How can GL Allocation Rules generate Intercompany transactions between Legal Entities?

Hello ,

Thank you in advance for your help,

We are currently reviewing the use of Allocation Rules in connection with the Oracle Fusion Intercompany module and would appreciate clarification on the standard functionality and required configuration.

Our requirement concerns genuine intercompany transactions between separate legal entities, not intracompany allocations between departments or cost centres within the same legal entity.

Business requirement

A holding company incurs shared costs that must be recharged periodically to three other legal entities.

The allocation is based on percentages that may be reviewed and updated annually.

Example:

• Holding company bears EUR 100,000 of shared costs;
• Legal Entity B is allocated 40%;