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Accounting Methods Builder (AMB)
Oracle Subledger Accounting
Copyright 2007, Oracle. All rights reserved.

Objectives
After completing this lesson, you should be able to:

Use the Accounting Methods Builder (AMB) to create
and modify subledger journal line setups and
application accounting definitions.
Describe and implement the process for building
accounting definitions.
Create copies of seeded definitions and customize them.
4-2 Copyright 2007, Oracle. All rights reserved.

Accounting Methods Builder (AMB) Overview
You can use the AMB to define the way in which subledger
transactions are accounted.
The AMB enables you to create and modify subledger
journal line setups and application accounting definitions.
These definitions define the journal entries that enable an
organization to meet specific fiscal, regulatory, and
analytical requirements. These definitions are then grouped
into subledger accounting methods and assigned
collectively to a ledger.

Accounting Methods Builder (AMB) Overview
Ledger
Subledger Accounting Method
Application Accounting Definition
Journal Line Definition
Journal Line Account Derivation Journal Entry

Types Rules Descriptions
Sources
Transaction Objects

AMB Process
1. Define Subledger Accounting Methods.

2. Define Application Accounting Definitions.
3. Define Journal Lines Definitions.
4. Define Account Derivation Rules.
5. Define Mapping Sets (optional).
6. Define Journal Entry Descriptions.
7. Define Journal Line Types.
All of the above data except (5) is seeded by Oracle.

You can modify existing definitions or create new ones.

Accounting Methods Builder (AMB)
Description
Account Derivation Rule
Line Type

Copy and Modify Functionality
If you have specific accounting requirements that are not

covered by the seeded definitions, use the copy feature
included in the AMB to create copies of the seeded
definitions and customize them. Also, create new
definitions and copy and modify them appropriately.
Note: You cannot modify definitions seeded by Oracle but

you can copy seeded definitions and modify the copy as
required.

Transaction Chart of Accounts
The transaction chart of accounts is the chart of accounts

for the primary ledger and is referenced when you enter
account combinations for your transactions. This chart of
accounts is employed when you enter and maintain the
data required to support the daily operations of your
company.

Accounting Chart of Accounts
Use the accounting chart of accounts to create the account

combinations for subledger journal entries. It is taken from
the ledger for which the journal entries are created.
Account derivation rules derive accounts for a specific
accounting chart of accounts. The creation of all journal
entries by Subledger Accounting is therefore done in the
context of the accounting chart of accounts.

Event Model
The Event Model is a 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.
When you run the Subledger Accounting Create
Accounting program, it processes all events with the
appropriate status.
4 - 10 Copyright 2007, Oracle. All rights reserved.

Event Classes
Assets Payables Receivables

Additions Invoice Invoice
Adjustments Debit Memo Deposit
Capitalization Prepayment Receipt
Depreciation Payments Bill
Refunds Receivables

Event Types
Payables Invoice Assets Receivables

Events Depreciation Receipt Events
Events
Validated Created
Depreciation
Adjusted Applied
Rollback
Cancelled Unapplied
Depreciation
Updated
Reversed

Ledger

Sources
Transaction Objects

Subledger Accounting Methods
Application accounting definitions that comply

with a common set of accounting requirements
can be grouped into a subledger accounting
method. The grouping allows a set of application
accounting definitions to be assigned collectively
to a ledger.

Setting Up Subledger Accounting Methods
Use to define the accounting methods to be used for

ledgers, such as Cash Basis, Accrual Basis, IAS/IFRS, or
US GAAP
Assign an application accounting definition for each
subledger application
Activate a new set of rules using effective start and end
dates
Generic or specific for a chart of accounts
Oracle provides the following subledger accounting
methods:
Standard Accrual
Standard Cash
Encumbrance and US Federal methods

Subledger Accounting Methods

Ledger

Sources
Transaction Objects

Application Accounting Definitions
Use Application Accounting

Definitions (AADs) to assign
journal lines definitions and
header descriptions to event
classes and event types.

