Supposed that there is a service type company, they have received whole money from their customer, but they have not provided the whole service finally. The whole service will be provided within 12 months from current month. Against accrual basis concept, the company can’t recognize revenue for the whole money amount to current month, even though they received whole money in current month.
Multi Period Accounting (MPA) enables users to create accounting for a single accounting event for more than one GL period. This functionality is primarily used to recognize revenue or a prepaid expense across multiple GL periods.
Within Multi Period Accounting, application provides different ways to Prorate the amounts.
- First Period
- Days In Period
- Total Days In Period
- 360 Days
The Amount prorated depends on the Proration Type.
Here are some of documentation for further deep dive :
Slidershare presentation – http://www.slideshare.net/prithis/multiperiod-accounting-in-oracle-ebs-r12 ( By Prithis Das )
Deep Dive blogs articles – http://www.yunning.net/blog/?s=mpa&submit=Search
R12: Subledger Accounting: White Paper Explaining Different Proration Types in Multi Period Accounting – https://support.oracle.com/epmos/faces/DocumentDisplay?id=1915795.1