The procedures for creating allocation rules are presented in several sections:
Name the allocation rule. See: Naming the Allocation Rule
Define the sources. See: Defining the Sources.
Define the targets. See: Defining the Targets.
(Optional) Define the offset.
If the basis method is Prorate, specify how you want the amounts prorated. See: Defining Prorated Basis Methods.
Save your work. You can also save periodically as you define an allocation rule.
Each rule consists of attributes that you can define:
The name of the rule, the operating unit it belongs to, and when it is effective
The basis and allocation method that specifies how and in what proportion to allocate the source pool to the target projects
Whether to run the allocation rule based on General Ledger or Oracle Projects periods
The expenditure organization, expenditure type class, and expenditure type to be used in creating allocation transactions
When you define an allocation rule, you select a basis method. The basis method defines how the amounts in the source pool are to be divided among the target lines. You enter the target lines in the Targets window. Each target line identifies projects and tasks.
Each basis method has its own characteristics.
Spread Evenly: This method is the most simple and direct. The rule divides the source pool amount equally among all the chargeable target tasks included in the rule.
Target % and Spread Evenly: This is another simple method. You specify the percentage of the source pool that you want to allocate to each target line. The rule calculates the amount to allocate to the line, and then spreads the results evenly among the tasks.
Prorate and Target % and Prorate: These two proration basis methods provide precise control over how the rule distributes the source pool. The rule uses the attributes set in the Basis window to derive the rate at which the source pool amount is apportioned among the target projects and tasks. For the Prorate basis method, the rule uses the basis attributes to apportion the source amount among all the tasks defined by the rule. For the Target % and Prorate method, the rule first uses the target percentage to calculate the amount to allocate to the line, and then goes on to apportion the results among all the tasks. For more information about the Basis window, see: See Refining Prorated Basis Methods.
Use Client Extension Basis: Another way to define percentages and a basis is to use the Allocation Basis extension. If you use this extension, you cannot use the Basis window. For more information, see: Allocation Basis Extension, Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.
The following tables show how the different basis methods would affect the allocation of a source pool amount of $1,000 to two target projects, P1 and P2.
P1 has three chargeable tasks (A, B, and C) and P2 has two chargeable tasks (Y and Z).
For the basis methods Prorate and Target % and Prorate, the proration is based on labor hours. At the time of the allocation, tasks have accrued labor hours as indicated in the Labor Hours column, for a total of 400 hours (300 hours for P1 and 100 hours for P2).
In the spread evenly basis method shown in the following table, the source pool amount is divided evenly between the tasks in all the target projects. The formula is shown below:
Source Pool Amount / Number of Tasks in All Target Projects
| Target Project | Target Task | Allocation Amount (Total = $1,000) |
|---|---|---|
| P1 | A | $200 |
| P1 | B | $200 |
| P1 | C | $200 |
| P2 | Y | $200 |
| P2 | Z | $200 |
In the target percent and spread evenly basis method shown in the following table, the source pool amount is multiplied by the target line percentage, then divided by the number of tasks in all target projects for the target line. The formula is shown below:
Source Pool Amount * Target Line Percentage / Number of Tasks in All Target Projects for the Target Line
| Target Project | Target Task | Target Percent | Allocation Amount (Total = $1,000) |
|---|---|---|---|
| P1 | A | 90% | $300 |
| P1 | B | 90% | $300 |
| P1 | C | 90% | $300 |
| P2 | Y | 10% | $50 |
| P2 | Z | 10$ | $50 |
In the prorate basis method shown in the following table, the source pool amount is multiplied by the task labor hours divided by all target project labor hours. The formula is shown below:
Source Pool Amount * (Task Labor Hours / All Target Project Labor Hours)
| Target Project | Target Task | Labor Hours | Allocation Amount (Total = $1,000) |
|---|---|---|---|
| P1 | A | 40 | $100 |
| P1 | B | 60 | $150 |
| P1 | C | 200 | $500 |
| P2 | Y | 80 | $200 |
| P2 | Z | 20 | $50 |
In the target percent and prorate basis method shown below, the source pool amount is multiplied by the target line percentage. The product is multiplied by the target task labor hours divided by all target project labor hours for the target line. The formula is shown below:
(Source Pool Amount * Target Line Percentage) * (Target Task Labor Hours / All Target Project Labor Hours for the Target Line)
| Target Project | Target Task | Target Percent | Labor Hours | Allocation Amount (Total = $1,000) |
|---|---|---|---|---|
| P1 | A | 90 | 100 | $150 |
| P1 | B | 90 | 20 | $300 |
| P1 | C | 90 | 300 | $450 |
| P2 | Y | 10 | 0 | $0 |
| P2 | Z | 10 | 50 | $100 |
Navigate to the Allocation Rule window.
You may want to use an existing rule as a template when you create a new rule. See: Copying Allocation Rules.
Enter a unique rule name and optional description, and specify the effective dates.
The allocation rule is effective during the dates you specify. You can use a rule to generate allocation transactions only within its effective date range.
Select a basis method. See Selecting a Basis Method.
For Allocation Method, select Full or Incremental. The results will be as shown below:
| Full | Allocate only once within the same GL or PA run period (as set up in Step 5) |
| Incremental | Allocate several times within the same GL or PA run period (as set up in Step 5) |
The allocation method you select has important implications for your business. See: Full and Incremental Allocations, Oracle Project Costing User Guide.
For Allocation Period Type, select GL or PA.
This field specifies if you want to identify amounts based on the Oracle General Ledger (GL) fiscal calendar or the Oracle Projects (PA) calendar.
For Target Selection, select Operating Unit, Legal Entity, Business Group, or all.
This field specifies whether you want to select target projects from the current operating unit only (default), the current legal entity (the default legal context organization), the current business group, or all project organizations in the project hierarchy. The last three options require cross-charge setup.
Specify the attributes that you want to associate with this rule. Some of the attributes are described below:
| Target Selection | When you select targets on the Targets window, you can select projects owned by the entity. If you select Legal Entity, Business Group, or All, you must set up your system to use cross charge and intercompany billing. |
| Auto Release | Enable this option if you want to release automatically the transactions generated by the allocation rule. If this option is not enabled, you must release the transactions in a separate step. See: Releasing the Allocation Run, Oracle Project Costing User Guide. |
| Allow Duplicate Targets (Available only if the rule uses the full allocation method) | Enable this option if you want to be able to allocate an amount to a chargeable task two or more times. Note: If you do not allow duplicates, the rule creates one transaction per target project and task, even if an allocation run returns a particular target project and task several times. |
| (Descriptive flexfield) | Enter the information specified by your system administrator. This descriptive flexfield is set up using an extension. See: Allocation Descriptive Flexfields Extension, Oracle Projects APIs, Client Extensions, and Open Interfaces Reference. |