At many companies internal P&Ls (Organizational, Product and Customer) have been completed satisfactorily except for expense distributions. Revenue accounting, internal funds accounting, risk adjustments and capital allocations are basically in place. While there may be some user discord about particulars, the overall methodology is in place. This is not the case with expense distributions. Expense distributions are the most contentious area remaining and one that precludes user acceptance of the P&L itself.
The issue of expense distributions arises from the following situation. In organizational profitability reporting revenue is booked into profit centers. Expense is booked into every center in the institution and is booked by natural classification: salaries, benefits, occupancy, depreciation, etc. The challenge is to credibly and accurately move the expense to the appropriate revenue. This becomes more problematic in product and customer profitability reporting.