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Oracle Secondary Ledger Accounting Setups and Usage

Overview
The purpose of this document is to familiarize the users of Secondary Ledger (R12)
with different levels of Secondary Ledger conversions feature. This document
provides details on the Usage and Setup of Secondary Ledgers.
Secondary Ledger is an optional, additional ledger that is associated with the
Primary Ledger.
A Secondary Ledger can be used to represent the Primary Ledger's data in another
accounting representation, which differs from the primary in one or more of the
following:

Chart of accounts (COA)

Accounting calendar/period type combination

Currency

Sub-ledger accounting method(SLA)


Introduction
In release 12, Secondary Ledgers can be created based on the legal requirements
and are mainly used for creating Multiple Accounting Representations (MAR).
One may want to know the financial position of the company under different
methods of Accounting, in which case we can create Secondary Ledgers and attach
different Accounting methods to it.
For example, your Primary Ledger may be according to French Accounting principles
and your Secondary Ledger may be according to US Accounting Principles. Using the
concept of Secondary Ledgers, whenever any financial transaction occurs, it can be
represented in both French Accounting and US Accounting Principles at the same
time.
Difference between Reporting Currency and Secondary Ledger (MAR)
If the business requirement is to report every balance in a different currency then
we can choose Reporting currency where as if we need to have different COA or
SLA, Calendar Method then we can use Secondary Ledger.
Reporting currency can be used to capture the information in a reporting currency
at Balance level, Sub-ledger level and Journal level.
Secondary Ledger could be used when you need to change the Chart of Accounts
and Accounting convention method to meet the statutory and corporate
requirements. This is used primarily where the organization need to report in
different authorities like Local authorities, US GAAP,IFRS,IASB etc.

Reporting Currency Ledger and Secondary Ledger

Conversion Rules:
As Secondary Ledger can be used to represent the Primary Ledger's data in another
accounting representation, the accounting representations depend on the following
conversion rules:

Chart of Accounts Conversion

Calendar Conversion

Currency Conversion

Journal Conversion (Used by General Ledger Posting only)

Chart of Accounts Conversion:


The chart of accounts conversion rule is used when the chart of accounts are
different between the Primary and the Secondary Ledger. In this scenario, a chart of
accounts mapping is defined to provide instructions for mapping the accounts or the
entire account segments from the Primary Ledger to the Secondary Ledger.
Calendar Conversion:
The calendar conversion rule is used when the Primary and Secondary Ledgers have
different calendars. In this scenario, the journal effective date determines the
corresponding non-adjusting period in the Secondary Ledger.
Currency Conversion:
The currency conversion rule is used when the Secondary Ledger currency is
different from the Primary Ledger currency.
In this scenario, the system converts the data from the currency of the Primary
Ledger to the currency of the Secondary Ledger using these conversion rules.
Journal Conversion (Used by GL Posting only):
Journal conversion is used to select the journals for transfer to the Secondary
Ledger based on journal source and category combinations.

In this scenario, the GL Posting program uses these source and category conversion
rules to determine which journals to automatically transfer to the Secondary Ledger
during posting.
Data Conversion Levels:
Secondary Ledgers can be maintained at one of the following data conversion
levels:

Balance Level Secondary Ledgers

Sub ledger Level Secondary Ledgers

Journal Level Secondary Ledgers

Adjustments Only Secondary Ledgers


Balance level Secondary Ledger:
The balance level Secondary Ledger only maintains the Primary Ledger balances in
another accounting representation. To maintain balances in this type of Secondary
Ledger, use General Ledger Consolidation to transfer the Primary Ledger balances
to the Secondary Ledger.
If the balance level Secondary Ledger uses a different currency from the Primary
Ledger, system automatically generates and assigns a balance level reporting
currency ledger to the Primary Ledger.
General Ledger Consolidation is used to transfer balances from the Primary Ledger's
balance level reporting currency to the balance level Secondary Ledger. This
balance level reporting currency uses the same currency as the Secondary Ledger
and represents the translated balances of the Primary Ledger.
Scenario: 1-Adding and Using a Balance Level Secondary Ledger
The balance level Secondary Ledger discussed in the below scenario uses a
different currency and chart of accounts as shown below.

Chart of Accounts
Currency
Calendar
Sub-ledger
Method

Accounting

Primary Ledger
SOracle_Coa
Segments)
INR
Soracle_Cal
Encumbrance Accrual

Secondary Ledger
(5 SOracle_Secondary_Coa
Segments)
USD
Soracle_Cal
Optional (not used in this case)

Step 1:
Navigation: General Ledger responsibility: Setup: Financials: Accounting Setup
Manager: Accounting Setups: Query the Primary Ledger. Select Add Secondary
Ledger button.

