Hello, I don't know if I should be asking this in the financials forum.
We have a number of provisions of element type Employer Charges (for example: gratuity provision, leave allowance provision) which accrue monthly. The cost and balancing account for this element across all operating units is the same.
If an employee is moved to a new operating unit with a different set of books (from company A to company B), is it possible to transfer his accrued gratuity provision, leave allowance provision etc to the new company SOB (note that account codes are the same).
If so, what is the best process to achieve this?
Is it possible to reverse gratuity provision in Company A to zero.
Then credit from Company A to Company B with the gratuity amount?
I am thinking of creating a new element say "Previously Accrued Gratuity Provision" which will be costed and balanced in Company B.
Problem is knocking off the value in Company A.
I am not an expert in financials obviously, just wondering what the logic for achieving this should be.
Edited by: igwe on Feb 4, 2013 5:53 AM
thanks Giuseppe. I thought the same as well. Only problem comes with costing, because it means I have to add the offset element in the previous month and cost it based on account parameter set up at that point in time.
It would be nice if I didn't have to attach a ledger in GL flexfield mapping. If oracle could pick up the set of books automatically, then modifying the account in the element entry is all I would need. that would be something. Oh well
Assuming the below scenarion:
Gratuity in Company A:
Balancing Account(Accruind Account)
Now define your offset element with costing and balancing segments as below:
Balancing Account (Accruing Account in Company 02)
In this case when the payroll and costing is processed for the offset element, it would debit: 01.200 and credit 02.300. But this will work assuming company 01 and 02 are configured as company segments in the same set of books. If your company are in 2 different SOB, a finance expertise would be required.
Thanks Ram and Guiseppe, I've tried playing with the link cost and balancing segments. Have partially got it to work.
In January payroll (company code 01) I am checking to see if a change has been made to the assignment payroll. If so, I get the accrued amount for gratuity, spin it off as an element which is then reverse costed,so that the total for the account in January becomes 0 after gl transfer et al is done. I then push the accrued amount into a balance.
In February, this accrued balance amount is generated as a provision and costed according to the new payroll (company code 02). So for 02 account I now have total accrued in 01 account + total accrued in february. For 01 account I now have 0.
The problem is with the accounting date though. Because this means that as at 31-JAN the total for the account is 0 which according to the clients finance office is wrong. The accrued amount in payroll 1 should be 0 as at 01-FEB not as at 31-JAN because the employee transfer happened on this date.
I was actually wondering if the retropay costing process can be used for this? What if I add a provision entry manually. This triggers the retropay process. If I run retrocosting process with an end date of 01-FEB, will it pick the set of books id for the old payroll for only my new entry, then use the new SOB id for the other entries in the run?
Anyway testing this to see what happens.
Many Thanks for the help so far. Unfortunately for me the client is insisting on this and I have never seen this done before to be honest.