Profitability Tech Tips – Learning When to Use Allocations Rules and Custom Calculations

Published January 14 2021
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Welcome to the Alithya Profitability Tech Tips! As consultants, we are continually learning interesting tips and tricks that make our lives easier, and while we always share these with our clients, individuals outside of the Alithya world are often not privy to them. In this blog series, we will share those tips and tricks through short and concise content that we hope will make your life easier and enable you to leverage your investment in Oracle Cloud EPM to the fullest.

We’ll kick off this series with an easy but critical tip; When you should use an Allocation Rule vs. a Custom Calculation Rule. As this would suggest, in Oracle EPM Profitability applications there are two types of rules that we can deploy in our applications:

  • Allocation Rules - These are the core of an Oracle Profitability Cloud application. They determine how allocated data flows and how drivers determine allocation amounts. These Rules, by default, will create an “Allocation In” value at the Rule destination and a corresponding negative “Allocation Out” value at Rule source. Allocation Rules also allow for the selection of a driver basis and accounting offset.
  • Custom Calculation Rules - These rules enable users to define calculations to be performed in a certain region of the database with results posted to a specific member. These Rules do not by default populate the “Allocation In”, “Allocation Out”, or Offset Balance members.

In most cases you can decide which Rule type to utilize by asking a simple question:

Am I trying to move data or am I trying to create data?

Let's dig into that a bit deeper:

  • We use Allocation Rules when:
    • We are required to move (allocate or consolidate) data at different intersections in our database that require balanced entries (Allocation In, Allocation Out, and custom Offsets).
    • When we require traceability as to the source, target, offsets, and driver basis utilized in our calculations.
  • We use Custom Calculations when:
    • We need to create data. This includes the obvious driver preparation calculations but also the more complicated PxQ (Price x Quantity), Mark-Up, and Journal type calculations.
    • We do not require traceability into the source, offset, and/or driver basis utilized in our calculations.

There are some important exceptions to the above, such as when we replace Allocation Rules with Custom Calculations Rules for performance purposes, but the above tip gives a good starting point for deciding on when to use which Rule type.

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