SUBLEDGER ACCOUNTING – A Complete Perspective

February 27, 2009

Presented By

Subash Krishnaswamy
skrishna@astcorporation.com

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 Agenda
What is Subledger accounting (SLA)

Main Features of SLA

Accounting Methods Builder

Overview of Ledger Setups for SLA

Multiple Representations

Upgrade Considerations

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 What is SLA?
Definition:

Oracle Subledger Accounting is a rules-based engine

for generating accounting entries based on source
transactions from ALL Oracle Applications.

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 What is SLA?
Subledger Accounting is a Service, not an Application
™ Rule-based accounting engine, toolset & repository to support
E-Biz modules
™ There are no SLA responsibilities
™ Users do not login to SLA
™ SLA forms and programs are embedded within standard
Oracle Application responsibilities (e.g. Payables Manager)
™ SLA provides the following services to Oracle Applications:
¾ Generation and storage of detailed accounting entries
¾ Storage of Subledger balances
¾ Subledger accounting entries (with Bidirectional drilldown
to /from transactions)
¾ Subledger reporting

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What is SLA?

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 Features of SLA
ƒ Replaces various disparate 11i setups, providing single
source of truth for financial and management analysis
™ Introduces a common data model and UI across subledgers
ƒ Highly granular level of detail in the Subledger
accounting model retained
ƒ Accounting Model separate from Transactional Model
ƒ Catering to custom requirements of accounting of
transactions in Subledgers
ƒ Allows multiple accounting representations for a single
business event
™ Optionally Post subledger accounting entries to Secondary
Ledgers
™ Resolves conflicts between Corporate and Local Accounting
Requirements
ƒ Accounting created in Draft or Final mode
™ Draft: Review Report, Correct errors
™ Final:Transfer to GL, Post in GL
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Features of SLA

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Accounting Modes

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 Accounting Modes : Online
Features
ƒ The transaction cannot be modified after creation in
Final Mode
ƒ Automatic Journal Import
ƒ Journal Import failure - Data will be rolled back
ƒ Journal Import and Correct forms not used
ƒ Correction is always in the subledger.
ƒ Reconciliation is simpler

Steps
ƒ Creates the SLA journals in Final mode
ƒ Transfers the data to GL_INTERFACE
ƒ Runs Journal Import
ƒ Optionally Triggers the General Ledger Posting
program
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 Overview of AMB

ƒ AMB : Acronym for Accounting Methods Builder

ƒ Enables an organization to meet specific fiscal,
regulatory and analytical requirements
ƒ Compromises of two models
™ Event Model
™ Accounting Model

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 Features of AMB
ƒ Define the way subledger transactions are
accounted.
ƒ Accounting options determine characteristics of JE
ƒ Default setup provides startup Application
Accounting Definitions
¾ Startup definitions based on standard accounting rules in 11i
¾ Startup definitions satisfy most needs
ƒ Customization of account rules possible
¾ Flexfield wise or Segment wise
¾ Conditional

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AMB Components

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 AMB Components
Event Model :
ƒ Definition of the Subledger transaction types
and lifecycle
ƒ Predefined Components- new components
cannot be defined
ƒ 3 Levels
™ Event Entity: Highest level, often 1 per Subledger
™ Event Class: classifies transaction types for accounting rule
purposes
™ Event Type: for each transaction type, defines possible
actions with accounting significance

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 AMB Components- Event Model
Event Classes

ƒ Payables ƒ Assets
™ Invoice ™ Additions
™ Adjustments
™ Debit Memo
™ Capitalization
™ Prepayment
™ Depreciation
™ Payments
™ Refunds

ƒ Receivables ƒ Purchasing
™ Invoice ™ Requisition
™ Deposit ™ Purchase Order

™ Receipt
™ Bill Receivable

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 AMB Components- Event Model
Event Types
ƒ AP Invoice Events ƒ FA Depreciation Events
™ Validated ™ Depreciation
™ Adjusted ™ Rollback depreciation
™ Cancelled

ƒ AR Receipt Events ƒ Purchase Order Events

™ Created
™ Created
™ Distributed
™ Applied
™ Cancelled
™ Unapplied ™ Rejected
™ Updated ™ Finally completed
™ Reversed
etc

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 AMB Components- Event Model
ƒ Events:
™ Represent transactions that have a financial accounting
impact
™ Captured when transactions are committed in the subledgers
i.e. when a particular action is completed

ƒ Financial accounting information can be

recorded for events

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AMB Components- Accounting Definitions

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AMB Components- Accounting Definitions
Accounting Definition Model
™ Startup data seeded by Oracle
™ Modify these definitions or create new ones
™ Copy and Modify Functionality provided
™ Comprises of following components
¾ Subledger accounting methods
¾ Application accounting definitions
¾ Journal lines definitions
¾ Journal line types
¾ Account derivation rules
¾ Journal entry descriptions