(3

Step 2:
Enter the name of the Secondary Ledger, chart of accounts, currency, and calendar
and the data conversion level as shown below. Select Apply.

Please make a note of the information that system generated reporting currency
has been assigned to your Primary Ledger as the Secondary Ledger currency is
different. Select Apply.

Step 3:
Complete the ledger processing options for the Secondary Ledger

Now select the update icon for primary to Secondary Ledger mapping

Step 4:
Select Create mapping button and create the mapping in the applications. Note that
the rate types are not populated

Create a Chart of accounts mapping using the steps below.

Give the name and description.

Enter the target as Secondary Ledger and source as Primary Ledger.

Select segment rules button and enter the segment rules for the
system to transfer the transactions/balances from the Primary
Ledger to Secondary Ledger.

Assign the chart of accounts mapping that was created in the previous step
This has to be assigned in the page Update primary to Secondary Ledger Mapping

Step 5:
Now select the update icon for Reporting Currencies under the Setup step of the
Primary Ledger

Observe that the reporting currency USD is already added by the system to the
Primary Ledger

Enter the required information for reporting currency and complete the setup

Now check the Primary to Secondary Ledger mapping, the period rates are
populated.

S
Step 6:
Navigation: Primary Ledger Responsibility: Journals: Enter
Place a manual journal and post the same.

Step 7:
Navigation: Currencies: Translation
Run the translation program from INR to USD

Check

the

translated

trial

balance.

Please note the lines in the above report as the same would be transferred to the
Secondary Ledger after consolidation.
Step 8:
Navigation: Consolidation: Define: Consolidation
Define consolidation.
In the consolidation attributes, the parent is the Secondary Ledger and the
subsidiary is the Primary Ledger.

Once the consolidation is defined, select transfer button.

Ensure Consolidation Transfer Program completes normal

Step 9:
Navigation: Secondary Ledger responsibility : Journals : Enter
Check the journal that has got generated and post the same

Only the first three segments of the Primary Ledger are mapped with the Secondary
Ledger. That is why the account in the journal has only three segments.
Journal Level Secondary Ledgers
The journal level Secondary Ledger is an additional accounting representation of the
Primary Ledger journal entries and balances.
This type of Secondary Ledger is maintained using the General Ledger Posting
Program. Every time you post a journal in the Primary Ledger, the same journal is
automatically replicated and maintained in the Secondary Ledger, depending on the
journal conversion rules specified for the Secondary Ledger.
Scenario: 2-Adding and Using a Journal Level Secondary Ledger
The journal level Secondary Ledger in the below scenario uses currency as USD,
which is different from the Primary Ledger currency.

Chart of Accounts

Primary Ledger
SOracle_Coa

Secondary Ledger
SOracle_Coa

Currency
Calendar
Sub-ledger Accounting Method

INR
USD
SOracle_Cal
SOracle_Cal
Encumbrance Accrual Optional (not used in this case)

Step1:
Navigation: General Ledger Super user: Setup: Financials: Accounting Setup
Manager: Accounting Setups: Query Ledger: Update Accounting setup: Add
Secondary Ledger

Step2:
Complete the Ledger Setups for the Journal Level Secondary Ledger

Step 3:
Primary to Secondary Ledger mapping Select Create mapping button and create
chart of accounts mapping

Step 4:

Define chart of accounts mapping: As per the mapping, all Primary Ledger balancing
segment values would be transferred into single balancing segment value 1000 in
Secondary Ledger.

Step 5:
See the Journal conversion rules defined as below.

Journal conversion rules:


These rules can be used to specify if the journals have to get posted automatically
in the Secondary Ledger and if the journal creator has to be retained.
The Journal source and category conversion can be used to restrict the transactions
of few sources and categories from getting transferred to the Secondary Ledger.
Step 6:
Define conversion rates between primary to Secondary Ledger
Navigation: Setup: Currencies: Rates: Daily

Step 7:
Enter and post a manual journal in Primary Ledger

Navigation: Journal : Enter


Note: We have entered 1000 & 2000 as BSV in Primary Ledger and we have
mapped to single value 1000 in Secondary Ledger.
Posting the below journal replicates the journal in Secondary Ledger.

Step 8:
Check the Secondary Ledger for the journal created.
Please note the BSV is 1000 for all the lines based on the chart of accounts
mapping.

