What are Allocation Sources?

An allocation source identifies the account, or range of accounts, to be used as the basis of an allocation.

Some, or all, of the transactions that have been posted to the source accounts are used to calculate the source amount for the allocation. When the allocation is performed, this source amount is manipulated to determine amount to be charged to the allocation target.

The allocation source determines how the source amount for the allocation are calculated. It does this by identifying the transactions for the source accounts that are included in the source amount. You can select the transactions by accounting period and by applying powerful selection criteria. You can select either budget or actual transactions for the source accounts.

Selecting the Transactions by Period or Balance

You can select the source transactions for a period of time, depending on the period, or range of periods, specified in Corporate Allocation Run (CAL). Use the Source Amount option in Allocation Sources (CAS) to determine the basis on which transactions are selected.

Filtering the Source Transactions

You may only want to allocate a particular group of the ledger transactions that have been posted to the source accounts for the chosen period. You can restrict the source transactions selected to those referencing particular analysis codes, within particular analysis dimensions.

For example, you might want to reallocate the advertising costs for product 1. You could assign a product 1 analysis code to each advertising transaction, in one of the analysis dimensions available. You could then calculate the source amount for an allocation by selecting the advertising account as the source account and restricting the transactions selected to those referencing the product 1 analysis code. The source amount would then represent the amount of advertising spent on that product alone, in the chosen period.

Note:  On a single allocation source you can select one account range and up to three ranges of analysis code. If you need more than one account range, or additional analysis code selection criteria, you can enter source continuation lines.

You can also apply a selection threshold to the transaction selection process. The total of the selected source transactions must fall within the threshold range for the transactions to be used as the basis for an allocation.

Allocating the Source Transactions

You can perform two different types of allocation: a charge type allocation or a split type allocation. The choice you make depends on whether or not you want to adjust the source account itself.

  • A charge type allocation generates postings to a target account and offsets the target offset account. Both of these accounts are defined in the allocation target.
  • A split type allocation generates postings to a target account and offsets the source account, thereby reversing the original source transactions.

In each case you can choose to allocate 100% of the source amount, or a proportion of this amount. The proportion is defined using an allocation ratio and may reduce or inflate the source amount.

If you are reversing the original transactions using a split allocation, you can optionally reduce the number of postings made by consolidating the offset transactions, for example by analysis code.