1. User Guide
  2. Business Rules Administration
  3. Application Specific Rules
  4. Transfer Pricing Standard Processes
  5. Process Definition Screens
  6. Direct Transfer Pricing of Ledger Balances

5.3.9.3.6 Direct Transfer Pricing of Ledger Balances

Oracle Funds Transfer Pricing allows users to calculate transfer rates for ledger average or ending balances that do not have corresponding Instrument table records using the following transfer pricing methodologies:

  • Moving Averages
  • Spread from Interest Rate Code
  • Redemption Curve
  • Caterpillar
  • Weighted Average Perpetual
  • Un-priced Account
  • Tractor method

Direct Transfer Pricing of Ledger Balances will always have to be done on only one Ledger Table, be it Ledger Stat or Management Ledger, whichever is selected in the Process. Users will do direct transfer pricing for ledger balances that do not have corresponding Instrument table records. The migration is done for those ledger balances that have corresponding instrument table records.

Oracle Transfer Pricing also generates records in the Management Ledger table, which are posted to the organizational unit (Org Unit), designated as the Transfer Pricing Offset Unit (a special Treasury Unit). During this process, an offset charge or credit amount is calculated for each normal charge/credit posted at the intersection of the Organization Unit and Product dimensions in the processes outlined above.

The sum of the Org Unit charges and credits at the Product dimension member level is multiplied by -1 and posted to the offset Org Unit designated in the Offset Org attribute for the Org Unit dimension. After this processing is complete, the total entity level charges and credits net to zero.

Note:

If no Offset Org Unit is specified, the offset amount will be posted to a default Org Unit (-99100). Users should be aware that the TP Migration process does not read the Offset Org ID attribute defined against any other dimension (Product, GL Account, and Common).

Financial Elements related to Direct Transfer Pricing of Ledger Balances:

  • 100 – Ending Book Balance (Inputs to the calculations)
  • 140 – Average Book Balance (Inputs to the calculations)
  • 170 - Average Transfer Rate (Only one out of 170 and 172 will get generated at a time, depending on Standard or Remaining Term)
  • 172 - Average Remaining Term Transfer Rate
  • 450 - Transfer Rate Charge/Credit (Only one out of 450 and 452 will get generated at a time, depending on Standard or Remaining Term)
  • 452 - Charge/Credit Remaining Term

Note:

Input FE's can be Average Book Balance, Ending Book Balance or even Custom Balance FE's can be used if setup as new FE's and selected in Application Preferences.