REMINDER

Check in on the
COLLABORATE mobile app
Ledger, Ledger on the Wall...
Who is the Fairest of Them All?

Prepared by:
Hans Kolbe, Ren Rmbell
Principal Consultant
Celantra Systems
Primary, Secondary or Reporting?
Session ID#:14546
Primary, Secondary, Reporting
& Consolidation Ledgers!?
Agenda
Introduction
About the Presenters
Company Information
Ledger High-Level Constructs in R12
Ledger Details Options / Constraints
Business Cases which Ledger Type to use
Ledger/Multi-Org simplification Cross-Legal Entity
Operating Unit
Questions / Answers
About the Presenter: Hans Kolbe
Hans Kolbe has managed and advised global
software implementation projects for over 15 years.
His extensive knowledge on Oracle applications is
combined with a formal background as a German
attorney, trained in international and comparative
law.
Chair of Multi-National SIG Group
Specialist in Intercompany and multi-org
configurations, international compliance and
transaction tax
hanskolbe@celantrasystems.com
www.celantrasystems.com
415-730-1131
Visit the Celantra Booth 1055 at Collaborate 2014
4


Mohan Iyer
Mohan Iyer is based in Fremont, CA. He has been working with Oracle
based ERP Systems since 1994 and Oracle EBS since 1996.
His extensive knowledge on Oracle applications and tools is combined
with a deep understanding of functional, technical and project
management challenges.
Mohan has published a concise and extensive book about R12 financials
options.
Mohan is Chairperson of the GL-SIG
mohan@fscpsolutions.com
FSCP Solutions, Inc.
San Francisco, CA 94114 +1 415 824 8344
info@celantrasystems.com
http://www.celantrasystems.com
Global Implementations and Process Alignment:
Plan, Design, and Execute
Celantra Systems provides innovative solutions to
todays most vexing issues in multi-national ERP
configurations.
Celantra Compliance Rule Engine (CCRE) and Compliance Sequencing Utility
Celantra has released a number of automated compliance tools, based on the Celantra
Compliance Rule Engine (CCRE)
Celantra Sequencing Utilities supports Oracle clients with international operations. We ensure
gapless date sequenced numbering for VAT and statutory journal reporting. Automated audit
trails and reporting are provided.
Visit the Celantra Booth
1055 at Collaborate 2014
Ledgers High Level

Types and Building Blocks
Ledger Types R 12
Primary Ledger Primary Transactions
Operating Unit Association
Secondary Ledger
4 different sub-types, i.e. data conversion levels
Reporting Currency (not Ledger)
Consolidation Ledger
4+ different sub-types (conversion levels and profile options)


Ledger Basic Building Blocks
4 Cs
Chart of accounts
Currency
Calendar
Accounting conventions
Processing Options
First Open Period
Retained Earning Account
Journal Approvals
Avg Balance Processing
.
.

Ledgers Details

Setups, Options and Constraints
Primary Ledger
Setups (unique to Primary Ledger)
Default Legal Entity Association
Operating Unit Association

You may also define
Inter- and Intra-Company Definition
Balancing Segment Value (BSV) association to LE and Ledger

This makes the Primary Ledger the main transaction Ledger

Primary Ledger Options
Secondary Ledger
4 Cs
Chart of accounts
Currency
Calendar
Accounting Conventions
Processing Options


All can be different from
Primary Ledger
Data Conversion Level
Sub-Ledger
Journal
Balance
Adjustments

Conversion Mechanism
COA Conversion/Mapping
Calendar / by Effective Date
Currency / FX Rate
SLA Method
Secondary Ledger Options
Secondary Ledger Conversion Options
Secondary Ledger
Data Conversion Level
Sub-ledger Level Conversion
Sub-ledger transaction
accounting is linked to primary
& secondary ledger (SLA)
Ledger Journals are moved
directly into secondary Ledger
(No SLA)

Journal Level Conversion
All Ledger Journals are copied
in secondary Ledger, including
the ones with sub-ledger
source. Sources can be
included/excluded. (check)
Balance Level Conversion
Account balances are
summarized in secondary
Ledger (similar to
translated ledger)

Adjustments Level
Conversion
Nothing gets copied.
Only Adjustments are
entered
Combine Adjustment and
Primary Ledger in a
Ledger set to do FSG
reporting
Secondary Ledger
Conversion Rues
COA Conversion
Similar to Consolidation
mapping rules
Segment mapping
Account mapping


Calendar
Effective date determines
the non-adjusting period in
the secondary ledger
Currency
Retain Transaction Rate
Type Yes/No




Journal
Specify Journal Source
and Category to be
converted

Reporting Currencies
Can be connected to a Primary or Secondary Ledger
Every ledger construct must be the same except the currency
Replaces the MRC ledger of R11

Currency conversion rules

Reporting Currency Conversion Options
Reporting Currency Conversion Options
(Source/Category Combinations)
Currency Conversion Options
Consolidation Ledger
Standard Consolidation Process: From many to one
Performed from multiple subsidiary ledgers
Performed after translation to a single currency
Multiple levels of consolidations are possible
Consolidation works on Balances (mostly)

Consolidation as Transformation: From one to one
Performed to transform corporate accounting standards to local
compliance and local COA
You can consolidate transactional level details
Provided you stay within the transacted functional currency *(?)
Transform ACCOUNTING and GAAP Rules :
Inventory Accounting: Record purchasing cost
Local Statutory and GAAP Requirement: Total Purchase Cost
into Cost of Purchases (France, Spain, Italy, Portugal, Belgium).

