0rac|e® F|nanc|a|s

Concepts Guide
Release 12
Part No. B28873-01
December 2006
OracIe IinanciaIs Concepls Guide, ReIease 12
Iarl No. ß28873-01
Copyrighl © 2006, OracIe. AII righls reserved.
Irimary Aulhor: Seamus Moran
Conlribuling Aulhor: Ayse Aba, Amy Andrevs, Ramasubramanian ßaIasundaram, Iayanla ßhovmik, Iohn
CafoIIa, GaiI D'AIoisio, Ioe Gum, David Haimes, Iacob Iohn, Ieggy Larson, IuIianna Lilvin, IIise Mallei,
Annelle MeIalli, Sleven Miranda, Rondy Ng, Omar Tahboub, Harsh TakIe, Terrance WampIer, Isaac WiIIiam,
Anne Wong, Linda Wong, Rob Zviebach
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Send Us Your Comments
1 Introduction
Ovcrvicw................................................................................................................................... 1-1
BcncIits...................................................................................................................................... 1-2
Kcy Attributcs nI Orac!c E-Busincss 5uitc............................................................................... 1-2
Orac!c Financia!s App!icatinns 5uitc........................................................................................ 1-4
Using this Guidc....................................................................................................................... 1-5
2 Organizational Models in Oracle Financials
Ovcrvicw................................................................................................................................... 2-1
Ynur Organizatinn..................................................................................................................... 2-1
Thc Rn!c nI Ynur Lcga! Entitics................................................................................................ 2-4
Rcprcscnting Ynur Organizatinn in thc 5ystcm....................................................................... 2-4
Organizatinna! C!assiIicatinns in Orac!c Financia!s................................................................ 2-5
5ystcmEntitics.......................................................................................................................... 2-6
Chart nI Accnunts.................................................................................................................... 2-14
A F!cxib!c Mndc!..................................................................................................................... 2-16
Using OracIe Human Resources vilh OracIe IinanciaIs.................................................... 2-17
Crnss Organizatinn Rcpnrting................................................................................................ 2-18
3 Reporting
Ovcrvicw................................................................................................................................... 3-1
Dai!y Managcmcnt.................................................................................................................... 3-1
Pcrindic Managcmcnt................................................................................................................ 3-1
Pcrindic Ana!ysis....................................................................................................................... 3-2
Rcpnrts....................................................................................................................................... 3-2
Rcpnrting Tnn!s......................................................................................................................... 3-3
5ccurity and Rcpnrts................................................................................................................. 3-4
Rcpnrting and 5ystcms Organizatinns..................................................................................... 3-4
4 Accounting with Oracle Financials Applications
Ovcrvicw................................................................................................................................... 4-1
Chart nI Accnunts ..................................................................................................................... 4-2
GIobaI Charl of Accounls..................................................................................................... 4-2
ReguIaled Charls of Accounls.............................................................................................. 4-3
Currcncy.................................................................................................................................... 4-4
Transaclion Currency........................................................................................................... 4-5
Irimary Currency ............................................................................................................... 4-5
Reporling Currency ............................................................................................................ 4-6
Ca!cndars................................................................................................................................... 4-7
Accnunting Cnnvcntinns .......................................................................................................... 4-7
5ub!cdgcr Accnunting in Orac!c Financia!s ............................................................................ 4-8
Some Imporlanl Iealures of OracIe SubIedger Accounling............................................... 4-10
5ctting Up Ynur Accnunting: Accnunting 5ctup Managcr.................................................... 4-12
Overviev of lhe Accounling Selup Manager..................................................................... 4-12
LegaI Invironmenl Consideralions................................................................................... 4-13
The Corporale Viev........................................................................................................... 4-14
Accnunting Cnnsn!idatinn in Orac!c Lcdgcrs ........................................................................4-15
IinanciaI ConsoIidalion Hub ............................................................................................ 4-15
Ledgers and Ledger Sels vilh IinanciaI Slalemenl Generalor ..........................................4-17
GIobaI ConsoIidalion Syslem............................................................................................. 4-18
5 Worldwide Operations with Oracle Financials Applications
Ovcrvicw................................................................................................................................... 5-1
Mu!tip!c Organizatinns 5uppnrt.............................................................................................. 5-2
Advanccd G!nba! Intcrcnmpany 5ystcm ................................................................................. 5-2
Faci!itating Intcrcnmpany Accnunting in Orac!c Lcdgcrs ...................................................... 5-3
Thc E-Busincss Tax Enginc....................................................................................................... 5-5
Thc Bank Accnunt Mndc!.......................................................................................................... 5-6
Lcdgcrs and Rcpnrting.............................................................................................................. 5-6
5ummary.................................................................................................................................... 5-7
6 Governance, Risk Management, and Compliance with Oracle Financials
Intrnductinn............................................................................................................................... 6-1
ReguIalions and CompIiance............................................................................................... 6-2
Rcquircmcnts Inr Financia! Cnmp!iancc.................................................................................. 6-2
An Ovcrvicw nI Orac!c's Cnmp!iancc Architccturc................................................................. 6-3
Entcrprisc Visibi!ity and 5ccurity............................................................................................ 6-5
Dala and Securily Managemenl........................................................................................... 6-5
Intcrna! Cnntrn! & Opcratinna! EIIicicncy............................................................................... 6-7
Aulomaled Irocesses & ConlroIs in lhe I-ßusiness Suile....................................................6-7
Shared Service Cenlers......................................................................................................... 6-8
Slandardized Irocesses........................................................................................................ 6-9
OracIe InlernaI ConlroIs Manager..................................................................................... 6-10
OracIe Learning Managemenl............................................................................................ 6-14
OracIe Tulor....................................................................................................................... 6-14
OracIe CoIIaboralion Suile................................................................................................. 6-15
Cnrpnratc Gnvcrnancc & GAAP............................................................................................. 6-15
7 Business Analytics & Corporate Performance Management
Intrnductinn............................................................................................................................... 7-1
Thc Orac!c Busincss Ana!ytics & Cnrpnratc PcrInrmancc Managcmcnt Architccturc........... 7-2
OracIe Dalabase 10g............................................................................................................. 7-2
OracIe Warehouse ßuiIder................................................................................................... 7-3
OracIe ßusiness InleIIigence................................................................................................. 7-3
Orac!c Cnrpnratc PcrInrmancc Managcmcnt App!icatinns..................................................... 7-6
Overviev of lhe OracIe Corporale Ierformance Managemenl Suile................................... 7-6
OracIe ßaIanced Scorecard................................................................................................... 7-9
OracIe Inlerprise IIanning and ßudgeling........................................................................7-10
OracIe IrofilabiIily Manager.............................................................................................. 7-10
OracIe DaiIy ßusiness InleIIigence..................................................................................... 7-12
A The Oracle Financials Product Footprint
Intrnductinn.............................................................................................................................. A-1
CRM, 5a!cs, Ordcr Managcmcnt, Prnduct Managcmcnt, Prncurcmcnt, and 5upp!y Chain
................................................................................................................................................... A-1
Lngistics, Maintcnancc, Human Rcsnurccs, 5crvicc, Financc, and Prnjccts............................A-4
B Industry Specializations
Ovcrvicw................................................................................................................................... B-1
Enhanccd Industry 5uppnrt...................................................................................................... B-1
Send Us Your Comments
Oracle Financials Concepts Guide, Release 12
Part No. B28873-01
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1  Introduction
2  Organizational Models in Oracle Financials
3  Reporting
4  Accounting with Oracle Financials Applications
5  Worldwide Operations with Oracle Financials Applications
6  Governance, Risk Management, and Compliance with Oracle Financials
7  Business Analytics & Corporate Performance Management
A  The Oracle Financials Product Footprint
B  Industry Specializations
Re|ated |nformat|on 8ources
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Rc!atcd Guidcs
You shouId have lhe foIIoving reIaled books on hand. Depending on lhe requiremenls
of your parlicuIar inslaIIalion, you may aIso need addilionaI manuaIs or guides.
Orac!c App!icatinns Insta!!atinn Guidc: Using Rapid Insta!!:
This book is inlended for use by anyone vho is responsibIe for inslaIIing or upgrading
OracIe AppIicalions. Il provides inslruclions for running Rapid InslaII eilher lo carry
oul a fresh inslaIIalion of OracIe AppIicalions ReIease 12, or as parl of an upgrade from
ReIease 11i lo ReIease 12. The book aIso describes lhe sleps needed lo inslaII lhe
lechnoIogy slack componenls onIy, for lhe speciaI silualions vhere lhis is appIicabIe.
Orac!c App!icatinns Upgradc Guidc: Rc!casc 11i tn Rc!casc 12:
This guide provides informalion for DßAs and AppIicalions SpeciaIisls vho are
responsibIe for upgrading a ReIease 11i OracIe AppIicalions syslem (lechslack and
producls) lo ReIease 12. In addilion lo informalion aboul appIying lhe upgrade driver,
il oulIines pre-upgrade sleps and posl-upgrade sleps, and provides descriplions of
producl-specific funclionaI changes and suggeslions for verifying lhe upgrade and
reducing dovnlime.
Orac!c App!icatinns Patching Prnccdurcs:
This guide describes hov lo palch lhe OracIe AppIicalions fiIe syslem and dalabase
using AuloIalch, and hov lo use olher palching-reIaled looIs Iike AD Merge Ialch,
OAM Ialch Wizard, and OAM Regislered IIagged IiIes. Describes palch lypes and
slruclure, and oulIines some of lhe mosl commonIy used palching procedures. Iarl of
Mainlaining OracIe AppIicalions, a 3-book sel lhal aIso incIudes OracIe AppIicalions
Mainlenance UliIilies and OracIe AppIicalions Mainlenance Irocedures.
Orac!c App!icatinns Maintcnancc Uti!itics:
This guide describes hov lo run uliIilies, such as AD Adminislralion and AD
ConlroIIer, used lo mainlain lhe OracIe AppIicalions fiIe syslem and dalabase. OulIines
lhe aclions performed by lhese uliIilies, such as moniloring paraIIeI processes,
generaling AppIicalions fiIes, and mainlaining AppIicalions dalabase enlilies. Iarl of
Mainlaining OracIe AppIicalions, a 3-book sel lhal aIso incIudes OracIe AppIicalions
Ialching Irocedures and OracIe AppIicalions Mainlenance Irocedures.
Orac!c App!icatinns Maintcnancc Prnccdurcs:
This guide describes hov lo use AD mainlenance uliIilies lo compIele lasks such as
compiIing invaIid ob|ecls, managing paraIIeI processing |obs, and mainlaining snapshol
informalion. Iarl of Mainlaining OracIe AppIicalions, a 3-book sel lhal aIso incIudes
OracIe AppIicalions Ialching Irocedures and OracIe AppIicalions Mainlenance
Orac!c App!icatinns Cnnccpts:
This book is inlended for aII lhose pIanning lo depIoy OracIe I-ßusiness Suile ReIease
12, or conlempIaling significanl changes lo a configuralion. Afler describing lhe OracIe
AppIicalions archileclure and lechnoIogy slack, il focuses on slralegic lopics, giving a
broad oulIine of lhe aclions needed lo achieve a parlicuIar goaI, pIus lhe inslaIIalion and
configuralion choices lhal may be avaiIab` f ` u h e ` ` r f y U Ou `
Ialching Ia aovr ©a, ia ci ' ` f oae AppIica l of Mainlailiculi sm,liesc f – y –ff f y f`U Ap – f v hi ` f ` A `cf – O r ons r –f ` fU cf Uf– fmpU –f` f f fU c zons r nlailIudeand` ` OracIe (aps sde scomp of Mainlailnniny` `c f y U yy y dU– f f U
funclion securily, audiling, and securily configuralions.
Orac!c App!icatinns Uscr's Guidc
This guide expIains hov lo navigale, enler dala, query, and run reporls using lhe user
inlerface (UI) of OracIe AppIicalions. This guide aIso incIudes informalion on selling
user profiIes, as veII as running and revieving concurrenl requesls.
Orac!c App!icatinns Mu!tip!c Organizatinns Imp!cmcntatinn Guidc:
This guide describes lhe muIlipIe organizalions concepls in OracIe AppIicalions. Il
describes in delaiI on selling up and vorking effecliveIy vilh muIlipIe organizalions in
OracIe AppIicalions.
Orac!c Advanccd G!nba! Intcrcnmpany 5ystcm Uscr's Guidc:
This guide describes lhe seIf service appIicalion pages avaiIabIe for Inlercompany users.
Il incIudes informalion on selling up inlercompany, enlering inlercompany
lransaclions, imporling lransaclions from exlernaI sources and generaling reporls.
Orac!c Advanccd Cn!!cctinns Uscr Guidc:
This guide describes hov lo use lhe fealures of OracIe Advanced CoIIeclions lo manage
your coIIeclions aclivilies. Il describes hov coIIeclions agenls and managers can use
OracIe Advanced CoIIeclions lo idenlify deIinquenl cuslomers, reviev paymenl hislory
and aging dala, process paymenls, use slralegies and dunning pIans lo aulomale lhe
coIIeclions process, manage vork assignmenls, and handIe Ialer-slage deIinquencies.
Orac!c Advanccd Cn!!cctinns Imp!cmcntatinn Guidc:
This guide describes hov lo configure OracIe Advanced CoIIeclions and ils inlegraled
producls. Il conlains lhe sleps required lo sel up and verify your impIemenlalion of
OracIe Advanced CoIIeclions.
Orac!c App!icatinns Mu!tip!c Organizatinns Imp!cmcntatinn Guidc:
This guide describes lhe muIlipIe organizalions concepls in OracIe AppIicalions. Il
describes in delaiI on selling up and vorking effecliveIy vilh muIlipIe organizalions in
OracIe AppIicalions.
Orac!c Asscts Uscr Guidc:
This guide provides you vilh informalion on hov lo impIemenl and use OracIe Assels.
Use lhis guide lo undersland lhe impIemenlalion sleps required for appIicalion use,
incIuding defining deprecialion books, deprecialion melhod, and assel calegories. Il
aIso conlains informalion on selling up assels in lhe syslem, mainlaining assels, reliring
and reinslaling assels, deprecialion, group deprecialion, accounling and lax accounling,
budgeling, onIine inquiries, impairmenl processing, and OracIe Assels reporling. The
guide expIains using OracIe Assels vilh MuIlipIe Reporling Currencies (MRC). This
guide aIso incIudes a comprehensive Iisl of profiIe oplions lhal you can sel lo cuslomize
appIicalion behavior.
Orac!c Ba!anccd 5cnrccard Uscr Guidc:
This guide describes hov lo use OracIe ßaIanced Scorecard lo manage performance. Il
conlains informalion on hov lo use scorecard vievs and ob|eclive reporls.
Orac!c Ba!anccd 5cnrccard Administratnr Guidc:
This guide describes hov lo sel up and adminisler OracIe ßaIanced Scorecard and
scorecard syslems. Ior scorecard designers, lhis guide expIains hov lo design and
prololype scorecards and measures. Il aIso expIains hov lo move scorecards inlo
produclion. Ior adminislralors, lhis guide expIains hov lo generale lhe dalabase
schema: Ioad dala: manage user and scorecard securily: and migrale scorecards lo olher
Orac!c Ba!anccd 5cnrccard Insta!! Guidc:
This guide describes hov lo hov lo inslaII lhe ßaIanced Scorecard Archilecl
Orac!c Bi!! Prcscntmcnt Architccturc Uscr Guidc:
This guide provides you informalion on using OracIe ßiII Iresenlmenl Archileclure.
ConsuIl lhis guide lo creale and cuslomize biIIing lempIales, assign a lempIale lo a ruIe
and submil prinl requesls. This guide aIso provides delaiIed informalion on page
references, seeded conlenl ilems and lempIale assignmenl allribules.
Orac!c Cash Managcmcnt Uscr Guidc:
This guide describes hov lo use OracIe Cash Managemenl lo cIear your receipls, as veII
as reconciIe bank slalemenls vilh your oulslanding baIances and lransaclions. This
manuaI aIso expIains hov lo effecliveIy manage and conlroI your cash cycIe. Il provides
comprehensive bank reconciIialion and fIexibIe cash forecasling.
Orac!c Crcdit Managcmcnt Uscr Guidc:
This guide provides you vilh informalion on hov lo use OracIe Credil Managemenl.
This guide incIudes impIemenlalion sleps, such as hov lo sel up credil poIicies, as veII
as delaiIs on hov lo use lhe credil reviev process lo derive credil recommendalions
lhal compIy vilh your credil poIicies. This guide aIso incIudes delaiIed informalion
aboul lhe pubIic appIicalion programming inlerfaces (AIIs) lhal you can use lo exlend
OracIe Credil Managemenl funclionaIily.
Orac!c Custnmcrs On!inc Uscr Guidc:
This guide describes hov lo use OracIe Cuslomers OnIine lo viev, creale, and mainlain
your cuslomer informalion. OracIe Cuslomers OnIine is based on OracIe Trading
Communily Archileclure dala modeI and funclionaIily, and is aIso parl of lhe OracIe
Cuslomer Dala Managemenl producl famiIy.
Orac!c Custnmcrs On!inc Imp!cmcntatinn Guidc:
This guide describes hov lo impIemenl OracIe Cuslomers OnIine.
Orac!c Dai!y Busincss Intc!!igcncc Imp!cmcntatinn Guidc:
This guide describes hov lo impIemenl OracIe DaiIy ßusiness InleIIigence, incIuding
informalion on hov lo creale cuslom dashboards, reporls, and key performance
Orac!c Dai!y Busincss Intc!!igcncc Uscr Guidc:
This guide describes hov lo use lhe preseeded DaiIy ßusiness InleIIigence dashboards,
reporls, and key performance indicalors.
Orac!c Data Librarian Uscr Guidc:
This guide describes hov lo use OracIe Dala Librarian lo eslabIish and mainlain lhe
quaIily of lhe Trading Communily Archileclure Regislry, focusing on consoIidalion,
cIeanIiness, and compIeleness. OracIe Cuslomer Dala Librarian has aII of lhe fealures in
OracIe Cuslomers OnIine, and is aIso parl of lhe OracIe Cuslomer Dala Managemenl
producl famiIy.
Orac!c Data Librarian Imp!cmcntatinn Guidc:
This guide describes hov lo impIemenl OracIe Dala Librarian. As parl of impIemenling
Dala Librarian, you musl aIso compIele aII lhe impIemenlalion sleps for OracIe
Cuslomers OnIine.
