How the Accounting is Determined

REVENUE EVENTS
The below section explains how the accounting is derived for the various “events” within PA. Refer to the Expenditure
Accounting for explanation of accounting for cost, also known as “expenditures.”
Within PA, there are “events” that are typically created for recording revenue and invoicing. MSI has created some
custom “events” to book different types of accounting entries. Those events are explained here.
Values are maintained in the Auto Accounting Lookup Sets and are documented here:
https://docs.google.com/spreadsheets/d/1_Adk_yEf2LDW0-_0z0TlRSXp8BBxoWjfBFjMl6ZzFhs/edit?usp=sharing

POC revenue adjustments: POC revenue adjustments are generated each month for POC projects. The accounting is
derived as follows:
Side Entity Account Dept CC APC
Debit Project OU Deferred 00000 00 0000
Receivable
account
Credit Project OU 400000 00000 Sales Country Code Technology
Classification Classification
There is one Deferred Receivable account assigned per Operating Unit
Deferred Receivable -> MSIPA_GLO_DEFER_RECEIVABLE OR MSIPA_US_DEFER_RECEIVABLE (if US_100000 OU)
Sales Country Code -> From Project Classifications on Project
Technology -> From Project Classifications on Project

Billings in Excess of Earnings (BIE) reclassification entry:

Side Entity Account Dept CC APC
Debit Project OU EIE 00000 00 0000
Credit Project OU Deferred Receivable account 00000 00 0000
There is one Deferred Receivable account assigned per Operating Unit
Deferred Receivable -> MSIPA_GLO_DEFER_RECEIVABLE OR MSIPA_US_DEFER_RECEIVABLE (if US_100000 OU)
EIE -> MSIPA_GLO_EIE

Earnings in Excess of Billings (EIE) reclassification entry:

Side Entity Account Dept CC APC
Debit Project OU Deferred Receivable account 00000 00 0000
Credit Project OU BIE 00000 00 0000
There is one Deferred Receivable one Deferred Revenue account assigned per Operating Unit
Deferred Receivable -> MSIPA_GLO_DEFER_RECEIVABLE OR MSIPA_US_DEFER_RECEIVABLE (if US_100000 OU)
BIE -> MSIPA_GLO_BIE

Reversal of SI Deferred Cost: When a Completed Contract project is complete or when a Milestone project has been
triggered, PA will reverse the SI Deferred Cost. The accounting is derived as follows:
Side Entity Account Dept CC APC
Debit Project OU 751000. 660000 if 00000 Sales Country Code Task Service Type
COPQ task type Classification
Credit Project OU SI Deferred Cost 00000 00 0000
account
There is one SI Deferred Cost account assigned per Operating Unit, except for US_100000 which has projects for multiple
regions. If the project belongs to US_100000, the system will retrieve the Deferred Cost account from a valueset based
on the Sales Country Code classification.
SI Deferred Cost -> MSIPA_GLO_CONTRACT_COSTACCT (SI-DEFER-<OUName>), based on event organization
Sales Country Code -> From Project Classifications on Project
Task Service Type -> Event organization, which is populated from Service Type Code assigned to the Task
Reversal of Non-SI Deferred Cost: When a Completed Contract is complete, PA will reverse the Non-SI (Equip) Deferred
Cost. The accounting is derived as follows:
Side Entity Account Dept CC APC
Debit Source Source Transaction Source Source Technology
Transaction Transaction Transaction Classification
Credit Project OU Equip Deferred Cost 00000 00 0000
account
There is one Equipment Deferred Cost account assigned per Operating Unit.
Source Transaction -> stored in a flexfield on the expenditure
Equip Deferred Cost -> MSIPA_GLO_CONTRACT_COSTACCT (EQUIP-DEFER-<OUName>), based on event organization,
which is populated from expenditure organization

Expenditure Accounting: How the Debit Account is determined

When a cost/expenditure is charged to a project, Oracle Projects will derive the Debit Account based on type of project
as follows:
Project Type Entity Account Dept CC WWAPC
AWARD Project OU 751000. 660000 if 00000 Sales Technology
(P&L or POC rev rec) COPQ task type Country and Service
Code Type on
Classification task
AWARD Project OU SI Deferred Cost 00000 00 0000
(Milestone or account
Completed Contract)
ADMIN Entity of 888531 Expenditure 00 0000
Department Organization
(Employee’s
Home
Department)
PRESALE Entity of 888531 or 888500 Charge To 00 0000
Department Classification
CHARGE- TO Entity of 888531 or 888500 Charge To 00 0000
DEPARTMENT Department Classification

The SI Deferred Cost account is determined from a value set based on the Operating Unit. There is one per Operating
Unit. There is a default value assigned for any OU that does not have a specific account assigned. If the project belongs
to US_100000 OU, the system will determine the Deferred Cost account from a value set based on the Sales Country
Code classification.