Application accounting definitions enable you to meet the

subledger accounting requirement of multiple accounting
representations. While one application accounting
definition can generate subledger journal entries that are
compliant with one particular set of accounting
requirements, another definition can be defined to meet a
completely different set of accounting requirements.
AADs must be included in a subledger accounting method
and assigned to a ledger.
You can group accounting definitions from multiple
products, such as Oracle Payables, Oracle Receivables,
and Oracle Assets into a single accounting method.


Importing Application Accounting Definitions
Application accounting definitions are imported using

the Import Application Accounting Definitions
concurrent program.

Exporting Application Accounting Definitions
The Export Application Accounting Definitions program

exports all application accounting definitions of an
application from a database to the file system and
produces a report of the results.
All application accounting definitions and journal entry
setups for an application are exported to the same data file.
When the application accounting definitions are exported, a
new version is stamped on the application accounting
definitions, mapping sets, and account derivation rules
referenced by exported application accounting definitions.

Journal Line Types
Ledger

Sources
Transaction Objects

Journal Line Types
they must
then be
assigned to a
journal lines
Journal Line Types
definition
Are defined for a
particular event
class along with
account
derivation
rules and
journal entry
descriptions.

Journal Line Types

Journal Line Types
Journal line types control journal entry line options such

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

Journal Line Types
Line Type

Account Derivation Rules
Ledger

Sources
Transaction Objects

Account derivation rules are used to determine the account

combinations for subledger journal entries. You can define
various rules in the AMB to determine how a journal entry
account is derived. You can derive accounts segment by
segment or as a complete account combination.
Determine if the rule will be generic or specific for a
given chart of accounts.
Identify what will be derived:
Account combination
Segment/qualifier value
Value from a value set


Defining Account Derivation Rules
Use account derivation rules to determine the

Accounting Flexfields for subledger journal entries. In
addition, specify the conditions under which these rules
apply. Using these capabilities, develop complex rules
for defining accounts under different circumstances to
meet their specific requirements.The definition can be
generic or specific to a particular chart of accounts.
Define a rule by Accounting Flexfield, segment, or value
set. If the rule is by Accounting Flexfield, the rule
determines the entire Accounting Flexfield combination.
For example, an account derivation rule defined by
Accounting Flexfield can be used to determine the
complete supplier liability Accounting Flexfield in
Payables.

Define how the value will be derived:

Constant
Source value
Mapping Set
Another account derivation rule
Set the conditions under which the rule will derive a
value.


Account Combination Rules
Set up account combination rules based upon the

following possible value types:
Source value Constant value

type type
Account
Mapping Set
Derivation
value type
Rule value
type

Segment Rules
Set up segment rules as follows:

When an accounting chart of accounts is specified,
create a rule to derive the value for a specific segment of
the specified chart of accounts.
If the accounting chart of accounts is not specified,
create a rule to derive the value for a qualified segment
of an account on any chart of accounts.

Segment Rules
Set up segment rules using the same four methods

discussed for account combination rules. By specifying
different value types, you can choose the way in which the
segment value is derived.
Source value type
Constant value type
Mapping Set value type
Account Derivation Rule value type

Oracle-Owned vs. User-Owned AMB Components
Owner: Oracle User

Created by: Oracle Development Customer
Updateable? No Yes
Chart of Accounts? Generic Generic or Specific

Value Set Rules
Value set based rules can be created when an accounting

chart of accounts is not specified. This enables you to
share the same rule between more than one accounting
chart of accounts if the segments in these charts of
accounts share the same value set.
Set up Value Set based rules using the same four methods
discussed for account combination rules. By specifying
different Value Types, you can choose the way in which the
segment value is derived.
Source value type
Constant value type
Mapping Set value type
Account Derivation Rule value type

Mapping Sets
Use mapping sets to associate a specific output

value for an account combination or account
segment.
Based on the input value, a specific value can be
assigned to a single segment or to the entire account
combination.
Use mapping sets in account derivation rules to build
the account combination.
Account
Combination

Journal Entry Descriptions
Ledger

Sources
Transaction Objects

Journal Entry Description
The journal entry description controls the description of

the journal entry and/or the individual entry lines. The
definition determines both the content and sequence in
which the elements of the description appear.
You need to determine whether the description on a
journal entry or on each of the journal entry lines will be
based on constants, sources, or a combination of both
and then set the conditions under which the rule will be
used.

