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Accounting Around the World in 80 Ways

Cynthia Prier Senior Instructor Oracle University

Disclaimer
This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service Agreement, which has been executed and with which you agree to comply. This document and information contained herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without prior written consent of Oracle. This document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its subsidiaries or affiliates. This document is for informational purposes only and is intended solely to assist you in planning for the implementation and upgrade of the product features described. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described in this document remains at the sole discretion of Oracle. Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without risking significant destabilization of the code.

Agenda
Introduction Business Benefits Key Concepts Major Features Setup and Process Dependencies and Interactions Demonstration of Oracle Applications R12 Questions and Answers
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Introduction

Subledger Accounting Around the World in 80 Ways

In R12, Oracle Financials introduces Subledger Accounting and significantly enhances the accounting support available across the Oracle e-Business suite. Subledger Accounting is a new set of tools, accounting engine, and repository

Subledger Accounting Description

Rule-based accounting engine, toolset and repository supporting both Oracle E-Business Suite and external modules Allows multiple accounting representations for a single business event Retains the most granular level of detail in the Subledger Accounting model Introduces a common data model and UI across subledgers, replacing various Oracle E-Business Suite 11 setups and providing a single source of truth for financial and management analysis

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Business Benefits

Business Benefits
Enables compliance with multiple legislative, industry or geography requirements concurrently in a single instance through configurable rules Increases transparency and enables full auditability of the transaction and accounting data through the new data model Improves accounting reconciliation through support for business flows across modules

Business Benefits Example

Simultaneous Accounting for all entities

US GAAP US COA US Calendar US GAAP US COA US Calendar US GAAP US COA US Calendar

Ensures corporate visibility and local compliance

Operations in US, UK, France

French IAS Plan Comptable French Calendar

Business Benefits
On a journal important pieces of information from the transaction are shown on the entry, exactly where the accounting came from There are also tools to enable further descriptive information to be tied on entries For example, for a journal entry created upon the validation of an accounts payable invoice, you will see: A description on the journal entry Information from the invoice itself which helps to associate the entry with the transaction.

Business Benefits
Ledger: FR Statutory GL Date: 2-Mar-2006 2-MarInvoice #100 ABC Networks 2 Monitors Marketing $ 1000 5 Printers Marketing $ 500 Freight Tax Total $ 100 $ 110 $ 1710 Line 1 Line 2 Line 3 Line 4 Invoice# 100 Ledger: US Corporate Supplier: ABC Networks GL Date: 2-Mar-2006 2-MarInvoice# 100 Supplier: ABC Networks CR 1 Expense 01-EXP-200 01- EXP2 Freight 01-FR-200 01- FR3 Tax 01-TX-200 01- TX4 Liability 01-LIAB-200 01- LIAB$1500 $100 $110 $1710 DR Invoice internal Identifier 1001

Invoice internal Identifier 1001

Business Benefits
01-EXP-200 01- EXPDR CR Invoice #100 - $800 01-EXP-240 01- EXPDR CR Invoice #100 - $200

Invoice #100 $1000

Pmt 1101 for Invoice #100 -

01-LIAB-200 01- LIABDR CR $800 - Invoice #100 $400 Pmt 1101 for Invoice #100 01-CASH-200 01- CASHDR CR $400 - Pmt 1101 for Invoice #100

01-LIAB-240 01- LIABDR CR $200 - Invoice #100 $100

Payment #1101 $500 Invoice #100

01-CASH-240 01- CASHDR CR $100 -Pmt 1101 for Invoice #100

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Key Concepts

Key Concepts
Event Model: Definition of the subledger transaction types and lifecycle Event Class: Classifies transaction types for accounting rule purposes Event Type: For each transaction type, defines possible actions with accounting significance Transaction Object: Data model containing transaction information to be used in accounting Source: Any attribute of a transaction that can be used in defining the journal entry rules and when generating an entry

Event Classes
Payables Purchasing

Invoice Debit Memo Prepayment Payments Refunds Invoice Deposit Receipt Bill Receivable

Requisition Purchase Order

Receivables

Events
Payables Invoice

Purchase Order
Created Distributed Cancelled Rejected Finally completed

Validated Adjusted Cancelled

Receipt

Created Applied Unapplied Updated Reversed

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Major Features

Major Features
Accounting Methods Builder Multiple Accounting Representations Accounted Amount and Exchange Rate Calculations Business Flows Multiperiod Accounting Automatic Scheduling of Accrual Reversals Date Effective Accounting Definitions Accounting per Process Category Online Accounting Straight Through Accounting Processing Draft Accounting

Major Features
Online Inquiries XML Reports Errors Accounting and Reporting Diagnostics Framework Accounting Definitions Loader Manual Subledger Journal Entries Replacement of Disabled Accounts Journal Entry Sequencing Third Party Control Accounts Third Party Merge Accounting

NEW!!!