Orac!c E-Busincss Tax Uscr Guidc:
This guide describes lhe enlire process of selling up and mainlaining lax configuralion
dala, as veII as appIying lax dala lo lhe lransaclion Iine. Il describes lhe enlire
regime-lo-rale selup fIov of lax regimes, laxes, slaluses, rales, recovery rales, lax
|urisdiclions, and lax ruIes. Il aIso describes selling up and mainlaining lax reporling
codes, fiscaI cIassificalions, lax profiIes, lax regislralions, configuralion oplions, and
lhird parly service provider subscriplions. You aIso use lhis manuaI lo mainlain
migraled lax dala for use vilh I-ßusiness Tax.
Orac!c E-Busincss Tax Imp!cmcntatinn Guidc:
This guide provides a concepluaI overviev of lhe I-ßusiness Tax engine, and describes
lhe prerequisile impIemenlalion sleps lo compIele in olher appIicalions in order lo sel
up and use I-ßusiness Tax. The guide aIso incIudes exlensive exampIes of selling up
counlry-specific lax requiremenls.
Orac!c E-Busincss Tax Rcpnrting Guidc:
This guide expIains hov lo run aII lax reporls lhal make use of lhe I-ßusiness Tax dala
exlracl. This incIudes lhe Tax Reporling Ledger and olher core lax reporls,
counlry-specific VAT reporls, and Lalin Tax Ingine reporls.
Orac!c E-Busincss Tax: Vcrtcx Q-5crics and Taxwarc 5a!cs/Usc Tax 5ystcm
Imp!cmcntatinn Guidc
This guide expIains hov lo selup and use lhe services of lhird parly lax service
providers for US SaIes and Use lax. The lax service providers are Verlex O-Series and
Taxvare SaIes/Use Tax Syslem. When impIemenled, lhe OracIe I-ßusiness Tax service
subscriplion caIIs one of lhese lax service providers lo relurn a lax rale or amounl
vhenever US SaIes and Use lax is caIcuIaled by lhe OracIe I-ßusiness Tax engine. This
guide provides selup sleps, informalion aboul day-lo-day business processes, and a
lechnicaI reference seclion.
Orac!c Embcddcd Data Warchnusc Uscr Guidc:
This guide describes hov lo use Imbedded Dala Warehouse reporls and vorkbooks lo
anaIyze performance.
Orac!c Embcddcd Data Warchnusc Imp!cmcntatinn Guidc:
This guide describes hov lo impIemenl Imbedded Dala Warehouse, incIuding hov lo
sel up lhe inleIIigence areas.
Orac!c Embcddcd Data Warchnusc Insta!! Guidc:
This guide describes hov lo inslaII Imbedded Dala Warehouse, incIuding hov lo creale
dalabase Iinks and creale lhe end user Iayer (IUL).
Orac!c Entcrprisc PcrInrmancc Fnundatinn Uscr's Guidc:
This guide describes OracIe Inlerprise Ierformance Ioundalion, an open and shared
reposilory of dala and business ruIes lhal provides lhe framevork for aII of lhe
appIicalions in lhe Corporale Ierformance Managemenl sel of producls. Il describes lhe
producl fealures lhal aIIov you lo manage reposilory meladala and enabIe you lo
generale managemenl reporls and perform anaIyses.
Orac!c Entcrprisc P!anning and Budgcting Uscr's Guidc:
This guide describes Inlerprise IIanning and ßudgeling, vhich is an enlerprise
appIicalion lhal provides rich funclionaIily lo conlroI lhe business processes of
pIanning, budgeling, and forecasling. Inlerprise IIanning and ßudgeling is depIoyed
as a Web based soIulion using lhe pover of OracIe reIalionaI lechnoIogy lo deIiver
scaIabIe, muIli-dimensionaI anaIysis and moniloring.
Orac!c Financia! Cnnsn!idatinn Hub Uscr Guidc:
This guide describes hov lo sel up, mainlain, and lroubIeshool OracIe IinanciaI
ConsoIidalion Hub. Il describes selling up enlilies, calegories, consoIidalion melhods,
consoIidalion ruIes, inlercompany ruIes, caIendar maps, lransIalion, consoIidalion
hierarchies, anaIylicaI reporling, and lhe IxceI add-in. The guide aIso incIudes chaplers
on submilling dala, running consoIidalions, accounling for acquisilions and disposaIs,
inlegraling vilh InlernaI ConlroIs Manager and WebADI spreadsheels.
Orac!c Financia! 5crviccs RcIcrcncc Guidc:
This guide provides reference maleriaI for OracIe IinanciaI Services appIicalions in
ReIease 12, such as OracIe Transfer Iricing, and incIudes lechnicaI delaiIs aboul appIicalion lse rs OerI os Oeneral oonseIle, a uilions, acd iaI VIelions,
Orac!c Einancia! 5crviccs RRprcmcntatinn Guidc:
Orac!c Einancia! 5crviccs RcIrrbing Udc ngsB acinn Guidc: This guide describes Ohe peporling,apchieechuresof OracIe rinanciaI Services appIicalions ` inlceIease 12, acd irovides rnlor aleon rn mov lo sic lo s peporli,
Orac!c Financia! Rna?tcyn c iiais RRsta!! cinn G ?rrcmcnta
securily groups, as veII as any posl-inslaII sleps required by some counlries.
Orac!c Financia!s Inr thc Amcricas Uscr Guidc:
This guide describes funclionaIily deveIoped lo meel specific business praclices in
counlries beIonging lo lhe Americas region. ConsuIl lhis user guide aIong vilh your
financiaI producl user guides lo effecliveIy use OracIe IinanciaIs in your counlry.
Orac!c Financia!s Inr Asia/PaciIic Uscr Guidc:
This guide describes funclionaIily deveIoped lo meel specific business praclices in
counlries beIonging lo lhe Asia/Iacific region. ConsuIl lhis user guide aIong vilh your
financiaI producl user guides lo effecliveIy use OracIe IinanciaIs in your counlry.
Orac!c Financia!s Inr Eurnpc Uscr Guidc:
This guide describes funclionaIily deveIoped lo meel specific business praclices in
counlries beIonging lo lhe Iuropean region. ConsuIl lhis user guide aIong vilh your
financiaI producl user guides lo effecliveIy use OracIe IinanciaIs in your counlry.
Orac!c Financia!s Inr India Uscr Guidc:
This guide provides informalion on hov lo use OracIe IinanciaIs for India. Use lhis
guide lo Iearn hov lo creale and mainlain selup reIaled lo India laxes, defauIling and
caIcuIalion of laxes on lransaclions. This guide aIso incIudes informalion aboul
accounling and reporling of laxes reIaled lo India.
Orac!c Financia!s Inr India Imp!cmcntatinn Guidc:
This guide provides informalion on hov lo impIemenl OracIe IinanciaIs for India. Use
lhis guide lo undersland lhe impIemenlalion sleps required for appIicalion use,
incIuding hov lo sel up laxes, lax defauIling hierarchies, sel up differenl lax regimes,
organizalion and lransaclions.
Orac!c Financia!s Imp!cmcntatinn Guidc:
This guide provides informalion on hov lo impIemenl lhe common financiaI
componenls across lhe OracIe IinanciaIs I-ßusiness Suile. Il guides you lhrough selling
up your organizalions, incIuding IegaI enlilies, and lheir accounling, using lhe
Accounling Selup Manager. Il covers inlercompany accounling and sequencing of
accounling enlries, and il provides exampIes.
Orac!c Financia!s RXi Rcpnrts Administratinn Tnn! Uscr Guidc:
This guide describes hov lo use lhe RXi reporls adminislralion looI lo design lhe
conlenl and Iayoul of RXi reporls. RXi reporls Iel you order, edil, and presenl reporl
informalion lo beller meel your company's reporling needs.
Orac!c Gcncra! Lcdgcr Imp!cmcntatinn Guidc:
This guide provides informalion on hov lo impIemenl OracIe GeneraI Ledger. Use lhis
guide lo undersland lhe impIemenlalion sleps required for appIicalion use, incIuding
hov lo sel up Accounling IIexfieIds, Accounls, and CaIendars.
Orac!c Gcncra! Lcdgcr RcIcrcncc Guidc
Orac!c iRcccivab!cs Imp!cmcntatinn Guidc:
This guide provides informalion on hov lo impIemenl OracIe iReceivabIes. Use lhis
guide lo undersland lhe impIemenlalion sleps required for appIicalion use, incIuding
hov lo sel up and configure iReceivabIes, and hov lo sel up lhe Credil Memo Requesl
vorkfIov. There is aIso a chapler lhal provides an overviev of ma|or fealures avaiIabIe
in iReceivabIes.
Orac!c i5upp!icr Pnrta! Uscr Guidc:
This guide conlains informalion on hov lo use OracIe iSuppIier IorlaI lo enabIe secure
lransaclions belveen buyers and suppIiers using lhe Inlernel. Using OracIe iSuppIier
IorlaI, suppIiers can monilor and respond lo evenls in lhe procure-lo-pay cycIe.
Orac!c i5upp!icr Pnrta! Imp!cmcntatinn Guidc:
This guide conlains informalion on hov lo impIemenl OracIe iSuppIier IorlaI and
enabIe secure lransaclions belveen buyers and suppIiers using lhe Inlernel.
Orac!c Lnans Uscr Guidc:
This guide describes hov lo sel up and use OracIe Loans. Il incIudes informalion on
hov lo creale, approve, fund, amorlize, biII, and service exlended repaymenl pIan and
direcl Ioans.
Orac!c Partncr Managcmcnt Imp!cmcntatinn and Administratinn Guidc:
This guide heIps Vendor adminislralors lo sel up and mainlain reIalionships and
programs in lhe Iarlner Managemenl appIicalion. The main areas incIude selling up
lhe parlner and channeI manager dashboards, parlner selup, parlner programs and
enroIImenl, opporlunily and referraI managemenl, deaI regislralion, speciaI pricing
managemenl, and parlner fund managemenl.
Orac!c Partncr Managcmcnt Vcndnr Uscr Guidc:
This guide assisls vendor users in using Iarlner Managemenl on a daiIy basis. This
incIudes inleraclion vilh lhe parlner and channeI manager dashboards, vorking vilh
parlners and parlner programs, managing opporlunilies and referraIs, regislering deaIs,
and vorking vilh speciaI pricing and parlner funds.
Orac!c Payab!cs Uscr Guidc:
This guide describes hov lo use OracIe IayabIes lo creale invoices and make paymenls.
In addilion, il describes hov lo enler and manage suppIiers, imporl invoices using lhe
IayabIes open inlerface, manage purchase order and receipl malching, appIy hoIds lo
invoices, and vaIidale invoices. Il conlains informalion on managing expense reporling,
procuremenl cards, and credil cards. This guide aIso expIains lhe accounling for
IayabIes lransaclions.
Orac!c Payab!cs Imp!cmcntatinn Guidc:
This guide provides you vilh informalion on hov lo impIemenl OracIe IayabIes. Use
lhis guide lo undersland lhe impIemenlalion sleps required for hov lo sel up suppIiers,
paymenls, accounling, and lax.
Orac!c Payab!cs RcIcrcncc Guidc:
This guide provides you vilh delaiIed informalion aboul lhe OracIe IayabIes open
inlerfaces, such as lhe Invoice open inlerface, vhich Iels you imporl invoices. Il aIso
incIudes reference informalion on purchase order malching and purging purchasing
Orac!c Paymcnts Imp!cmcntatinn Guidc:
This guide describes hov OracIe Iaymenls, as lhe cenlraI paymenl engine for lhe
OracIe I-ßusiness Suile, processes lransaclions, such as invoice paymenls from OracIe
IayabIes, bank accounl lransfers from OracIe Cash Managemenl, and sellIemenls
againsl credil cards and bank accounls from OracIe ReceivabIes. This guide aIso
describes hov OracIe Iaymenls is inlegraled vilh financiaI inslilulions and paymenl
syslems for receipl and paymenl processing, knovn as funds caplu` l` ysl ` ` ` ` r ` i `
lransaclions, and hov us il vilh eolernaI paymenl syslems.
Orac!c Paymcnts scr Guidc: This guide describes hov OracIe Iaymenls, as lhe cenlraI paymenl engine for lhe OracIe I-ßusiness Suile, processes lransaclions, such as invoice paymenls from OracIe IayabIes, bank accounl lransfers from OracIe Cash Managemenl, and sellIemenls againsl credil cards and bank accounls from OracIe ReceivabIesG This guide aIso describes l lhe Iaymenl d inislral r hov l r nil r lhe `unds caplu` l` ysl ` ` e l Orac!c PrTcu!cmcnt Bvycr s uidc :n P?nc n?t a d Oransuamcnt P?nc n?t: This guide conlains necess` ` ` rs impIemenling yemole cala conlenl vn a su pI y GyfU– U f Orac!c PrTcu!cmcnt nntracts nn i c c p: This guide is provided as vnI – ` ` a pI f f U– y f f Uy f f f f y yfU y I yf Orac!c PrTcu!cmcnt nntracts Imp!cmcntatinn a d A mi istratinn Guidc: This guide describes hov l `sel u and Ld inisler OracIe Irocu` yfU OracIe Irocu` yfU f – – ` f f – conlracls lhhough a`se–f sevvice, meb inlerface. Orac!c PrTIitabi ity Ba ascr tscr s uidc: This guide describes IrofilabiIil` Managev, vhich provides a`hich sel of fealu` f U su porl •ompIe emode–s l `xnaI y f l ` ` aIIocalion engine lhalrsu porls ` IIocalion melhodo U ` f UManagemenl ca–c f f y y l ` ` aclivil` hales, and •oslmob ecl unil cosls, and •usl yy y f – ` Uf U ` conso idale •usl yyfUU f l ` ``
Orac!c Pub!ic 5cctnr Advanccd Fcaturcs Uscr's Guidc:
This guide describes hov lo sel up and adminisler OracIe IubIic Seclor Advanced
Iealures. Il describes Incumbrance ReconciIialion Reporls, GASß 34/35 Assel
Accounling, and Iunds AvaiIabIe Inhancemenls.
Orac!c Purchasing Uscr's Guidc:
This guide describes hov lo creale and approve purchasing documenls, incIuding
requisilions, differenl lypes of purchase orders, quolalions, RIOs, and receipls. This
guide aIso describes hov lo manage your suppIy base lhrough agreemenls, sourcing
ruIes, and approved suppIier Iisls. In addilion, lhis guide expIains hov you can
aulomalicaIIy creale purchasing documenls based on business ruIes lhrough inlegralion
vilh OracIe WorkfIov lechnoIogy, vhich aulomales many of lhe key procuremenl
Orac!c Rcccivab!cs Uscr Guidc:
This guide provides you vilh informalion on hov lo use OracIe ReceivabIes. Use lhis
guide lo Iearn hov lo creale and mainlain lransaclions and biIIs receivabIe, enler and
appIy receipls, enler cuslomer informalion, and manage revenue. This guide aIso
incIudes informalion aboul accounling in ReceivabIes. Use lhe Slandard Navigalion
Ialhs appendix lo find oul hov lo access each ReceivabIes vindov.
Orac!c Rcccivab!cs Imp!cmcntatinn Guidc:
This guide provides you vilh informalion on hov lo impIemenl OracIe ReceivabIes.
Use lhis guide lo undersland lhe impIemenlalion sleps required for appIicalion use,
incIuding hov lo sel up cuslomers, lransaclions, receipls, accounling, lax, and
coIIeclions. This guide aIso incIudes a comprehensive Iisl of profiIe oplions lhal you can
sel lo cuslomize appIicalion behavior.
Orac!c Rcccivab!cs RcIcrcncc Guidc:
This guide provides you vilh delaiIed informalion aboul aII pubIic appIicalion
programming inlerfaces (AIIs) lhal you can use lo exlend OracIe ReceivabIes
funclionaIily. This guide aIso describes lhe OracIe ReceivabIes open inlerfaces, such as
AuloLockbox vhich Iels you creale and appIy receipls and AuloInvoice vhich you can
use lo imporl and vaIidale lransaclions from olher syslems. Archiving and purging
ReceivabIes dala is aIso discussed in lhis guide.
Orac!c 5nurcing Imp!cmcntatinn and Administratinn Guidc:
This guide conlains informalion on hov lo impIemenl OracIe Sourcing lo enabIe
parlicipanls from muIlipIe organizalions lo exchange informalion, conducl bid and
auclion processes, and creale and impIemenl buying agreemenls. This aIIovs
professionaI buyers, business experls, and suppIiers lo parlicipale in a more agiIe and
accurale sourcing process.
Orac!c 5ub!cdgcr Accnunting Imp!cmcntatinn Guidc:
This guide provides selup informalion for OracIe SubIedger Accounling fealures,
incIuding lhe Accounling Melhods ßuiIder. You can use lhe Accounling Melhods
ßuiIder lo creale and modify lhe selup for subIedger |ournaI Iines and appIicalion
accounling definilions for OracIe subIedger appIicalions. This guide aIso discusses lhe
reporls avaiIabIe in OracIe SubIedger Accounling and describes hov lo inquire on
subIedger |ournaI enlries.
Orac!c 5upp!icr 5chcdu!ing Uscr's Guidc:
This guide describes hov you can use OracIe SuppIier ScheduIing lo caIcuIale and
mainlain pIanning and shipping scheduIes and communicale lhem lo your suppIiers.
Orac!c Prncurcmcnt Cnntracts Imp!cmcntatinn and Administratinn Guidc:
This manuaI describes hov lo sel up and adminisler OracIe Irocuremenl Conlracls.
OracIe Irocuremenl Conlracls enabIes empIoyees lo aulhor and mainlain compIex
conlracls lhrough a seIf–service, Web inlerface.
Orac!c Trading Cnmmunity Architccturc Uscr Guidc:
This guide describes lhe OracIe Trading Communily Archileclure (TCA) and hov lo
use fealures from lhe Trading Communily Manager responsibiIily lo creale, updale,
enrich, and cIeanse lhe dala in lhe TCA Regislry. Il aIso describes hov lo use Resource
Manager lo define and manage resources.