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AMB Components- Accounting Definitions
Accounting Definition Model
ƒ Journal Line Types: Control journal entry line
options such as balance type, side and
summarization
ƒ Journal Entry Descriptions: Control the
description for the journal entry headers and lines
and provide additional information about the journal
entry
ƒ Account Derivation Rules: Control the derivation
of Accounting Flexfield combinations for the journal
entry lines to construct the accounts

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AMB Components- Accounting Definitions
Highest Level : Accounting Method

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AMB Components- Accounting Definitions

Journal Line Types

™ Control journal entry line options such as balance type, side
and summarization
™ Defined for a particular event class
™ Determines the characteristics of the subledger journal entry
lines.
™ Define conditions for the use of the journal line type

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Define Journal Line Types

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AMB Components- Accounting Definitions
Journal Line Types

Line Type
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AMB Components- Accounting Definitions
Journal Entry Descriptions
™ Provide additional information about the journal entry
™ Ability to control the description for the journal entry headers
and lines
™ Can be defined for both Subledger Header and Line
™ Define the elements/contents of a description that appear on
the subledger journal
™ Can define the sequence in which the elements appear
™ Build using any of the available sources for the application.
For example, an individual segment of an Accounting Flexfield
can be included in the description.

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 AMB Components- Accounting Definitions
Journal Entry Descriptions

Description

Line Type

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AMB Components- Accounting Definitions
Account Derivation Rules
™ Define user specified rules to determine how a journal entry
account is derived or built
™ Define Accounting Options that determine different
characteristics of the journal entry
™ Define conditions that determine when subledger journal entry
accounts and lines are created
™ Control the derivation of Accounting Flexfield combinations for
the journal entry lines
™ Define a rule by Accounting Flexfield, segment, or value set.
™ Can use both segment-based and flexfield-based rules to
derive a single account.
™ Uses segment-specific rules where they are defined and takes
the remaining values from a flexfield-based rule

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 AMB Components- Accounting Definitions
Account Derivation Rules

Description

Account Derivation Rule

Line Type

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 AMB Components- Accounting Definitions
Journal Line Definitions

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AMB Components- Accounting Definitions
Journal Lines Definition
™ Use journal lines definitions enable to create sets of line
assignments for an event class or event type.
™ These sets can be shared across application accounting
definitions.
™ Link Journal Types, Descriptions and Derivation rules by
assigning account derivation rules and descriptions to journal
line types
™ Define multiperiod accounting rules for a journal line type

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AMB Components- Accounting Definitions

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AMB Components- Accounting Definitions
Application Accounting Definitions

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AMB Components- Accounting Definitions
ƒ Application Accounting Definitions
™ Use application accounting definitions to group journal lines
definitions and header assignments for event classes and
event types.
™ Indicate whether to create accounting for a particular event
class or event type e.g., when using cash basis accounting,
you would not create a journal entry to record the accrual of
an invoice.

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AMB Components- Accounting Definitions

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 AMB for Custom Sources
ƒ Extend the list of sources available to
application accounting definitions.
ƒ Using standard and system source values as
parameters, write PL/SQL functions that create
custom sources.
ƒ Define custom sources using seeded sources
and constant values when sources required for
the definition of accounting rules are not
provided as seeded sources.
ƒ Use the custom source defined in Account
Derivation Rules.

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 Multiple Representations
Terminologies:
¾ What are Primary and Secondary Ledgers?

¾ What is an Accounting Representation?

Combination of a Subledger Accounting Method and Ledger

¾ What is a Transaction Chart of Accounts?

¾ What is a Accounting Chart of Accounts?

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Multiple Representations

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 SLA Setup
Ledger> System Options

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 SLA Setup
Ledger> Accounting Options (Primary Ledger)

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 SLA Setup
Ledger> Accounting Options (Secondary Ledger)

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 SLA Setup
Primary and Secondary Ledger Mapping

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 Technical Architecture
SLA Tables Structure

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 SLA Upgrade Considerations
ƒ By default, the R12 upgrade migrates 6 months’
of accounting entries from each application to
the SLA data model.
ƒ You can modify this if desired
ƒ For prior periods, the historical data is
preserved. You can drill from General Ledger
to the historical transactions using standard GL
drilldown
ƒ You can upgrade prior periods by request
during uptime

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 SLA Upgrade Considerations
ƒ Default SLA rules preserve the accounting
rules used in 11i
™ All seeded rules are generic – not chart of accounts specific
™ In most cases, accounts are passed from Oracle Applications
into SLA as sources

ƒ Users can optionally copy and then modify the

seeded SLA rules
ƒ No need to modify any seeded responsibilities
™ If using custom menus or responsibilities, you may need to
add SLA forms/reports/programs to the custom responsibilities

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 Questions and Answers

Questions and Open Discussions

Contact Information

Subash Krishnaswamy
Email: skrishna@astcorporation.com For Presentation Copy Visit
Phone: 815-715-5013 www.astcorporation.com/papers

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