Ledger: R12 Oracle General Ledger Management Fundamentals

Ledger
R12 Oracle General Ledger Management Fundamentals
Copyright 2007, Oracle. All rights reserved.
Objectives
After completing this lesson, you should be able to do the following: Describe the elements required to create a ledger within Oracle General Ledger Identify key implementation issues involved when creating a ledger in Oracle General Ledger Identify the attributes, options and settings required to define the Accounting Flexfield Define an accounting calendar
Objectives
After completing this lesson, you should be able to do the following: Enable predefined currencies Create a ledger in Oracle General Ledger Utilize the Account Hierarchy Manager to view and maintain Accounting Flexfield values
Ledgers Defined
Ledgers The Ledgers represent the core of a companys financial records where every transaction flows through.
Accounting Setup Manager Overview

Maintaining Multiple Accounting Representations with Secondary Ledgers
Legal Entity
Accounting
Corporate Ledger (Primary Ledger)
Local Statutory Ledger (Secondary Ledger)
SLA
SLA Subledger Transactions
Transaction
AP
AR
FA
Other Subledgers
Secondary Ledgers
Secondary Ledgers The Secondary Ledgers are used for supplementary purposes and can be used for global companies to comply with various legal requirements.
Secondary Ledger Conversion Levels

Level of Detail Desired
Balances Level
Path to Secondary Ledger

Use GL Consolidation to Transfer Balances
Use Posting for Automatic Journals Replication Use SLA for Automatic Maintenance Manual Adjustments in GL or Automated Adjustments from SLA
GL Journals Level
AP AR FA
Subledger Journals Level

Adjustments Only
Reporting Currencies
If one or more of the following are different, If difference is only currency,
US GAAP Accrual Corporate Chart of Accounts
Monthly Calendar
Accounting Method
Currency
use a Secondary Ledger
use Reporting Currencies
Reporting Currency (RC) Conversion Levels

Level of Detail Desired Path to ALC
Balance Level
Use GL Translation
Journal Level
Use GL Posting
AP AR FA
Subledger Level
Use SLA for Automatic Maintenance
Note: Subledger Level RCs not available for Secondary Ledgers

Accounting Setup Steps

GL SETUP STEPS SETUP From the Accounting Setup Manager Complete Accounting Options
Define Chart of Accounts
Define Legal Entities
Define Calendars
Assign Legal Entities for Accounting Setup (optional)
Complete Accounting Setup
Enable Currencies
Define Primary Ledger
Complete Optional Setup Steps
Define Secondary Ledger(s) (optional)
Accounting Setup Manager Create Accounting Setup
1. Create accounting setup structure
2. Complete the accounting options
Two main steps exist to create an accounting setup
Accounting Calendar
You create a calendar to define an accounting year and the periods it contains.
Unlimited Currencies
You can enable predefined currencies or set up your own customized currencies You can enable a variety of currencies to allow you to enter transactions in multiple currencies
Sharing Ledgers Across Oracle Applications

Many elements of an Oracle General Ledger ledger are shared with other Oracle applications.
Account structure Value sets Segment values Security rules Cross-validation rules Accounting calendar Periods Period Types Currencies Daily Rates Rate Types
Journal
Categories Sources
Chart of Accounts
Your chart of accounts is a list of Accounting Flexfields you create to identify general ledger accounts This flexible structure is made up of subfields or segments Each segment has a name and a set of values
Company
Division
Department
Account
Project
Building the Chart of Accounts Structure
Define a flexible chart of accounts structure: Create up to 30 segments with a maximum of 25 characters per segment
Maximum total length allowed is 240 characters
Define each segment name and the order in which it appears Attach a list of valid values to each segment
XX XXX XXXX XXXX XXX
Company | Cost Center | Account | Sub-Account | Product
Identifying Business Requirements
Identify the aspects of your business that you need to track and analyze; pay specific attention to aspects that span several applications. Examples include: Company, legal entity, fund Division, region, territory, state, country Location, plant, office, store Cost center, department, function Natural Account categories:
asset, liability, owner's equity, revenue and expense
Product, product line, line of business, channel Project, phase, task, job, work order
Identifying Segment Requirements
Assign each business dimension as a separate segment. Avoid having more than one meaning for each segment.
Product & Company XXX Region XX Project XXXX
Analyzing Reporting Requirements
Make certain that you can generate the required reports based on the segments in your Accounting Flexfield.
Company Region
Cost Center
Project
Creating a Worldwide Chart of Accounts
Many companies need to use a unified chart of accounts, but also need to capture different information in different sites and countries based on business needs and statutory requirements.
Consolidating segments (HQ control) Nonconsolidating segments (Local control)