Orac!c Trading Cnmmunity Architccturc Administratinn Guidc:
This guide describes hov lo adminisler and impIemenl OracIe Trading Communily
Archileclure (TCA). You sel up, conlroI, and manage funclionaIily lhal affecls dala in
lhe TCA Regislry. Il aIso describes hov lo sel up and use Resource Manager lo manage
Orac!c Trading Cnmmunity Architccturc RcIcrcncc Guidc:
This guide conlains seeded reIalionship lypes, seeded Dala OuaIily Managemenl dala,
D and ß dala eIemenls, ßuIk Imporl inlerface labIe fieIds and vaIidalions, and a
comprehensive gIossary. This guide suppIemenls lhe documenlalion for OracIe Trading
Communily Archileclure and aII producls in lhe OracIe Cuslomer Dala Managemenl
Orac!c Trading Cnmmunity Architccturc Tcchnica! Imp!cmcntatinn Guidc:
This guide expIains hov lo use lhe pubIic OracIe Trading Communily Archileclure
appIicalion programming inlerfaces (AIIs) and deveIop caIIouls based on OracIe
WorkfIov ßusiness Ivenls Syslem (ßIS). Ior each AII, lhis guide provides a
descriplion of lhe AII, lhe IL/SOL procedure, and lhe Iava melhod, as veII as a labIe of
lhe parameler descriplions and vaIidalions. Ior each ßIS caIIoul, lhis guide provides
lhe name of lhe IogicaI enlily, ils descriplion, and lhe ID parameler name. AIso
incIuded are selup inslruclions and sampIe code.
Orac!c TransIcr Pricing Uscr Guidc:
This guide conlains lhe informalion you need lo undersland and use OracIe Transfer
Iricing, incIuding hov lo generale lransfer rales and oplion cosls for your producl
porlfoIio and delermine accounl IeveI malch-funded spreads.
Orac!c U.5. Fcdcra! Financia!s Uscr Guidc:
This guide describes lhe common concepls for an inlegraled financiaI managemenl
soIulion for federaI agencies lo compIy vilh lhe requiremenls of lhe U.S. IederaI
governmenl. Il describes lhe producl archileclure and provides informalion on ßudgel
Ixeculion, Irompl Iaymenl, Treasury paymenls, Third parly paymenls, Inleragency
lransaclions, ReceivabIes managemenl, IederaI reporls, CCR Inlegralion, and Year Ind
Orac!c U.5. Fcdcra! Financia!s Imp!cmcntatinn Guidc:
This guide describes lhe common concepls for an inlegraled financiaI managemenl
soIulion for federaI agencies. Il incIudes a consoIidaled selup checkIisl by page and
provides delaiIed informalion on hov lo sel up, mainlain, and lroubIeshool lhe IederaI
IinanciaI appIicalion for lhe foIIoving funclionaI areas: Sub Ledger Accounling, ßudgel
Ixeculion, Irompl Iaymenl, Treasury paymenls, Third parly paymenls, Inleragency
lransaclions, ReceivabIes managemenl, IederaI reporls, CCR Inlegralion, and Year Ind
|ntegrat|on Repos|tory
The OracIe Inlegralion Reposilory is a compiIalion of informalion aboul lhe service
endpoinls exposed by lhe OracIe I-ßusiness Suile of appIicalions. Il provides a
compIele calaIog of OracIe I-ßusiness Suile's business service inlerfaces. The looI Iels
users easiIy discover and depIoy lhe appropriale business service inlerface for
inlegralion vilh any syslem, appIicalion, or business parlner.
The OracIe Inlegralion Reposilory is shipped as parl of lhe I-ßusiness Suile. As your
inslance is palched, lhe reposilory is aulomalicaIIy updaled vilh conlenl appropriale
for lhe precise revisions of inlerfaces in your environmenl.
0o Not Use 0atabase Too|s to Hod|fy 0rac|e App||cat|ons 0ata
OracIe STRONGLY RICOMMINDS lhal you never use SOL®IIus, OracIe Dala
ßrovser, dalabase lriggers, or any olher looI lo modify OracIe AppIicalions dala unIess
olhervise inslrucled.
OracIe provides poverfuI looIs you can use lo creale, slore, change, relrieve, and
mainlain informalion in an OracIe dalabase. ßul if you use OracIe looIs such as
SOL®IIus lo modify OracIe AppIicalions dala, you risk deslroying lhe inlegrily of your
dala and you Iose lhe abiIily lo audil changes lo your dala.
ßecause OracIe AppIicalions labIes are inlerreIaled, any change you make using an
OracIe AppIicalions form can updale many labIes al once. ßul vhen you modify OracIe
AppIicalions dala using anylhing olher lhan OracIe AppIicalions, you may change a
rov in one labIe vilhoul making corresponding changes in reIaled labIes. If your labIes
gel oul of synchronizalion vilh each olher, you risk relrieving erroneous informalion
and you risk unprediclabIe resuIls lhroughoul OracIe AppIicalions.
When you use OracIe AppIicalions lo modify your dala, OracIe AppIicalions
aulomalicaIIy checks lhal your changes are vaIid. OracIe AppIicalions aIso keeps lrack
of vho changes informalion. If you enler informalion inlo dalabase labIes using
dalabase looIs, you may slore invaIid informalion. l` ` ` `of vrecks lvu enler inf U`
Introduction    1-1
This chapler covers lhe foIIoving lopics:
• Overviev
• ßenefils
• Key Allribules of OracIe I-ßusiness Suile
• OracIe IinanciaIs AppIicalions Suile
• Using lhis Guide
The OracIe I-ßusiness Suile is a compIele sel of business appIicalions lhal enabIes
corporalions lo efficienlIy lrack delaiIed business lransaclion dala and lurn il inlo
decision making informalion using a syslem buiIl on a unified informalion archileclure.
OracIe IinanciaIs appIicalions are a subsel of lhis suile and are a famiIy of producls
designed lo caplure and anaIyze your financiaI dala on a vorIdvide basis. Use OracIe
IinanciaIs appIicalions lo beller manage business lo lhe largels lhal are announced lo
inveslors. Managemenl can beller reporl lo inveslors and coIIeagues. OracIe IinanciaIs
appIicalions aIso heIp you lo meel your obIigalions in key areas surrounding lhe
numbers, such as:
• CompIiance
• IinanciaI ConlroI
• ReguIalory Reporling
• Cosl Conlainmenl
• Risk Managemenl
The OracIe IinanciaIs Concepls Guide inlroduces you lo lhe fundamenlaI concepls
1-2    Oracle Financials Concepts Guide
invoIved in selling up and using OracIe IinanciaIs appIicalions.
OracIe IinanciaIs AppIicalions are parl of ReIease 12, "The GIobaI ßusiness ReIease". We
lhink of gIobaI bolh as reIaling lo or invoIving lhe enlire earlh and faciIilaling your
vorIdvide operalions by being comprehensive and incIuding everylhing you need.
Th|nk C|oba||y to make the r|ght dec|s|ons
You can make more informed decisions vilh a gIobaI viev of your cuslomers,
suppIiers, parlners, and financiaI dala.
Make confidenl decisions based on a gIobaI viev across helerogeneous syslems and
divisions. Many of lhe fealures discussed in lhis guide, for exampIe OracIe IinanciaI
ConsoIidalion Hub or OracIe IrofilabiIily Manager, faciIilale anaIysis and reporling of
profilabiIily aIong any dimension incIuding producls, channeIs, segmenls, and
individuaI cuslomers.
work C|oba||y to be more compet|t|ve
Your business viII be more compelilive vilh beller supporl for gIobaI vork lhal crosses
appIicalions, companies, divisions, and regions.
Operale more efficienlIy vilh singIe gIobaI access. Wilh muIlipIe organizalions access
conlroI you can process and reporl across muIlipIe nalionaI operalions. The nev Iedgers
and Iedger sels deIiver bolh IocaI compIiance and a gIobaI corporale viev aIigned vilh
your governance demands. TooIs such as lhe lax engine faciIilale operaling cenlraIIy yel
in compIele compIiance vilh IocaI reguIalion.
Hanage C|oba||y to |ower cost and |ncrease performance
ReIease 12 makes il easier and Iess expensive for you lo impIemenl, manage, and scaIe
gIobaI appIicalions.
Reduce lhe cosl and compIexily of represenling your business in lhe soflvare. Wilh
looIs such as lhe Accounling Selup Manager and LegaI Inlily Configuralor, OracIe
IinanciaIs, ReIease 12 easiIy adapls lo your environmenl.
Key Attr|butes of 0rac|e E-ßus|ness 8u|te
Iour key allribules characlerize lhe OracIe I-ßusiness Suile:
• Common Dala ModeI
• Reduced Number of Inslances
Introduction    1-3
• Inlegraled AppIicalions
• Dalabase Inlegralion
6ommon 0ata Hode|
In crealing a suile lhal spans a Iarge number of diverse moduIes, OracIe has laken care
lo ensure lhal lhe producls share a "Common Dala ModeI" in lheir archileclure. This
means lhal any syslem enlily sel up in one producl (for exampIe "an empIoyee") is used,
lo lhe exlenl possibIe, by aII olher producls lhal require a simiIar enlily.
Consider cuslomer reference dala enlered inlo an appIicalion and slored in lhe common
dala modeI. This cuslomer dala can subsequenlIy be accessed by aII appIicalions and
funclions lhal use such cuslomer dala. Inlry of imporlanl enlilies is minimized and
revisions are enlered onIy once. There is no need for any repIicalion vhich is a source of
inefficiency and inconsislency. Wilh cIean, compIele cuslomer dala in one consoIidaled
dala modeI, you have a lrue 360 degree viev of your cuslomer for lhe besl possibIe
cuslomer inleIIigence.
Reduced Number of |nstances
Iach lime you consoIidale dalabases, informalion increases and cosls decrease.
Many cuslomers are managing vorIdvide operalions using our unified informalion
archileclure on a singIe inslance of lhe OracIe I-ßusiness Suile. You can consoIidale and
share informalion gIobaIIy and fasler. Al lhe same lime, you can eIiminale dupIicale
dala cenlers, hardvare, and informalion lechnoIogy cosls requiring muIlipIe dalabases
and separale reporling infraslruclures around lhe vorId. A gIobaI financiaI syslem al
lhe Iovesl possibIe cosl is nov vilhin your reach.
|ntegrated App||cat|ons
OracIe I-ßusiness Suile is engineered lo vork logelher as an inlegraled syslem. You can
pass informalion from one appIicalion lo anolher vilhoul any incremenlaI inlegralion
cosls. WhiIe OracIe's appIicalions are inlegraled, lhey are aIso moduIar. ßased on your
business needs, you can impIemenl one moduIe, severaI moduIes, or lhe enlire suile.
OracIe ßusiness InleIIigence syslems and lhe lransaclionaI syslems use lhe same dala
and informalion. There is no passing of dala, spinning lhe facls, or deIay: your
managers see lhe dala on lheir personaI machines as il emerges from lhe business fronl
0atabase |ntegrat|on
OracIe Dalabase 10g ReIease 2 incIudes dimensionaIily supporl, nexl-generalion
fealures, and olher fealures lhal are expIoiled by lhe financiaI appIicalions.
The cumuIalive effecl of having a common dala modeI, aII appIicalions on a singIe
1-4    Oracle Financials Concepts Guide
inslance, and lhe appIicalions lhemseIves fuIIy inlegraled, is lhal aII of your informalion
is in one pIace. As a resuIl, you receive poverfuI synergies such as:
• A gIobaI, unified viev inlo crilicaI informalion such as saIes posilions, invenlory
IeveIs, headcounl, revenue, and expenses-across aII organizalions, Iines of business,
producls, and geographies. The informalion is accurale and up-lo-dale as lhere is
inlegrily in dala lhal is nol fragmenled.
The OracIe I-ßusiness Suile incIudes dala from business appIicalions from muIlipIe
vendors using our Hubs. Ior exampIe, OracIe Cuslomer Dala Hub gives you a
unified, enlerprise-vide viev of your cuslomer dala, no maller vhose soflvare you
• Your corporale financiaI reporls and inleIIigence viII be across divisions and
geographic regions - you von'l have lo requesl addilionaI informalion from lhose
sources. The resuIl is a much smoolher and fasler cIosing process.
• Your Shared Service Cenlers vork across vorIdvide operalions, deaIing easiIy vilh
bolh IocaI compIiance and corporale processes.
• Ixeculives and empIoyees, from lhe officers and direclors lo Iine supervisors,
receive daiIy business inleIIigence reveaIing lhe slale of lhe business every day,
reIalive lo pasl, presenl, and pro|ecled performance melrics. Your decision makers
viII reach more informed concIusions and lake more immediale aclion lovards
achieving individuaI and group ob|eclives - daiIy, nol quarlerIy or monlhIy.
0rac|e F|nanc|a|s App||cat|ons 8u|te
The OracIe IinanciaIs suile of appIicalions is comprised of lhe foIIoving subfamiIies,
organized by slandard business fIov, lo supporl your firm's financiaI processes:
• IinanciaI ConlroI & Reporling
• Corporale Ierformance Managemenl
• Corporale Governance
• Credil-lo-Cash
• Irocure-lo-Iay
• Assel, ReaI Islale and Lease Managemenl
• Cash & Treasury Managemenl
• TraveI & Ixpense Managemenl
The appIicalions supporl and cIoseIy malch lhese nalive business fIovs. The key lo
Introduction    1-5
expIoiling lhe fealures impIicil in lhe fIovs is, more lhan anylhing eIse, lo undersland
lhe concepluaI archileclure of OracIe IinanciaIs appIicalions.
The ob|eclive of lhis guide is lo presenl lhose concepls lo you. This guide discusses hov
you mighl:
• Represenl your regislered companies and managemenl organizalion in lhe syslem.
• Reporl and anaIyze your business dala.
• Accounl for your businesses lo managemenl, inveslors, and aulhorilies.
• Share services across your vorId vide operalions.
• Undersland vhal olher producls do vilhin lhe I-ßusiness Suile.
• ConlroI and ensure compIiance across your organizalion.
• AnaIyze and evaIuale your enlerprise performance.
• Secure your informalion.
• SpeciaIize in parlicuIar induslries.
Us|ng th|s Cu|de
The OracIe I-ßusiness Suile and OracIe IinanciaIs conlain a greal number of fealures.
This guide discusses lhe concepluaI archileclure and lherefore does nol describe lhe
fealures for each producl. Refer lo lhe producl documenlalion for addilionaI delaiIs
aboul producl fealures.
Ior exisling users of OracIe IinanciaIs, ve indicale vhere ReIease 12 has evoIved from
prior reIeases. Refer lo lhe Oracle Applications Upgrade Guide: Release 11i to Release 12 and
Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to Release 12
for delaiIs on upgrading lo ReIease 12. The upgrade is designed so lhal your earIier
funclionaIily viII vork as il vas before lhe upgrade. You can lake advanlage of lhe nev
fealures al lhe pace lhal your business can accommodale.
Organizational Models in Oracle Financials    2-1
Organizational Models in Oracle Financials
This chapler covers lhe foIIoving lopics:
• Overviev
• Your Organizalion
• The RoIe of Your LegaI Inlilies
• Represenling Your Organizalion in lhe Syslem
• OrganizalionaI CIassificalions in OracIe IinanciaIs
• Syslem Inlilies
• Charl of Accounls
• A IIexibIe ModeI
• Cross Organizalion Reporling
The OracIe I-ßusiness Suile uses a variely of organizalionaI conslrucls lo caplure
corporale slruclures lhal exisl in lhe reaI vorId. This chapler provides delaiIed
informalion on lhe organizalions you can sel up in lhe OracIe I-ßusiness Suile lo
represenl your enlerprise.
Your 0rgan|zat|on
OracIe IinanciaIs can be impIemenled in muIlipIe vays lo refIecl your reaI-vorId
organizalion. Groups generaIIy refIecl a lension belveen lheir IegaI organizalion,
managemenl organizalion, and business divisions.
The Lega| 0rgan|zat|on
Our abiIily lo buy and seII, ovn, and empIoy comes from our charler in lhe IegaI
2-2    Oracle Financials Concepts Guide
syslem. CommerciaI groups exisl lhrough corporale Iav. Unils in lhe IegaI slruclure of
a group are individuaI companies lhal share common ovnership and conlroI. In a
pubIic group, a company is ovned by lhe pubIic lhrough shares soId on a slock markel.
In a privale group, lhey are heId by a privaleIy heId hoIding company. In olher
organizalions, lhe IegaI enlilies are parlnerships, funds, or governmenl agencies.
A IegaIIy recognized enlily can ovn and lrade assels and empIoy peopIe: vhiIe an
enlily vilhoul IegaI recognilion cannol. When granled lhese priviIeges, IegaI enlilies are
aIso assigned responsibiIilies lo accounl for lhemseIves lo lhe pubIic (slalulory
reporling and exlernaI reporling), compIy vilh IegisIalion and reguIalions, and pay
income or profil and lransaclion laxes.
Mosl groups have many IegaI enlilies. They are crealed lo faciIilale IegaI compIiance,
segregale operalions, oplimize laxes, and for many olher reasons. LegaI enlilies
eslabIish your idenlily under lhe Iavs of each nalion in vhich you operale, and provide
vehicIes for conlracluaI reIalionships, compIiance, and laxalion.
The foIIoving diagram shovs an archelypicaI group of companies operaling various
business and a slandard funclionaI organizalion.
• A separale card represenls each of a series of regislered companies, lhal is, IegaI
enlilies. The Iisl of cards is lhe "LegaI Axis".

e ` U man ` sepy f ar eacy man yf u a slock ma`– ` ` , ` ` ` is f ra` ` ` dard funcssel u ` `e al ` `Thf ,u is l©lion. e``eyfy'–r–a`agn2g``fy"isf`
Organizational Models in Oracle Financials    2-3
ßus|ness 0|v|s|ons
SuccessfuIIy managing muIlipIe businesses requires lhal you segregale lhem by lhe
revards and risks invoIved in making lhem profilabIe. You divide your organizalion
accordingIy and assign managemenl personneI lo each division.
AIlhough reIaled lo your IegaI slruclure, lhe business organizalionaI hierarchies do nol
need lo be refIecled direclIy in lhe IegaI slruclure of lhe firm. The managemenl enlilies
and slruclure incIude divisions and subdivisions, Iines of business, and olher slralegic
business unils, and incIude lheir ovn revenue and cosl cenlers.
Funct|ona| 0rgan|zat|ons
SlraddIing lhe IegaI and business organizalions is an organizalion slruclured around
peopIe and lheir compelencies: saIes force, operalions, pIanls, researchers, finance
peopIe, human resource managemenl, informalion lechnoIogisls, and managemenl. The
income slalemenl oflen refIecls lheir efforls and expenses direclIy. Organizalions musl
manage and reporl revenues, cosl of saIes, and funclionaI expenses such as Research
and DeveIopmenl (R&D) and SeIIing, GeneraI, and Adminislralive Ixpense (SG&A).
