R12 Subledger Accounting Cookbook

R12 Subledger Accounting Cookbook
Multi Period Accounting

NCOAUG Training Day
August 14, 2014
Prepared by:
Prithis Das
Dynamique Solutions LLC
Presenters background
Copyright Prithis Das

Oracle Applications experience goes back to 1997

Over 22 years of business process improvement experience
Consulting experience with Big 5 and other major
organizations
Oracle Certified Specialist in General Ledger
Chartered Accountant and Management Accountant from
India
Authored and presented papers on SLA, WebADI, Reports
Manager and other topics at several OAUG and local events
Just completed a major R12 upgrade and working on a Cash
Basis Secondary Ledger implementation
Contact:
Cell: 630.3649457
Email: Prithis.das@dynamiquesolutionsllc.com
Web: Dynamiquesolutionsllc.com
Agenda
Introduction to Multi Period Accounting

Typical Prepayment Process
Prepayment Scenario
Multiperiod Accounting Setups Optional Setups
SLA Setups for Multiperiod Accounting
Transaction Processing using MPA
Implementation Considerations
References
Q&A


Introduction to
Multi Period Accounting

Introduction
What is Multiperiod Accounting?
Multiperiod accounting enables users to create accounting for a
single accounting event for more than one GL period. The
functionality is primarily used to recognize revenue or a prepaid
expense or revenue across multiple GL periods.
Uses of Multiperiod Accounting

Automated recognition of Prepaid AP invoices
AR Revenue recognition
Can be used in Primary as well as Secondary Ledgers (for
Management reporting)
This presentation focuses on recognizing prepaid expenses

across multiple GL periods.



Typical Prepayment process without Multiperiod Accounting
Setup/maintain Special Calendar

Setup Distribution Set
Create Prepayment invoice
Pay Prepayment invoice
Create Recurring invoice template for expense amortizations
Generate Recurring invoices
Apply to Prepayment Invoice each month manual process
Run Create Accounting/Transfer to GL
Use Prepayment Status Report.


Typical Prepayment process with Multiperiod Accounting
Setup Multiperiod Accounting in Subledger Accounting
Create Standard invoice
Complete Deferred fields during invoice entry
Pay Standard invoice to pay the prepayment

Run Create Accounting/Transfer to GL
Use Multiperiod Accounting and Accrual Reversal Report
Periodically run Complete Multiperiod Accounting program

Prepayment Scenario

Scenario
Prepayment for Software Support
A company prepays annual software maintenance of $12,000 on
June 25th , 2014. The company needs to expense $1,000 each
month for 12 months according to the following schedule:
Period
Amount
Period
Amount
Jul-14
$1,000
Jan-15
$1,000
Aug-14
$1,000
Feb-15
$1,000
Sep-14
$1,000
Mar-15
$1,000
Oct-14
$1,000
Apr-15
$1,000
Nov-14
$1,000
May-15
$1,000
Dec-14
$1,000
Jun-15
$1,000

Scenario
Expected journal entries in Jun-14
Period
Journal
Period
Journal
Jun-14
Dr Prepaid Expense $12,000

Cr AP Liability $12,000
Jun-14
Dr AP Liability $12,000
Cr Bank $12,000
Expected journal entries Jul-14 to Jun-15

Period
Journal
Period
Amount
Jul-14
Dr Expense $1,000
Cr Prepaid Expenses $1000
Jan-15
Dr Expense $1,000
Aug-14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep-14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct-14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-14
Dr Expense $1,000
May-15
Dr Expense $1,000
Dec-14
Dr Expense $1,000
Jun-15
Dr Expense $1,000

Multiperiod Accounting Setups


Optional Setups likely to be different for each
implementation, based on design
Value Set for Prepayment Type
Create Values for the Value Set
Descriptive Flexfield
Invoice Lines DFF
Subledger Accounting Setups likely to be similar for all

implementations
Mapping Set
Account Derivation Rule
Journal Line Types
Journal Line Definition
Application Accounting Definition
Subledger Accounting Method
Ledger


Value Set for Prepayment Type


Enter Values in Value Set for Prepayment Type
You can enter values for:
Specific types of Prepayments
Specific Vendors


Invoice Lines DFF
You do not have to

make this DFF
context sensitive.
You can make this
Global.


