Defining Intracompany Balancing Rules

Posted on January 28, 2008 by David Haimes

Written by Rohit Kathuria and David Haimes
In order to take advantage of the automatic Intercompany balancing during GL posting and SLA Accounting you first
need to define the accounts you want us to use.
Intercompany and Intracompany Accounts in R12 are defined in two different Set Up Pages, the Intracompany
Balancing Rules are what we had in 11i for Intercompany Accounts (confusing I know) this is where you will find the
rules you had in 11i of you are upgrading from 11i. If you dont want to take advantage of the Legal Entity
Configurator product and define Legal Entities and map them to your accounting structure, you can still go ahead and
use the intracompany rules. If you start to map your Legal Entities to Ledgers and/or Balancing Segment Values
(BSV) then you will want to be sure you complete the job, so there is no ambiguity in your setup. Consider the
example below for BSV 10, 20, 30, 40, 80 and 90 :

The France Ledger is mapped to the FR LE, so all BSV in that ledger are assumed to be owned by LE France.
However the UK Ledger has BSV 10 and 20 mapped to the UK LE, but 80 and 90 are not mapped to anything we
have no way to know what LE they are assigned to.
You will be able to set up Intracompany balancing rules

Between 10 and 20
Between 80 and 90
between 30 and 40

You can set up Intercompany Accounts between

10 and 30 or 40
20 and 30 or 40
LE France and LE UK

All the above are unambiguous, we know what we are dealing with. The 80 and 90 BSV are in the same ledger with
no LE at Ledger or BSV level so we just assume that any transactions between 80 and 90 are intracompany.
We would not allow you to create Intracompany rules between
 80 and 10 or 20
90 and 10 or 20

This is because we dont know if 80 and 90 are in the UK LE or not, if they are then assign those BSV to LE UK too
and youre good to go.
If 80 and 90 arent in the UK LE then what LE do they belong to? Once you map them to the to the appropriate LE
then you will need to define Intercompany accounts for them.