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When does Negative encumbrance occur in Funds Inquiry screen?


Negative encumbrance will be shown in funds inquiry form; if any of the following conditions are met,

When un-reserved amount > total encumbrance shown in funds inquiry for that period in which the Un-reserve action is taken

Scenario: If a purchasing document is reserved in one period and unreserved in different period by doing Cancel/Final close/Un-reserve action without consuming the funds (receipt and invoice not done), it will create negative encumbrance.

When received amount > total encumbrance shown in funds inquiry for that period in which the receipt is done

Scenario: If a Purchase Order is reserved in one period and received in another period, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget.  

But this negative encumbrance does not increase the funds availability as the encumbrance is getting converted to actual.

When billed amount > total encumbrance shown in funds inquiry for that period in which the invoice is matched

Scenario: If a Purchase Order is set to accrue at period end is reserved in one period and billed in another period without performing receipt, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget . 

But this negative encumbrance does not increase the funds availability as the encumbrance is getting converted to actual.

When cancelled amount in Invoice > total encumbrance shown in Funds Inquiry for that period in which the invoice is canceled

Scenario: If a non PO matched Invoice is validated in one period and canceled in different period without consuming the funds, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget. 

Note:  Another scenario where negative encumbrance can happen is, 
For Purchase orders set to accrue at period end, encumbrance reversal will get created at the time of generation of accrual entries by Receipt Accruals Period end program. If this encumbrance reversal is not reversed and posted in the period next to the one in which accrual is created and when invoice is accounted in that next period, it will create a negative encumbrance.

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