Account based calculations - business rules ..?

[Former Member]

Hi all

In what case, we go for account based calculations? I have read in the document, it says about cash flow statement. I couldn't understood it properly. Can anyone here explain me a little detail with one example please. Can we use this business rule in all models (planning, consolidation ..??).

Regards

swetha

[former_member210696 · Accepted solution]

Hi Swetha,

Yes, this business rule can be used for any models. As an example, say you have an income statement where in you are arriving at the net profit or loss for a period. Now, this value will generally need to be posted to retained earnings (one of the accounts in Balance Sheet) otherwise the BS equation won't hold true. For this purpose, you can configure this business rule to post the value from IS net profit/loss to retained earnings.

Similarly, for arriving at cash flow statement there are lot of movements from one account to another which can be configured through this business rule.

Hope it helps!!

[former_member210696 · Accepted solution]

Ignore the rating on your post. I clicked on that accidently and I am not able to take it off.

[Former Member · Accepted solution]

Thanks ashish . Can you give more examples if you know it. Other wise ignore it. Any how , thanks for your reply. I am fine with your answer.

[former_member210696 · Accepted solution]

Hi Shwetha,

There are many BS accounts which would go to your cash flow statements. Also, for these accounts, you would be required to post only the delta values (current year - previous year0 because that's actually your net cash inflow/outflow. For such calculations, you will make use of source period and source year and write 2 business rules for one cash flow line item (for calculating the delta values).

Consider for example inventories which you will find in your BS statement. Now in cash flow, change in inventories wrt prior year would be recorded. For this, you may configure 2 business rules, in first one getting the value of current year inventories and writing it to the cash flow account for inventories, in 2nd business rule, you would make use of source period/year to get the previousyear's inventory value and check the tick mark for 'Reverse sign' and write it back to the same cash flow account. This way, you will have this calculation done through business rule and net change in inventories will be recorded in your cash flow.

Hope it helps!!