This is my Collaborate 18 #CLV18 presentation on Multi Period Accounting in Oracle Fusion ERP Financials Cloud.

1. Session ID:
Prepared by:
Remember to complete your evaluation for this session within the app!
10011
A Deep Dive Into Multi Period
Accounting in Oracle Fusion
ERP Financials Cloud
Release 12 and Release 13
April 24, 2018
Prithis Das
Dynamique Solutions LLC

2. Presenter’s background - Prithis Das
• In the Oracle ERP space since 1997
• Founder of Dynamique Solutions LLC, an Oracle Silver Partner
• Consulting experience with Big 5 and other major organizations
• Oracle Certified Specialist in all the Oracle ERP Cloud Financials modules
• Oracle Certified Specialist in Oracle E-Business Suite Financials modules
• Chartered Accountant and Management Accountant from India
• Multiple presentations on Oracle technologies at major Oracle events
• Contact:
– Cell: +1.630.3649457
– Email: prithis.das@dynamique.us
– LinkedIn: www.linkedin.com/in/prithisdas/
– Web: www.dynamique.us

3. Agenda

4. Agenda
• Introduction to Multi Period Accounting
• Multiperiod Accounting Scenario - Prorate by Periods
• Multiperiod Accounting Setups - Prorate by Days
• Multiperiod Accounting - Setups for Proration by Days
• Implementation Considerations
• Q&A

5. Introduction to Multi
Period Accounting

6. Introduction to Multi Period Accounting (MPA)
• What is Multiperiod Accounting?
– Multiperiod accounting (MPA) enables users to create accounting for a single
accounting event for more than one GL period. The functionality is primarily used to
amortize a prepaid expense across multiple GL periods.
• How is Multiperiod Accounting used?
– In the Fusion Payables module for automated amortization of Prepaid AP invoices
• This presentation focuses on amortization of prepaid expenses across multiple
accounting periods using two methods:
– Amortization by Periods
– Amortization by Days

7. Typical Prepayment Process without MPA
• Typical Prepayment process without Multiperiod Accounting
– Setup/maintain Special Calendar in Fusion Payables
– Setup Distribution Set
– Create Prepayment invoice
– Pay Prepayment invoice
– Create Recurring invoice template for monthly expense amortizations
– Generate Recurring invoices
– Apply to Prepayment Invoice each month – manual process
– Run Create Accounting/Transfer to GL
– Use Prepayment Status Report.
• Optionally use Manual/Recurring Journal Entries to amortize prepaid expenses.

8. The new Multi Period Accounting Process
• The Multiperiod Accounting process
– Create Standard invoice in Accounts Payable
– Make Multi Period Accounting tab visible at the Lines level of the invoice (one-time
task)
– Complete Multi Period Accounting fields during invoice entry
– Pay Standard invoice to pay the prepayment
– Run Create Accounting/Transfer to GL
– Periodically run Complete Multiperiod Accounting program
• The MPA functionality in Release 12 and 13 supports two scenarios
– Prorate by number of periods - Default setting, no setups are required
– Prorate by days - Configurable, custom Subledger Accounting setups are required

9. Multi Period Accounting
- Prorate by Periods

10. MPA Scenario 1 – Prorate by Periods
• Prepayment for Software Support
– A company prepays annual software support of $12,000 on October 28th , 2017.
– The support contract is from October 15th, 2017 to October 14th 2018.
– The company needs to expense $1,000 each month for 12 months according to the
following schedule:
Period Amount Period Amount
Oct-17 $1,000 Apr-18 $1,000
Nov-17 $1,000 May-18 $1,000
Dec-17 $1,000 Jun-18 $1,000
Jan-18 $1,000 Jul-18 $1,000
Feb-18 $1,000 Aug-18 $1,000
Mar-18 $1,000 Sep-18 $1,000

11. MPA Scenario 1 – Prorate by Periods
• Expected journal
entries in Oct-17
• Expected journal
entries in Oct-17
Period Journal Period Journal
Oct-17 Dr Prepaid Expense $12,000
Cr AP Liability $12,000
Oct-17 Dr AP Liability $12,000
Cr Bank $12,000
Period Journal Period Amount
Oct-17 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Apr-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Nov-17 Dr Expense $1,000
Cr Prepaid Expenses $1,000
May-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Dec-17 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Jun-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Jan-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Jul-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Feb-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Aug-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Mar-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000
Sep-18 Dr Expense $1,000
Cr Prepaid Expenses $1,000

