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Copyright 2007, Oracle. All rights reserved.

Ledger

R12 Oracle General Ledger Management

Fundamentals

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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

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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

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Ledgers Defined

Ledgers

The Ledgersrepresent the

core of a companys financial

records where everytransaction flows through.

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Accounting Setup Manager Overview

SLA

Transaction

Accounting

Subledger Transactions

SLA

Corporate Ledger(Primary Ledger) Local Statutory Ledger(Secondary Ledger)

AP AR FAOther

Subledgers

Legal Entity

Maintaining Multiple Accounting Representations with Secondary

Ledgers

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Secondary Ledgers

Secondary Ledgers

The SecondaryLedgersare

used for supplementary

purposes and can be used forglobal companies to comply

with various legal

requirements.

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Level of Detail Desired

Secondary Ledger Conversion Levels

Path to Secondary Ledger

Balances LevelUse GL Consolidation

to Transfer Balances

GL Journals LevelUse Posting for

Automatic Journals

Replication

AP AR FA

Subledger Journals

Level

Use SLA for Automatic

Maintenance

Adjustments OnlyManual Adjustments in

GL orAutomated

Adjustments from SLA

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Reporting Currencies

Currency

If difference isonly currency,

Corporate

Chart of

Accounts

MonthlyCalendar

Accounting

Method

US GAAP

Accrual

use a Secondary Ledgeruse Reporting

Currencies

If one or more of the following are different,

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Level of Detail Desired

Reporting Currency (RC) Conversion Levels

Path to ALC

Note: Subledger Level RCs not available for Secondary Ledgers

Use SLA for

Automatic MaintenanceAP AR FA

Subledger Level

Use GL PostingJournal Level

Use GL TranslationBalance Level

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Accounting Setup Steps

Define Secondary

Ledger(s)

(optional)

Complete

Accounting Options

Complete

Accounting Setup

Assign Legal Entitiesfor Accounting Setup

(optional)

Define

Primary Ledger

Define Legal Entities

Define Calendars

Enable Currencies

Complete

Optional Setup Steps

GL SETUP STEPS

Define

Chart of Accounts

SETUP From the Accounting SetupManager

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Accounting Setup Manager

Create Accounting Setup

1. Create

accountingsetup

structure

2. Complete

theaccounting

options

Two main steps exist to create an accounting setup

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Accounting Calendar

You create a calendar to define an accounting year and the

periods it contains.

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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

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Sharing Ledgers

Across Oracle Applications

Many elements of an Oracle General Ledger ledger are

shared with other Oracle applications.

Accounting calendar

Account structure Value sets

Segment valuesSecurity rules

Cross-validation rules

Currencies

Periods

Period Types

Daily Rates

Rate Types

Journal Categories

Sources

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Company ProjectDivision Department Account

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

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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

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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

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Identifying Segment Requirements

Assign each business dimension as a separate

segment.

Avoid having more than one meaning for each

segment.

Company

XXX

Region

XX

Product &

Project

XXXX

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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

}

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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)

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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 AccountProduct

United Kingdom

Company Cost Center AccountSubaccount

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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.European

Division

Western

Region

CompanyCost

CenterAccount

Division parent

Region parent

Child level

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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

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Using Independent

and Dependent Segments

Independent Segment Dependent Segment

Segment that has meaning

on its own without

depending on othersegment values

Segment that is linked to

an independent segment

Example

Company: 01

ExampleAccount: 1100

Subaccount: 001

Desc: Cash-Citibank

Account: 2200

Subaccount: 001

Desc: Debt-B of A

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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 AccountingFlexfield values

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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

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Defining Value Sets

Use value sets to control the characteristics and format ofthe Accounting Flexfield segment.

Thesame value set can be used more than once in thesame Accounting Flexfield structure.

Value_set 1

Format:

Char

Max size: 2

Validation:

Independent

Value_set 1

Format:

Char

Max size:2

Validation:

Independent

Value_set 2

Format:

Char

Max size: 3

Validation:

Independent

Value_set 3

Format:

Char

Max size: 4

Validation

Independent

Balancing Cost Center NaturalAccount

Intercompany

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Defining the Accounting

Flexfield Structure

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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

Value_set 1

Format:

Char

Max size:2

Validation:

Independent

Value_set 2

Format:

Char

Max size: 3

Validation:

Independent

Value_set 3

Format:

Char

Max size: 4

Validation

Independent

Balancing Cost Center NaturalAccount

Intercompany

01

02

03

01

02

03

100

101

999

TSAL

1000

9999

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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