0ther 0rgan|zat|ona| 8tructures
OracIe IinanciaIs formaIIy recognizes severaI olher organizalionaI slruclures, lhal viII
exisl in your enlerprise, in lhe dala schema. You viII have processing slruclures aIong
differenl business fIovs:
2-4    Oracle Financials Concepts Guide
• IersonneI reporling slruclures lhal may or may nol correspond vilh lhe business
hierarchy or IegaI or exlernaI reporling diclales.
• Iroducl driven slruclures in your produclion environmenl lhal may or may nol
correspond vilh your markel and deIivery slruclures.
The Ro|e of Your Lega| Ent|t|es
Your IegaI enlilies, vhelher commerciaI regislered companies or enlilies incorporaled
under Iavs olher lhan company Iavs, pIay a pivolaI roIe in your processing syslems.
6omp||ance and 0|sc|osure Requ|rements
LegaI enlilies are formaIIy lhe enlilies lhal acluaIIy enler inlo lransaclions. IndividuaI
IegaI enlilies ovn lhe assels of lhe enlerprise, record saIes and pay laxes on lhose saIes,
make purchases and incur expenses, and make olher lransaclions.
AII IegaI enlilies exisl in parlicuIar IegaI |urisdiclions, bolh nalionaI and reguIalory, and
musl compIy vilh lhe reguIalions of lhose |urisdiclions. LegaI enlilies have muIlipIe
compIiance requiremenls pIaced on lhem, many of vhich define lhe form of lhe
lransaclions inlo vhich lhal IegaI enlily enlers.
Many company slalules require lhal IegaI enlilies crealed in compIiance vilh lhem
pubIish specific and periodic discIosures. AnnuaI or more frequenl accounling reporls,
oflen referred lo as "slalulory accounls" and "exlernaI reporling," are required. These
musl be reporled lo specified nalionaI and reguIalory aulhorilies, for exampIe lhe
Securilies and Ixchange Commission (SIC) in lhe Uniled Slales. DiscIosure
requiremenls are diverse. LocaI enlilies fiIe IocaIIy using IocaI reguIalions and currency,
and lhrough lheir hoIding company using parenl GeneraIIy Accepled Accounling
IrincipIes (GAAI) and currency.
A given IegaI enlily may or may nol represenl aII or parl of a managemenl framevork
in ils domain. Ior exampIe, in a Iarge counlry such as lhe Uniled Kingdom or Germany,
you mighl depIoy individuaI companies lo represenl each business division, and you
mighl conlroI many companies in lhal counlry. In a smaIIer counlry, for exampIe
Auslria, you mighl use a singIe IegaI enlily lo hosl aII of your business divisions.
LegaI enlilies have very specific reIalionships vilh shared service cenlers and vilh lhe
ovnership of lhe goods and lransaclions managed by such cenlers.
Represent|ng Your 0rgan|zat|on |n the 8ystem
0rgan|zat|on 8tructures
OracIe IinanciaIs has poverfuI schemas of organizalion unils lhal supporl your IegaI,
managemenl, and funclionaI organizalion. They are designed lo:
Organizational Models in Oracle Financials    2-5
• Iase lhe managemenl of your vorIdvide shared service organizalion and faciIilale
sourcing al lhe oplimaI mix of empIoyee cosl, dala fIov, and managemenl conlroI.
• Irovide access conlroI and securily, excIuding lhose vilhoul aulhorily, and
faciIilaling access across unils for lhose vho need il.
• Adminisler compIiance and segregale lransaclions and adminislralive ruIes by
• Irovide allribules for reporling and idenlify business evenls according lo lhe
reIevanl business dimensions.
0rgan|zat|ons and Transact|ons
OracIe IinanciaIs enabIes you lo calegorize and cIassify your lransaclions lo lhe IeveI of
granuIarily required lo refIecl each of lhese organizalions. A singIe lransaclion can be
calegorized as foIIovs:
• On lhe LegaI axis: ßy company or olher IegaI enlily, by groups of companies, and
by eslabIishmenl. IslabIishmenl is lhe presence of a IegaI enlily in a |urisdiclion for
purposes such as paymenl of lransaclion laxes.
• On lhe Managemenl axis: ßusiness cIassificalion by severaI managemenl enlilies.
• On lhe IunclionaI axis: ßy nalure of lhe lransaclion (for exampIe, delaiIed accounls
invoIved such as markeling or cosl of saIes). ßy peopIe and cosl cenlers invoIved.
• ßy Olher allribules.
The core lask of OracIe IinanciaIs appIicalions is lo lrack lhe appropriale business and
accounling allribules of a lransaclion.
ßusiness allribules are lracked in lhe producl moduIes and incIude such delaiIs as
lrading parlner, sub|ecl maller, quanlily, price, agenl, empIoyee, lax, addresses, dales,
and so on. Accounling allribules are generaled from lhal dala by our subIedger
accounling engine and are recorded in delaiI in lhe subIedger accounling labIes and al
your choice of summary IeveI in GeneraI Ledger.
0rgan|zat|ona| 6|ass|f|cat|ons |n 0rac|e F|nanc|a|s
Tvo vehicIes, syslem organizalion enlilies and lhe charl of accounls, are lhe
cornerslones for securing lransaclions and modeIing an enlerprise in lhe OracIe
I-ßusiness Suile. The assembIy of lhese buiIding bIocks lo modeI your enlerprise viII
define lhe represenlalion of your business and your process fIovs in lhe appIicalions
In generaI, a syslem organizalion enlily mighl represenl any reaI organizalionaI unil
vilhin a business. Depending on lheir cIassificalion, syslem enlilies deIiver specific
2-6    Oracle Financials Concepts Guide
fealures and conlroIs, such as access conlroI and shared service adminislralion, poIicy,
IegaI or compIiance adminislralion, dala slorage, and empIoyee adminislralion. OracIe
IinanciaIs provides names lhal refIecl lhal funclionaIily. In generaI, assigning a syslem
enlily lo represenl a reaI vorId enlily vilh lhe same nomencIalure is an effeclive choice.
ßy conlrasl, a charl of accounls represenlalion of a reaI vorId enlily is an idenlifier for
anaIysis and accounling, vilh fever fealures and conlroI associaled vilh il. Imporlanl
enlilies, such as cosl cenler and IegaI enlily, can be represenled by bolh a syslem enlily
and as a vaIue in a charl of accounls seclion.
SeveraI syslem enlilies are so cIoseIy lied lo accounling enlilies lhal ve aulomalicaIIy
correIale lhem: olhers have Iooser associalions so lhal you can lune lhe reIalionship lo
your acluaI organizalion.
8ystem Ent|t|es
The OracIe I-ßusiness Suile incIudes lhe foIIoving imporlanl syslem enlilies:
• ßusiness Group and Deparlmenls
• Governmenl Reporling LegaI Inlily (GRLI)
• LegaI Inlily
• Ledgers
• Operaling Unil
• Invenlory Organizalion
• Human Resources Organizalion
Iach syslem enlily is assigned lo a cIassificalion lhal delermines ils funclionaIily and
indicales hov you mighl vanl lo depIoy il.
ßus|ness Croup and 0epartment
ßus|ness Croups
The business group is an organizalion lhal is sel up and configured in OracIe Human
Resources. The business group is parlilioned inlo separale fiIes of Human Resources
informalion and is used lo adminisler Human Resources payroII and benefils for
A business group is oflen reIaled lo counlry-specific IegisIalion. Il may correspond lo
your enlire enlerprise or lo a ma|or grouping such as a subsidiary or operaling division.
One business group is needed for each ma|or empIoymenl |urisdiclion. These
|urisdiclions roughIy correspond lo nalions. If a group of nalions unile logelher on
2-8    Oracle Financials Concepts Guide
enlily is lhe firsl parly on business lransaclions and is lhe lransaclion lax fiIer and
payer. We recognize lhal for many groups, parlicuIarIy in environmenls vhere lhe
aulhorilies aIIov you lo lreal many IegaI enlilies as one, you don'l need or vanl lo
segmenl dala or accounl separaleIy for each enlily lhal you have incorporaled.
Therefore, lhe syslem IegaI enlily does nol aulomalicaIIy accounl for ilseIf.
Inslead, ve faciIilale correIalion of subIedger aclivily vilh reporling IegaI slruclures by
expIoiling reIaled syslem enlilies for operaling unils, Iedgers, and company
represenlalion in lhe charl of accounls.
• You can accounl for any reaI vorId IegaI enlily separaleIy if you need lo do so:
• You can accounl for a group of reaI vorId IegaI enlilies as if lhey vere one vhen
lhal fils your modeI:
• And you can accounl for a parl of a reaI vorId IegaI enlily as if il vere compIeleIy
slandaIone vhen appropriale.
A syslem IegaI enlily can accounl for ils lransaclions in many Iedgers, using differenl
accounling convenlions, or using differenl currencies.
Tip for Existing Oracle Financials User
• You viII find lhal a IegaI enlily has more allribules in ReIease 12 and lhal a LegaI
Inlily Configuralor is provided. Tax caIcuIalion, inlercompany processing, and
bank ovnership expIoil IegaI enlily allribules more assiduousIy lhan previousIy.
A syslem IegaI enlily is lhe lransaclor and laxpayer for each lhird parly lransaclion. Il
hoIds lax regislralion dala, such as idenlificalion numbers. An individuaI IegaI enlily
can have exposure lo severaI lax aulhorilies, and be regislered vilh each. Ior exampIe, a
CaIifornia-regislered company mighl have "eslabIishmenls" in CaIifornia and in severaI
olher slales.
Tip for Existing Oracle Financials User
• IslabIishmenl is an enlily lhal vas nol expressIy caIIed oul in previous reIeases and
is usefuI in resoIving lransaclion lax silualions.
Ledgers, Hu|t|p|e Ledgers, Ledger 8ets, ßa|anc|ng 8egments, and 8ub|edgers
A fundamenlaI concepl in OracIe AppIicalions is lhe "Ledger." The Ledger represenls
an accounling represenlalion for an organizalion lhal is accounlabIe in a seIf-conlained
A Iedger ovner mighl be a IegaI enlily, a group of companies in a common IegaI
environmenl, a subslanliaI operalion vilhin a IegaI enlily bul vilh IegaI enlily
allribules, or a foreign branch. Ledgers are aIso used lo consoIidale and manage
Organizational Models in Oracle Financials    2-9
reporling. In a pure impIemenlalion, "a IegaI enlily accounls for ilseIf in a Iedger".
A Iedger provides baIanced Iedger accounling for lhe accounling enlily and serves as
lhe reposilory of financiaI informalion. ConsequenlIy, il is lhe principaI source of
informalion for lhe anaIylicaI appIicalions in lhe OracIe I-ßusiness Suile.
Ledger baIances have meaning - lhey asserl lhal lhe baIance:
1. on an accounl
2. al a given dale
3. has a specific vaIue in a parlicuIar currency and
4. is properIy caIcuIaled.
This impIies a consislenl appIicalion of vhal ve somelimes caII "lhe 4 Cs": Charl of
Accounls (COA), CaIendar, Currency, and accounling Convenlion. The COA provides
lhe accounl: CaIendar lhe dale: Currency lhe amounl: and Convenlion lhe caIcuIalion.
Hu|t|p|e Ledgers
Of course, you viII need differenl currency and parenl company GAAI represenlalions
of your overseas operalions. One vay lo achieve lhis is lo use muIlipIe Iedgers for an
accounling enlily.
An accounling enlily can accounl for ilseIf in Iedgers lhal are prepared under differenl
convenlions vilh differenl charls of accounls, and vaIue lransaclions in differenl
currencies. One of lhe Iedgers is lhe 'primary' Iedger. The accounling for a subIedger
lransaclion can be sel up so lhal muIlipIe Iedgers are popuIaled according lo differenl
ruIes and in differenl currencies. You choose lhe appropriale accounling according lo
your needs.
When using a second Iedger, you can eIecl lo use an "aII lhe delaiI" phiIosophy in vhich
delaiIed lransaclions are posled lo GeneraI Ledger. You mighl prefer lo use a "|usl vhal
mallers" phiIosophy vhere onIy GeneraI Ledger baIances are posled.
Ledger 8ets
Ledgers can be grouped inlo "Ledger Sels". A Ledger Sel is a coIIeclion of Iedgers lhal
you vish lo manage as lhough lhey vere one Iedger. "Manage" incIudes reporling,
opening and cIosing, running aIIocalion caIcuIalions, and enlries. Ior exampIe:
• You have 26 regislered companies in Regmany. Regmany reguIalions require lhal
each company mainlains a dislincl book of accounls. You sel up a Ledger for each
company and group lhem inlo a Ledger Sel. Your finance slaff can lreal lhe
coIIeclion as if lhey vere one for aII accounling aclivilies, vhiIe lhe dala remains
dislincl for each company.
• You couId creale a Iarenl Currency and Iarenl GAAI Iedger for each overseas
2-10    Oracle Financials Concepts Guide
operalion. You can group aII of lhem inlo a Iarenl Viev Ledger Sel. Your corporale
finance slaff can lreal lhem as one vorIdvide Iedger for aII accounling aclivilies.
Tip for Existing Oracle Financials User
• Ledger and Ledger Sels logelher repIace Sels of ßooks. The dala of a Sel of ßooks is
conlained in a Iedger. The managemenl of lhe Sel of ßooks (open and cIosing,
reporling, aIIocaling, and so on) is nov al lhe Ledger Sel IeveI.
• MuIlipIe Ledgers is a nev fealure in ReIease 12.
ßa|anc|ng 8egment
Ledgers baIance, lhal is, lhe sum of lhe debil and credil baIances equaI each olher and
you can prepare an income slalemenl and baIance sheel from lhem. OracIe IinanciaIs
checks lhal imporled dala, subIedger posling, and |ournaI enlries (ad|uslmenls) baIance,
in order lo mainlain lhis inlegrily. Ledgers in a Ledger Sel aIso baIance and are aIso
used for financiaI reporling.
Wilhin a Iedger, you can nominale a segmenl of your charl of accounls lo be a
"baIancing segmenl". The vaIues (ßaIancing Segmenl VaIues or ßSV) lhal you assign in
lhal segmenl viII represenl enlilies in your organizalion for vhich you vanl lo measure
bolh income and veaIlh, lhal is, lo prepare income slalemenls and baIance sheels, and
lo measure relurn on inveslmenl.
You mighl do lhis for divisions, pIanls, exlernaIIy reporlabIe segmenls, IegaI enlilies
sharing a |urisdiclion, and for olher reasons.
Cuslomers frequenlIy combine enlilies inlo ßSVs and reporl on groups of lhem. Ior
exampIe, if you vanl lo lrack relurn on inveslmenl (ROI) on bolh "pIanls" and
"divisions", you mighl creale baIancing segmenl vaIues as shovn in lhe foIIoving labIe.
Division Plant Balancing Segment Values
D01 I100 D01:I100
D01 I200 D01:I200
D02 I100 D02:I100
D03 I200 D03:I200
During selup, you can specify vhelher a syslem IegaI enlily uses a vhoIe Ledger or
baIancing segmenls.
Ledgers and 8ub|edgers
OracIe IinanciaIs refIecls lhe lradilionaI segregalion belveen lhe generaI Iedger and
Organizational Models in Oracle Financials    2-11
associaled subIedgers.
DelaiIed lransaclion informalion is caplured in lhe subIedgers and periodicaIIy posled
(in summary or delaiI form) lo lhe Iedger. You posl from subIedger lo generaI Iedger in
reaI lime, vilhoul any grouped processing, or you can posl on a scheduIe
corresponding lo your praclice.
0perat|ng Un|ts
In lhe financiaI appIicalions of OracIe's I-ßusiness Suile, an Operaling Unil (OU) is a
syslem organizalion lhal:
1. hd|ren®nuK|eTker® ada®n t rad |L®,r|H®dwe® ada®ann|cFadeT®-Fdw®|dwew®0} ®dwad®
nutt| d®a®t dFcu| w®|eTker®P dFdF||n w
. T®F|Fn ern®nuK|eTker®Tu|en®nucw®an®dw|n ®ann|cFadeT®-Fdw®dra|nacdF||®xLte Y ne ue|cF|k®ncweHe Yra| ®|dwew®na|en®da ®|w® . T®F|Fnern®unew®accenn®d|®dwe®ada®,|r®tr|cennF|kra|®wet|dF|krPecurenw . Is ol produ l sp cifi ran ulom licaIIy Iin s aII subIedger produ l lhal posl lo ,I sp cifi rIedger: . tt|Fen®d|®nuK|eTker®KunF|enn®dra|nacdF||®a| ® |cuHe| ® ada®a| ® nn|cFadeT® ada nucw®an® und|Her® edaF|nm®huK|eTker®acc|u| F|kr ada®Fn® |d®xa keT®-Fdw®0} e| F,F adF||®u||enn®c|uHe|e d®d|® |®n m® e|era|®|eTker® ada®Fn® |d® a|a eT®d r|u ? ? ?
|u®ca|®une®0} ®d|®nd|re® ada®||®K wa ,®|,®a®ceka|® | Fd|m® n® |Ht|Fa|ce®-Fdww
dra|nacdF||®xa ® uTF F|kr|euFn| dF||®Fn®KuF|d®Fhd|®dra|nacdF||®xLte ®a| ®dra|nacdF||®xLte w ? -Fdw®dwe®xLte eka|® | Fd| ®P0} c n®Fn®|, e|®uneT®F|®c|| u|cdF||®-Fdw®a®ceTker®d|w ®a|a e®Yrwea|®-|r T®|eua|®e| Fd|.n®t ter-|r m® ||®nuK|eTker®tr|Tu d ® wawe®xwe®|eua|w e| Fd|.n®0}®a|T®t|nd®d|®dwe®ceTkerw we®wea|®-|r T®|eua|®e| Fd|.n® |Ht|Fa|ce®| |FuadF||0®awe® T®F|Fn ereT® |w ? ? ? ? ? ? ? |® F,,ere| ®nFd adF||0w ?
2-12    Oracle Financials Concepts Guide
This is a normaI selup for a counlry or region lhal cIoseIy reguIales subIedger dala
by IegaI enlily.
• SeveraI IegaI enlilies accounl for lhemseIves in one Ledger sloring subIedger dala in
one OU, and use lhe Charl of Accounls baIancing segmenl lo produce financiaI
slalemenls for each IegaI enlily. This is a normaI selup for a counlry or region lhal
reguIales a group of companies as a vhoIe.
• A IegaI enlily or group of IegaI enlilies accounl for lhemseIves in one Ledger sloring
subIedger dala in severaI OUs. This is a normaI selup for a group doing business in
highIy reguIaled induslries in a given counlry or region.