Accounting Methods Builder

Accounting Methods Builder
Toolset to define journal entry rules for the transactions and events of a subledger application Allows defining multiple sets of rules to be used concurrently for different requirements

Accounting Methods Builder

Journal entries are split into components:
Descriptions Line Types Account Derivation rules

Journal Line Types

Account Derivation Rules

Journal Entry Descriptions

Accounting Methods Builder

FR Statutory Ledger Standard IAS Subledger Accounting Method Payables Application Accounting Definition Payment Journal Line Definition

Journal Line Types

Account Derivation Rules Sources Transaction Objects

Journal Entry Descriptions

Online Accounting
Generate journal entries in the Payables Invoice Entry window
Click the actions button Select Create Accounting options Draft, Final, or Final and Post

Inquiries
The accounting for a transaction is accessible from the transaction view This function queries entries created for the transaction, including multiple representations such as reporting currency and secondary ledgers

Inquiries
The accounting for a transaction is accessible from the transaction view This function queries entries created for this transaction, including multiple representations such as reporting currency and secondary ledgers, as well From the inquiry screen, you can: Navigate back to the transaction windows View further details of the journal entry Compare two entries side by side View the entry in t-account format

Offline Accounting
You can submit an offline process to create accounting for multiple transactions. By specifying the end date, you can process all of your unaccounted events or a subset of them based on a process category. By using the standard scheduling capabilities, you can have accounting processed automatically every night

Standard Reports

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Setup and Process

Setup
JOURNAL ENTRY SETUPS
Define/copy and modify journal line types Define/copy and modify account derivation rules Define/copy and modify descriptions

METHODS AND DEFINITIONS

Define/copy and modify journal line definitions Define/copy and modify application accounting definition

LEDGER SETUP
Assign Subledger Accounting method to ledger

Validate application accounting definition Define/copy and modify Subledger Accounting method

Setup

Journal Line Type

On journal entries for payables invoice validation (standard accrual) there are lines for: Liability Item expense You can have, for example, one credit line type defined for liability, and one debit line type defined for item expense, which generates a separate entry line for each line of the invoice

Setup

Journal Line Type

Identify the natural side Debit Credit Gain/Loss Determine the accounting class Set the conditions under which rule will create a journal line Define the values needed for entry line generation, such as amount, currency, conversion rate information Control behavior for certain features, i.e. multiperiod accounting, business flows, line merging and summarization

Setup

Journal Line Type

2

5 3 4

Setup

Account Derivation Rule

The account derivation rule determines to which GL account an entry should be posted There is a lot of flexibility in defining account derivation rules

Setup

Account Derivation Rule

Determines if a rule is generic or specific for a given chart of accounts Identifies what is derived Flexfield Segment/qualifier Value Set Defines how the value is derived Constant Source value Mapping Set Another Account Derivation Rule Sets under which conditions the rule derives a value

Setup

Account Derivation Rule

An account derivation rule can be defined specifically for a given chart of accounts, or generic for any Chart of Accounts It can be defined to derive the value of the entire flexfield, just a single segment or qualifier, or a value set It can be defined to return the value of a source, that is an attribute of the underlying transaction, a constant, a mapping set, or another account derivation rule

Setup

Journal Entry Description

Define how the description on a journal entry or on each of its lines will be built: Constant Source value Set the conditions for which the rule is used

Setup

Journal Line Definition

Identifies the journal line types, descriptions, and account derivation rules that are used to create a journal entry for a particular event type Can be Generic or specific for a chart of accounts Defines processing options for features such as multiperiod accounting and business flows

Setup

Journal Line Definition

Setup

Application Accounting Definition

For a subledger application, identifies the event class and event types for which entries should be created Identifies the journal line definitions to create the entries Defines how the GL date of an entry is to be determined Can be generic or specific for a chart of accounts

Setup

Application Accounting Definition

As the rules to be used for each event class and event type are identified, the remaining final definitions are done on the Application Accounting Definitions form. For example, the description to be on the header of the journal entry, the set of balanced lines. This is also where the GL date derivation rule is specified: should the GL date be the transaction date or some other date, for example.

Setup

Subledger Accounting Method

Subledger Accounting Method aka SLAM Use to define the accounting methods to be used for ledgers, such as Cash Basis, Accrual Basis, IAS/IFRS, US GAAP Assign an application accounting definition for each subledger application Activate new set of rules using effective dates Generic or specific for a chart of accounts Provided out of the box: Standard Accrual Standard Cash Encumbrance and US Federal methods

Setup

Subledger Accounting Method

If the accounting standards change over time, existing rules can be end-dated, and new ones activated. All components can be defined specifically for a given chart of accounts, or generic across chart of accounts. This is especially important if you define rules using Chart of Account specific flexfields or segment values, which would not be meaningful when generating entries for ledgers with a different COA structure.

Ledger Setup and SLAM Assignment

Each primary and secondary ledger is assigned a SLAM to determine the standard of accounting for that ledger. For example, when accounting is generated for the transactions of an operating unit, the accounting method associated with the ledger of that operating unit is applied.

Ledger Setup and SLAM Assignment

Invoice

Primary Ledger: FR Statutory SLAM: Standard IFRS COA: Plan Comptable Calendar: French Currency: EUR

Secondary Ledger: US Corporate SLAM: US GAAP COA: US COA Calendar: US Currency: USD

Setup

Set Key Profile Options

SLA: Enable Subledger Transaction Security in GL SLA: Enable Data Access Set Security in Subledger SLA: Additional Data Access Set SLA: Allow Reports Journal Source Override

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Dependencies and Interactions

Dependencies and Interactions

Accounting Configurations Subledger Journal Entries Accounting Program Accounting Events Journal Entry Setup Subledger Application General Ledger Subledger Balances

Transactions

GL Journal Entries And Balances

SLA

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DEMONSTRATION

QUESTIONS ANSWERS

Coming to a Classroom near you!

R12 Subledger Accounting Fundamentals (E-Business Suite)

Check at http://education.oracle.com

For More Information

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http://metalink.oracle.com/

Oracle product documentation

http://appsnet/products/documentation/content.html

E-Business Suite TOI Center

http://ebiz.us.oracle.com/toicenter/byrelease/

The preceding 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 decisions. The development, release, and timing of any features or functionality described for Oracles products remains at the sole discretion of Oracle.