R12 FV Accounting: Need to Prevent Prepayment Application Across BSV (Balance Segment Values) (Doc ID 1679433.1)

Last updated on MAY 04, 2015

Applies to:

Oracle U.S. Federal Financials - Version 12.1.1 to 12.2 [Release 12.1 to 12.2]
Oracle Payables - Version 12.1.1 to 12.2 [Release 12.1 to 12.2]
Information in this document applies to any platform.

Symptoms

ACTUAL BEHAVIOR
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The 'Prevent Prepayment Application Across Balancing Segment' option from 11i is not available on R12, based on the expection that SLA (Subledger Accounting Method) should create intercompany accounting when prepayment application is done across balancing segments.

However, that results in the following problems in the FV environment:
a) Cannot account advances and AP invoices that its applied to cross Treasury symbols or funds, since doing so results in incorrect accounting and financial statements.
b) Intercompany accounting does not allow for budgetary accounting, which results in incorrect accounting getting created.
c) If a Prepayment is sent - it must be related to a particular fund/PO - the system cannot allow it to be matched to any Invoice.

EXPECTED BEHAVIOR
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The 'Prevent Prepayment Application Across Balancing Segment' option - or a similar option - needs be available to Federal Financials customers on R12.

STEPS
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The issue can be reproduced at will with the following steps:
1. Create an invoice for a particular fund / treasury symbol,and match it to Purchase Order
2. Apply it to a Prepayment paid out of a different fund / treasury symbol, do Invoice validation, and create accounting
3. Find that it is not possible to track expenditures from obligation through payment as the funds suddenly change -- obligations and payments are never going to match/tie/reconcile for a treasury symbol

BUSINESS IMPACT
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The issue has the following business impact:
The agency experienced many issues with interfund and rounding errors on 11i in the past, before realizing that the 'Prevent Prepayment Application Across Balancing Segment' option was available.
The agency processes a high volume of prepayment activity and at minimum needs this transaction to balance at the fund level.
Otherwise, the end result accounting impact is huge - a reconciliation nightmare - on account of the requirement to perform data cleanup after reconciliations.

Cause

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