Intercompany segment

[fun2chat]

Dear Gurus,

I have some doubts on intercompany segment.

Say i have 2 Indian LE and 2 US LE, 1 ledger and common COA between 2 indian LE and 1 ledger and common COA between 2 US LE.

There is a single OU in all the LE's. But there are multiple IO in all LE's. So i am taking this IO as locations in my segments. My question is, should i be making this segment as balancing segment??

The product divisions i am keeping as cost centers, since the client require P&L on product division basis.

Also there will be inter LE transactions during year end, little not much.

Need your advice on, what should be the balancing segment, whether i should have a intercompany segment. And what more i would require?

Regards

KK

[karthikeyanp1981]

Provide us with your chart of accounts structure and the purpose/justification of every segment in the structure. We can discuss on pros and cons of it ..

Regards,
Karthikeyan

[fun2chat]

This is my proposed COA Structure.

Segment 1 COMPANY Legal Entity
Segment 2 LOCATIONS Inventory Orgs (Balancing segment)
Segment 3 COST CENTERS Profit Centers/Divisions (Cost Centers)
Segment 4 ACCOUNTS Natural Accounts
Segment 5 INTERCOMPANY Intercompany
Segment 6 EMPLOYEES For Future Expansion
Segment 7 FUTURE Future Expansion

Location are the mfg plants/warehouses.
Cost Centers are the product divisions.
This is a process industry.

Regards

[karthikeyanp1981]

Please read the section "Defining Your Account Structure" from Oracle General Ledger User guide. You will get more clarity on the purpose of each qualifiers and which segment go with which qualifier, and when an intercompany segment as such is required .

Regards,
Karthikeyan

[fun2chat]

Yes i will definetly be reading that part. But i need your suggestion on this.

Should i be going for intercompany segment??

Regards

[karthikeyanp1981]

You will be having transactions of following nature i suppose:
1) Transactions between Legal Entities belonging to same Set of Book
2) Transactions between Legal Entities belonging to different Set of Book

Intercompany transactions are taken care in General Ledger in the following ways:

1) You can use the Intercompany Accounts window to define templates that govern how intercompany balancing lines are created by General Ledger. When an intercompany transaction is posted, General Ledger automatically creates account code combinations for intercompany balancing lines based on combinations of source, category, and balancing segment defined in the template.
2) You can also create an intercompany segment in your chart of accounts structure that shares the same value set as the balancing segment. The intercompany segment is used in the account code combination to create balanced intercompany journals. Intercompany transactions using the intercompany segment provide more detail for reporting and reconciliation.
3) You can have a Clearing company created for your balancing segment and use the same for creating balancing lines for intercompany transactions.

Which one of the above to be used is your call .... i have not been part of such decisions myself, so cannot direct you any further. However members who have been there, will definitely help you out ....
Intercompany setups ( AGIS ) is bit different in Release 12 ....

Regards,
Karthikeyan

[fun2chat]

Thanks buddy for that.

For my location segment which will be my balancing segment. I will create one common value. And i will be using Intracompany setup. Will be using this common value for balancing intracompany entries. Will use All Other to All Other rule.

For balancing entries between LE's, i will have to do intercompany setup. Never tried that so just wanted to know whether for this i need intercompany setup??

Regards