General Ledger

A Deep Drive

J. Sathya Kumar

Definition
Oracle General Ledger:
Oracle General Ledger is a comprehensive financial management solution that dramatically enhances financial controls, data collection, information access, and financial reporting throughout your enterprise.

Interface Information: Accounting Entries

Invoices Payments Additions/Retirements Depreciation Adjustments

Payables
Inventory COGS Salary Deductions

Assets

Inventory

General Ledger
WIP activity Other costs Employee Information Accrued Receipts

Payroll

Work in Process

Human Resources

Receivables Receipts

Revenues

Revenue Labor Costs Usage Costs

Purchasing

Projects

E-Business Suite Integration

External Systems** Oracle Master Scheduling
Planned Orders

Purchase Orders (Outside Processing)

Oracle Work in Process

Final Assembly Orders Model Structure Item Information Units of Measure Sales Orders Customer Information Credit Information Sales Reps. Payment Terms Invoice Information Returns/Credits Booked Orders Journal Entries - Invoices - Receipts Customer Data Invoice Information Shipment Reservation Demands

Model Structure

Oracle Bill of Material

Items Info/Units of Measure Reservations

Oracle Receivables

Oracle Order Entry

Units of Measure Item Information ATP/On Hand

Oracle Inventory

Demand

Internal Requisitions Journal Entries (inventory and work in process activity)

Inventory Transactions (Receipts)

Units of Measure Item Information ATP/On Hand

Oracle Project Accounting

Vendor Data Vendor Invoices Employee Data

Revenue Adjustments

Oracle General Ledger *

Journal Entries - Additions - Retirements - Depreciation - Adjustments

Accrued Receipts

Oracle Purchasing

Requisitions Purchase Orders

Vendors Information Journal Entries - Invoices - Payments

Invoice Information (from POs)

Oracle Human Resources

Journal Entries

Oracle Assets

Oracle Payables

Item Information Units of Measure

Assets Information (from Invoices) Expense Reports

Shared General Ledger Data

Many elements of an Oracle General Ledger are shared with other Oracle applications.
Account Structure Value sets Segment values Security rules Cross-validation rules Shorthand Aliases Currencies Daily rates Rate types Accounting Calendar Periods Period Types

General Ledger

Journal Entries Sources Categories

Modeling Entities with Sets of Books

R11i Pain Points

SOBs SOB USA ($) SOB BEL () SOB ATS () SOB DM ()

Legal Entities

USA

Belgium

Austria

Germany

OUs

OU USA

OU BEL

OU ATS

OU DM

R11i Pain Points (continued)

Pros
Each legal entity is a separate set of books Data is secure Easy to secure definitions, such as FSG reports

Cons
Many books to maintain Changing responsibilities Difficult to share data and setup information Cannot perform processes across books Time-consuming open/close process Difficult reporting

Maintaining Multiple Accounting Representations with Secondary Ledgers or Reporting Currencies

Key Concepts and Terminology

Legal Entity

Accounting

Corporate Ledger (EUR) (Primary Ledger)

Reporting Currency (USD)

Statutory Ledger (EUR) (Secondary Ledger)

SLA Transaction Subledger Transactions AP AR FA

SLA

Others

Configuring PL/RC & SL

Key Concepts and Terminology

Primary Ledger (PL) Main, record-keeping ledger Secondary Ledger
Optional, additional accounting representation of Primary Ledger

Reporting Currency
Optional, currency representation of Primary or Secondary Ledger

Defined by 4Cs:
Chart of accounts Accounting calendar Primary currency Subledger aCcounting Method

Can differ in one or all 4Cs:

Chart of accounts Accounting calendar Primary currency Subledger aCcounting Method

Only differs in: Currency

Difference Between Secondary Ledgers and 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

SL Vs RC
COA Calendar Currency SLAM (Convention)
USD US GAAP

Sathya (LE)

SATHYA_COA

Accounting 12

Sathya OU1 (INDIA) SATHYA OU2 (FRANCE) SATHYA OU3 (USA) SATHYA OU4 (Japan)

SATHYA_COA

Accounting 12

INR

US GAAP

SATHYA_COA

Accounting 12

EUR

FRS

SATHYA_COA

Accounting 9

USD

US GAAP

SATHYA_JAPAN _COA

Accounting 12

JPY

US_GAAP

Accounting Configuration
Process of Configuring PL/SL and RC in ASM. Used ASM as a tool. Used in case of Accounting for Multiple companies.

