Multi Period Accounting(MPA)

Multiperiod Accounting (MPA) in Oracle Fusion is a feature that allows users to create accounting entries for a single financial event across multiple accounting periods. It can be useful for situations where a single transaction spans multiple accounting periods, such as prepaid expenses.

There are certain expenses which are incurred once but you want to apportion those expenses over a period of time. Ex: Software licenses, if you purchase a software license which is valid for one year.

Setups Required: In case we want to use Pro-rate expenses by number of periods we don’t to need to configure anything, this is a default setting. If you want apportion the expense based on a number of days in a month, then custom SLA setups are needed.

MPA Process Steps

• Create AP Invoice
• Provide Multiperiod Account details like Start Date, End Date and Accrual Account 
• Validate and Account the invoice
• Run “Create Multiperiod Accounting” program
• View Accounting to check the Accounting Entries

Create AP Invoice

Click on Lines

Distribution Combination account should be Invoice Charge account (Software Expense).

As far as Multiperiod accounting is concerned we need to enter few more details, click at View à Columns à Show all

Go to Multipeiod Accounting tab

Save à Validate à Post to Ledger

Click View Accounting

Run “Create Multiperiod Accounting” program

Ok à

Update parameters

Submit

Once it is process it will create Multi period Accounting Execution Report we can check output to see journal entries, we can also check it at Invoice level as well.

Journal Entry

Initial Entry                       Deferred Item Expense A/C Dr                  12000                    (Accrual Account)
                                                          To Liability A/C                                            12000

Month1                             Item Expense A/C Dr                     1000
                                                          To Deferred Item Expense A/C                 1000

Month2                             Item Expense A/C Dr                     1000
                                                          To Deferred Item Expense A/C                 1000             and so on

Note: Deferred Item Expense Account is an Accrual Account provided at the time of invoice creation under Multiperiod Accounting section in invoice lines.

Item Expense Account is provided in Invoice lines under Invoice Distribution Combination.