Invoice Lines DFF
Assign the Value Set created in the earlier step
In this demo we have
selected
ATTRIBUTE15.
Typically you would
start at ATTRIBUTE1 if
available.


Invoice Lines DFF
You must uncheck

Required checkbox as
not all invoices are
Prepayments.

Subledger Accounting Setups

for MPA

Subledger Accounting Setups for MPA
Mapping Set

Journal Line Type


Ledger


Navigation Paths from Payables Manager Responsibility
Mapping Set
Journal Line Type

Ledger


Mapping Set
Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Field
Data
Mapping Set Code
XXPD_MPA_EXP_CCID
Mapping Set Name
XXPD MPA ACCRUAL EXPENSE CCID
Mapping Set
Description
XXPD Multi-Period Accounting Invoices - Amortization

Expense Account
Ledger
Link the Mapping Set

to the Value Set
created earlier
For each Input Value,

enter the Output
Value: Enter the
target Expense
account for
amortization


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger

Field
Data
Rule Code
XXPD_MPA_EXP_FLEX
Rule Name
XXPD MPA Prepaid to Expense Account Flexfield
Description
XXPD MPA Prepaid to Expense Account Flexfield

Assign the Mapping
Set = XXPD MPA
ACCRUAL EXPENSE
CCID created earlier.
Input Source =
Invoice Line Flexfield
Segment 15
There is no need to
assign a Condition
Will receive a
Warning on save


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger
Journal Line Type - Accrual

Field
Data
Line Type Code
XXPD_AP_ITEM_EXP_INV_MPA_ACC
Name
XXPD Multi Period Accounting and Regular Item Expense Accrual
Description
XXPD Multi Period Accounting and Regular Item Expense Accrual,

replaces Item Expense JLT
For the accrual journal

line type, set the
Multiperiod option to
'Accrual'


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger
Journal Line Type - Recognition

Field
Data
Line Type Code
XXSL_AP_ITEM_EXP_INV_MPA_RECOG
Name
XXPD Multi Period Accounting Item Expense Recognition
Description
XXPD Multi Period Accounting Item Expense Recognition
For the recognition

journal line type, set the
Multiperiod option to
'Recognition'.


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger
Journal Line Type Accrual Assign Sources

Assign sources to the following accounting attributes for the accrual journal line type
Multiperiod Start
Date
Determines the accounting period and accounting date for the first
recognition journal entry
Multiperiod End
Date
Determines the accounting period and accounting date for the last
recognition journal entry
Multiperiod
Option
Determines whether multiperiod or single period accounting to be

generated for an accounting event


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Retrieve and Copy the seeded JLD Accrual, Invoices All.

Field
Data
Definition Code
XXSL_AP_ITEM_EXP_INV_MPA_RECOG
Definition Name
XXPD Accrual, Invoices All
Description
XXPD Oracle Payables Accrual Accounting Definition (All)
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Journal Line Definition (User owned)

Copy the seeded Line Assignment Item Expense to a new
Assignment XXPD Multi Period Accounting and Regular Item
Expense Accrual
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM

Inactivate the seeded line assignment Item Expense
Assign new JLT XXPD Multi Period Accounting and Regular
Item Expense Accrual
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM

Assign the seeded Account Derivation Rule Invoice Distribution
Account to All Segments
Assign a Line Description (custom JLD in this example)
Ledger


Mapping
Set
ADR
JLT
JLD
AAD

The Multiperiod Accounting button will be enabled for this
Journal Line Type
Click on the Multiperiod Accounting button
SLAM
Ledger


Mapping
Set
ADR
Multiperiod Accounting Assignment

Options
Number of Journal Entries
GL Dates
Proration Type
JLT
JLD
AAD
SLAM
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Multiperiod Accounting Assignment Options

Number of Journal Entries: Number of multiperiod journal entries to be
created
One
One multiperiod journal entry is created to

recognize the entire accrual amount.
Note: If this option is selected, it is not possible to select a
proration type since only one journal entry is created for the
entire accrual amount.
One per GL
Period
One multiperiod journal entry is created per GL period

between the dates defined by the multiperiod start and end
date accounting attributes.
Source: Oracle Subledger Accounting Implementation Guide
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM

GL Dates: Specifies when the multiperiod journal entries are created in
the GL period
First Day GL
Period
Multiperiod journal entries have a GL date of the first day of

the period
Example: 1-Oct-2014
Last Day GL
Period:
Multiperiod journal entries have a GL date of the last day of

the period.
Example: 31-Oct-2014
Originating
Day
Multiperiod entries have the same GL date as the originating

journal entry.
Example: 22-Oct-2014
If Originating Day is 31-Oct, the next multiperiod JE will have a
date of 30-Nov.
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM

See Document 1915795.1 on My Oracle Support for worked out
examples for each Proration Type
Proration Type: Specifies how the recognition amount per period should be
calculated
360 days
Partial periods calculated by assuming 360 days in a year
Days in Period
Partial periods calculated by dividing the number of partial

period days by the actual number of days in the period
First Period
Accrual amount divided by the number of periods and

recognized evenly starting with the first period
Total Days in
Period
Both the partial periods and the whole periods are based on
the actual number of days in the period. The number of days
within each period is then divided by the total number of days
in the whole multi accounting period. The result is then
multiplied by the total amount due to arrive at an amount for
each respective period.
Ledger


Mapping
Set
ADR
JLT
JLD
Multiperiod Accounting Assignment options
Click on the Line Assignments button
AAD
SLAM
Ledger


Line Assignments
Mapping
Set
ADR
JLT
JLD
AAD
SLAM
For the Accrual Journal Line Type
All Segments will use the seeded ADR Invoice Distribution Account
Ledger


Line Assignments
Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger
For the Recognition Journal Line Type
All Segments will use the custom ADR XXPD MPA Prepaid to Expense
Account Flexfield


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Ledger

Copy the seeded AAD Accrual Basis to a custom AAD XXPD
Accrual Basis
Replace the seeded JLD Assignment XXPD Accrual, Invoices All
to the custom JLD XXPD Accrual, Invoices All
Validate the
Application
Accounting
Definition


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Subledger Accounting Methods

Copy the seeded SLAM Standard Accrual to a custom SLAM
XXPD Standard Accrual
Replace the seeded AAD Assignment Accrual Basis to the
custom AAD Assignment XXPD Accrual Basis
Ledger


Mapping
Set
ADR
JLT
JLD
AAD
SLAM
Subledger Accounting Methods

Replace the SLAM Standard Accrual with the custom SLAM
XXPD Standard Accrual in your Primary Ledger
Ledger

Transaction Processing for MPA

Enter a Standard Invoice for Prepaid Software Maintenance

Invoice Type is Standard and not Prepayment
Say Invoice Date is 15th June, it was entered on 25th June

At the Line level
Enter a Prepayment Distribution account

Check the Deferred Option checkbox
Enter the Deferred Start Date and Deferred End Date fields
Enter the Prepayment Type (select from LOV) in the DFF

Create Accounting
Validate the Invoice, then run Create Accounting


Create Accounting will spawn:
Accounting Program
Journal Import
Subledger Accounting Balances Update
Subledger Multiperiod Accounting and Accrual Reversal Report

If Create Accounting and Account Program completes with a

yellow Warning or red Error, STOP!
Review the report to identify and troubleshoot the problem
Common causes for Create Accounting to Fail:
The Application Accounting Definition was not validated (in this case
the Create Accounting program completes in a red error)
The DFF at the Line level was not used. In this example the
Prepayment Type drives the Recognition accounting. So in the
absence of this information on the DFF the Accounting will fail
The General Ledger period was not open
Cross-validation or Security Rules were violated
Account Combination was disabled

Create Accounting
Will generate the Subledger Accounting Program Report


Subledger Multiperiod Accounting and Accrual Reversal
Report


Report


Report


Report


GL Journal Entry



Period
Journal
Period
Journal
Jun-14

Jun-14
Cr Bank $12,000

Period
Journal
Period
Amount
Jul-14
Dr Expense $1,000
Jan-15
Dr Expense $1,000
Aug-14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep-14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct-14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-14
Dr Expense $1,000
May-15
Dr Expense $1,000
Dec-14
Dr Expense $1,000
Jun-15
Dr Expense $1,000

Complete Multiperiod Accounting concurrent program
Run in subsequent months from Jul-14 to Jun-15
Schedule this program to run automatically



Creates journal entries for Expense Recognition for the period it
is run
Provides a report for the Multiperiod Journal Entries for that
period





