Allocations When the Financial Management application allocates an expense, it breaks down the expense into detailed amounts of money called allocations. The allocations are then associated to specific segments and accounts in the IT chart of accounts. To allocate expenses, the application uses the following items, which comprise your cost model: Allocation rules, which are the over-arching definition that the application needs to break expenses down and allocate expenses to segments. Rules use filter conditions, methods, and metrics. Allocation filter conditions, which specify what conditions that expenses must meet to be matched by the rule. Rule matching means the expense met the criteria, such as the vendor or cost center, that the rule requires. Each rule must use a filter condition. Allocation methods, which tell the rule how to calculate the breakdown of the expense on a percentage or fixed basis. Methods also specify which account from the IT chart of accounts should receive the allocation. Allocation metrics, which contain additional instructions that the application uses to allocate expenses based on a weighted calculation or on a script. A method can use one or more metrics. Users with the financial management administrator or financial analyst role can administer cost allocations through the workbench, which is the preferred method, or by using lists and forms. Chargebacks The application supports "chargebacks", or negative amounts in general ledger expenses that can be used to transfer credits between segments for a shared cost. Chargeback expenses process fixed amount methods in the opposite way of other expenses. For example, a fixed amount type method that allocates $50 on a $100 dollar chargeback, shown as "-100" in the general ledger expense, applies a $50 credit as specified by the rule. Example Allocations The demo data provided with the application provides good examples of different types of allocations. You can make several types of allocations, such as allocating: Storage costs based on consumption Private cloud costs based on usage of virtual machines Servers based on cost, CPUs, location, and so on Project management contract costs Allocation rulesAllocation rules contain the information that the Financial Management application needs to break expenses down and allocate them to segments. Allocation methodsAllocation methods tell the allocation rule how to calculate the breakdown of the expense. Methods also specify which segment and account should receive the allocation.Allocation metricsAllocation metrics contain additional instructions that the application uses to allocate expenses based on a weighted calculation or on a script. Allocation methods use metrics to perform the allocation.Create allocation groupsAllocation groups help you categorize metrics and methods. Allocation metrics must be associated with an allocation group. Allocation methods can be associated with an allocation group, which then limits the selection of the metric to only those metrics in that group.Account bucketsAccount buckets help you categorize cleansed expenses before you assign the expenses to accounts and segments.Grooming and cleansing conditionsGrooming conditions define how expenses are related to each other and to buckets when you make changes in the workbench, while cleansing conditions define how financial data is cleansed by segment.Expense allocationExpense allocation refers to the assignment of expenses to accounts in the IT chart of accounts. Allocation APIsThe Cost Allocation Method API in the FinancialMethodUtils script include allows you to create allocation methods. Use these methods for customizing cost allocation methods.Financial Management example allocationsThe demo data that is available with the Financial Management application provides examples of cost allocations that you can use to model allocation rules, methods, and metrics.