The objective of this sample use case is to use the share allocation method to proportionally redistribute the total monthly rent expense across departments, based on the square footage each department occupies.
Consider an outline with the following dimensions:
Company: Contains multiple ledgers. The rent expense allocations take place in the Vision US ledger.
Department: Contains the following members:
100, which stores the total monthly rent expense, of $100,000, for Vision US. This amount is proportionally allocated to the children of department 999.
999, which is the parent of the following departments:
101, which receives 45% of the rent allocation
102, which receives 30% of the rent allocation
103, which receives 25% of the rent allocation
Account: Contains the following members:
5740, which is a rent expense account
SQFT, which is a statistical account used to record square footage for each department
AmountType: Contains PeriodActivty, which is the parent of the following members:
PeriodActivityDebit, which is the target location
PeriodActivityCredit, which is the offset location
You can accomplish the rent expense allocation in several ways, each with the same result. Two scenarios are presented. For each scenario, assume that the following parameters are defined as follows:
Allocation method: Share
Range: The descendents of department 999:
101
102
103
No cells in the range are excluded.
Basis: The square footage of each range member for the period of activity (which is monthly).
SQFT,PeriodActivity
Zero amount option: (Default) Allocate zero amount values.
Zero basis option: If the basis value is zero, cancel the allocation operation.
Basis time span option: (Default) Split, use the basis value for each time period individually.
Rounding method: Round allocation values to the nearest 1,000 and add the total rounding error to department 101.
Debit member: If the sum is positive, write the value to PeriodActivityDebit.
Credit member: Write the value to PeriodActivityCredit.