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Segment Qualifiers

Account Type

Budget Entry Allowed

Posting Allowed

Third Party Control Account

Reconciliation Flag

Asset, Liability, Owners' Equity

Revenue, Expense

Budgetary Dr, Budgetary Cr

Yes or No

Yes or No

Payables, Receivables, Yes,

or No

Yes or No

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Control Accounts

Ensure control accounts can only contain data from an

approved journal source

Prevent manual data entry to control accounts

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Control Accounts

Setup and Process

SETUP PROCESS

Automated process

Set Control Account

Qualifier for a

Natural Account Value

In the Segment Values

Window

Create Accounting in

SLA or enter journal in

GL

Accounting or

Journal Created

Is account a

control account?

ErrorSelect a different

account

Yes

No

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Defining Hierarchies

Define parent/child relationships, including multilevel

hierarchies, to facilitate reporting and analysis.

Top-level

parent

Second-

level

parents

Children

Western Region

NevadaCalifornia

East

CA

East

OR

West

CA

West

OR

East

NV

West

NV

Oregon

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Working with Ranges

For each parent value, you can:

Define child ranges

Define parent ranges

Move child ranges

Move parent ranges

View hierarchies

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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.

CPUsDisk

drivesPrinters

New

YorkParis Chicago

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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

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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

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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 theperiod in which you start entering transactions

Optionally, define multiple calendars and assign a

different calendar to each ledger

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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

LedgerPeriod Type

Month

Jan-02 to

Dec-02

Calendar

=+

Periods

01/01/2002

to12/31/2002

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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

Second

period

(First

Transaction

Period) Enter historical data

First

period

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Accounting Period Statuses

Each accounting period has one of the following five

statuses:

Open

Period

Closed

Period

Permanently

Closed Period

Never

Opened

Future

Enterable

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Calendar Auditing

Checks calendar

definitions

Checks date

gaps

Checks

overlapping

periods

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Enabling Currencies

You must enable a currency before you can enter

transactions or record balances in that currency.

Enabled

Canadian Dollar

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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

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Segment Value Inheritance

111011

01-200-111011Preserveaccounts

Enabled

Posting

Budgeting

01-100-111011

Enabled

Posting

Budgeting

Enabled

Posting

Budgeting

Inherited

Attributes for Segment

Not Inherited

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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_DATEfield

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Defining Flexfield Security Rules

Restrict data entry, online inquiry, and reporting to specific

values by using flexfield security rules.

0000 to 9999

1000 to 3999

Account Segment

Include:

Exclude:

1000 to 3999

0000 to 0999 4000 to 9999Available:

Unavailable:

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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 InsertsX

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Defining Cross-Validation Rules

Prevent the creation of invalid account combinations bysetting 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

Region:

100 New York

400 Tokyo

Account:

4100 Sales

7550 Travel

01 100 4100

01 400 4100

Valid

Invalid

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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.

AccountCombination

Shorthand Alias

Cash01

NY

Sales

01-110-000-1110-000-0000

- 320 - - - -

01- 420 - 4110 - - - -

=

==

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Overview of Account Hierarchy Manager

Account

HierarchyManager

Oracle

General

Ledger

Maintaining

Your

Chart of

Accounts

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Integrating with Oracle General Ledger

Use Account Hierarchy Manager to make changes to your

account structure. Upon saving, Oracle General Ledgerreflects changes automatically.

Key Segment Values Rollup Groups

Web ADI

GL

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Using the Account Hierarchy Toolbar

View Hierarchy

Save Changes

View Query

View Values List

New Parent

New Child

Export Hierarchy

Display Help

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Account Hierarchy Manager

Segment Symbols

Top Level Parentrepresents an entire

chart of accounts structure

Chart of Accounts SegmentRepresentsan individual segment of a particular chart

of accounts structure

Parent LevelRepresents a parent

segment value

ChildRepresents a child segment value

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Parent Levels in an Account Hierarchy

Lower LevelParents

Level 2Level 1 Level 33000 3100 3110

3160

3200

3250

3220

3150 3115

3111

3300 3310

3350 3115

3311

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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:

Description:

Account Type:

Effective:Enabled:

Allow Budgeting:

Allow Posting:

4140

Training

Revenue

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Ledger Sets

Use ledger sets to group multiple ledgers for

processing efficiency

LedgerSets

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Data Access Sets

Data Access Sets enable the specification of:

read only or read and write access

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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

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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

Documents

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