R12 Intercompany Balancing

In order to take advantage of the automatic Intercompany balancing during GL

posting and SLA Accounting you first need to define the accounts you want us
to use.

Intercompany and Intracompany Accounts in R12 are defined in two different

Set Up Pages, the Intracompany Balancing Rules are what we had in 11i for
Intercompany Accounts (confusing I know) - this is where you will find the
rules you had in 11i of you are upgrading from 11i. If you don't want to
take advantage of the Legal Entity Configurator product and define Legal
Entities and map them to your accounting structure, you can still go ahead
and use the intracompany rules. If you start to map your Legal Entities to
Ledgers and/or Balancing Segment Values (BSV) then you will want to be sure
you complete the job, so there is no ambiguity in your setup. Consider the
example below for BSV 10, 20, 30, 40, 80 and 90 :

The France Ledger is mapped to the FR LE, so all BSV in that ledger are
assumed to be owned by LE France. However the UK Ledger has BSV 10 and 20
mapped to the UK LE, but 80 and 90 are not mapped to anything we have no way
to know what LE they are assigned to.
You will be able to set up Intracompany balancing rules

• Between 10 and 20

• Between 80 and 90

• between 30 and 40

You can set up Intercompany Accounts between

• 10 and 30 or 40

• 20 and 30 or 40

• LE France and LE UK

All the above are unambiguous, we know what we are dealing with. The 80 and
90 BSV are in the same ledger with no LE at Ledger or BSV level so we just
assume that any transactions between 80 and 90 are intracompany.

We would not allow you to create Intracompany rules between

• 80 and 10 or 20

• 90 and 10 or 20
This is because we don't know if 80 and 90 are in the UK LE or not, if they
are then assign those BSV to LE UK too and you're good to go.

If 80 and 90 aren't in the UK LE then what LE do they belong to? Once you
map them to the to the appropriate LE then you will need to define
Intercompany accounts for them.

Advanced Global Intercompany in R12

R12 introduces the new product Advanced Global Intercompany System (AGIS),
which takes forward the features provided by GIS in 11i GL and adds a number of
important new capabilities. The major new capabilities are:

* Creation of Documentation (ie. Payables and Receivables Invoices) for AGIS

transactions. Oracle Advanced Global Intercompany System can create invoices in
payables and receivables sub ledger from intercompany transactions. Using Oracle
Advanced Global Intercompany System user can enter transactions for multiple
recipients within a single batch. This allows user to submit intercompany
transactions from one initiator to one or more recipients in a single batch.

* Web ADI Integration to facilitate uploading transactions from Excel. This was a
missing link in the earlier version, as earlier product does not have capability to use
direct upload functionality, rather than interfacing through Open GIS interface. In
Release 12 ADI is heavily used in this module, which is replacement of external
integration for AGIS System using by mean of Microsoft based Excel spreadsheet.
Now flexibility is provided to user that can generate spreadsheet templates that
have features of intercompany entry pages and using the templates the user can
enter transactions in the spreadsheet and upload them into Oracle Advanced Global
Intercompany System. The good thing has found the standard templates can be
customized by removing or adding the entry fields from a list of available fields. This
feature is used to create a template that contains only the entry fields that are
important for the business. The required fields cannot be removed from the
template. Once the templates are generated, user can save them in their local
computer to reuse them in the future. This figure describe the options available in
both the versions.

* One Sender to many receivers in the same transaction batch (the receivers can be
in different ledgers, with different chart of accounts, currencies, periods etc)

* Integration with Oracle Approvals Manager for fully flexible approval rules with no
coding

* Introduction of Intercompany Periods, which can be opened and closed by AGIS

transaction type

* New user grants based security so many subsidiaries can be accessed from the
same responsibility

* Online Reconciliation reporting tool, allows drilldown from account balances to the
transactions. Uses XML Publisher to provide export to Excel and customization of
outputs

* Proration of transaction distribution amounts - When user allocates more than one
distribution account in a batch that has multiple recipient transactions, Oracle
Advanced Global Intercompany System can automatically prorate the distribution
amounts based on the recipient transaction amounts. The proration of amounts is
also used by Oracle Advanced Global Intercompany System to adjust the
distribution amounts in the batch when a recipient transaction is deleted or it is
rejected.

* Reversal of batch/transaction - This changed feature enables a user to reverse a

whole batch or an individual transaction in a batch. When the user reverses a batch
or a transaction, a new reversal batch is created, which displays the references to
the original transaction. One point to be noticed is that new batch is submitted
automatically immediately after it is created. Not both the parties (Sender
/receiver), its only users with access to the initiator organization can reverse its
batches or transactions. The set up is there where a user can choose a reversal
method determining if the new batch will be created with opposite signs, or with
switched debits and credits.

* Descriptive flexfield support - In AGIS descriptive flexfields is supported on the

batch and also on individual transactions within the batch. Descriptive flexfields
allow user to enter any additional information specific to the nature of business, in
the batch and in the transactions. Important to note that these DFF can be used by
sender. The user can enter descriptive flexfield information for the recipient in the
Recipient Accounting section.

The Intercompany balancing feature in GL is now under the AGIS product and has
some new features

* Define Intercompany Payables and receivables accounts by Legal Entity

* Define separate Payables and Receivables accounts for each direction of
Intercompany trading relationships
* Intercompany Balancing performed in the subledger when transactions are
accounted by SLA

An important point to note is that although we add a lot of new features any GIS set
up you have in 11i will be upgraded and you can keep running as in 11i and start
taking advantage f the new features if and when you are ready and it makes sense
to you.
Intercompany Reconciliation and Reporting

There are two new reports avaible in XML Publisher format

* Intercompany Transaction Summary report

* Intercompany Account Details report.

These reports replace reports that were available in the Global Intercompany
System (GIS) in Release 11i.

The new reports offer all of the functionality of the obsolete reports plus additional
benefits.

Intercompany Transaction Summary report replaces the Intercompany Transaction

Detail report and Unapproved Transaction Listing report.

The purpsoe of this report is to give user a clear overview of intercompany

transactions and their statuses, there so that day-to-day tasks and speeds up period
close activities.

This report also provides supporting documentation for intercompany reconciliation

and helps keep intercompany in balance by uncovering any potential discrepancies.
Intercompany Reconciliation and Reporting

There are two new reports avaible in XML Publisher format

* Intercompany Transaction Summary report

* Intercompany Account Details report.

These reports replace reports that were available in the Global Intercompany
System (GIS) in Release 11i.

The new reports offer all of the functionality of the obsolete reports plus additional
benefits.

Intercompany Account Details report replaces the Transaction Activity Summary

report

This new report provides a detailed listing of all accounting lines for intercompany
batches, grouped by transaction.

The report is divided into two sections:

* one section for outbound batches

* one section inbound transactions.

The outbound section shows transactions initiated by the organizations to which the
user has an access, the inbound section shows transactions received by these
organizations. The user can choose whether to include inbound, outbound, or both
sections in the report.

The user can run the report for one or many organizations to which the user is given
the access.
User can select what parameters like initiator, Recipient, GL Date range, Batch
Number range, Transaction Status, Currency, Batch Type, Invoice Number, and
many more to run the report by. User can run the report by ranges of initiator and
recipient accounts to see what transactions make up their balances.