GL Journal Entry in each subsequent period through Jun-15


Period
Journal
Period
Journal
Jun-14

Jun-14
Cr Bank $12,000

Period
Journal
Period
Amount
Jul-14
Dr Expense $1,000
Jan-15
Dr Expense $1,000
Aug-14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep-14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct-14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-14
Dr Expense $1,000
May-15
Dr Expense $1,000
Dec-14
Dr Expense $1,000
Jun-15
Dr Expense $1,000


Enhancement possibilities
Use a DFF for Prepayment Type and a Mapping Set to drive the
expense account (as shown in this example)
Alternately, use the Prepayment Account on the invoice to drive
the Expense account using a Mapping Set
Invoice having regular expense or Asset purchase in addition

to Prepayment expense
Use Deferred option fields only for those lines which are
prepayment in nature
What if Prepaid Invoice is already paid outside Oracle

Can enter Invoice in Oracle and set Deferred start and end
dates. System will take care of the rest and account correctly

Existing open Prepayments when MPA is implemented
There is no way to convert Prepayment invoices to Standard
invoices using MPA. Process Prepayment invoices as usual till
they are closed.
If the journal effective date of a journal imported from the

Subledger defaults to the last date of the period, you will have
to adjust the summarization Subledger Accounting Options
for the Ledger
Critical patches released for Multiperiod Accounting in SLA
7109881, 8505463, 8635648, 8664504, 9954676, 9162117,
10394715, 11654120, 13023651 and 13415216.
Patch 13018752:R12.XLA.B is recommended for Proration Type
First Period amounts fix

Do we need two accrual journal line types to achieve single
period accounting and multiperiod accounting?
No, two separate accrual journal line types are not required.
With the same accrual journal line type, single period and
multiperiod accounting can be created.
Whether multiperiod or single period accounting is to be created
for a transaction is determined based on the value passed for
the Multiperiod Option accounting attribute.
If the value passed is 'Y' then multiperiod accounting is created.
If the value passed is 'N' or null then single period accounting is
created.
No changes in MPA functionality from 12.1.3 to 12.2 as of

today

References
References

Oracle Subledger Accounting Implementation Guide

(E13628-04)
Document 1399611.1 on My Oracle Support
Out-dated information (12.1.2), but useful for basic setups
Document 1915795.1 for 12.1.3 on My Oracle Support

Most current document (Aug-2014)
Gives explanation of Proration Type options with examples
Q&A
Additional questions?
Contact
Email
Prithis.Das@dynamiquesolutionsllc.com
Cell
630.3649457
Website
Dynamiquesolutionsllc.com

R12 Subledger Accounting Cookbook - Multi-Period Accounting

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Multi Period Accounting

Copyright Prithis Das

Oracle Applications experience goes back to 1997

Introduction to Multi Period Accounting

Copyright Prithis Das

Copyright Prithis Das

Copyright Prithis Das

Uses of Multiperiod Accounting

This presentation focuses on recognizing prepaid expenses

Copyright Prithis Das

Typical Prepayment Process

Copyright Prithis Das

Typical Prepayment Process

Setup/maintain Special Calendar

Copyright Prithis Das

Typical Prepayment Process

Complete Deferred fields during invoice entry

Pay Standard invoice to pay the prepayment

Copyright Prithis Das

Copyright Prithis Das

Copyright Prithis Das

Dr Prepaid Expense $12,000

Expected journal entries Jul-14 to Jun-15

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

Create Values for the Value Set

Invoice Lines DFF

Subledger Accounting Setups likely to be similar for all

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

You do not have to

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

You must uncheck

Copyright Prithis Das

Subledger Accounting Setups

Copyright Prithis Das

Subledger Accounting Setups for MPA

Account Derivation Rule

Journal Line Definition

Subledger Accounting Method

Copyright Prithis Das

Subledger Accounting Setups for MPA

Journal Line Definition

Copyright Prithis Das

Subledger Accounting Setups for MPA

Mapping Set Code

Mapping Set Name

XXPD MPA ACCRUAL EXPENSE CCID

XXPD Multi-Period Accounting Invoices - Amortization

Link the Mapping Set

For each Input Value,

Copyright Prithis Das

Subledger Accounting Setups for MPA