• A parl of a IegaI enlily accounls for ilseIf in a Iedger using one or severaI OUs. This
is a normaI silualion for a Iarge corporalion using severaI inslances or Inlerprise
Resource IIanning (IRI) syslems.
Syslem IegaI enlilies, Ledgers, and OUs are defined in reIalionship lo one anolher. A
IegaI enlily accounls for ilseIf in lhe Irimary Ledger and oplionaIIy in olher Iedgers,
and slores ils subIedger dala in one or more OUs.
OUs are oflen idenlified vilh securily. In lhe OracIe I-ßusiness Suile, users are given
access lo lhe dala lhey handIe lhough "responsibiIilies". A responsibiIily is associaled
vilh a specific OU, or vilh severaI OUs - lhis is a fealure caIIed "MuIlipIe Organizalions
Access ConlroI". ßy securing subIedger dala in lhis vay users can access and process
lransaclion informalion onIy for lhe parlicuIar operaling unil or sel of operaling unils lo
vhich lhey have been granled access. They viev onIy vhal lhey need and have
aulhorizalion lo viev.
This is very fundamenlaI securily. The OracIe I-ßusiness Suile incorporales many olher
securily modeIs specific lo circumslances lhal malch lhe usage and depIoymenl
requiremenl needs lhal you have for lhose circumslances, and inlegrale vilh MuIlipIe
Organizalions Access ConlroI lo provide comprehensive and appropriale securily.
OUs can be used lo modeI aulonomous organizalionaI unils lhal creale financiaI
lransaclions. You creale, process, and reporl on subIedger financiaI dala vilhin lhe
conlexl of an OU.
• Use an OU vhen you need lo keep lhe dala of one organizalion dislincl - al arms
Ienglh - from lhe dala of anolher organizalion. You mighl have lhe righl lo prevenl
a slale's lransaclion lax audilor from vieving lhe lransaclions of a neighboring
slale: consider sloring each slale's lransaclions in separale OUs. This righl oflen
exisls vhen lhe slales are independenl nalions, bul seIdom vhen lhey are
• Use an OU vhen you need lo compIy vilh lransaclion lax Iav lhal is subslanliaIIy
differenl (more lhan |usl lhe lax rales) lo simiIar Iavs in neighboring slale. You can
use producl "lransaclion lypes" lo creale simiIar lransaclions lhal foIIov differenl
documenlalion and processing praclices.
Organizational Models in Oracle Financials    2-13
• Use an OU vhen you vish lo keep dala of an operalion privale from managemenl
of anolher operalion. Ior exampIe, vilhin a financiaI inslilulion division, you may
vanl lo keep lhe lransaclions and dala of lhe Iending operalion separale from lhal
of lhe brokerage operalions.
OUs divide lhe subIedger documenl dala in OracIe IinanciaIs appIicalions inlo dislincl
segmenls. Slandard reporls and processes run vilhin OUs: and 'speciaI' reporls and
processes run across lhem. You can depIoy OUs lo provide barriers lhal require speciaI
access, reporling, and processing lo cross.
8ub|edger Account|ng and 0perat|ng Un|ts
WhiIe subIedger lransaclion ruIes are governed by OU, subIedger accounling ruIes are
nol OU dependenl.
OUs slore lransaclion lypes and ruIes lhal govern lhe lransaclion documenl such as
invoices, and lhe business ruIes (for exampIe, credil lerms) lhal you vanl appIied lo
lhose documenls.
SubIedger accounling ruIes are nol slored by OU. They are slored cenlraIIy, bul can
refer lo any dala (incIuding OU idenlifiers) associaled vilh lhe lransaclion lo derive lhe
appropriale accounling.
8hared 8erv|ces and Hu|t|p|e 0rgan|zat|ons Access 6ontro|
The selup of operaling unils provides a poverfuI securily conslrucl in lhe appIicalions
by crealing a lighl reIalionship belveen lhe funclions a user can perform and lhe dala
lhal a user can process. This securily modeI is appropriale in a business environmenl
vhere IocaI business unils are soIeIy responsibIe for managing aII aspecls of lhe finance
and adminislralion funclions.
In a vorIdvide depIoymenl, lhis lighl reIalionship provides an inlernaI conlroI on
inappropriale processing. Ior exampIe, in lradilionaI IocaI operalions, an invoice of one
OU (a syslem represenlalion of, perhaps, a company in a counlry) cannol be paid by a
paymenl from anolher (a syslem represenlalion of, perhaps, a differenl company in a
differenl counlry). This vouId amounl lo lax fraud.
ßy conlrasl, in a Shared Service Cenler environmenl, processes lhal aIIov one company
lo perform services for olhers, vilh appropriale inlercompany accounling, require lhal
users access lhe dala of differenl companies, each compIying vilh differenl IocaI
To accommodale shared services ve use MuIlipIe Organizalions Access ConlroI lo
expand lhe reIalionship belveen funclions and dala. A ResponsibiIily can be associaled
vilh a singIe OU or vilh muIlipIe OUs. You can isoIale your dala by OU for securily
and IocaI IeveI compIiance and aIso enabIe cerlain users and processes lo vork across
lhem. This is lhe core of our shared service archileclure.
Consider an environmenl vhere lhe orders are laken in severaI differenl OUs each
represenling differenl regislered companies. These OUs segregale lhe orders and dala
2-14    Oracle Financials Concepts Guide
approprialeIy. Hovever, aII of lhese orders can be managed from a "shared service"
order desk in an oulsourcing environmenl lhrough a singIe ResponsibiIily.
Tip for Existing Oracle Financials User
• MuIlipIe Organizalions Access ConlroI is a nev fealure for ReIease 12.
|nventory 0rgan|zat|ons
The Invenlory Organizalion represenls an organizalion for vhich you lrack invenlory
lransaclions and baIances. These organizalions mighl be manufacluring or dislribulion
cenlers. SeveraI moduIes and funclions in lhe OracIe Manufacluring and SuppIy Chain
Managemenl suile secure informalion by Invenlory Organizalion.
Invenlory Organizalions are associaled vilh OUs. Iach Invenlory Organizalion has a
parenl OU and can serve olher OUs.
Various funclions in lhe OracIe I-ßusiness Suile use lhis organizalion cIassificalion. Ior
exampIe, lo aclivale lhe "Iurchasing Receiving" funclion, your responsibiIily musl have
access lo an organizalion lhal is cIassified as an Invenlory Organizalion.
Through ils parenl Operaling Unil, lhe Invenlory Organizalion financiaIIy impacls lhe
Ledger lo vhich il roIIs up. Ior exampIe, requisilion lransaclions or repIenishmenl of
suppIies are crealed againsl an Invenlory Organizalion, vhich lhen have a financiaI
impacl on lhe Ledger.
6hart of Accounts
Ior lhe mosl parl, ve have discussed syslem enlilies (for exampIe, LegaI Inlily, OU,
Ledger) and lheir reIalionships vilh reaI vorId enlilies (for exampIe, Company,
Managemenl Unil, Division) lhal you have in your organizalion. Syslem enlilies are
crealed lhough speciaI selup screens and slored in labIes.
We have discussed lhe "ßaIancing Segmenl" lhal is parl of lhe charl of accounls ralher
lhan a slored syslem enlily. The charl of accounls, your Iisling of accounl numbers,
incIudes olher segmenls lhal refIecl your organizalion. You mighl have company codes,
cosl cenler codes, business organizalion codes, and olher organizalion reIaled codes, as
veII as non-organizalion codes such as naluraI accounls, producl codes, or pro|ecl
The charl of accounls is a very fIexibIe, aImosl free-form, combinalion of segmenls (as
many as you Iike) of differenl Ienglhs. You use lhese segmenls lo fIag lransaclions so
lhal lhey are summarized in a meaningfuI vay lo your business. The charl is referred lo
as "fIexfieIds", vhich is lhe underIying lechnoIogy. The acronym "CCID" (Code
Combinalion Idenlifier) or lhe lerm "Accounling IIexfieId" refers lo an individuaI
combinalion of segmenl vaIues, or a compIele accounl number.
A specific charl of accounls (compIele vilh vaIues) is associaled vilh each Iedger and
lhe same charl can be associaled vilh many Iedgers.
We specify onIy lhree segmenls, NaluraI Accounl, ßaIancing Segmenl, and Cosl Cenler,
2-16    Oracle Financials Concepts Guide
ßaIancing Segmenl vaIue and makes lhem an exceIIenl represenlalion for any business
unil for vhich you need lo lrack baIance sheels.
Our cuslomers use baIancing segmenls lo idenlify regislered companies lhal are
accounled for logelher in a singIe Iedger, divisions for vhich lhey vish lo measure
baIance sheel dala and relurn on inveslmenl, and exlernaIIy reporlabIe segmenls.
You can use a baIancing segmenl vaIue for each IegaI enlily accounled for in a Iedger:
Companies 01, 02, and 03. Olher lhan baIancing, no addilionaI funclionaIily is allached
lo ßaIancing Segmenl, so using a ßaIancing Segmenl VaIue aIone is recommended onIy
in a federaI environmenl lhal lreals groups as one lax or slalulory reporler or fiIer.
Natura| Account
Ior many companies, naluraI accounl aIso has an organizalionaI impacl. Companies
depIoy lhe naluraI accounl in differenl vays. Some slarl "al lhe lop" vilh lheir exlernaI
reporling Iines (for exampIe, cash, revenue), expand lhe Iisl lo incIude lheir
managemenl reporling Iines (differenl lypes of revenue), and lhen expand furlher lo lhe
IeveI of granuIarily lhey vish. Olhers slarl "al lhe bollom" vilh delaiIed deparlmenlaI
expendilure lypes.
Companies lhal slarl vilh reporling Iines oflen reach lhe poinl vhere "Iinance SaIaries",
"Iinance ßenefils", and so on are naluraI accounls, and a reporl on aII Iinance accounls
deIivers lhe Iinance expense. Those lhal slarl al lhe bollom oflen use "SaIaries" and
"ßenefils" as lhe naluraI accounl and eslabIish a Iisl of cosl cenlers lo be lhe lolaI
A F|ex|b|e Hode|
When you are finished, you viII have modeIed your organizalion in lhe syslem using
Iedgers, Iedger sels, and baIancing segmenls lo reporl your IegaI and managemenl
slruclure, and using differenl combinalions of each as appropriale for slalulory
compIiance and managemenl needs.
You viII have seIecled OUs lo slore and secure your dala, refIecling lransaclion lax
audil and fiIing needs lhal are mapped lo your operaling needs. You viII aIso have
seIecled accounling allribules lhrough your charl of accounls, using naluraI accounls
and cosl cenlers logelher vilh olher segmenls, lo heIp you cul lhough lhe dala lo gel lo
lhe hearl of your operalions.
In lhe earIier discussion forYour Organizalion, page 2-1 , a diagram shovs cards
represenling companies lhal are slriped verlicaIIy by business subdivisions and
horizonlaIIy by funclionaI groups. The foIIoving diagram shovs hov some syslem
enlilies can be mapped, oflen in aIlernale vays, lo your organizalion. The syslem
enlilies map lo organizalionaI characlerislics as foIIovs:
• LegaI Inlilies correspond lo lhe company cards and keep lheir financiaI accounling
in Ledgers vilhin Ledger Sels.
Organizational Models in Oracle Financials    2-17
• ßaIancing Segmenls can represenl bolh IegaI enlilies and business subdivisions.
• IunclionaI Groups map lo Deparlmenls and Cosl Cenlers in lhe syslem.
• NaluraI Accounls cIassify lhe funclionaI groups' aclivilies.
• Operaling Unils mosl oflen hoId companies' dala and can hoId lhe dala of differenl
businesses al arms Ienglh from each olher vilhin a IegaI environmenl.
Us|ng 0rac|e human Resources w|th 0rac|e F|nanc|a|s
Iusl as IegaI enlily and Iedger slruclures furnish a slrong degree of lransaclionaI conlroI,
business groups and deparlmenl slruclures in OracIe Human Resources provide
significanl inlernaI conlroI in an enlerprise.
In addilion lo direcl reIalionships belveen headcounl and spend rales, peopIe and
OpnlernaI SegmeonoI do iliaI` `yU ` OpOri S`` inns fusoun R S`` neyinnegmel IuoS`dipIe a ` Opnxa hilrIpIe a o:pIerer `
2-18    Oracle Financials Concepts Guide
2. IournaI Vouchers: Since |ournaI vouchers can be unique in nalure, lheir approvaI
cannol be reslricled lo a hierarchy vilhin a parlicuIar deparlmenl. You can creale
vorkfIov rouling ruIes lo personneI in a business group for lhe approvaI of
|ournaIs in OracIe GeneraI Ledger.
3. ManuaI Invoices: ManuaI invoices use OracIe ApprovaI Managemenl Ingine
(AMI) for approvaI. In lurn, AMI uses lhe Human Resources deparlmenlaI
hierarchy and spending aulhorily al every IeveI in lhe hierarchy lo roule lhe
SaIary mighl be your primary expense. OracIe Human Resources breaks oul saIary by
your deparlmenlaI organizalions. ßroadIy speaking, your Human Resources
deparlmenls viII map lo OracIe GeneraI Ledger cosl cenlers.
Note: The OracIe I-ßusiness Suile comes vilh one predefined defauIl
business group. If you are impIemenling OracIe IinanciaIs vilhoul aIso
impIemenling OracIe Human Resources, you can choose nol lo sel up
anolher business group.
The caveal here is lhal once you sel up your operaling unils and assign
empIoyees lo lasks in lhe various moduIes, il is difficuIl lo
subsequenlIy configure and assign a nev business group vilh your
ovn choice of defauIl informalion. Therefore, ve recommend lhal you
sel up a business group vhiIe impIemenling OracIe IinanciaIs even if
you do nol pIan lo expIicilIy use il for Human Resource purposes.
6ross 0rgan|zat|on Report|ng
In generaI, IocaI user subIedger appIicalion reporling respecls lhe fundamenlaI securily
impIicil in operaling unils. GeneraI Ledger reporling respecls lhe Ledger Sel
conslrainls. To provide for corporale and regionaI vievs of dala, cross-organizalionaI
reporling presenls informalion from differenl operaling unils or Iedgers.
Reporling in generaI is discussed more fuIIy in lhe Reporling chapler.
8tandard Reports
SeIecled slandard reporls for various appIicalions in lhe OracIe I-ßusiness Suile are
designed lo aIIov lhe user lo reporl across OUs, LegaI Inlilies, or Ledgers.
0rac|e 0a||y ßus|ness |nte|||gence
OracIe DaiIy ßusiness InleIIigence (DßI) is a syslem designed lo pubIish lhe dala you
are coIIecling using lhe OracIe I-ßusiness Suile direclIy lo your managemenl leam from
lhe Iine supervisors lo lhe officers. Il is series of pre-designed porlIels and porlaI pages
deIivered vilh lhe producl, and ready lo depIoy vilh minimaI selup. DßI pubIishes
Organizational Models in Oracle Financials    2-19
dala "as is". Il is generaled daiIy and is inlended lo aIIov managers lo lake immediale
aclion lo drive resuIls. DßI funclions across Ledgers, Operaling Unils, and olher
organizalion unils, and slandardizes dala in parenl, regionaI, or IocaI currencies as
Ledger 8ets
Ledger Sels enabIe cross organizalionaI processing and reporling on Iedgers. Ledger
Sels aulomalicaIIy aggregale lhe dala from lhe Ledgers lhal lhey incIude.
w|th Hu|t|p|e 0rgan|zat|ons Access 6ontro|
MuIlipIe Organizalions Access ConlroI enabIes cross organizalionaI processing and
reporling on operaling unils in subIedgers.
0rac|e's 6onso||dat|on Too|s
The OracIe I-ßusiness primary consoIidalion looI is lhe OracIe IinanciaI ConsoIidalion
Hub. The OracIe IinanciaI ConsoIidalion Hub is a fuIIy fealured rov and coIumn based
consoIidalion appIicalion, vilh specific consoIidalion fealures such as minorily inleresl
caIcuIalion and inlercompany eIiminalion. GeneraI Ledger aIso incIudes funclionaIily
lermed lhe GIobaI ConsoIidalion Syslem lhal performs simpIe consoIidalions inside
GeneraI Ledger, and lhe aggregalion faciIily of Iedger sels can be used lo perform
consoIidalions loo. AII provide fuII reporling capabiIilies.
0rac|e XHL Pub||sher
OracIe XML IubIisher incIudes a dala exlraclion looI for use in ad-hoc cross
organizalion inquiries.
0rac|e's Report|ng Too|s
OracIe Discoverer is a business inleIIigence looI for anaIyzing dala. Users can access and
anaIyze dala in a company's dalabase vilhoul having lo undersland difficuIl dalabase
concepls. Users can aIso viev vorkbooks and inlegrale dalabase oulpul onlo a veb sile
and porlaI lhal can be easiIy cuslomized lo conform lo a parlicuIar veb sile Iook and
feeI, or lo buiId cuslom Discoverer appIicalions for lhe veb.
Reporting    3-1
ReIease 12 is designed so lhal you have decision making informalion al your fingerlips.
This provides "Grealer ßusiness Insighl".
0a||y Hanagement
OracIe DaiIy ßusiness InleIIigence (DßI) is a porlaI vilh Key Ierformance Indicalors
(KII) and porlIels focused on measuring your grovlh and direclion for each of your
business and cosl cenler managers. In lhe OracIe I-ßusiness Suile, lhere are over sixly
dashboards, over 360 KIIs, and approximaleIy 920 porlIels.
(K ) on cu O O 5l `
3-2    Oracle Financials Concepts Guide
processed and pubIished.
XßRL is a Ianguage for lhe eIeclronic communicalion of business and financiaI dala. Il is
one of a famiIy of "XML" (IxlensibIe Markup Language) Ianguages lhal is becoming a
slandard means of communicaling informalion belveen businesses and on lhe inlernel.
XßRL is being deveIoped by an inlernalionaI non-profil consorlium of ma|or
companies, organizalions and governmenl agencies. Il is an open slandard, free of
Iicence fees. XßRL offers cosl savings, grealer efficiency, and improved accuracy and
reIiabiIily lo lhose invoIved in suppIying or using financiaI dala.
Per|od|c Ana|ys|s
Iroducls lhal are buiIl on lhe OracIe Inlerprise Ierformance Ioundalion such as OracIe
Inlerprise IIanning and ßudgeling, OracIe IinanciaI ConsoIidalion Hub, OracIe
IrofilabiIily Manager, and OracIe Transfer Iricing, incIude lheir ovn deepIy
configurabIe reporling. The Inlerprise Ierformance Ioundalion based producls share a
rich inlerface vilh your desklop office appIicalions.
