How to Use the PowerPoint Template...Primary Ledger Legal Entity Operating Units Inventory Orgs India Ledger (INR) India Org US OUIndia OUs India LEsIndia LEs US Org Journal Level

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Secondary Ledgers… …Unleashing Its Power!!!

Presented By: Anshu Anand, Principal Software Engineer, Oracle GCS Sivaranganath Chittapragada, Principal Software Engineer, Oracle GCS Sangam’ 2014 : November 07

Oracle Confidential – Internal/Restricted/Highly Restricted

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Agenda

• Global Reporting : Pre-R12 Options • Secondary Ledgers : The Solution Offered by Release 12. • Kinds of Secondary Ledger Conversions. • Adding Secondary Ledger to existing Primary : Balance Initiation. • Tips for Easy Maintenance. • Things to Know Before Considering Secondary Ledgers. • Pointers to Reconcile • Q&A


Scope

Oracle Confidential – Internal/Restricted/Highly Restricted 4

•Focus on Functionality and Business Usage. Detailed setups are kept out of Scope for now. The reference documents for setups are available in the Oracle Knowledge Base.

•The examples referred are for indicative purposes only. Their actual usage may depend on the holistic requirement of an organization.

•Reference to Accounting Conventions. The details and their accounting are kept out of the scope of this presentation.


Corporate Global Presence… Varied Statutory Needs….


Low priced Asset Purchased Asset or

Expense ?

Interdepartmental Sales

Depreciation Useful Life of Asset or

Fixed Percentage

Company : ABC Corp Ltd Head Office : United States Currency : USD

Company : ABC Corp Ltd Country Office : Singapore Currency : SGD

Company : ABC Corp Ltd Country Office : India Currency : INR


Pre R12 Options Statutory Global Reporting


Primary Book Chart of Accounts : Acc

Currency : USD

Reporting Book 1 Chart of Accounts : Acc

Currency : AUD

Reporting Book2 Chart of Accounts : Acc

Currency : SGD

Reporting Book3 Chart of Accounts : Acc

Currency : INR

• Multiple Reporting Currencies (MRC)

• Consolidation


Possible Solutions Offered by R12 Application Meeting Statutory Requirements for Global Presence!



Secondary Ledgers Defined

• Represents Primary Ledger data that differs in one or more of the following Chart of Accounts Currency Sub Ledger Accounting Method(SLAM) Calendar

• Used for supplementary purposes, such as Consolidation, Statutory reporting or Adjustments for one or more legal entities within the same accounting setup.

• Optional



Kinds of Secondary Ledger Conversions • Journal Level Secondary Ledger. • SubLedger Level Secondary Ledger. • Balance Level Secondary Ledger. • Adjustment Level Secondary Ledger.


ananand

Highlight


Journal Level Secondary Ledger


Journal in Primary

Journal Replicated in Secondary Posting

Sub Ledger Transactions Transfer to

General Ledger

Manual Journals

Data Flow


• Comes across as a powerful tool when companies require the transactions/Journal details to be available in secondary ledger.

• Drilldown facility. • Enable the Required Sources for Replication

General Ledger Responsibility -> Setup -> Accounting Setup Manager Journal Conversion Rules

• Allows Manual ‘Adjustments’ too.


Business Case 1:

Corporate Head Office : USA

Country Office : India

Different Calendar Needs for Statutory and Corporate Reporting.

If a legal entity must perform corporate and statutory reporting, one can use the primary ledger to satisfy corporate reporting requirements and then use a secondary ledger to satisfy statutory reporting requirements.


Secondary Ledger

Primary Ledger

Legal Entity

Operating Units

Inventory Orgs

India Ledger (INR)

India Org

India OUs

India LEs India LEs

US Org

US OU

US LE

US Ledger(USD)

Corporate Consolidated Ledger (USD)

Corporate Reporting: Jan to Dec

Statutory Reporting: Apr to Mar

India Secondary Ledger (Calendar:

Apr –Mar)


Kinds of Secondary Ledger Conversions

• Journal Level Secondary Ledger. • Subledger Level Secondary Ledger. • Balance Level Secondary Ledger. • Adjustment Level Secondary Ledger.


ananand

Highlight

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Sub Module Transactions

Journal Import

Manual Journals

Primary Ledger

Secondary Ledger

Manual Journals

Sub Ledger Accounting

Method (SLAM)

Transaction Version1

Transaction Version2

Replication on Import

Data Flow

Replication On Posting


Sub Ledger Entries

Primary Ledger: Chart of Accounts : A Currency : USD ( SLAM : United States Federal )

SLAM: Standard Accrual

SLAM: Standard Cash

SLAM: United States Federal

Secondary Ledger: Chart of Accounts : B Currency : SGD ( SLAM : Standard Accrual)

Secondary Ledger: Chart of Accounts : B Currency : INR ( SLAM : Standard Cash)


• Most transparent form of Conversion.