Sub-ledger Level Secondary Ledgers


The sub ledger level Secondary Ledger maintains an additional accounting
representation of the sub-ledger journals, journal entries, and balances.
The sub ledger level Secondary Ledger is maintained using both Sub-ledger
accounting and the General Ledger Posting program.
Scenario: 3-Adding and Using a Sub ledger Level Secondary Ledger
In the below scenario, sub-ledger level Secondary Ledger uses a different currency
and sub-ledger accounting method as shown below.

Chart of Accounts
Currency
Calendar
Sub-ledger Accounting Method

Primary Ledger
SOracle_Coa
INR
SOracle_Cal
Encumbrance Accrual

Secondary Ledger
SOracle_Coa
USD
SOracle_Cal
Standard Accrual

Step 1:
Navigation: General Ledger Super user: Setup: Financials: Accounting Setup
Manager: Accounting Setups
Query Ledger: Update Accounting setup: Add Secondary Ledger

Step 2:
Complete the Ledger processing options for the Secondary Ledger

Primary to Secondary Ledger mapping:

Step 3:
Define the journal conversion rules as below.

For sub-ledger level Secondary Ledgers, the journal sources that use Sub-ledger
Accounting must be set to No in the Transfer Journals to this Secondary Ledger field.
Any journal source that uses Sub-ledger Accounting to generate its accounting
entries must not be converted to the Secondary Ledger using General Ledger
Posting because Sub-ledger Accounting automatically performs the conversion for
these sub-ledger journals.
If the option is set to yes, duplicate journals will be created in the Secondary Ledger.
Step 4:
Navigation: AP responsibility : Invoices : Entry : Invoices to create an invoice.

Perform create accounting for the invoice created

Step 5:
Note there are two journal import requests triggered, one for primary and other one
for Secondary Ledger

Posting requests for Primary and Secondary Ledgers

Step 6:
Journal created in Primary Ledger

Journal created in Secondary Ledger

Adjustments Only Secondary Ledgers

The adjustments only Secondary Ledger is an incomplete accounting representation


that only holds manual adjustments created from general ledger.
Adjustments only Secondary Ledgers must share the same chart of accounts,
accounting calendar/period type combination, and currency as the associated
Primary Ledger.
Automated adjustments from sub-ledger accounting are not possible.
Scenario: 3-Adding and Using a Adjustments Only Secondary Ledger
The adjustments only Secondary Ledger shares the same chart of accounts,
calendar and currency as that of the Primary Ledger as shown below.

Chart of Accounts
Currency
Calendar
Sub-ledger Accounting Method

Primary Ledger
SOracle_Coa
INR
SOracle_Cal
Encumbrance Accrual

Secondary Ledger
SOracle_Coa
INR
SOracle_Cal
Not used in this case

Step 1:
Navigation: General Ledger Super user: Setup: Financials: Accounting Setup
Manager: Accounting Setups: Query Ledger: Update Accounting setup: Add
Secondary Ledger

Step 2:
Complete the ledger processing options for the Adjustment only Secondary ledger

Step 3:
Create a ledger set to check the combined balances
Navigation: Setup: Financials: Ledger Set

Navigation: Inquiry: Account


If user wants to reduce 100 from 190, the rectification entry can be passed in the
Adjustments only Secondary Ledger

Step 4:
Create the rectification / adjustment entry in the adjustment only secondary ledger
and post the journal
Navigation: Journals: Enter

Step 5:
Define and run a FSG report for the ledger set created to fetch combined balances.
Navigation: Reports: Define: Report

Step 6:
FSG output
Note the balance is reduced from 190 to 90 because of the entry posted in the
adjustments only Secondary Ledger

Upgrade of Historical Data for Secondary Ledger


A new concurrent program:SLA Secondary/ALC Ledger Historic Upgrade is
introduced to create the accounting for the Secondary Ledger for the historic
transactions in SLA based on the corresponding Primary Ledger. This is based on the
principle that the balances of Secondary Ledger are initialized based on Primary
Ledgers balances.
Following are the list of the validations performed in the concurrent program before
any data can be processed:
1) The relation between Secondary Ledgers with the Primary Ledger should be at
sub-ledger level
2)
In the case of historical upgrade of Secondary Ledger, the application
accounting definition of secondary and Primary Ledgers should be same.
3)
All the final accounted journals in SLA for the Primary Ledger should be
transferred to GL.
4)
If the earlier run of the program is incomplete / failed, then the present run
should be in Recovery mode, with the same parameters of the prior run.
5)
For the conversion information provided, currency conversion rates between
Primary Ledgers entered / accounted currency to Secondary Ledgers functional
currency should be defined.
6)
If the Secondary Ledger is of a different chart of accounts, the chart of
account mappings should be defined.
Frequently Asked Questions (FAQ):

1. How to Disable a Secondary Ledger Already Created?


Once you disable the conversion of Secondary Ledgers, it immediately prevents the
propagation of journals from the Primary Ledger to the Secondary Ledger.
The disabled Secondary Ledger is still available for historical reporting and manual
journal entries.
Note: Balance level Secondary Ledgers cannot be disabled. To stop transferring
balances from the source representation (Primary Ledger or balance level reporting
currency) to the balances level Secondary Ledger, stop running consolidations.
Note: Adjustments only Secondary Ledgers cannot be disabled because journals are
not automatically transferred to this Secondary Ledger.
To disable the conversion of Secondary Ledgers:

Navigate to the Accounting Options page.

