Changing the Legal Entity to Balancing Segment Assignement

In the R12 Accounting Setup Manager, you can assign Balancing segment values (aka BSV, Company Codes) to Legal Entities, that’s nothing new for me to blog about.  However a few times in the last month or two I have been asked a question along the lines of

“We are doing a re-org or have created a new LE and now we want to reassign an existing BSV to the new LE, how do we do that?”

My reply is

“I don’t think you really want to do that”

The reason why is because moving ownership of assets and liabilities from one Legal Entity to another is an Intercompany Sale, it has to be done correctly and any taxes due etc must be paid.  Also you need to keep all the history of the activity the old legal entity did and report on that and have it available for audit.  Also you probably want to deal with all the open transactions against the old LE in one way and just start recording new transactions against the new LE.  A good option is to create a new balancing segment value and assign that to the new LE.

There is one situation where I am ok with people wanting to change the assignment, that is when it was a mistake during implementation and you have not entered any transactions against it yet.  That is essentially a data fix.

3 Responses

  1. So what are the steps for the data fix? We would like to use the same BSV and enter it into another LE.

    Like

  2. Hi David,

    I understand the business (financial, audit, and reporting) restrictions noted. However, purely from a system standpoint, what would be the implications of removing a BSV from an LE and reassiging it to another LE (e.g. data corruptions, subledger impact)?

    Current client is not concerned about the business restrictions and would like to still execute the reassignment of BSV. They are looking at a reorganization tool/software from ePrentise to accomplish this.

    Your thoughts are greatly appreciated.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s