Ior addilionaI informalion aboul lhese producls, refer lo lhe foIIoving:
• Oracle Enterprise Planning and Budgeting User's Guide
• Oracle Financial Consolidation Hub User's Guide
• Oracle Profitability Manager User's Guide
• Oracle Transfer Pricing User Guide
OracIe IinanciaIs provides exlensive reporling capabiIily as described in lhe foIIoving
8tandard Reports
SeveraI lhousand reporls are shipped vilh OracIe IinanciaIs producls.
F|||ng w|th the Author|t|es
OracIe IinanciaIs incIudes many slandard reporls lhal are designed lo supporl your
abiIily lo fiIe slalulory, lransaclion lax (for exampIe, saIes lax, VaIue Added Tax (VAT),
and Goods and Service Tax (GST)), and olher reporls vilh aulhorilies in over 120
counlries around lhe vorId.
Reconc|||at|on and 6ontro|
Many olher slandard reporls are orienled lovards reconciIing and conlroIIing your
Reporting    3-3
dala. IxampIes incIude receivabIes aging reporls and cuslomer and vendor lriaI
0r|||-down and 6ross Reference
The OracIe I-ßusiness Suile producls are inlegraled and based on a common dala
modeI. InlerreIaled driII-dovn reporls are efficienl and comprehensive, and in many
cases, severaI Iayers deep.
Product 8pec|f|c Reports
OracIe IinanciaIs provides many reporls for specific funclionaI areas. OracIe GeneraI
Ledger and OracIe SubIedger Accounling reporl on accounling affairs. OracIe
ReceivabIes and OracIe IayabIes reporl on invoices and paymenls. OracIe Cash
Managemenl provides delaiIed cash fIov reporls. OracIe I-ßusiness Tax provides
reporls specificaIIy for saIes and vaIue added lax reporling.
Cenerat|ng Reports
You can run reporls from our menu syslem. Ixlracls are generaled from lhe dalabase
and are lhen formalled and pubIished. TradilionaI reporls have a unique exlracl. Never
and revised reporls may share exlracls and aIIov formalling lo hide dala lhal is nol
Report|ng Too|s
OracIe XML IubIisher is a key reporling looI in ReIease 12. XML IubIisher heIps users
lo creale formalling lempIales in desklop producls such as Microsofl Word and
Microsofl IxceI so lhal non lechnicaI and non Informalion TechnoIogy peopIe can do
lhis. XML IubIisher aIso faciIilales heIps lo aulomalicaIIy pair lhese lempIales vilh
exlracls lo produce lhe ideaI reporl.
You can use XML IubIisher lo save reporls lo many differenl fiIe lypes incIuding XML,
IDI, RTI, and IxceI and lo pubIish reporls by prinling, sending in an e-maiI, or posling
lo veb siles or porlaIs. XML IubIisher can be appIied lo bolh reporls and documenls.
ReIease 12 incIudes nev common exlracls and XML IubIisher lempIales for many
slandard reporls. Cerlain slandard reporls relain lheir previous unique exlracls and
Tip for Existing Oracle Financials Users
• In ReIease 12, slandard reporls are migraling lo XML IubIisher. ApproximaleIy 20
exlracls supporl 400 reporls. Olher slandard reporls are supporled as before.
0esktop |ntegrators
Olher imporlanl reporling looIs incIude lhe Desklop Inlegralors. Desklop Inlegralion
3-4    Oracle Financials Concepts Guide
provides supporl for crealing and summarizing bolh inpul and oulpul dala in
lvo-dimensionaI spreadsheels. Desklop Inlegralion is provided by mosl producls in
appropriale circumslances.
RX| Reports
The RXi Reporls Adminislralion TooI aIIovs you lo design lhe conlenl and Iayoul of
your RXi reporls. You can prinl lhe same reporl using differenl Iayouls, and you can
conlroI lhe dala ilems incIuded in your reporl. RXi Iels you laiIor your reporls lo meel
slalulory and olher reporling requiremenls, and lo creale reporls for your ovn inlernaI
80L Extracts
Your slaff can creale and run SOL exlracls lo oblain addilionaI informalion from lhe
0rac|e 0|scoverer
OracIe Discoverer is a business inleIIigence looI for anaIyzing dala. Users can access and
anaIyze dala in a company's dalabase vilhoul having lo undersland difficuIl dalabase
concepls. Users can aIso viev vorkbooks and inlegrale dalabase oulpul onlo a veb sile
and porlaI lhal can be easiIy cuslomized lo conform lo a parlicuIar veb sile Iook and
feeI, or lo buiId cuslom Discoverer appIicalions for lhe veb.
0rac|e Porta|
You can use OracIe IorlaI lo creale a porlaI Web inlerface, pubIish and manage
informalion, access dynamic dala, and cuslomize lhe porlaI experience. You can design
enlerprise porlaIs lhal are lhe singIe enlry poinl lo business appIicalions, conlenl,
coIIaboralive looIs, and Web siles.
8ecur|ty and Reports
Ior lhe mosl parl, access and securily lo reporls of aII kinds foIIovs lhe access and
securily lhal are associaled vilh lhe syslem represenlalion of your organizalion and lhe
process invoIved. Where appropriale, reporling securily exlends lhis modeI. Ior
exampIe, a reporler vorking on lhe receivabIes baIance needs lo knov lhe fuII
receivabIe, even if lhe reporler doesn'l have access lo each invoice.
Report|ng and 8ystems 0rgan|zat|ons
In generaI, reporling respecls your organizalion as you have modeIed il in lhe syslem.
Ior exampIe, reporls associaled vilh a Iedger viII be Iimiled lo lhal Iedger. Reporls
associaled vilh a Iedger sel viII incIude aII Iedgers in lhe Iedger sel.
Reporting    3-5
SubIedger reporls are generaIIy defined by lhe operaling unil vilh vhich lhey are
reporled. Ior exampIe, reporls for lhe IlaIian operaling unliI viII incIude dala for IlaIy
onIy. In specific cases, reporls can run across subIedgers. Cerlain DaiIy ßusiness
InleIIigence (DßI) reporls are secured by operaling unil, and are MuIlipIe Organizalions
enabIed. You can access dala for eilher a subsel of lhe operaling unil or aII of lhe
operaling unils, depending on lhe selup.
Ior exampIe, if Ioe is a IayabIes Manager for Norlh America, lhe DßI IayabIes page can
be sel up lo give Ioe summary informalion across lhe Uniled Slales and Canada onIy,
vhiIe Ioe's boss Mary can be sel up lo have access lo informalion across aII operaling
Olher producl specific reporls are aIso designed lo run across operaling unils.
As lhe dala in operaling unils can be defined specificaIIy for lhal operaling unil (for
exampIe, lhe operaling unil may define lransaclions in differenl currencies) users musl
be carefuI lhal lhe aggregaled reporl incIudes simiIar dala. Ior exampIe, lhe reporl
shouId nol add vaIues in USD currency from a Uniled Slales operaling unil lo vaIues in
CAD currency from a Canadian operaling unil.
Accounting with Oracle Financials Applications     4-1
Accounting with Oracle Financials
This chapler covers lhe foIIoving lopics:
• Overviev
• Charl of Accounls
• Currency
• CaIendars
• Accounling Convenlions
• SubIedger Accounling in OracIe IinanciaIs
• Selling Up Your Accounling: Accounling Selup Manager
• Accounling ConsoIidalion in OracIe Ledgers
The OracIe I-ßusiness Suile enabIes fasl and efficienl business processing, al Iov cosl,
for aII of your business fIovs:
• Irovides voIume oulpul of your bookkeeping and papervork from base
lransaclions lo GeneraI Ledger.
• DispIays dala on appIicalion pages and reporls designed lo give bolh execulive and
middIe managemenl lhe inleIIigence needed for daiIy decision making.
Iroducl IeveI documenl orienled dala is slored and secured in operaling unils by
documenl processing moduIes. Irom lhere, il is accounled for in Iedgers and Iedger sels
lhal are mapped in differenl vays based on a syslem represenlalion of your
organizalion. You can use a charl of accounls lo lag lhe dala vilh characlerislics lhal are
imporlanl lo you.
As discussed in lhe chapler for OrganizalionaI ModeIs in OracIe IinanciaIs, Iedger
4-2    Oracle Financials Concepts Guide
baIances derive lheir meaning from four characlerislics:
• Charl of accounls
• Currency
• CaIendar
• Accounling convenlions
We'II examine each of lhese in delaiI. The fundamenlaI idea is lhal a baIance on an
accounl al a cerlain dale is expressed in a currency and compIies vilh your definilion of
lhal accounl.
6hart of Accounts
The segmenls in lhe charl of accounls can be summarized as foIIovs:
• There are lhree mandalory segmenls: naluraI accounl, baIancing segmenl, and cosl
• The baIancing segmenl refIecls organizalionaI unils, bolh IegaI and managemenl.
• The cosl cenler is generaIIy aIigned vilh lhe deparlmenl slruclure used in your
human resources appIicalion.
• Olher segmenls are used for producl hierarchies, pro|ecl codes, or channeI anaIysis
- vhalever you vish lo lrack.
To make mosl use of our inlercompany funclionaIily, il is advisabIe lo use one segmenl
(nol a baIancing segmenl) lo mark lhe corresponding inlercompany enlily. This viII
make inlercompany reconciIialion and eIiminalion easier, bolh in GeneraI Ledger or
IinanciaI ConsoIidalion Hub. VaIidalion ruIes and securily ruIes are crealed and
managed using lhe various segmenls.
OracIe DaiIy ßusiness InleIIigence uses lhe combinalion of baIancing segmenl and cosl
cenler lo summarize dala in porlIels and porlaIs.
AII producls lhal perform accounling derive lhe accounl code combinalion idenlifier
(CCID) using OracIe SubIedger Accounling and vrile a fuII enlry for each business
evenl. These enlries are oplionaIIy summarized and posled on your scheduIe (for
exampIe, can be posled immedialeIy or monlhIy) lo lhe Iedger.
C|oba| 6hart of Accounts
We recommend lhal you consider a slandardized approach lo accounling for your
organizalion in lhe OracIe Iedgers by using a gIobaI charl of accounls.
A gIobaI charl of accounls is a designaled accounl slruclure formal and sel of vaIues
Accounting with Oracle Financials Applications     4-3
lhal aII enlilies in a group viII use. Some vaIues vilhin lhe segmenls viII differ
according lo IocaI requiremenls. Hovever, each segmenl is designaled for a specific use
and lherefore is consislenl in ils funclion across aII Iedgers.
A gIobaI charl of accounl faciIilales slandard business anaIysis: appIes lo appIes
performance reporling:
• IaciIilales sharing of Iedger services and reduces reporling risk miligalion cosls.
• InabIes accounl derivalion in inlercompany and cross IegaI enlily silualions.
• IIiminales mapping and dala revork on consoIidalion.
When severaI Iedgers share lhe same charl of accounls, lhey can be combined inlo a
Iedger sel. A Iedger sel can aggregale lhe resuIls and dala of many operalions using
individuaI Iedgers. You can driII from Iedger sel baIances lo lransaclion dala, and you
can reporl on a Iedger sel as one Iedger.
There are severaI sleps lhal you can lake so lhal your GIobaI Charl of Accounls can be
depIoyed and used in many counlries.
Regu|ated 6harts of Accounts
SeveraI counlries use a mandalory nalionaI charl of accounls lhal specify accounl
numbers or vaIues lhal you musl pul in an accounl segmenl. Depending on lhe
compIexily of your business, ve provide severaI vays lo accommodale nalionaI charls:
Use a 6hart of Accounts 8egment
• You can creale a nalionaI charl of accounls lhal can be depIoyed in a NalionaI or
AIlernale segmenl of your Corporale Charl of Accounls, and mapped lo lhe
corporale accounls. We provide Irench and CoIombian charls lhal can be depIoyed
in lhis vay.
Use a 8econdary Ledger
• You can sel up a Iedger using your corporale charl of accounls and make il your
primary enlry book. Use lhis vilh a nalionaI charl of accounls in a secondary
• Or you can sel up a Iedger lo accommodale lhe nalionaI charl of accounls and make
il your primary enlry book. Use lhis vilh a corporale charl of accounls in a
secondary Iedger.
• In bolh cases, OracIe SubIedger Accounling can popuIale bolh Iedgers
approprialeIy and simuIlaneousIy.
4-4    Oracle Financials Concepts Guide
Use 6onso||dat|on
• You can creale a corporale book using your corporale charl, and use OracIe
IinanciaI ConsoIidalion Hub lo Iink and map NalionaI bookkeeping lo il.
• Or you can consider crealing a consoIidaled book using lhe nalionaI charl, and use
OracIe IinanciaI ConsoIidalion Hub lo Iink and map your corporale bookkeeping lo
Ledgers have a definilive currency used lo conslrucl lhe baIances and can accommodale
an infinile number of lransaclion denominalion currencies. The lransaclions, aclivily, or
baIances can be vaIued in olher currencies in severaI differenl and sophislicaled vays.
Our currency handIing offers fIexibiIily in hov you compIy vilh InlernalionaI
Accounling Slandards (IAS 21) and IinanciaI Accounling Slandards (IAS 52):
• ßolh slandards define "lransIalion" - converling aII baIances al various definilions
of lhe currenl rale - as lhe melhod you musl use lo converl lhe resuIls of an
overseas operalion lhal operales as an inveslmenl (independenl business) from
lheir accounling currency lo lhe reporling currency.
• ßolh slandards define "remeasuremenl" - cerlain non-monelary baIances are
converled al a rale from lhe day you acquired lhem - as lhe melhod you musl use
vhen lhe overseas operalion is lighlIy inlegraled vilh lhe parenl business.
• ßolh slandards use lhe lerm "funclionaI currency" as lhe lesl for inlegralion. When
lhe overseas business shares ils funclionaI currency vilh lhe parenl, il is inlegraled
and musl remeasure vhen ils bookkeeping currency is differenl
The OracIe I-ßusiness Suile provides severaI vays lo oblain a parenl currency viev of
overseas operalions. You can choose lo depIoy lhem depending on your overseas
operalion's circumslances:
1. TransIale or remeasure overseas operalions in OracIe IinanciaI ConsoIidalion Hub.
IinanciaI ConsoIidalion Hub can see lhe dala in many Iedgers and incIudes severaI
currency conversion funclions by assel, IiabiIily, and income slalemenl baIance.
2. TransIale or remeasure Iedger baIances in a lradilionaI vay using OracIe GeneraI
Ledger. GeneraI Ledger TransIalion slores lransIalion ruIes lhal are appIied lo
baIances in a Iedger.
3. TransIale or remeasure bolh Iedger baIances using lhe reporling currencies fealure.
4. Converl subIedger aclivily, Iedger aclivily, and baIances (onIy) using lhe reporling
currency fealure on subIedger lransaclions.
4-6    Oracle Financials Concepts Guide
A primary Iedger inlerfaces cIoseIy vilh lhe economy in vhich lhe enlilies lhal are
using lhal Iedger are lrading. Ior exampIe, your IocaI banks issue bank slalemenls lhal
lie lo lhe Iedger. You accounl for IocaI empIoyees' payroII, in IocaI currency, in lhe
primary Iedger. LocaI conlraclors and vendors are reimbursed in IocaI currency. Ior
lhese reasons, ve recommend lhal lhe primary currency of a primary Iedger be lhe IocaI
business currency.
Iach Iedger musl be assigned a primary currency. Ledgers lhal are nol primary shouId
aIso have a primary currency.
Report|ng 6urrency
You may need lo reporl in addilionaI currencies lo salisfy managemenl, IegaI, and
slalulory requiremenls. Reporling currencies represenl lhe dala of a Iedger in olher
currencies. Reporling currencies refIecl lhe same charl of accounls, caIendar, and
accounling convenlion as lhe primary Iedger.
Ior each reporling currency, you can mainlain accounling dala al one of lhree IeveIs:
• ßaIance LeveI: GeneraI Ledger baIances are direclIy converled from lhe primary
Iedger currency lo lhe reporling currency using lransIalion.
• IournaI LeveI: Mainlains GeneraI Ledger |ournaI enlries and baIances in lhe
reporling currency using lhe GeneraI Ledger Iosling Irogram. Iach lime a |ournaI
is posled in lhe source Iedger, lhe |ournaI is aulomalicaIIy converled lo lhe
respeclive |ournaI IeveI reporling currency based on lhe |ournaI conversion ruIes.
• SubIedger LeveI: The SubIedger LeveI is lhe mosl delaiIed of lhe lhree IeveIs as il
mainlains a currency represenlalion of your subIedger |ournaIs, GeneraI Ledger
|ournaI enlries, and baIances.
When using lhe subIedger IeveI reporling currency, you viII refIecl lhe subIedger
accounling ruIes crealed using OracIe SubIedger Accounling. These ruIes provide
inslruclions on hov lo converl subIedger dala enlered inlo lhe source Iedger lo one
or more subIedger IeveI reporling currencies. We ship seeded ruIes lhal you can
As a generaI ruIe, use reporling currencies ralher lhan secondary Iedgers vhen
currency is lhe onIy difference belveen lhe primary Iedger and lhe viev lhal you need
of il.
Tip for Existing Oracle Financials Users
• Currency supporl is subslanliaIIy improved in ReIease 12. MuIlipIe Reporling
Currencies is repIaced vilh Reporling Currencies and MuIlipIe Ledgers. Olher
currency fealures are enhanced.
Accounting with Oracle Financials Applications     4-7
ßaIance sheels are snapshols of your assels and IiabiIilies al poinls in lime, and income
slalemenls are an anaIysis of lhe change in your nel veaIlh belveen each baIance sheel.
Iach Iedger has an accounling caIendar, vhich represenls a period of lime in GeneraI
Ledger, defined by a slarl and end dale. You musl design your caIendar based on your
business and managemenl praclice. Manufacluring businesses oflen use caIendars vilh
periods and quarlers lhal end on veekends and are equaI, for comparabiIily and
slandards caIcuIalion. Service businesses oflen use lhe reguIar caIendar.
You can lake inlo accounl lhe IegaI obIigalions and business operalions vilhin each
counlry. Transaclion lax reporling and slalulory requiremenls are faclors in lhe design
of mosl Iedger caIendars.
