Reclassifying Data

Objectives

After completing this lesson, you will be able to:

  • Configure a reclassification method

Steps to Implement a Reclassification

Reclassification Implementation Steps

Business scenario: At ABC Corporation, your country/region accounting standards differ from the group policies regarding the classification of extraordinary income. You need a reclassification method that does the following:

  • Reclassify extraordinary income to non-operating income.
  • If revenue is less than zero, no reclassification should occur.
  • Segment 1000_C should be replaced with segment 1000_A.

To to meet these requirements, you need to perform the following steps:

  • Create a reclassification method.
  • Assign the method and document type to the task.

Reclassification Overview

Reclassification Methods - Key Points

  • Methods contain sequences.
  • Sequences contain business logic in five tabs:
    • Settings: Periodic or YTD, identify the consolidation unit to book.
    • Trigger: If the trigger data region has a value, then book an entry. Uses selection objects.
    • Source and destination: Identify the debit and credit FS Items. Uses role and attribute assignments to lower the cost of maintenance.
    • Dr / Cr Sign: If sign-triggered reclassification is on, this tab is used to select balancing dimensions.
    • Percentage: Identify the % to use. If blank, use 100%.
  • Methods may contain multiple sequences. For example, the reclassification method could contain the following sequences:
    1. Sequence 1: Other income adjustment
    2. Sequence 2: Finished goods inventory

To access reclassification methods, go to Reclassification in configuration and choose Define Reclassification Methods. This takes you to the maintenance screen for methods and the related sequences. A method basically contains one or more reclassification sequences comprised of triggers, sources, and targets that indicate to the system how to reclassify the data.

Reclassification Delta Setting

The No Delta Documents setting is used to prevent creation of additional documents when reclassification runs are repeated:

  • If you don't selectNo Delta Documents: fewer documents are created when reclassification is run repeatedly. For example, when you repeat a reclassification for the same data region, the system doesn’t reverse documents from the previous run. Instead, it calculates a delta by adding together the results from the previous run and the current run, and only creates documents if something changed. As a result, fewer documents are posted.
  • If you do selectNo Delta Documents, the system creates documents to reverse records from the previous run and then re-books the original values in additional documents. In this scenario, this process nearly doubles the number of documents posted.

Reclassification Settings

When you create a new reclassification method, the Settings are configured first.

In the Settings tab, the fields that are relevant for a reclassification scenario are as follows:

  1. Sequence Number: This is a number to uniquely identify a reclassification step. The number doesn't impact the sequence of processing.
  2. Periodic Reclassification: If selected, only current period values are reclassified. If not selected, year-to-date values are reclassified.
  3. Cons Frequency: Specify the Cons Frequency if using periodic reclassification. Values in the periods per the consolidation frequency are considered.
  4. Sign Triggered Reclassification: If something other than blank is specified, the reclassification will be done if the triggering value matches the sign. For example, you might reclassify a negative cash balance to a liability. If you select Sign Triggered Reclassification, a new tab called Dr/Cr Sign appears. In the new tab, Consolidation Unit is added as a Balance per characteristic dimension.
  5. Currency for Sign Decision: If Sign Triggered Reclassification is selected, choose the currency to use for the sign decision.

Reclassification Trigger

In the trigger tab, you add a selection object that tells the system when to reclassify values between the source and target items. If there's a value in the trigger, the reclassification will execute.

Reclassification Source and Destination

The source/destination tab controls the line items of the reclassification entry. In the following example, values in the 511300 FS Item (gains on the disposal of other assets) will be reclassified to the 515000 FS Item (other income).

The source item will always post in the opposite sign as the trigger. So, if the trigger is a net debit, then the source will be posted with a net credit. The destination item will always book values with the same sign as the trigger.

Note
If the Source Item Role is blank, the trigger FS item is used.
Note
The Subitems are added by the system based on the FS item breakdown category.

Source and Destination Fields

  • Source selections:
    • Source Item Role: Use this object to select a single FS Item as the source via its assigned role.
    • Target Attribute for Source: Use this to select multiple FS Items as the source via their assigned target attributes, which include:
      • Elimination target
      • NCI target
      • Planning target
    • Target attribute inherited from destination item: the source FS Item is determined via the destination FS Item's target attribute FS Item.
  • Source account assignments: these are determined from the role and attribute selections.
  • Destination selections:
    • Destination Item Role: Use this to select a single FS Item as the destination via its assigned role.
    • Target Attribute for Destination: Use this to select multiple FS Items as the destination via their assigned target attributes, which include:
      • Elimination target
      • NCI target
      • Planning target
    • Target attribute inherited from the source item: the destination FS Item is determined via the source FS Item's target attribute FS Item.
  • Destination account assignments: these are determined from the role and attribute selections.

Reclassification Debit / Credit Sign

When you perform a Sign Triggered Reclassification, the system adds the Debit / Credit Sign tab. You then add Consolidation Unit to the Balance per Characteristic.

Reclassification Percentage

On the Percentage tab, you specify the selection to determine the percentage. For example, add a selection that includes an FS item used to store percentages.

Note
If the field is blank, 100% is used by default.

Reclassification - Additional Characteristics

Reclassification moves values between FS items. However, at ABC Corporation, you also need to change the segments. To do this, you define the Source and Destination values for the additional fields. You have the following options for the Source and Destination values:

  • Define a fixed value

  • Delete the value

  • Inherit the value from the partner field

Configure a Reclassification Method

Business Scenario

You need to create a new reclassification method for the ABC Corporation to reclassify extraordinary income to non-operating income.

What skills will you develop in this practice exercise?

  • Create a reclassification method
  • Create a reclassification segment
  • Configure segment as an additional characteristic

Document Type Assignments

At ABC Corporation, you're using document type 1o for your reclassification. You need to reclassify standardized data, therefore, posting level 10 is assigned to this document type.

After you create your reclassification method, you need to assign it to the task and document type.

Note
One of the delivered task ids for reclassification is the S190.

Document type assignments are version-dependent.

Assign the Method to a Task and Document Type

Business Scenario

Now that you've created a new reclassification method, you need to assign it to a task and document type.

What skills will you develop in this practice exercise?

In this exercise, you'll enhance your reclassification method configuration skills by performing the following task: Assign the method to a task and document type.

Reclassification Components

Watch this video to review the components to implement a reclassification.

Reclassification Result

After you run the reclassification, you view the results in a report.

In the preceding image, you have the following results:

  • Consolidation Unit FR00:
    • Values are reclassified from 511300 to 515000.
    • Values are moved from segment 1000_C to 1000_A.
  • Consolidation Unit US00:
    • Values aren't reclassified because the 511300 value is less than zero.
    • Values aren’t moved between segments because the values are already in 1000_A.

Run the Reclassification

Business Scenario

Now that you’ve created a new reclassification method and assigned it to a task and document type, you need to test it.

What skills will you develop in this practice exercise?

  • Run the reclassification task from the data monitor
  • Verify the results in the log

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