● SI Deferred Cost Account -> MSIPA_GLO_CONTRACT_COSTACCT (SI-DEFER-<OUName>), based on service type

code from Task used on expenditure.
● SI Deferred Cost Account if OU = US_100000: MSIPA_US_DEFER_COSTACCT, based on the country code
assigned as the Sales Country Code project classification
○ Examples: CN: 134001, DEFAULT: 134013

● Charge To Classification -> “Charge To Department” Project Classification from Project

● Sales Country Code -> Project Classification from Project
● Service Type on task -> Service Type Code from Task used on expenditure

Cross-charge transactions:
Whenever an expenditure is being charged to a Project in a different operating unit, the expenditure is considered a
cross-charge transaction. The OU where the expenditure is created is considered the Provider OU. The OU of the
Project is the Receiver OU. In the case of cross-charge transactions, the debit account is overridden with a temporary
holding account. As of 2017, this account is 920170. Refer to below section on Intercompany Accounting. Also refer to
the Intercompany training manual for more information on the Intercompany process and the accounting entries:
https://docs.google.com/a/motorolasolutions.com/document/d/13v5oGcZVttK-
h5ZgXYhADggEnlLrri5SyIyVAl8cNO0/edit?usp=sharing

Expenditure Accounting: How the Credit Account is determined

The credit account will depend on the type and source of the expenditure.
Type or Source Logic for Credit Account
Labor (Oracle Time and Labor, Uncosted Employee’s Home Department, which appears as the
ADI, or Pre-approved Batch Timecard) Expenditure Organization on the expenditure.
Account segment from MSIPA_GLO_LABOR_CLRACCT:
● 888997 (if charging P&L or B/S)
● 888500 (if charging dept in other entity)
● 888531 (if charging dept in same entity)
Miscellaneous expenditures (Pre- The full accounting distribution comes from the Expenditure
approved batch or Costed ADI) Clearing Account flexfield on the expenditure. If it is not
entered, the transaction will fail accounting.
Supplier Invoices and Expense Reports PA does not create any accounting for these transactions.
(AP Invoices, AP Expenses) The credit account is a payables liability account. It is booked
and determined by Payables. Please refer to AP team for
information on this account.
Equipment (COGS) PA does not create any accounting for these transactions.
The credit account is likely an inventory account, which is
booked and determined by Inventory & Costing. Please refer
to supply chain accounting team for information on this
account.
If “labor” is entered as a miscellaneous expenditure, it will follow the accounting rules for Miscellaneous. The rules
are based on the class and source; it is not based on the “expenditure type.”

Intercompany Accounting
PA, AR and AP modules will all create accounting entries to complete the intercompany accounting.

● PA will create the initial expenditure in the Provider OU, which creates half of the accounting required in the
Provider entity. This expenditure will appear on the Project and will reflect the different Provider and Receiver
Operating Units. AP may also create the accounting for the initial expenditure when it processes a supplier invoice
that is cross-charging entities. (Provider OU = OU from where the cost originates; the OU that provides the service
or product being charged. Receiver OU = OU receiving the cost; since Projects receive cost, the Project OU will
always be the same as the Receiver OU)

o When the expenditure is a cross-charge transaction, the accounting for the debit account (as explained
above) will be overridden to charge the OIE account.
● AR will create an intercompany AR invoice in the Provider OU, which creates the other half of the accounting
required in the Provider entity. It will credit the same OIE line used on the PA expenditure for the cost amount, and
credit a separate OIE line for the markup, thus leaving only the markup in the OIE line.

● AP will create an intercompany AP invoice in the Receiver OU, which creates the accounting required in the Receiver
entity. This entry will charge the expenditure cost to the account required for the project charged and charge the
markup to the OIE line.

Example:
An employee in the US charges time to a POC project in GB OU. Cost = 400. Markup = 20 (400 x 5%).
Entry #1: PA books debit to OIE and credits Employee’s Home Dept for the cost. PA sends data to AR system.
Entry #2: AR creates invoice in Provider OU, debits Interco AR, credits OIE for cost and markup
Entry #3: AP creates invoice in Receiver OU, debits Project Account for cost, debits OIE for markup, credits Interco AP.