Description


Journal Lines Definition
Ledger

Sources
Transaction Objects

Journal Lines Definitions
Use journal lines definitions to create sets of line

assignments for an event class or event type. These sets
can be shared across application accounting definitions.
Identify the journal line types, descriptions, and account
derivation rules that will be used to create a journal entry
for a particular event type.
The definition can be generic or specific to a particular
chart of accounts.
Define processing options for advanced features such as
Multiperiod Accounting and Business Flows.

Journal Lines Definitions

Summary
In this lesson, you should have learned how to:

Use the AMB to create and modify subledger journal line
setups and application accounting definitions.
Describe and implement the process for building
accounting definitions.
Create copies of seeded definitions and customize them.

Practice 1:
Running the Create Accounting Program in Draft Mode

Practice 2:
Defining Subledger Accounting Methods

Practice 3:
Defining Application Accounting Definitions

Practice 4:
Defining Journal Line Types

Practice 5:
Defining Account Derivation Rules

Practice 6:
Defining Journal Lines Definitions

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Accounting Methods Builder (AMB)

Oracle Subledger Accounting

Copyright 2007, Oracle. All rights reserved.

After completing this lesson, you should be able to:

4-2 Copyright 2007, Oracle. All rights reserved.

4-3 Copyright 2007, Oracle. All rights reserved.

Subledger Accounting Method

Application Accounting Definition

Journal Line Definition

Journal Line Account Derivation Journal Entry

4-4 Copyright 2007, Oracle. All rights reserved.

1. Define Subledger Accounting Methods.

All of the above data except (5) is seeded by Oracle.

4-5 Copyright 2007, Oracle. All rights reserved.

Account Derivation Rule

4-6 Copyright 2007, Oracle. All rights reserved.

If you have specific accounting requirements that are not

Note: You cannot modify definitions seeded by Oracle but

4-7 Copyright 2007, Oracle. All rights reserved.

The transaction chart of accounts is the chart of accounts

4-8 Copyright 2007, Oracle. All rights reserved.

Use the accounting chart of accounts to create the account

4-9 Copyright 2007, Oracle. All rights reserved.

The Event Model is a definition of the subledger

4 - 10 Copyright 2007, Oracle. All rights reserved.

Assets Payables Receivables

4 - 11 Copyright 2007, Oracle. All rights reserved.

Payables Invoice Assets Receivables

4 - 12 Copyright 2007, Oracle. All rights reserved.

Subledger Accounting Method

Application Accounting Definition

Journal Line Definition

Journal Line Account Derivation Journal Entry

4 - 13 Copyright 2007, Oracle. All rights reserved.

Application accounting definitions that comply

4 - 14 Copyright 2007, Oracle. All rights reserved.

Use to define the accounting methods to be used for

4 - 15 Copyright 2007, Oracle. All rights reserved.

4 - 16 Copyright 2007, Oracle. All rights reserved.

Subledger Accounting Method

Application Accounting Definition

Journal Line Definition

Journal Line Account Derivation Journal Entry

4 - 17 Copyright 2007, Oracle. All rights reserved.

Use Application Accounting

4 - 18 Copyright 2007, Oracle. All rights reserved.

Application accounting definitions enable you to meet the

4 - 19 Copyright 2007, Oracle. All rights reserved.

4 - 20 Copyright 2007, Oracle. All rights reserved.

Application accounting definitions are imported using

4 - 21 Copyright 2007, Oracle. All rights reserved.

The Export Application Accounting Definitions program

4 - 22 Copyright 2007, Oracle. All rights reserved.

Subledger Accounting Method

Application Accounting Definition

Journal Line Definition

Journal Line Account Derivation Journal Entry

4 - 23 Copyright 2007, Oracle. All rights reserved.

4 - 24 Copyright 2007, Oracle. All rights reserved.

4 - 25 Copyright 2007, Oracle. All rights reserved.

Journal line types control journal entry line options such

4 - 26 Copyright 2007, Oracle. All rights reserved.

4 - 27 Copyright 2007, Oracle. All rights reserved.