Worldwide Chart of Accounts Example
Canada and the United Kingdom reserve the right-most segment for their specialized needs. This segment does not roll up to the consolidated financials compiled at Headquarters.
Headquarters Company Cost Center - Account
Canada Company Cost Center Account Product
United Kingdom Company Cost Center Account Subaccount
Creating Vertical Structures
Use vertical parent rollups on specific segments when possible rather than creating additional segments. Segment by using vertical Accounting Flexfields. Example: Division and region are not included in the posting level.
Division parent European Division Western Region Cost Center
Region parent
Child level
Company
Account
Validation and Value Sets
When you define value sets, you also need to determine how you want to validate your values The available validation types are:
Independent Dependent Table
Oracle recommends using independent validation with the Accounting Flexfield
Using Independent and Dependent Segments

Independent Segment
Segment that has meaning on its own without depending on other segment values
Dependent Segment
Segment that is linked to an independent segment
Example
Company: 01
Example
Account: 1100 Subaccount: 001 Desc: Cash-Citibank Account: 2200 Subaccount: 001 Desc: Debt-B of A
Designing Size and Numbering Systems

Decide whether to allow alphabetical characters in the Accounting Flexfield Decide on the size of the Accounting Flexfield segments Design the coding scheme for your Accounting Flexfield values
Creating Accounting Flexfields
To create an Accounting Flexfield: 1. Define a value set 2. Define an account structure 3. Define valid segment values 4. Optionally, create account combinations 5. Optionally, create aliases 6. Optionally, define security rules
Defining Value Sets

Use value sets to control the characteristics and format of the Accounting Flexfield segment.
Value_set 1 Format: Char Max size: 2 Validation: Independent Balancing Value_set 2 Format: Char Max size: 3 Validation: Independent Cost Center Value_set 3 Format: Char Max size: 4 Validation Independent Natural Account Value_set 1 Format: Char Max size:2 Validation: Independent Intercompany
The same value set can be used more than once in the same Accounting Flexfield structure.
Defining the Accounting Flexfield Structure
Defining Segment Values
Enter valid values for each segment before using them in the Accounting Flexfield segments.
Value_set 1 Format: Char
Max size: 2 Validation: Independent Balancing 01 02 03
Value_set 2 Format: Char

Max size: 3 Validation: Independent Cost Center 100 101 999
Value_set 3 Format: Char Max size: 4
Value_set 1 Format: Char Max size:2
Validation Independent
Natural Account TSAL 1000 9999
Validation: Independent
Intercompany 01 02 03
Populating Segment Value Attributes

Attributes for each value include: Translated Value Description Parent Group and level Segment qualifiers
Allow budgeting and posting Account type natural account segment values Control Account Reconciliation Flag
Enabled Date From and To

Segment Qualifiers
Account Type
Asset, Liability, Owners' Equity Revenue, Expense Budgetary Dr, Budgetary Cr Yes or No Yes or No Payables, Receivables, Yes, or No Yes or No
Budget Entry Allowed Posting Allowed Third Party Control Account
Reconciliation Flag
Control Accounts
Ensure control accounts can only contain data from an approved journal source Prevent manual data entry to control accounts
Control Accounts Setup and Process

SETUP PROCESS
Set Control Account Qualifier for a Natural Account Value In the Segment Values Window
Create Accounting in SLA or enter journal in GL
Is account a control account?