Olher faclors may aIso need lo be considered. Ior exampIe, lhere is oflen a need for one
or lvo ad|usling periods al year or quarler end lo incIude GeneraI Ledger lransfers,
accounl reconciIialions, ad|usling |ournaIs, and olher period end specific lasks. Some
counlries have specific requiremenls such as a cIosing |ournaI voucher lhal can be
accommodaled in an ad|usling period.
AII OracIe subIedgers depend on lhe GeneraI Ledger caIendar. You can associale a
common caIendar vilh muIlipIe Iedgers.
Account|ng 6onvent|ons
Ledgers refIecl accounling convenlions. The baIance on your "revenue" accounl has
meaning onIy insofar as il refIecls your definilion of revenue. In lurn, your definilion of
revenue viII refIecl your compIiance vilh your GAAI (for exampIe, InlernalionaI
Accounling Slandards/InlernalionaI IinanciaI Reporling Slandards (IAS/IIRS) or
Uniled Slales GAAI), your slalulory and reguIalory obIigalions, and perhaps your
lransaclion lax reguIalion mandales.
We make il easy lo conslrucl meaningfuI baIances by posling lo lhe accounls according
lo easiIy arlicuIaled and conlroIIed ruIes lhal are appIied lo each subIedger lransaclion.
The ruIes are sel up in OracIe SubIedger Accounling and are assigned lo individuaI
Iedgers. Groups of ruIes can be managed in sels lhal ve caII "Accounling Melhods".
Ior lhose silualions vhere you musl compIy vilh bolh IocaI reguIalion and a parenl
GAAI, lhe ruIes engine aIIovs you lo accounl for a business lransaclion using differenl
convenlions. This supporl can be laiIored lo lhe compIexily of lhe silualion, from
aulomalic ad|usling enlries in lhe same Iedger lhrough compIeleIy popuIaled secondary
Ior exampIe, by using lvo Iedgers vilh lhe appropriale convenlions, a Irench firm vilh
a subsidiary in lhe Uniled Slales (US), can aulomalicaIIy creale IocaI bookkeeping in
accordance vilh US principIes (in lhe US primary Iedger), bul aIso simuIlaneousIy
mainlain accounling for lhe same lransaclions in accordance vilh Irench reguIalions (in
a Irench secondary Iedger).
4-8    Oracle Financials Concepts Guide
Tip for Existing Oracle Financials User
• Accounling convenlions vere impIicil in earIier reIeases. In ReIease 12, lhey are
expIicil and managed lhrough Accounling Melhods in OracIe SubIedger
8ub|edger Account|ng |n 0rac|e F|nanc|a|s
OracIe SubIedger Accounling is parl of lhe OracIe I-ßusiness Suile and is an accounling
service lhal:
• Derives lhe appropriale accounls lo use for individuaI business evenls, such as
saIes, expenses, purchases, and olhers.
• Is in accordance vilh accounling ruIes lhal you eslabIish in Iine vilh your
compIiance requiremenls.
• ßy means of a broad looIsel, aIIovs you lo manage lhe ruIes, reviev lheir effecl,
and sludy lheir appIicalion.
• Irovides a slandard means of posling subIedger dala lo GeneraI Ledger.
• Irovides slandardized slorage for subIedger accounling enlries and subIedger
• Is compIele vilh lhe appropriale delaiI and in definabIe formals as needed for
various IocaI compIiance reasons.
OracIe SubIedger Accounling is an open and fIexibIe service lhal defines and generales
accounling for lransaclions caplured by lhe lransaclion processing syslems in lhe
OracIe I-ßusiness Suile. Iach subIedger lransaclion lhal requires accounling is
represenled by a compIele and baIanced subIedger |ournaI enlry lhal is slored
according lo a common dala modeI.
SubIedger Accounling can be used lo supporl lransaclions processed in non-OracIe IumI3 aIWTu2cuRgIyar-©1IAuRrR-ur©2I.21a•
Accounting with Oracle Financials Applications     4-9
compIiance and accounling reconciIialion, vhich repIace lhe "dislribulion" labIes
for lhese purposes. Dislribulion labIes in ReceivabIes, Assels, Iro|ecls, and
Irocuremenl remain avaiIabIe and are depIoyed for olher purposes.
0efau|t Transact|on 0|str|but|ons
Iach lype of lransaclion in lhe OracIe IinanciaIs subIedger producls has defauIl
"dislribulions" associaled vilh il, indicaling hov lhe lransaclion is dislribuled vilhin
your business. Ior exampIe, a saIes invoice mighl be dislribuled over severaI revenue
accounls. You can edil lhe dislribulion defauIls al lhe producl IeveI. Dislribulion labIes
in ReceivabIes, Assels, Iro|ecls, and Irocuremenl are popuIaled by reference lo lhe
defauIls. The defauIl dislribulions are used by SubIedger Accounling as a basis for lhe
accounling of each lransaclion and are modified by lhe SubIedger Accounling ruIes
vhen you use SubIedger Accounling lo amend lhe accounling impacl of lhe
producl-suppIied defauIls.
8ub|edger Account|ng Ru|es
OracIe SubIedger Accounling deveIops lhe accounling for each "accounling evenl" by
appIying a ruIe lhal you have defined for lhe evenl. We caII lhe ruIes "accounling
• Accounling evenls represenl lransaclions lhal have a financiaI accounling impacl
and require lhal accounling informalion is recorded. IxampIes of accounling evenls
incIude issuing an invoice and disposing of an assel.
• Accounling evenls are nol comparabIe lo syslem evenls and programs lhal updale
lransaclion labIes: accounling evenls are evenls in lhe reaI business sphere.
Accounling evenls are caplured vhen lransaclions are saved in lhe subIedgers.
An accounling definilion, or business ruIe, is simiIar lo lhis exampIe: If producl 'A' is
soId and is shipped lo a dislribulor, lhen book il lo accounl 'Aß' vilh a descriplion of
'AßC' on lhe |ournaI enlry Iines. If lhe same producl 'A' is shipped lo a direcl cuslomer,
lhen book il lo accounl 'XY' vilh a descriplion of 'XYZ' on lhe |ournaI enlry Iines.
You can use virluaIIy aII dala caplured by lhe OracIe I-ßusiness Suile as poinls of
reference vhen drafling a ruIe. SubIedger Accounling ruIes are dale effeclive. The
OracIe I-ßusiness Suile, as shipped, incIudes ruIes for slandard accruaI accounling and
for cash accounling. You can cuslomize lhese ruIes as required or creale your ovn.
IslabIishing an accounling melhod or convenlion for a Iedger enlaiIs defining
subIedger accounling ruIes and cIuslering lhem logelher. Accounling convenlions are
sel up for bolh primary and secondary Iedgers. AII subIedgers assigned lo a Iedger
inheril lhe accounling convenlion from lhal Iedger.
4-10    Oracle Financials Concepts Guide
8ome |mportant Features of 0rac|e 8ub|edger Account|ng
Note: Refer lo lhe Oracle Subledger Accounting Implementation Guide for a
comprehensive descriplion of SubIedger Accounling.
F|ex|b|e Journa| Entry 8etup
IIexibIe |ournaI enlry selup enabIes users lo conlroI every aspecl of lhe subIedger
|ournaI enlries lhal are generaled for a subIedger lransaclion. User defined ruIes, based
on dala dravn from lhe subIedger lransaclions, conlroI vhich lypes of |ournaI Iines are
crealed, hov accounl numbers (CCIDs or "accounling fIexfieIds") are derived, and lhe
conlenls of lhe |ournaI enlry descriplions.
Differenl subIedger accounling melhods are used lo salisfy lhe confIicling requiremenls
impIied by corporale accounling poIicies, IocaI fiscaI reguIalion, and cash basis or
business orienlaled anaIysis.
Hu|t|p|e Account|ng Representat|ons
OracIe SubIedger Accounling enabIes you lo creale muIlipIe accounling represenlalions
from a singIe lransaclion. Using muIlipIe accounling represenlalions, you can popuIale
more lhan one Iedger vilh subIedger |ournaI enlries for a singIe IegaI enlily's subIedger
lransaclions. This is a poverfuI fealure as each accounling represenlalion represenls an
aIlernale accounling inlerprelalion of lhe underIying subIedger lransaclion. Iach
accounling represenlalion can use differenl charls of accounls, caIendars, currencies,
and subIedger accounling melhods.
MuIlipIe accounling represenlalions enabIe corporalions lo design and impIemenl
gIobaI accounling poIicies independenlIy from consideralions lhal appIy lo subsidiaries
operaling in parlicuIar counlries, or in highIy reguIaled verlicaI markels. Corporale
accounling poIicies can lherefore be designed and impIemenled vilhoul prior
knovIedge of lhe vide range of IocaI fiscaI reguIalion encounlered in lhese counlries.
Of course, if you don'l need compIele Iedgers for a parlicuIar overseas operalion, you
can use SubIedger Accounling ruIes lo design aulomalic ad|usling enlries and posl
lhem lo an ad|usling segmenl.
Consider a silualion vhere IocaI lransaclion lax reguIalion requires lhal lhe "saIes
accounl" refIecls aII biIIing, bul your GAAI, for exampIe IAS/IIRS, requires lhal you
recognize revenue vhen lhe cuslomer accepls lhe producl. You can choose one of lhe
foIIoving melhods:
Mcthnd 1: 5amc Lcdgcr
The seeded reguIar SubIedger Accounling ruIe, simpIified for iIIuslralion purposes,
suggesls lhal vhen issuing a saIes invoice, in a specified Iedger vilh one baIancing
• ReceivabIes are debiled
Accounting with Oracle Financials Applications     4-11
• Revenue is crediled
Ior exampIe, assume lhere is a baIancing segmenl "10", "Division 10". We eIecl lo lrack
our managemenl and GAAI ad|uslmenls in baIancing segmenl "99", "Ad|usling
Division".. We modify lhe reguIar ruIe so lhal, vhen issuing a saIes invoice:
• ReceivabIes in segmenl 10 are debiled
• Revenue in segmenl 10 is crediled
• Revenue in segmenl 99 is debiled
• Deferred revenue in segmenl 99 is crediled
A reporl accessing aII segmenls excepl 99 viII refIecl lhe IocaI fiIing slalus. A reporl
accessing aII segmenls incIuding 99 viII refIecl lhe GAAI reporling slalus.
Mcthnd 2: Primary and 5ccnndary Lcdgcr
The seeded reguIar SubIedger Accounling ruIe, simpIified for iIIuslralion purposes,
suggesls lhal vhen issuing a saIes invoice in a specified Iedger:
• ReceivabIes are debiled
• Revenue is crediled
Ior exampIe, assume ve have Ledger A, "Counlry Ledger". We eIecl lo accounl for lhe
same operalion under our GAAI ruIes in Ledger ß, "Corporale Ledger". We modify lhe
reguIar ruIe so lhal, vhen issuing a saIes invoice:
• ReceivabIes in Ledger A are debiled
• Revenue in Ledger A is crediled
• ReceivabIes in Ledger ß are debiled
• Deferred revenue in Ledger ß is crediled
A reporl accessing Ledger A viII refIecl lhe IocaI fiIing slalus. A reporl accessing Ledger
ß viII refIecl lhe GAAI reporling slalus.
6ommon 8ub|edger 0perat|ons
SubIedger Accounling is a service lhal is invoked by aII subIedger producls in lhe
OracIe I-ßusiness Suile, and provides a slandard approach across producls for various
lasks and syslem enlilies.
• There is one simpIe process for lransferring dala from a subIedger lo GeneraI
• GeneraI Ledger can, oplionaIIy, be updaled inslanlaneousIy by subIedger aclivily.
4-12    Oracle Financials Concepts Guide
• SubIedger lransaclions have compIele accounling arlicuIalion. A compIele |ournaI
enlry is vrillen for each accounling evenl. Iach enlry is fuIIy described. AII debils
and credils in lhe various currencies are scheduIed. The enlry is numbered and
idenlified, and correIaled vilh lhe appropriale documenls. The accounl is fuIIy
compIeled for aII segmenls.
• SubIedger lransaclions are slored in slandardized subIedger accounling labIes,
simiIar lo oId fashioned "day books". This grealIy faciIilales reporling and dala
• There are many delaiI SubIedger Accounling fealures lhal are nov avaiIabIe lo aII
producls: subIedger accounling "formalling" oplions such as lhe oplionaI
suppression of zero Iines, oplionaI presenlalion of enlries as negalive debils or
credils, and olhers.
|nqu|r|es, 0r|||-down, and Report|ng
DelaiIed subIedger accounling reporls and inquiries lhal salisfy IocaI fiscaI and business
requiremenls for delaiIed reconciIialion belveen subIedger lransaclions and accounling
are provided.
SubIedger Accounling uses OracIe XML IubIisher exlensiveIy. Ixlracls are made from
lhe SubIedger Accounling labIes and formalled vilh XML IrolocoI (XMLI) lempIales.
Ior exampIe, specific nalionaI day books are supporled by an exlracl and a lempIale
deIivered vilh lhe producl.
8ett|ng Up Your Account|ng: Account|ng 8etup Hanager
0verv|ew of the Account|ng 8etup Hanager
You sel up your accounling in ReIease 12 of lhe OracIe I-ßusiness Suile by assigning
Iedgers lo IegaI enlilies. In olher vords, you seIecl lhe Iedger lhal you vanl lo use lo
accounl for a IegaI enlily. We provide an Accounling Selup Manager, vhere you can
define lhe foIIoving for each enlily:
• Ledgers (primary and secondary)
• Currencies (primary and reporling)
• Accounling melhods
• Many olher oplions
Tip for Existing Oracle Financials User
• The Accounling Selup Manager is a nev fealure in ReIease 12.
4-14    Oracle Financials Concepts Guide
In GeneraI Ledger, documenl sequences are generaled for lransaclions al lhe Iedger
IeveI, lhal is, aII operaling unils and aII IegaI enlilies associaled vilh a given Iedger viII
share avaiIabIe GeneraI Ledger numbering sequences. In lhe rare silualion lhal a IocaI
reguIalory aulhorily requires gapIess GeneraI Ledger documenl sequencing and gapIess
subIedger documenl sequencing, il may be necessary lo mainlain a one lo one
reIalionship belveen a IegaI enlily, a Iedger, and an operaling unil.
You can creale secondary Iedgers lo represenl lhe primary Iedger's accounling dala in a
formal lhal viII be consoIidaled vilh lhe parenl. If you creale Iedgers for sequence
managemenl purposes, use a Iedger sel so lhal you can lreal lhem as one for
accounling, ad|uslmenl, aIIocalion, reporling, managemenl, and consoIidalion
|f the Regu|atory 8|tuat|on of Your 8ubs|d|ar|es Fac|||tates Us|ng 0ne Ledger |n Respect to 8evera|
Cerlain aulhorilies focus on groups of IegaI enlilies in lhe IegaI syslem - vhere lhey "Iifl
lhe veiI of incorporalion" - and have drafled reguIalions lhal permil or require you lo
combine IegaI enlilies lhal you conlroI for compIiance purposes in a given |urisdiclion.
This silualion viII aIIov muIlipIe IegaI enlilies lo be associaled vilh lhe same primary
Iedger, lhal is muIlipIe IegaI enlilies can share lhe Iedger allribules (4 C's) and Iedger
processing oplions of lhe primary Iedger.
This accounling selup is appropriale vhen each of lhe IegaI enlilies assigned lo lhe
accounling selup meels lhe foIIoving condilions:
• Operale in a counlry lhal aIIovs muIlipIe IegaI enlilies lo share lhe same primary
Iedger, Iedger allribules, and accounling oplions.
• Do nol need lo use differenl Iedger processing oplions (such as aulonomous
documenl sequencing) for each IegaI enlily.
• Do nol have lax requiremenls lhal are specific lo a IegaI enlily.
0ther Account|ng Env|ronment
Il is aIso possibIe lo use accounling selups lhal have no IegaI enlilies and do nol
eslabIish any IegaI reIalionship in respecl lo lhe primary Iedger for lhal accounling
selup. Use lhis selup lo suppIemenl reguIar accounling arrangemenls. Ior exampIe, you
can mainlain various Iedgers for managemenl reporling or consoIidalion purposes.
The 6orporate V|ew
We've revieved hov you can sel up IocaI organizalions and accounling so lhal you can
compIy vilh IocaI and nalionaI ruIes and reguIalion.
Of course, il is aIso imporlanl lhal you manage your businesses and accounl for lhem lo
your sharehoIders on a vorIdvide basis. We've described severaI devices lhal faciIilale
lhe deveIopmenl of informalion from lhe IocaIIy compIianl operalions lhal conform lo
Accounting with Oracle Financials Applications     4-15
your managemenl principIes and appIicabIe vorIdvide GeneraIIy Accepled
Accounling IrincipIes:
1. GIobaI Charl of Accounls
2. Ad|usling Segmenl Aulomalion and Accounling RuIes
3. MuIlipIe Ledgers, Ledger Sels, and Accounling RuIes
4. TransIalion and Remeasuremenl Techniques
5. Cross Organizalion Reporling
You can aIso use our formaI consoIidalion looIs.GIcouIsosoyIßRsCRIl HosRsIsoIrgHcIeI ksvprr` ` ` ` ` ` y – G yUy f ` U – Uy – G U U yy y u r ` ` r ` `
4-16    Oracle Financials Concepts Guide
IinanciaI ConsoIidalion Hub is lighlIy inlegraled vilh GeneraI Ledger and lhe
subIedgers. Ior exampIe, inquiries and driII-dovn from lhe IinanciaI ConsoIidalion
Hub reach aII lhe vay lhrough GeneraI Ledger and SubIedger Accounling lo lhe
documenls in lhe subIedger producls. IinanciaI ConsoIidalion Hub aIso supporls
Iedgers from olher vendors.
IinanciaI ConsoIidalion Hub aulomalicaIIy imporls dala from lhe Iedgers vilh minimaI
selup and dispIays il in coIumns by business unil. Updales in GeneraI Ledger are
aulomalicaIIy refIecled in IinanciaI ConsoIidalion Hub. If you have lurned on lhe
SubIedger Accounling simuIlaneous Iedger posling, updales in lhe subIedgers are aIso
aulomalicaIIy refIecled in IinanciaI ConsoIidalion Hub.
IinanciaI ConsoIidalion Hub can serve as a bridge belveen lransaclionaI appIicalions
and Corporale Ierformance Managemenl, puIIing logelher financiaI dala from across
an enlerprise lo enabIe corporale-IeveI anaIysis and pIanning. To lhis end il is aIso
lighlIy inlegraled vilh OracIe Inlerprise Ierformance Ioundalion and OracIe
Inlerprise IIanning and ßudgeling on lhe anaIylicaI appIicalion side.
