Overview of Oracle Advanced Global Intercompany System (AGIS)

AGIS is a new feature introduced in R12 to facilitate transactions between two Legal entities,
these transaction occur between two legal entities are called as the Intercompany transactions.

Intercompany transactions are transactions that occur between two or more related internal legal
entities which belong to a single ledger or between unrelated legal entities that belong to
different Ledgers.

Advanced Global Intercompany System (AGIS) enables you to create, settle and reconcile
intercompany transactions. AGIS is a vast improvement of the Global Intercompany System
functionality in GL.
- Interaction with sub ledgers facilitating invoicing using Receivables and Payables
-A brand new ingenious and robust security model
- Facilitates transaction processing between different Legal Entities under one or more Ledgers.
- Completely operated from SSWA Pages (Web Pages) without any forms

Intercompany Accounting in 11i:

Intercompany transaction: An intra-set of book transactions which happens with in the set of
books.
GIS Transaction: An inter-set of book transaction that takes place between the set of books. GIS
transactions are restricted in General ledger and sub ledger level transaction are never allowed.

Intercompany Accounting in Rel 12.

Transaction happens within a single legal entity or within a group of balancing segment values
mapped to a ledger

Setup are covered in four parts:

1. Environment setups
2. General Ledger Setups
3. Receivables(AR) and Payables (AP) setups
4. Advanced Global Intercompany (AGIS) setups.

Transaction Processing in AGIS is as follows:

Initiation of Transactions by an Intercompany Organization.

Completion of Accounting from the initiator side.
Completion of the Accounting by the Recipient Side.
Approval of the transaction by the Recipient.

If the invoicing is enabled/required in the transaction type setup, then

- Processing of the invoice from Receivables - for the initiator subsidiary side.
- Processing of the invoices in Payables - for the Recipient Subsidiary Side.
AGIS Setup Navigation:

Intercompany Setup Pre-Requisites:

Define the Employee in HRMS Responsibility.

Assign employees to the user in the sys administrator responsibility
Complete definition of Legal entity and ledger in General ledger responsibility
Complete operating unit setup for Accounts Payable and Accounts Receivables
responsibilities

In an Intercompany Transaction there are 2 or more Legal entities involved. One would be the
initiator or Transacting LE and one or more would be the Recipient or trading partner LE.
In AGIS always The Initiator or Transacting LE would be creating an Intercompany transaction
and send it to the Recipient LE for Approval The transaction type will identify if transaction
requires manual approval and also invoicing is required In case transaction need invoicing then
destination would be sub ledger applications if transaction does not need invoicing then the
destination would be General Ledger.

AGIS Flow:
Note that when a transaction is created by ACE East to be transferred to ACE West,

ACE East is initiator of transaction and ACE west is Recipient of transaction.

Transacting LE is ACE East LE

Trading Partner LE is ACE West LE

We check if invoices are required and there are two places that we look for that. First is the
AGIS transaction type flag, seen on the AGIS Transaction Page in the Set up Tab.
You can also create a rule in the Legal Entity setup, we create that rule at the registration level.
This is set by selecting the Legal Function Create Intercompany Invoice when entering the
Legal Entity Registration. If the this rule is set for one of the Legal Entity involved in an AGIS
transaction it will take precedence over the Transaction Type rule and the invoice will be created.

We create an AR invoice (via an Invoice API or the Open Interface tables) at that point the eTax
module will kick in and calculate the tax for you and add that to the invoice. When the AR
invoice has been created we create the AP invoice (via the AP Invoice Interface) using the
invoice number from the AR invoice, so it will be easy to match those invoices. We also ensure
that the same information required by eTax is on the AP invoice so the tax calculation will be the
same on the AR and AP invoices.

Setups:

Ledger Creation
Legal Entities creation, balancing Segment Value assignment.
Assignment of Legal Entities to the Ledger.
Operating units creation and assignment to the Ledger.
Definition of Intracompany Accounting Rules.
Definition of Intercompany relationship definitions and respective account definition.

Note that the Balancing Segment Value Assignments can be done at the LE level or at the
Ledger level depending on the requirements.

1 Setup Employee in HRMS, these employee definitions are used later on in security setup for
AGIS.

Navigation: HRMS>People>Enter and Maintain.

2. Create the user and assign the employee to the user and assign the GL, Inv, AR, AP, AGIS,
eBtax responsibility to the user.