Yes
No
Accounting or Journal Created
Error
Automated process
Select a different account
Defining Hierarchies
Define parent/child relationships, including multilevel hierarchies, to facilitate reporting and analysis.
Top-level parent
Western Region
Secondlevel parents
Children
California
Nevada
Oregon
East CA
West CA
East NV
West NV
East OR
West OR
Working with Ranges
For each parent value, you can: Define child ranges Define parent ranges Move child ranges Move parent ranges View hierarchies
Account Hierarchies
You can set up a variety of flexible parent/child account hierarchies to match your organizational needs.
Smart Computers, Inc.

Smart Computers, Inc.
CPUs
Disk drives
Printers
New York
Paris
Chicago
Account Hierarchy Manager
With the Account Hierarchy Manager you can: Graphically create, maintain, and review account structure hierarchies Define new parent and child segment values, as well as change parent/child dependencies Create new rollup groups from the Account Hierarchy Manager and have your changes reflected automatically in both the Key Segment Values and Rollup Groups windows
Account Hierarchy ManagerSecurity
The Account Hierarchy Manager has security rules that enable you to control: Read only or read/write access Access to hierarchies, segment values, and charts of accounts
Defining an Accounting Calendar
Create a calendar to define an accounting year and the periods that it contains. Set up one year at a time, specifying the accounting period type Define your calendar with at least one period before the period in which you start entering transactions Optionally, define multiple calendars and assign a different calendar to each ledger
Defining Period Types
Each calendar has an associated period type Pre-defined period types in Oracle General Ledger are Month, Quarter, and Year If needed, define your own period types in addition to the standard periods
Period Type Month Periods 01/01/2002 to 12/31/2002 Calendar Ledger
=
Jan-02 to Dec-02
Defining Your First Accounting Period
Define at least one accounting period before the first period for which you enter transactions or perform foreign currency translation.
Dollar Yen First period Second period (First Transaction Period)
Enter historical data
Accounting Period Statuses
Each accounting period has one of the following five statuses:
Never Opened
Future Enterable
Open Period
Permanently Closed Period
Closed Period
Calendar Auditing
Checks calendar definitions
Checks date gaps
Checks overlapping periods
Enabling Currencies
You must enable a currency before you can enter transactions or record balances in that currency.
Enabled
Canadian Dollar
Enabling Account Combinations
To use an account combination, accept the default enabled check box in the GL Accounts window.
01-100-1420-003
02-100-1420-005 01-200-1420-002 02-100-1420-004
Segment Value Inheritance

Attributes for Segment 111011
Enabled Posting Budgeting
Enabled Inherited Posting Budgeting Not Inherited Preserve accounts 01-100-111011
Enabled Posting Budgeting 01-200-111011
Troubleshooting Segment Value Inheritance

Segment Value Inheritance updates the Accounting Flexfield structure assigned to the ledger for your responsibility A chart of accounts that uses table validation must have a LAST_UPDATE_DATE and a CREATION_DATE field
Defining Flexfield Security Rules
Restrict data entry, online inquiry, and reporting to specific values by using flexfield security rules.
Account Segment
Include:
Exclude:
0000 to 9999 1000 to 3999 0000 to 0999 4000 to 9999
Available:
Unavailable:
1000 to 3999
Using Dynamic Insertion
You can dynamically create new account code combinations when entering data by enabling dynamic insertion in the Key Flexfield Segments window. Dynamic Insertion can be enabled or disabled at any time Define cross validation rules to prevent incorrect account combinations from being created by dynamic insertion
Allow Dynamic Inserts
Defining Cross-Validation Rules

Prevent the creation of invalid account combinations by setting up cross-validation rules. Define cross-validation rules before entering a chart of accounts Use cross-validation rules in combination with dynamic insertion
Division: 01 US 02 Asia Valid Invalid Region: 100 New York 400 Tokyo Account: 4100 Sales 7550 Travel
01 100 4100 01 400 4100
Defining Shorthand Aliases
A shorthand alias is a word or code that represents a partial or complete account combination. Use shorthand aliases to reduce account-entry keystrokes and to maximize productivity and accuracy.
Shorthand Alias Cash01 Account Combination
NY
Sales
= = =
01-110-000-1110-000-0000
- 320 - - - -
01- 420 - 4110 - - - -
Overview of Account Hierarchy Manager
Maintaining Your Chart of Accounts
Account Hierarchy Manager
Oracle General Ledger
Integrating with Oracle General Ledger