In the Secondary Ledgers region, select the Disable Conversion icon for the
Secondary Ledger to be disabled.
Note: Once the conversion of a Secondary Ledger is disabled, the status of the
Secondary Ledger is changed to Disabled.
2. Even after a Secondary Ledger is disabled, it still appears in the
Accounting Setup Manager (ASM), in a disabled status. Is it possible to
remove this from appearing from ASM at all?
No, it is not possible to completely stop this assignment from appearing in
Accounting Setup Manager.
3. Can a Secondary Ledger be associated with more than one Primary
Ledger?
No, a Secondary Ledger can only be associated with a single Primary Ledger.
4. Can Primary Ledger Be Changed To Secondary and Secondary To
Primary After Few Years Of Operations?
Changing ledger types is not recommended.
5. How to delete a Secondary Ledger?
You can only delete Secondary Ledgers before the accounting setup is complete.
After the accounting setup is complete, you can disable the conversion of
Secondary Ledgers. This prevents any journals that are entered in the Primary
Ledger or source representation from being transferred to the Secondary Ledger.
Deleting a Secondary Ledger removes the ledger and all of its setup steps.
To delete Secondary Ledgers:

Navigate to the Accounting Options page.

Find the Secondary Ledger to delete and select the Remove Secondary Ledger
icon.
6. Can we map a non balancing segment in the primary ledger to a
balancing segment in the secondary ledger?
You cannot map a non balancing segment in the primary ledger to a balancing
segment in the secondary ledger. If you attempt to do this, the posting program is
likely to fail.

7. The posting of a Reversal Journal in Primary Ledger does not create the
corresponding Reversal in the Secondary Ledger. Why?
Enhancement Request/Bug 5686912 GL POSTING DIDNT CREATE a REVERSED
MANUAL JOURNAL IN SECONDARY LEGER was logged and it is implemented now.
Issue is fixed in the following files.
For R12.0: forms/US/GLXJEENT.fmb 120.81.12000000.36
For R12.1: forms/US/GLXJEENT.fmb 120.83.12010000.22
8. What is the Naming Convention of R12 Secondary Ledger Journal
Batches?
When the posting runs it creates secondary ledger journals and while creating
journal batches from primary ledger journal batches it follows below naming
convention.
Secondary Ledger batch name = Secondary Ledger Short Name || Primary Ledger
Journal Batch name || Primary ledger Journal Batch Id.
9. How to Transfer Historical Balances to a New Journal Level Secondary
Ledger?
There is no program provided by Oracle to upgrade historical data for Journal Level
Secondary and Reporting ledgers.
The "SLA Secondary/ALC Ledger Historic Upgrade" concurrent program is not for
Journal level secondary ledgers. For Journal level secondary ledgers, this program
should not be run.
The Secondary ledger balances in General Ledger need to be initialized.
Use the General Ledger Consolidation functionality to initialize the balances in GL
for the Journal level secondary ledger.

10. What are the differences in behavior, between a Primary Ledger and a
Secondary Ledger?
Journal Reconciliation will have to be done separately for Secondary Ledger.
Revaluation has to be done manually for Secondary Ledger.
You can only enable average balances or average balance consolidation for your
secondary ledger if average balances or average balance consolidation is also
enabled for its primary ledger.
By default, journals that use the following journal sources are
not transferred to the journal level secondary ledger:
* Move/Merge
* Move/Merge Reversal
* Revaluation
11. Is it possible to create automated adjustments using Sub ledger
accounting?
It is not possible to create automated adjustments using Sub ledger Accounting. An
internal bug has been raised with development for correcting this in the
documentation.

Technical Details:
Tables that can be used to get the Secondary Ledger details:
GL_LEDGER_CONFIG_DETAILS and GL_LEDGER_RELATIONSHIPS - To find the
Secondary Ledgers associated with a Primary Ledger

GL_JE_INCLUSION_RULES - To find the source and category conversion levels


GL_DAILY_RATES - To find the source and category conversion levels
GL_CONS_SEGMENT_MAP - To find the mapping rules