Accounting Configuration classification

Business Requirement

Multiple Companies share the same ledger

Multiple Companies using Diff Ledger

Multiple companies using special purpose Ledger Other Accounting Configuration

Shared Accounting Configuration

Exclusive Accounting Configuration

Why Multiple companies share the same Ledger?

 Country in which companies operate do not have strict statutory requirement such as unique COA for LE.  You do not need to open and close periods independently between LE and companies.  Multiple LE can maintain same accounting representation such as same corporate and statutory requirement.  Multiple LE share the same COA,Calendar,Currency and SLAM.  Shared Accounting Configuration is the only solution for the above business requirements.

Shared Accounting Configuration

 Allows accounting for multiple LEs in same PL.  Assign Unique Balancing Segment Value to represent each LE.  Easy identification of transaction per LE.  If LE is subject to multiple set of legislations, SL can be attached to PL.  RC can be attached if a different currency representation is required.

Shared Accounting Configuration

Legal Entities Modeled as Ledgers(Exclusive)

Sathya Enterprise

Legal Entity UK

Legal Entity France

UK Ledger (GBP)

French Ledger(EUR)

BSV 10

BSV 20

BSV 30

Legal Entities Modeled as BSV(Shared setup)

Sathya Enterprise US Ledger(USD)

Legal Entity USA

Legal Entity CAD

BSV 10

BSV 20

BSV 30

Multiple Companies using different Ledgers

 Strict Legal requirement for LE to have their data separate.  Diff Accounting structures(eg one company requires 20 segment and other may require 5)  One require a weekly calendar and other requires monthly.  One may use Accrual method and other cash basis.  Strict Tax requirement.  Facility to open/close periods independently for each LE.  Diff accounting representation for diff LEs.  Using multiple Oracle Applications Instance.  Exclusive Accounting configuration is the only solution which allows one LE to be assigned to one PL.

Multiple Companies user Special Purpose Ledger

 Name says it all. Used when one of following is true:  No requirement to maintain transactions using LE context.  GL is used as a standalone application.  Used for consolidation adjustments which are separate from your day to day transactions.  Ledger used to enter consolidation adjustments across multiple LEs.

Accounting Configuration comparision

LE Attributes Number of LEs allowed per Ledger Level of Statutory compliance Ledger Attributes: COA CURRENCY Calendar SLAM Shared Multiple LE can be represented LOW: Countries not highly regulated All LEs must share the same attributes. Exclusive Only one LE Others No LE concept

HIGH: Strict legislative compliance LEs use different attributes.

NONE

Any Combination.

Feature Comparison by Accounting Configuration

Feature
Open/Close GL Accounting Periods VAT Controls

Shared
Same time

Exclusive
Different Time

Other
Independent of other ledgers.
N/A No Subledger transactions exists. N/A. No Subledger transactions exists.

All LEs share the same VAT in Oracle Payables

Allow consolidated invoice payments across multiple LEs. Allows journals across multiple LE.

Have autonomous VAT controls.

No ability to make lumpsum payment across LE. No ability to create journals that cross multiple LE.

Consolidated Payments

Multiple LE Journals

N/A. No Subledger transactions exists.

Difference Between Secondary Ledgers and 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

Conversion Levels
Level of Detail
Balance

Path to SL
Use GL Consolidation to Transfer Balances Use GL Posting for Automatic Journal Replication Use SLA for Automatic Maintenance Manual Adjustments in GL

Path to RC
Use GL Translation

Journal

Use GL Posting (Thin-MRC)

Subledger
AP AR FA

Use SLA (Full-MRC)

Adjustments Only

Key Concepts and Terminology

Use Balance Level Secondary Ledger if:

You only need to maintain an additional accounting representation at the balances level You do not need the balances to be updated in real-time; you can wait until they have been transferred to the secondary ledger

RC Conversion Level
Balance Highest Level (No Control) Subledger Level Lowest Level (Tight Control) Journal Level Posted transactions(Moderate control)

SLAM in SL
SLAM in SL can be used only when conversion is done at Subledger Level or Adjustment Only Level. All the 3 Cs (Currency, Calendar and COA)should be same if conversion is done at Adjustment only Level.

Levels of Conversion

SL Conversion Level

Other Topics
Flex field Cross Validation Rules Dynamic Inserts Security Rules AHM Roll up Groups and Parent Account Data Access Set

 Thank You