Allocation ratios define the basis on which source transactions should be manipulated to generate the target transactions in an Corporate Allocation Run (AR). An allocation ratio can be used to determine the proportion, percentage or fixed amount of the source amount is allocated to the target account for an allocation. For example, you may want to allocated 30% of the Head Office costs to the Manufacturing Division.
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The ratio is maintained in a ratio account, or range of accounts. Selected postings to the ratio accounts are used to calculate the ratio amount, percentage or proportion.
An allocation ratio is applied to an allocation on Allocation Setup (CALS). If an allocation ratio is not used on an allocation, then 100% of the source transaction value is allocated to the target account.
Allocation ratios are described in more detail in What are Allocation Ratios?.

The Allocation Ratios form contains the following:
Header Information
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Allocation Ratio Code
The code that uniquely identifies the allocation ratio.
Allocation Ratio Name
A descriptive name that identifies the allocation ratio.

General Tab
Ratio Account From/To 1-5
This is the ratio account, or range of accounts. The transactions posted to these accounts form the basis of the ratio calculation. For example, the percentage or ratio to be allocated would have been posted to the account referenced here. Up to five account code ranges can be included in this allocation ratio.