offsetting entry lines without having to define intercompany or intracompany rules.

This option is also used by Oracle Fusion Receiving to derive the receiving inspection account.

Tip: Consider this option carefully before setting it. Changing automatic offsets after creating accounting entries can result in accounting inconsistencies or slow performance.

To meet more complex offsetting requirements, you can set up intracompany or intercompany rules at the ledger level in Oracle Fusion General Ledger. If you enable additional balancing segments for your chart of accounts, you must define intracompany or intercompany rules for the journal entry to balance.

Select one of the following offset segment methods:

• None

• Primary balancing segment

• All segments, except natural account

None

The invoice liability distribution provides the liability entry line account, without any segment override. Receiving uses the receiving inspection distribution that's defined for the destination organization.

Note: If you anticipate creating invoices that cross balancing segment values, select another method or set up intracompany or intercompany rules in General Ledger.

Primary Balancing Segment

This method builds the liability entry line account using both the charge distribution on the invoice line and the liability distribution on the invoice header. The charge distribution provides the primary balancing segment value and the liability distribution on the invoice header provides the remaining segment values. The resulting journal entry is balanced by the primary balancing segment.

Receiving builds the receiving inspection entry line account using both the purchase order charge distribution and the receiving inspection distribution for the destination organization. The charge distribution provides the primary balancing segment value and the receiving inspection distribution provides the remaining segment values.

This figure illustrates how the invoice liability entry line account is built when the offset segment method is set to Primary Balancing Segment.

All Segments, Except Natural Account

This method builds the liability entry line account using both the liability distribution on the invoice header and the charge distribution on the invoice line. The liability distribution on the invoice header provides the natural account segment and the charge distribution provides the remaining segment values. The resulting journal entry is balanced by all segments, except the natural account segment.

Receiving builds the receiving inspection entry line account using both the receiving inspection distribution for the destination organization and the purchase order charge distribution. The receiving inspection distribution provides the natural account segment and the purchase order charge distribution provides the remaining segment values.

This figure illustrates how the liability entry line account is built when the offset segment method is set to All Segments, Except Natural Account.