• SubLedger transfers data to both Primary and Secondary at the same time

• Virtually allows a Company to live in two different accounting representations.

• Complete drilldown available from Secondary Ledger to the Submodule.

• Apart from SubLedger transferred entries, GL Posting also replicates data into Secondary to allow replication of manual journals.

• SubLedger Sources should be disabled for replication Upon Posting to avoid duplicates.



Business Case 2:

Corporate Head Office : USA

Country Office : Switzerland

Different Accounting Treatment needed for same transaction : Sales Account

Local tax regulation requires that the “Sales Account" reflects all billing…but..Corporate GAAP, (for example IAS/IFRS) requires that revenue is recognized only when the customer accepts the product.


Primary Ledger (For Corporate

Reporting)

Country Operations Secondary Ledger (For Statutory/Local

Reporting)

Issue a Sales

Invoice

International Accounting Standards (IAS) Revenue is recognized only when the customer accepts the product.

Local Laws of Reporting Sales Account reflects all Billing

Receivables a/c….Debit Deferred Revenue a/c… Credit

Receivables a/c….Debit Revenue a/c… Credit


Kinds of Secondary Ledger Conversions • Journal Level Secondary Ledger. • Subledger Level Secondary Ledger. • Balance Level Secondary Ledger. •Adjustment Level Secondary Ledger.


ananand

Highlight


Journal in Primary

Only Balances Moved To Secondary CONSOLIDATION

SubLedger Transactions Transfer to

General Ledger

Manual Journals

Data Flow


Balance Level Secondary Ledger Cont….

• Secondary Ledger maintains only Balances from Primary (and not journals)

• Requires ‘Consolidation’ to transfer balances from Primary to Secondary.

• Ideal when no Adjustments are required in Secondary Ledger.

• Provides drilldown from ‘Account Inquiry and Drilldown’.

• Does not provide real time data like Journal Level Conversion.

• Easy to maintain and Reconcile.



Kinds of Secondary Ledger Conversions • Journal Level Secondary Ledger. • Subledger Level Secondary Ledger. • Balance Level Secondary Ledger. •Adjustment Level Secondary Ledger.


ananand

Highlight


Primary Ledger

Adjustments Only Ledger

Create FSG Report

Data Flow


• Adjustment ledger must share same Chart Of Accounts, Calendar/Period Type combination and Currency associated to the Primary Ledger

• Suggested to Include the Adjustment leader with the same Ledger Set as the Primary Ledger to get complete picture while running Reports.

Adjustment Level Secondary Ledger Cont….

Account Primary Ledger (INR)

Adjustments (Secondary) (INR)

Total (INR)

Sales 5,00,000 6,000 5,06,000

Short Term Investments

10,000 10,000

Other Receivables 76,000 2,000 78,000

CIP Cost 1,00,000 600 1,00,600

Accrued Payroll 69,000 69,000


Subledger Subledger, Journals & Balances

• Enable Sub ledger Accounting Method for Primary & Secondary Ledgers is Mandatory. • Data Conversion depends on the Journal Conversion Rules and Currency Translation Options for Secondary Ledger .

Journal GL Journals & Balances

Data Conversion depends on the Journal Conversion Rules and Currency Translation Options for Secondary Ledger

Balances Balances Only

Data Conversion depends on the Journal Conversion Rules and Currency Translation Options for Secondary Ledger

Adjustments Only

Enter Manual Adjustments directly into Secondary Ledger or set the SLA rules such that it transfers only adjustments

The Chart of Accounts, Calendar, and Currency of a Secondary Ledger are in sync with that of Primary Ledger.

Summarizing the Concept…


Adding Secondary Ledger to Existing Primary…



• To Initialize Balances for General Ledger Consolidation Web ADI

• To Initialize Subledger Events Concurrent program:”SLA Secondary/ALC Ledger Historic Upgrade”.