Entity Module Transaction Accounting Distributions Dr Cr Line Desc.

Provider Projects Cross-charge Dr. OIE 100000-920170-00000-00-0000-000000 400 Project Cost
(PA) transaction Cr. Employee 100000-888997-AB123-00-0000-000000 400 Cost relief for
in PA Home Dept project cost
Receivables AR Interco Dr. Interco AR 100000-116100-00000-00-0000-908000 420 Interco Receivable
(AR) Invoice Cr. OIE 100000-920170-00000-00-0000-000000 400 Project Cost
(Provider) Cr. OIE 100000-920540-00000-00-0000-000000 20 Markup
Cr. Tax Liability 100000-321219-00000-00-0000-000000 0 Tax (if required)
Receiver Payables AP Interco Dr. Project 908000-751000-00000-BH-5703-000000 400 Project Cost + Tax
(AP) Invoice Dr. OIE 908000-920540-00000-00-0000-000000 20 Markup
(Receiver) Cr. Interco AP 908000-316100-00000-00-0000-100000 420 Interco Payable

Net result of entries in Provider entity:

Dr. Interco AR 100000-116100-00000-00-0000-908000 444 Cost, Markup,
Tax
Cr. Home Dept 100000-888997-AB123-00-0000-000000 400 PA Cost
Cr. OIE 100000-920540-00000-00-0000-000000 20 Markup
Cr. Tax Liability 100000-321219-00000-00-0000-000000 0 Tax

Net result of entries in Receiver entity:

Dr. Project P&L 908000-751000-00000-BH-5703-000000 400 Cost + Tax
Dr. OIE 908000-920540-00000-00-0000-000000 20 Markup
Cr. Interco AP 908000-316100-00000-00-0000-400000 420 Cost, Markup,
Tax

Screenshots of fields that determine accounting:

Project Classifications:
Task Service Type:
Options > Tasks > Select task > Task Detail
Deferred Cost Accounting for US and CA Operating Units:

Expenditure Accounting: How the Debit Account is determined for US and CA Operating Units:

The SI Deferred Cost account is determined from a value set based on the Operating Unit. If the project belongs to
US_100000 OU, CA_140000 OU the system will determine the Deferred Cost account from a value set based on the
combination of Sales Country Code classification + Sub Region (We can find out from Project Hierarchy based on Project
Owning Org) + Technology Classification

● SI Deferred Cost Account if OU = US_100000: MSIPA_US_DEFER_COSTACCT, based on the country code

assigned as the Sales Country Code project classification + Sub Region + Technology assigned at Project
classification.
○ Examples: Project Owning Org: T5S, Sales Country Code: US, TECHNOLOGY: ASTRO

Based on the Project owning Org, Sub region would be

Lookup set: Based on the Combination Deferred account will be 134006

Case 2:

If the technology value from Project classification does not exist in Sales country code~Sub-region~Technology
combination, then use the Sales country code~Sub-region~ALL

Case 3:

If combination doesn’t exist in the Case 1 and Case 2, then system will pick the deferred account based on Country from
the same lookup set.

US: 139999
CA: 134020

Same logic will be applied to Project based Purchase Order’s and Payables Invoice’s as well.
Expenditure Accounting: How the Credit Account is determined for US and CA Operating Units if expenditure type is
TRAILING COST:

If the Expenditure type is “TRAILING COST “, credit account will derive from the “MISPA_G_CCL_DEF_ACC”
Lookup set based on Operating unit.

Revenue Events:

1) In case of “SI COST ACCRUAL” and “XX COST RECOGNITION” events types Credit account will be:

Credit: Deferred Account -This will be picked from “MSIPA_US_DEFER_COSTACCT” Lookup as per the logic
explained above

2) In case of “SI COST ACCRUAL OFFSET” and “XX COST RECOGNITION OFFSET” events types
Debit account will be:

Debit: P&L Account – This will be picked from “MSIPA_GLO_COST_PNL”

 Side Entity Account Dept CC APC
Debit Project OU 751000 00000 Sales Country Code Task Service Type
Classification
Credit Project OU SI Deferred Cost 00000 1 0000
account

3) In case of “COST RECOGNITION CONV” and “COST OFFSET CONV” events types Credit and debit
account will be:

Side Entity Account Dept CC APC

Debit Project OU SI Deferred Cost 00000 00 0000
account
Credit Project OU SI Deferred Cost 00000 00 0000
account