Consolidation in Oracle GL (Part 1)

Client Profile - Global clients who want to implement Consolidation functionality within Oracle GL. Other consolidation methods include Financial Consolidation Hub (FCH) and use of Hyperion cubes to generate Consolidated reports. Consolidation - is the periodend process of combining the financial results of separate subsidiaries with the parent company to form a single, combined statement of financial results. Clients can consolidate any number of subsidiaries that use different SOBs and having different COA, currencies and calendars. GL Consolidation Tools - There are basically two consolidation tools which can be used for consolidation within Oracle GL. 1. Financials Statement Generator (FSG) - Used for consolidating financial information for businesses using a single SOB or using different SOB that share the same calendar and COA. 2. Global Consolidation System (GCS) - GCS is a multi-source consolidation solution that can accumulate information from diverse financial systems, geographic locations, including Oracle and non-Oracle Applications. With GCS one can consolidate data from multiple SOBs, multiple instances and non-Oracle applications. What Can Be Consolidated? - With GCS, one can consolidate any business dimension at any level of detail from any point of view: 1. Any Source: Data from any source system, including ledger, databases, or other accounting systems can be consolidated 2. Any Chart of Accounts: Subsidiaries can use separate COA from the parent to address unique operational accounting practices and meet local statutory requirements. GCS enables you to consolidate across diverse charts of accounts. 3. Any Calendar: Subsidiaries can use different accounting calendars from the parent. GCS enables you to consolidate across calendars. 4. Any Currency: Subsidiaries can use a functional currency which differs from the functional currency of the parent. GCS revalues and translates all subsidiary balances to ensure consistent consolidated results. 5. Any Level of Detail: Consolidate detail transactions, detail balances and summary balances. 6. Any Balance Type: Consolidate any balance type; including actual, average, translated, budget, and statistical balances. Implementation Considerations Do all subsidiaries share the same SOB? If yes, then FSG can be used to meet the requirement. Do all subsidiaries have different SOB? If yes, then: They share the same COA and calendar Use FSG They reside in the same instance Use FSG Do all lines of business use GL as their operational accounting system? Is a separate consolidation SOB required to keep consolidation data separate from transactional data or can the companies be consolidated in the parent SOB? Is a separate elimination company required to segregate eliminations or can it happen in the parent company? Are companies to be consolidated at Balance level or Transaction level? Other Uses of GCS: 1. Changing Chart of Accounts (COA) after implementation. GCS can be use to map values from old COA to new COA and balances from old SOB can be transferred to new set of books.

2. Changing the Accounting Calendar after implementation. GCS can be used to map and transfer account balances from the old period to the new period. In my next article, I will explain in detail the various steps involved in setting up GCS in Oracle GL.