US Enterprise Requirement (US GAAP compliant): Record
Standard cost and Purchase Price Variance

Local GAAP Transaction
Accrued Payables Cr 2,200
Purchase Cost: Dr 2,200
Example: PO Receipt for Raw Materials:
Purchase Price 2200 EUR, Standard Cost 2000
US GAAP Transaction:
Accrued Payables Cr. 2,200
Inventory Acct. Dr 2,000
Purchase Price Variance Dr 200
Segment and Account Mapping
US GAAP Books Fiscal Books
Accounts Payable ---------------> Accounts Payable
Inventory Account ------------------> Cost of Purchases
Variance Account --------------> Cost of Purchases
Reliable: Consolidation is an old standard GL function.
No bugs, no separate patches.
Accounting Transformation: Consolidation allows rule
based account mapping from primary to statutory
books.
Periods/Adjustments: Consolidation can
accommodate a statutory set of books with different
calendar, periods, adjustments
Audit Trail: Consolidation provides a solid audit trail
between the books. Drill-down from statutory books
to primary sub-ledger available.
Consolidation - Review
Statutory Compliance Functions are part of Consolidation
Functionality (since 11I)
An option is provided to import batch name, journal name, line
description, and date of the original GL transaction.
Exclude by Source: Also, consolidation provides an option to
exclude transactions journal category.
Foreign currency journals automatically retain their original
currency and conversion information. No setup required. The
setup is done through configuration of profile options and
journal categories.
Same Functional Currency required: Detail consolidation only
available, if both ledgers operate in the same functional currency.
Consolidation - Review
General Limitations on Local
Statutory Compliance Tools
Detail needs to be in Source: SLA or detail consolidation can
only provide transformation and mapping for those
transactions that are available. It does not create additional
detail, additional separation of entries or additional
sequences. This is critical for the setup of the primary GL
books and transaction setup.

Examples: Payroll Detail required for statutory reporting
must be booked in primary books (need additional accounts
in global COA, a statutory account segment or sub-accounts)
Gotchas

Note /Gotcha: Legal Entity cannot be assigned to multiple
ledgers, unless they are secondary ledgers. Then the
assignment is inherited from the primary ledger. However,
BSVs can be assigned to multiple ledgers, example
consolidation ledgers. Typically consolidation ledgers have no
legal entities assigned to them.

If LE assignment to BSV needs to be changed, you need
patch from Oracle. NEW PATCH.
How does the Ledger model
influence the e-Business Suite
Organizational Model?

Business Cases

Opportunities using the Ledger, Legal
Entity and Operating Unit options
Model the Ledger and Legal structure independent of
operational structure

Reduce time to integrate acquisitions and roll-out new
modules and functionality

Ensure global processes by reducing number of
configurations and synchronizations challenges

Simplify and speed up monthly closing

Traditional Silo Model
1 Ledger-1 Legal Entity-1 Operating Unit
Secondary
Ledger
Primary
Ledger
Secondary
Ledger
Primary
Ledger
Secondary
Ledger
Primary
Ledger
Secondary
Ledger
Primary
Ledger
Secondary
Ledger
Primary
Ledger
LE
OU
LE
OU
LE
OU
LE
OU
LE
OU
Primary
Ledger
LE
OU
LE
OU
LE
OU
LE
OU
LE
OU
Advanced Silo Model
1 Ledger-n Legal Entities-n Operating Units

Secondary
Ledger
New Cross Legal Entity Operating Unit (CLEO)
1 Ledger-n Legal Entities-1 Operating Unit

Secondary
Ledger
Primary
Ledger
LE LE LE
OU
LE LE
Secondary
Ledger
Business Cases:
International: Many small subsidiaries in the EURO Zone,
including France with local COA: what is the best
configuration? Can I use a single Ledger? How?
How are the Oracle localizations supported
How to resolve Document, Accounting and Reporting
Sequences -
Celantra Compliance rule engine allows dynamic configuration
to local ledger and provides multi-country solutions.
Sequencing Utility needed if multiple LEs in single ledger
International: Can I have a single primary ledger and multiple
secondary ledgers in local currency? For Asia Pac or non-
EURO countries
How are currency variations handled?



Capabilities using the R12 multi-ledger
multi-org options
Use Ledger Sets to access a set of ledgers for operational
efficiency using a single responsibility

Use ledger sets to manage reporting using multi-ledger
columnar reporting

Use Multi-Organizational Access Control (MOAC) to access
multiple operating units (subledgers) using a single
responsibility

Review tasks that can be performed on multiple ledgers using
ledger sets
Control access and capability using Data Access sets

Open Questions

Compare Maintenance Overhead
Comparison Secondary Ledger vs. Consolidation
Choices for Calendar Conversion rules
Defining Adjustment periods

Note /Gotcha: Legal Entity cannot be assigned to multiple
ledgers, unless they are secondary ledgers. Then the
assignment is inherited from the primary ledger. However, BSVs
can be assigned to multiple ledgers, example consolidation
ledgers. Typically consolidation ledgers have no legal entities
assigned to them.
2
nd
Note: If LE assignment needs to be changed, you need
patch from Oracle (QC watch out)

Another Business Case:

Thin versus Thick COA: Can I utilize a thin primary COA
(4-5 segments) and use secondary ledger for management
reporting with 12 segment COA ?



Please complete the session
evaluation
We appreciate your feedback and insight
You may complete the session evaluation either
on paper or online via the mobile app