3. Setup Ledger.
The Ledger Definition is done using GL- Accounting Setup Manager
Navigation: GL> Setup> Financials > Accounting Setup Manager > Accounting Setups.
Ensure that the relevant Legal Entities are assigned to the Ledgers.
Note that the balancing Segment values have been assigned as adn when the Legal entities were
created.

Two Operating units.

1 ACE East Operating unit
2 ACE West Operating unit
have been created and assigned to ACE Ledger.

4. Define Intra-Company Balancing Rules, option to define intra company rules option would be
visible, If and only If Intra Company balancing option is enabled for the concerned Ledgers,
GL provides to define the intra company balancing rules for different LE's.

5. Setup Receivables module

Note :
1) In AR system options for both OU's , the system options defined columns shows as Yes, this
shows that the required setup is completed from receivables side.
2) Check the transactions form if the LOV appears correctly for the OU's or not, Check if Batch
Sources LOV is appearing with the OU names that means the responsibility has been setup
correctly.

3) Both the OU's are appearing in the LOV since the Security Profile has been set like that.

4) Receivables Transaction types and receivables memo line can be linked only if receivables
setups are complete. If those setups are not complete then the lov will not appear, the values
appearing there Intercompany and Global Intercompany respectively are new seeded values in
receivables, these have been specifically seeded in receivables for AGIS

The recipient subsidiary will have this invoice transferred in their payables hence need to setup
Payables.

6. Setup Payables Module

7. Setup AGIS

Organization creation
Accounting- Balancing Accounts search, Intercompany Balancing Rules, Intercompany
Accounts.
Security setup for users
Transaction type creation
Invoicing options- Receivables Assignments
Invoicing options- Customer/Supplier Association Definition
Defining System options
Period Control (optional)
Security is defined as which user/person will have access to which and how many intercompany
organizations.

Transaction types- if invoices are required to be generated for the AGIS transaction is defined
here, if the invoicing is set to require then receivables and payables setups are mandatory.

System options: If you intended to use separate calendar in AGIS then you can define the same
here, if a calendar is defined in system options then the period statuses can be controlled based
on transaction types as well.

If the system options is setup to online, there is no need to run the Transfer to Payables and
Transfer to Receivables Program, then instead of using concurrent requests the workflow will be
used to populate the interface tables.

If this option is set to Batch then the data will be transferred to receivables and payables
interface on running the requests only.
The period opening and closing is done in periods tab.

Invoice options: There are two parts in invoicing options definition.

- Receivables assignments
- Customer and Supplier Associations

Create the relationship setups and account definition for the intercompany accounts.
Under Intercompany accounts link there is a link called Define Relationships where one can
create the relationships between various Legal Entities. This is the place where GL is notified of
from where and to where the transactions are going to Flow.
Define the relationship, there are two parties in a relationship.
Transaction Entity and Trading Partner Entity.

Note that for using the invoicing feature in AGIS it is mandatory that the receivables
responsibility has been created and setup correctly for both the operating units unless the
receivables is setup for both OU's the AGIS transaction processing does not work correctly.

Transactions:
The Transaction created by Initiator transacting LE is called as an outbound transaction and
the transaction received by the recipient LE is called as inbound transaction.
The outbound fields are Transaction type, Initiator, GL Date and currency.

The Initiator Subsidiary organization uses the outbound and the recipient subsidiary organization
is inbound.

Intercompany Reconciliation:

Reports:

Transaction Summary Report

Oracle Intercompany Account Details Report.
Intercompany Reconciliation Report.
Reconciliation is the process of ensuring an intercompany transactions
- accounted in AR for initiator legal entity
- Payables for recipient legal entity
- Intercompany reconciliation report allows for checking of discrepancies or missing transactions

online reconciliation reporting tool.

- Allow drill down from account balances to transactions
- uses xml publisher to provide export to excel and customization of outputs.

Open Interface Tables:

Intercompany transactions from external source populate following intercompany interface

tables
- FUN_INTERFACE_CONTROLS
- FUN_INTERFACE_BATCHES
- FUN_INTERFACE_HEADERS
- FUN_INTERFACE_DIST_LINES

Intercompany import program will import transactions in base tables (FUN)

Business Events:
AGIS supports multiple business events which enables real time outbound/inbound integration
with legacy systems.