Multiperiod accounting Concept in Oracle Fusion

Multiperiod accounting enables you to create accounting entries across more than one accounting period for a single accounting event. The functionality is primarily used to defer/split the recognition of revenue or prepaid expense across multiple accounting periods.

Workaround Solution without MPA

- Setup Special Calendar

- Setup Distribution Set.

- Create  a prepayment Invoice and make the payment.

-Create Recurring Invoice Template for Monthly Expenses.

-Generate recurring Invoice.

-Manually Apply to prepayment Invoice each month.

MPA Support Two Scenarios

1.Prorate by No of Periods- Default Settings. No Setup are required.

2. Prorate By Days- Custom Subledger Accounting Setup Configuration is required.

MPA Process with Scenario 1: Prorate by No of Periods- Default Settings. No Setup are required.

-Create a Standard Invoice in Account Payable and in Multi Period Accounting region enter the required details(Start Date, end date and Accrual Account)  at Line Level.

-Pay the standard Invoice

-Run the create Accounting and Transfer to GL 

-Periodically run the Complete the Multi Period Accounting Program

Case Study:  A software Licence Purchased  worth Rs 12,000/- For 1 year. this expenses need to allocate to all the 12 periods(Each Month 1000).

MPA Accounting Entry  - for Prorate by No of Periods. 

Step 1: Create Standard Invoices - (Period JAN-25)

Deferred item Expenses a/c    ...Dr  12000   (Accrual Account Update at line level in MPA region)

     To Accounts payable A/c.  Cr   12000

Step 2: Make Payment to Standard Invoice and Accounting Entry generated as below

Accounts payable A/c.  Dr   12000

                     To Bank A/c    Cr    12000

Step 3:  After running , Create Multi Period Accounting  Program periodically , the Below entry will be generated month wise (JAN-25 to DEC-25)

Expenses A/c   Dr  1000  (Expenses Accounting as distribution line)

           To Deferred item Expenses A/c   Cr 1000  (Knock off Line from Base Entry(Clearing A/c))

MPA Process with Scenario 2: Prorate by days- Custom Subledger Accounting Setup Configuration is required.

Custom SLA Changes

Journal Line Rule(JLR)(Seeded)

Journal Line Rule(JLR)(Custom from the seeded Rule)

Active the custom Journal Entry Rule Set

Seeded Accounting Method (Standard Accural) 

Custom Accounting Method (Duplicated from 'Standard Accural') 

Replace the  Seeded Journal line Rule Set with Custom Rule set

Ready to Active

In Specify Ledger Option Update the new SLAM