The program performs the following validations: • Applicable for SubLedger Level Conversion Only. • Application Accounting Definition (AAD) of Secondary and Primary Ledgers should be same. • If the earlier run of the program is incomplete / failed, then the present run should be in Recovery mode, with the same parameters as the prior run. • Currency conversion rates between Primary Ledger’s entered / accounted currency to Secondary Ledger’s functional currency should be defined. • If the Secondary Ledger is of a different chart of accounts, the chart of account mappings should be defined.

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28

But Maintenance of Secondary Ledgers Is Very Difficult…. …Not Really


Secondary Ledgers using same Chart of Accounts, Calendar and Period Type

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1. Posting For Journal and Subledger level conversions

Setup : ‘Post Journals Automatically from Source Ledger' Requirements : Period Open in Secondary Ledger For Balance Level Conversion

Setup : Check ‘Autopost’ while running Consolidation.

Posts in Secondary2

Journal /Subledger Conversion

Post in Primary

Posts in Secondary1

2. Autopost Allows posting all Unposted Journals at one shot.

. 3. Document Sequences

Profile: GL_COPY_DOC_SEQ_FROM_PRIMARY Available through Patch 8509030:R12.GL.B


Journal Reversal

• Option 'Synchronize Reversals Between Primary and Secondary‘

• Option 'Replicate Reversals from Primary Ledger' No Manual Yes

AutoReversal

Allows reversal of Multiple Journals at one shot. Criteria Set based.

Budgets Journal Approval Journal Line Reconciliation

Ledger Specific Functionalities


Things to Know while Considering Secondary Ledgers …..Do It Right!


• Average Balances • Journal Line Reconciliation. • Subledger level Reporting Currency cannot be attached to a Secondary ledger. • Selective Assignment of Balancing Segment from Primary to Secondary • 'Chart of Accounts Mapping', a Balancing Segment Value of one ledger cannot be mapped to Non-BSV segment of the other.

•'Adjustment Segment' Vs 'Adjustment Ledger‘ • Re-enable Secondary Ledger • Budgets - Do we need them in Secondary??? • Change in SLAM Allowed ????

1. Balancing Segment 2. Cost Center 3. Natural Account 4. Future

1. Balancing Segment 2. Natural Account 3. Future


Pointers to Reconciliation



Journal Level Expectations

• All posted Journals from primary are replicated in Secondary.

• Excepting those sources and Categories marked for non-replication explicitly.


• Post the ‘Unposted’ journals in primary to allow For replication in Secondary. • Both Primary and Secondary are individual ledgers on their own. Manual Journals created in Secondary only can be one of the major causes of mismatch in balances

Technical Assistance

1. Upon Posting in Primary Table : GL_JE_HEADERS

2. Identify Sources and Categories excluded for Replication

Table : GL_JE_INCLUSION_RULES


Subledger Level • Run the ‘SLA Diagnostics’ to identify missing transactions. How To Avoid and Fix Corruption in Data Transfer from SLA - Negative Ledger_ID, Not Reached GL, Duplicate in GL (Doc ID 883557.1) Any Datafix To be run after confirmation from Oracle Support Only*** • Can be run for both Primary and Secondary. • Query from Journal Reconciliation to be run to identify manual Journals not replicated.

• Ensure All journals are posted in Primary and Secondary before reconciliation. • Document Sequences



Balances Level • Post all the journals in Primary before running Consolidation

• Suggested to run Consolidation in the ‘Audit’ mode.

• Ensure Journals created in Secondary are Posted.

• Run Summary Trail Balance (or Translated Trial Balance) for both ledgers to compare the Account balances.

• For accounts with difference, suggested to run the ‘Account Analysis (180 chars)’ report to identify any manual journals created in Secondary causing the difference.

• Reports: ‘Chart of Accounts - Mapping Rules’ Report Consolidation Exception Report: Unmapped Subsidiary Accounts Consolidation Exception Report: Disabled Parent Accounts



Safe Harbor Statement


The above material is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.



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How to Use the PowerPoint Template...Primary Ledger Legal Entity Operating Units Inventory Orgs India Ledger (INR) India Org US OUIndia OUs India LEsIndia LEs US Org Journal Level