12. MPA Scenario 1 – Prorate by Periods
Proration Formula used

13. MPA Scenario 1 – Prorate by Periods
Invoice entry with MPA
Enter the Expense
Distribution Set /
Combination

14. MPA Scenario 1 – Prorate by Periods

15. MPA Scenario 1 – Prorate by Periods
Enable the MPA
fields

16. MPA Scenario 1 – Prorate by Periods
Dynamique Solutions LLC
Enable the MPA
information

17. MPA Scenario 1 – Prorate by Periods
Create Accounting

18. MPA Scenario 1 – Prorate by Periods
Create Multiperiod Accounting

19. MPA Scenario 1 – Prorate by Periods

20. MPA Scenario 1 – Prorate by Periods

21. Multi Period Accounting
- Prorate by Days

22. MPA Scenario 2 – Prorate by Days
• Prepayment for Business
Liability Insurance
• A company prepays annual
software maintenance of $12,000
on October 28th , 2017.
• The company needs to expense the
full amount from October 23 2017
to October 22 2018, with each
month being charged according to
the days in the month.
• Amortization schedule:
Month Days in Month Calculation Amount
Oct-17 9 (23 to 31) 12000 x (9 / 365) 295.89
Nov-17 30 12000 x (30 / 365) 986.30
Dec-17 31 12000 x (31 / 365) 1,019.18
Jan-18 31 12000 x (31 / 365 1,019.18
Feb-18 28 12000 x (28 / 365) 920.55
Mar-18 31 12000 x (31 / 365) 1,019.18
Apr-18 30 12000 x (30 / 365) 986.30
May-18 31 12000 x (31 / 365) 1,019.18
Jun-18 30 12000 x (30 / 365) 986.30
Jul-18 31 12000 x (31 / 365) 1,019.18
Aug-18 31 12000 x (31 / 365) 1,019.18
Sep-18 30 12000 x (30 / 365) 986.30
Oct-18 22 (1 to 22) 12000 x (22 / 365) 723.29
Total 365 12,000

23. MPA Scenario 2 – Prorate by Days
• Expected journal entries in
Oct-17
Period Journal Period Journal
Oct-17 Dr Prepaid Expense $12,000
Cr AP Liability $12,000
Oct-17 Dr AP Liability $12,000
Cr Bank $12,000
• Expected journal entries
for Deferred Expenses
Oct-17 to Sep-18
Period Journal Period Amount
Oct-17 Dr Expense $295.89
Cr Prepaid Expenses $295.89
Apr-18 Dr Expense $986.30
Cr Prepaid Expenses $986.30
Nov-17 Dr Expense $986.30
Cr Prepaid Expenses $986.30
May-18 Dr Expense $1,019.18
Cr Prepaid Expenses $1,019.18
Dec-17 Dr Expense $1,019.18
Cr Prepaid Expenses $1,019.18
Jun-18 Dr Expense $986.30
Cr Prepaid Expenses $986.30
Jan-18 Dr Expense $1,019.18
Cr Prepaid Expenses $1,019.18
Jul-18 Dr Expense $1,019.18
Cr Prepaid Expenses $1,019.18
Feb-18 Dr Expense $920.55
Cr Prepaid Expenses $920.55
Aug-18 Dr Expense $1,019.19
Cr Prepaid Expenses $1,019.18
Mar-18 Dr Expense $1,084.55
Cr Prepaid Expenses $1,019.18
Sep-18 Dr Expense $986.30
Cr Prepaid Expenses $986.30
Oct-18 Dr Expense $723.29
Cr Prepaid Expenses $723.29

24. MPA Scenario 2 – Prorate by Days
Proration Formula available for use, not default

25. Multi Period Accounting
- Setups for Proration by Days

26. MPA Custom Setups – Proration by Days
Available
Journal Line Rules
(JLR) for MPA

27. MPA Custom Setups – Proration by Days
Journal Line Rule (seeded)

28. MPA Custom Setups – Proration by Days
Journal Line Rule (custom) – duplicated from seeded rule
Update the Proration
Formula
Activate

29. MPA Custom Setups – Proration by Days
Journal Line Rule Set
(custom) –
duplicated from seeded rule
set “Invoice Accrual Basis”
Replace

30. MPA Custom Setups – Proration by Days
Replace seeded
JLR with custom
JLR

31. MPA Custom Setups – Proration by Days
Activate custom
Journal Entry Rule
Set

32. MPA Custom Setups – Proration by Days
Seeded Accounting
Method
“Standard Accrual”

33. MPA Custom Setups – Proration by Days
Custom Accounting
Method –
duplicated from
“Standard Accrual”

34. MPA Custom Setups – Proration by Days
Replace seeded
Journal Line Rule Set
with custom Rule Set

35. MPA Custom Setups – Proration by Days
Ready to
Activate

36. MPA Custom Setups – Proration by Days
Accounting
Method is Active

37. MPA Custom Setups – Proration by Days
Specify Ledger
Options

38. MPA Scenario 2 – Prorate by Days
Enter Standard
Invoice

39. MPA Scenario 2 – Prorate by Days
Prepayment Scenario 2 – Prorate by Days
Enter Expense
Distribution Set /
Combination

40. MPA Scenario 2 – Prorate by Days
Enter MPA
Information

41. MPA Scenario 2 – Prorate by Days

42. MPA Scenario 2 – Prorate by Days
Create Multiperiod Accounting

43. MPA Scenario 2 – Prorate by Days

44. MPA Scenario 2 – Prorate by Days

45. Multi Period Accounting
- Implementation considerations

46. MPA Implementation Considerations
• Decide on MPA method (Periods or Days) upfront
– Changing the method after implementation will create adjustments to existing
amortizations in future periods
• Include Create Multiperiod Accounting ESS job as part of Month-end checklist
• Additional Journal Rules may be required for Credit Memos, Debit Memos, etc
• Consider migrating “in-flight” prepayment amortizations to the new method
– Enter MPA invoices with balance un-amortized amount and balance periods/days
– Make “dummy” payments to “pay” migrated MPA invoices
• Additional setups required (eg Dummy Bank account) to ensure Accounting “wash” for dummy
payment
– Treat this like a mini-project with requirements, design, setups, testing and
implementation

47. Session ID:
Remember to complete your evaluation for this session within the app!
10011
prithis.das@dynamique.us