Use Account Hierarchy Manager to make changes to your account structure. Upon saving, Oracle General Ledger reflects changes automatically.
Web ADI
GL
Key Segment Values
Rollup Groups
Using the Account Hierarchy Toolbar
View Hierarchy
New Parent
Save Changes
New Child
View Query
Export Hierarchy
View Values List
Display Help
Account Hierarchy Manager Segment Symbols

Top Level Parentrepresents an entire chart of accounts structure
Chart of Accounts SegmentRepresents an individual segment of a particular chart of accounts structure Parent LevelRepresents a parent segment value ChildRepresents a child segment value
Parent Levels in an Account Hierarchy

Level 1 3000 Lower Level Parents Level 2 Level 3 3100 3110 3150 3160 3200 3220 3250
3111
3115
3300
3310 3350
3311 3115
Creating New Child Values
Use the Account Hierarchy Manager to define a new child segment value. Create a new child value in the Child Attributes window Enter attributes
Segment Value: 4140 Description: Training Account Type: Revenue Effective: Enabled: Allow Budgeting: Allow Posting:
Ledger Sets
Ledger Sets
Use ledger sets to group multiple ledgers for processing efficiency
Data Access Sets
Data Access Sets enable the specification of: read only or read and write access
Summary
In this lesson, you should have learned how to: Describe the elements required to create a ledger within Oracle General Ledger Identify key implementation issues involved when creating a ledger in Oracle General Ledger Identify the attributes, options and settings required to define the Accounting Flexfield Define an accounting calendar
Summary
In this lesson, you should have learned how to: Enable predefined currencies Create a ledger in Oracle General Ledger Utilize the Account Hierarchy Manager to view and maintain Accounting Flexfield values

Ledger: R12 Oracle General Ledger Management Fundamentals

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Ledger

R12 Oracle General Ledger Management Fundamentals

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Accounting Setup Manager Overview

Corporate Ledger (Primary Ledger)

Local Statutory Ledger (Secondary Ledger)

SLA Subledger Transactions

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Secondary Ledger Conversion Levels

Path to Secondary Ledger

Subledger Journals Level

Copyright 2007, Oracle. All rights reserved.

US GAAP Accrual Corporate Chart of Accounts

use a Secondary Ledger

use Reporting Currencies

Copyright 2007, Oracle. All rights reserved.

Reporting Currency (RC) Conversion Levels

Use SLA for Automatic Maintenance

Note: Subledger Level RCs not available for Secondary Ledgers

Accounting Setup Steps

Define Chart of Accounts

Define Legal Entities

Assign Legal Entities for Accounting Setup (optional)

Complete Accounting Setup

Define Primary Ledger

Complete Optional Setup Steps

Define Secondary Ledger(s) (optional)

Copyright 2007, Oracle. All rights reserved.

Accounting Setup Manager Create Accounting Setup

1. Create accounting setup structure

2. Complete the accounting options

Two main steps exist to create an accounting setup

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Sharing Ledgers Across Oracle Applications

Copyright 2007, Oracle. All rights reserved.

Copyright 2007, Oracle. All rights reserved.

Building the Chart of Accounts Structure

Company | Cost Center | Account | Sub-Account | Product

Copyright 2007, Oracle. All rights reserved.

Identifying Business Requirements

Copyright 2007, Oracle. All rights reserved.

Identifying Segment Requirements

Copyright 2007, Oracle. All rights reserved.

Analyzing Reporting Requirements

Copyright 2007, Oracle. All rights reserved.

Creating a Worldwide Chart of Accounts

Consolidating segments (HQ control) Nonconsolidating segments (Local control)

Worldwide Chart of Accounts Example

Canada Company Cost Center Account Product

United Kingdom Company Cost Center Account Subaccount

Copyright 2007, Oracle. All rights reserved.

Creating Vertical Structures

Copyright 2007, Oracle. All rights reserved.

Validation and Value Sets

Oracle recommends using independent validation with the Accounting Flexfield

Copyright 2007, Oracle. All rights reserved.

Using Independent and Dependent Segments