Features and Funct|ons
OracIe IinanciaI ConsoIidalion Hub provides advanced consoIidalion funclionaIily
• Aulomaled processing: You can aulomale as much of lhe consoIidalion process as
you choose, from iniliaI dala submission lo finaI reporling and anaIysis. IinanciaI
ConsoIidalion Hub Ieverages OracIe WorkfIov lo run an enlire consoIidalion
process, incIuding lransIalion and eIiminalions, as veII as sub-consoIidalions.
Non OracIe sources can be imporled direclIy lo IinanciaI ConsoIidalion Hub
vilhoul crealing a "ghosl" OracIe Iedger firsl, due lo lhe IinanciaI ConsoIidalion
Hub base in lhe Inlerprise Ierformance Ioundalion.
• Audil enlries and driII-dovns for every slage of consoIidalion: The appIicalion
aIIovs you lo audil enlries from every slage of lhe consoIidalion process for every
sub-consoIidalion, subsidiary, and affiIiale.
• Sub-consoIidalions: ßy execuling sub-consoIidalions al any IeveI, you can reviev
fuIIy consoIidaled financiaI slalemenls for any reIevanl subsel of lhe enlerprise in
addilion lo lhe fuIIy consoIidaled financiaIs for lhe enlire enlerprise.
• IarliaI ovnership: IinanciaI ConsoIidalion Hub has aulomaled capabiIilies for
handIing parliaI ovnership. You can generaIIy define a singIe ruIe for aII
parliaIIy-ovned subsidiaries.
• SimuIalions: Wilh IinanciaI ConsoIidalion Hub, you can aulomalicaIIy dupIicale a
consoIidalion hierarchy, simuIale an acquisilion on lhe nev hierarchy, and submil a
consoIidalion for lhe nev hierarchy.
Accounting with Oracle Financials Applications     4-17
Ledgers and Ledger 8ets w|th F|nanc|a| 8tatement Cenerator
Ledgers aggregale lhe resuIls of enlilies lhal you've mapped lo baIancing segmenl
vaIues and Iedger sels aggregale lhe conlenl of individuaI Iedgers. ßolh are de faclo
consoIidalions. Il is usefuI lo dislinguish belveen lhe foIIoving silualions:
1. ConsoIidale muIlipIe companies vilhin a singIe Iedger.
2. ConsoIidale muIlipIe companies lhal reside in muIlipIe Iedgers on lhe same
appIicalion inslance.
6onso||date Hu|t|p|e 6ompan|es 8har|ng a 8|ng|e Ledger
You firsl enler lhe appropriale |ournaI enlries lo eIiminale inlercompany lransaclions
and perform any olher "ad|uslmenls on consoIidalion" lhal you need. The lolaIs are
lhen ready for reporling
GeneraI Ledger incIudes a reporling looI, IinanciaI Slalemenl Generalor. You can use
lhe IinanciaI Slalemenl Generalor lo creale consoIidaled financiaI slalemenls al lhe
parenl IeveI.
6onso||date Hu|t|p|e 6ompan|es Res|d|ng |n Hu|t|p|e Ledgers [8ame |nstance}
You can incIude Iedgers lhal share lhe same charl of accounls and accounling
caIendar/period lype combinalion in a Iedger sel. They do nol have lo share lhe same
currency or accounling convenlions. The Iedger sel lolaIs lhe incIuded Iedgers |usl as
lhe Iedger lolaIs baIancing segmenls. If lhe Iedgers you have incIuded in lhe Iedger sel
accounl for IegaI enlilies, you viII have aggregaled lhose IegaI enlilies.
Aggregalion is nol formaI consoIidalion. You viII need lo eIiminale lhe inlercompany
baIances, as you do in a singIe Iedger. You can use GeneraI Ledger funclionaIily lo
creale lhese eIiminaling enlries.
You can aggregale Iedgers in a Iedger sel even vhen lhey have differenl primary
currencies, using lhree lechniques:
• TransIalion: Run GeneraI Ledger TransIalion in lhe subsidiaries' Iedger using
lransIalion or remeasuremenl as required, and lhen define IinanciaI Slalemenl
Generalor reporls across Iedgers using lhe "TransIaled" currency lype.
• Reporling Currency: If you use |ournaI or subIedger IeveI reporling currencies, you
may be abIe lo bypass lhe lransIalion by direclIy consoIidaling lhe subsidiary
reporling currency vilh your parenl Iedger.
• Secondary Ledger: Map your primary Iedger lhal compIies vilh IocaI accounling
requiremenls lo a secondary Iedger lhal shares lhe corporale charl of accounls,
caIendar, and currency. Nexl, incIude lhe secondary Iedger in lhe Iedger sel for
4-18    Oracle Financials Concepts Guide
Though Iedgers and Iedger sels vilh IinanciaI Slalemenl Generalors can adequaleIy
meel lhe needs of your enlerprise, bolh IinanciaI ConsoIidalion Hub and GIobaI
ConsoIidalion Syslem are more formaI.
C|oba| 6onso||dat|on 8ystem
When your financiaI dala is spread across muIlipIe Iedgers lhal do nol share lhe same
charl of accounls and accounling caIendar combinalion or lhe Iedgers are on separale
inslances, consider using lhe GIobaI ConsoIidalion Syslem vilhin OracIe GeneraI
Ledger lo consoIidale resuIls.
GIobaI ConsoIidalion Syslem uses a "Dala Transfer ConsoIidalion" melhodoIogy vhere
you move your financiaI dala from diverse Iedgers and dala sources inlo a singIe
consoIidalion parenl Iedger. You lhen reporl on and anaIyze consoIidaled financiaI
informalion from lhis consoIidaled Iedger. Use lhe GIobaI ConsoIidalion Syslem in
silualions vhere you need lo physicaIIy move lhe dala lo a consoIidaled Iocalion ralher
lhan simpIy reporl off muIlipIe Iedgers in a sel.
GIobaI ConsoIidalion Syslem is lhe lradilionaI consoIidalion melhodoIogy in OracIe
IinanciaIs. The GIobaI ConsoIidalion Syslem imporls, in lhe form of baIance and |ournaI
IeveI vouchers, appropriale accounls from lhe lriaI baIances of subsidiary Iedgers. The
GIobaI ConsoIidalion Syslem consoIidalion funclion incIudes a number of olher
• Sophislicaled consoIidalion mapping ruIes lo map accounls and specify lransfer
ruIes from lhe subsidiary lo lhe parenl. The mapping ruIes delermine hov your
subsidiary accounl baIances roII up inlo lhe parenl. As in IinanciaI ConsoIidalion
Hub, lhe Iedgers invoIved in GIobaI ConsoIidalion Syslem do nol need lo share any
• A vorkbench lo viev lhe consoIidalion slalus of your subsidiaries and a
ConsoIidalion Hierarchy Viever lo graphicaIIy dispIay your consoIidalion
• AulomalicaIIy generales |ournaI enlries lo eIiminale inlercompany baIances based
on ruIes you define. This is based on aulomalic recurring enlries lhal are defined in
lhe GeneraI Ledger moduIe.
• Use of speciaIized looIs incIuding:
• The Inlerface Dala Transformer (IDT). This is a user-friendIy looI lhal makes
dala imporl from exlernaI feeder syslems inlo OracIe GeneraI Ledger and lhe
GIobaI ConsoIidalion Syslem easier and Iess lime consuming.
• The Slale ConlroIIer: A coIor coded navigalion looI lo guide you lhrough lhe
consoIidalion process.
The consoIidalion syslems are nol muluaIIy excIusive. You can incIude a GIobaI
Accounting with Oracle Financials Applications     4-19
ConsoIidalion Syslem Iedger in a Iedger sel and incorporale ils resuIl in a super sel.
IinanciaI ConsoIidalion Hub can drav dala from Iedger sels and from GIobaI
ConsoIidalion Syslem Iedgers - and lhe driII-dovn remains vaIid.
You can lransfer dala from a Iedger on one inslance lo anolher inslance for
consoIidalion, eilher using GIobaI ConsoIidalion Syslem or IinanciaI ConsoIidalion
Worldwide Operations with Oracle Financials Applications    5-1
Worldwide Operations with Oracle
Financials Applications
This chapler covers lhe foIIoving lopics:
• Overviev
• MuIlipIe Organizalions Supporl
• Advanced GIobaI Inlercompany Syslem
• IaciIilaling Inlercompany Accounling in OracIe Ledgers
• The I-ßusiness Tax Ingine
• The ßank Accounl ModeI
• Ledgers and Reporling
• Summary
We've discussed your organizalion and hov you mighl represenl il in lhe syslem, and
ve've discussed hov you can accounl for il. Lel's Iook al lhose concepls lhal heIp you
provide common services lo lhe differenl enlilies, mainlain consislency in praclice, and
minimize cosls in your operalion.
Our appIicalions incIude many fealures lhal enabIe IocaI operalions of vorIdvide
companies. We offer IocaIized fealures in 120 counlries, ranging from slalulory
reporling lhrough lransaclion lax caIcuIalion and fiIing lo IocaI business reporling - aII
in lhe core producls. AddilionaI supporl for never reguIalions may be avaiIabIe from
our consuIling organizalion.
We assume lhal you are going lo ralionaIize your operalions, lhal is, lo cenlraIize
cerlain aclivilies and dislribule olhers. We recommend depIoymenl on a singIe inslance,
or al Ieasl, on as fev inslances as possibIe.
There are severaI concepls lhal are imporlanl lo undersland as you design your inlernaI
5-2    Oracle Financials Concepts Guide
service nelvork.
Hu|t|p|e 0rgan|zat|ons 8upport
Operaling unils slore subIedger documenl dala for enlilies lhal are separaled from one
anolher for lransaclion lax or olher reasons.
SubIedger users are assigned responsibiIilies. A responsibiIily can be allached lo one or
many operaling unils as required, using a fealure caIIed "MuIlipIe Organizalions Access
ConlroI". In a shared service cenler, users vho are empIoyees of lhe shared cenler's ovn
IegaI enlily, are given access lo operaling uniles lhal are ovned by lhe IegaI enlilies lhal
lhe cenler serves. Users al an IreIand Shared Service Cenler viII be empIoyed by an
IreIand LegaI Inlily and have access lo operaling uniles lhal represenl lhe Uniled
Kingdom, Irance, Germany, and lhe Uniled Slales.
More imporlanlIy, MuIlipIe Organizalions Access ConlroI aIso enabIes aulomaled
processes lo access lhe reIevanl operaling unils permilled for lhe process.
Advanced C|oba| |ntercompany 8ystem
Inlercompany lransaclions record lransfers of goods and services belveen reIaled IegaI
enlilies. Transaclions belveen reIaled IegaI enlilies musl be lracked and documenled
for financiaI consoIidalion, IocaI compIiance, and lax reporling purposes.
The Advanced GIobaI Inlercompany Syslem is an exlensive and compIele syslem
inlegraling severaI OracIe producls and fealures incIuding ReceivabIes, IayabIes,
SubIedger Accounling, and GeneraI Ledger. The syslem generales bolh IayabIes and
ReceivabIes lransaclions.
Advanced GIobaI Inlercompany Syslem, logelher vilh lhe SuppIy Chain Ivenl
Managemenl moduIe, Inhanced Drop Ship, provides a compIele syslem in supporl of
"InlernaI SuppIy Chain". When a cuslomer of one of your subsidiaries pIaces an order,
you can lhen pIace orders vilh your varehouses and pIanls - each of vhich viII be
recognized in Irocuremenl and in Order Managemenl approprialeIy - and lransfer lhe
goods from lhe originaling pIanl lo lhe subsidiary using comprehensive
documenlalion, bolh commerciaI and in-house invoices.
The inlercompany fealure inlegrales vilh olher OracIe producls lhal impacl lhe
inlercompany soIulion:
• LegaI Inlily Configuralor, Trading Communily Archileclure - Idenlifies lrading
parlners and lheir reIalionships, lhereby idenlifying vhich lransaclions are
inlercompany. Trading Communily Archileclure is lhe slandardized means of
defining various parlies and lheir reIalionships vilhin lhe OracIe I-ßusiness Suile.
• ReceivabIes, IayabIes, and SubIedger Accounling - Inlercompany uses ReceivabIes
lo produce invoices for lhe inilialor. Once lhe ReceivabIes lransaclion is compIeled,
lhe invoice number is lhen aulomalicaIIy used lo creale mirror-image invoices in
Worldwide Operations with Oracle Financials Applications    5-3
SubIedger inlegralion is an imporlanl fealure of inlercompany funclionaIily lhal
aIIovs you lo creale a physicaI invoice for an inlercompany lransaclion in bolh
ReceivabIes and IayabIes.
• GeneraI Ledger - Inlercompany lransaclions lhal do nol require an invoice can be
processed direclIy in GeneraI Ledger.
The Inlercompany engine aIso supporls lhe foIIoving fealures:
• CenlraIized Inlercompany Accounls Definilion: This enabIes aII moduIes lo access
accounling definilions in a slandardized manner.
• MuIlipIe Ledger ßalches: ßalches of inlercompany lransaclions can be enlered and
addressed lo muIlipIe recipienls vilh no reslriclion on lhe charl of accounls,
currency, or caIendar. Thus, lhe inilialor and lhe recipienls of lhe inlercompany
lransaclions in lhe balch can aII use differenl Iedgers. This is a poverfuI fealure and
enabIes lhe processing of gIobaI inlercompany lransaclions vilh fever overheads.
• ReconciIialion and Reporling: Inlercompany provides reconciIialion looIs lo sorl
oul any discrepancies in accounling baIances belveen lhe inlercompany
ilh feT f ph differhis is a erc f aIily lhal
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acc O `organyessed d feG an

5-4    Oracle Financials Concepts Guide
nol make caIIs lo olher moduIes such as IayabIes, ReceivabIes, or Irocuremenl:
• You can creale generic baIancing Iines againsl lhe inlercompany accounls lhal you
have defined for specific sources of lransaclions.
• Inhanced inlercompany baIancing in GeneraI Ledger |ournaI vouchers and
SubIedger Accounling:
• You can define separale inlercompany accounls lo record more delaiI for your
inlercompany |ournaIs and lrack inlercompany baIances.
• CIearing Companies:
Ior cerlain lypes of inlercompany lransaclions, you can designale one company lo
acl as lhe lrading parlner for aII subsidiary companies in lhe organizalion. Ior
exampIe, company 01 among your subsidiary companies can provide lhe accounls
payabIe funclion for your enlire organizalion. AII accounls payabIe lransaclions
lhen cIear lhrough company 01.
When you creale a cIearing company Iike lhis, you can consoIidale lhe accounls
payabIe aclivilies for lhe enlire company as veII as aulomalicaIIy baIance
muIli-company inlercompany lransaclions. Use enhanced inlercompany accounling
or lhe inlercompany segmenl lo impIemenl lhe cIearing company modeI and lrack
lhe amounls lhal each individuaI subsidiary oves lo each of lhe olher subsidiaries.
• Inlercompany Segmenl:
You can creale an inlercompany segmenl in your charl of accounls slruclure lhal is
used lo creale baIanced inlercompany |ournaIs. Sel up lhe Iedger lo aulomalicaIIy
popuIale lhe inlercompany segmenl vilh lhe baIancing segmenl vaIue of lhe
lrading parlner. Inlercompany lransaclions using lhe inlercompany segmenl
provide more delaiI for reporling and reconciIialion.
Inlercompany accounls can be represenled in muIlipIe vays:
• DelaiIed inlercompany accounl baIances are mainlained in bolh lhe subIedger and
generaI Iedger. In lhis mode, inlercompany accounls are discIosed in delaiI in lhe
lriaI baIance.
• DelaiIed inlercompany accounls are incIuded in subIedgers and a summarized form
is lransferred and mainlained in lhe generaI Iedger as inlercompany conlroI
• Inlercompany CIearing Companies as described earIier.
In aII cases, a fuIIy aulomaled inlercompany syslem is crilicaI lo ensure lhal aII
inlercompany accounl lolaIs across lhe coIumns are equaI lo zero. When consoIidaling
financiaI resuIls, you creale eIiminaling enlries lo excIude lhe impacl of inlercompany
Worldwide Operations with Oracle Financials Applications    5-5
• Aulomalic inlercompany eIiminalions are accommodaled in bolh lhe GIobaI
ConsoIidalion Syslem and OracIe IinanciaI ConsoIidalion Hub. ßolh moduIes can
be sel up lo pick up lhe inlercompany baIances, popuIaled by eilher lhe
inlercompany engine or by recurring |ournaI enlries, and subsequenlIy eIiminale
lhem. This aulomalion can save you days in lhe cIose process.
• The GIobaI ConsoIidalion Syslem eIiminalion funclionaIily can be depIoyed in a
Iedger sel environmenl lo enhance lhe Iedger sel aggregalion and reporling.
The E-ßus|ness Tax Eng|ne
Nalions, slales, and federalions around lhe vorId derive subslanliaI parls of lheir
income by laxing business lransaclions. A ma|or parl of your operaling cosl is
compIiance vilh various ruIes and reguIalions. We heIp you lo meel lhis obIigalion by
crealing a lransaclion lax engine lhal faciIilales focus of lhe conlroI issues vhere your
experls are and aIIovs lhe soflvare lo supporl lhe lax caIcuIalions even al Iocalions far
remole from lhe laxing |urisdiclion.
There are many kinds of lransaclion laxes, incIuding SaIes Tax, VaIue Added Tax
(VAT), Goods and Services Taxes (GST), and Cusloms Dulies. Your lax experls viII
rapidIy famiIiarize lhemseIves vilh lhe delaiIs of lhe lax engine. The engine incIudes
lhe foIIoving fealures:
• A dalabase of ruIes and reguIalions lhal are mainlained and popuIaled by your
experls and advisors as lhe reguIalory environmenl evoIves. This dalabase refIecls
lhe laxing |urisdiclion: Nev Hampshire's saIes lax ruIes are quile differenl from
• A dalabase of rales lhal are updaled vhen lhe rales are revised. You can buy and
imporl rale changes from rale vendors.
• Inlegralion vilh Trading Communily Archileclure for your cuslomer delaiIs,
incIuding lhe Iocalion of lhe ship-lo addresses and inlegralion vilh your vendor
• Inlegralion vilh your operaling unil and olher organizalion records for lhe Iocalion
of your shipping organizalions.
• Inlegralion vilh lhe producl hierarchy for producl codes and descriplion.
A subIedger producl lhal requires a lax caIcuIalion on a business documenl invokes lhe
engine and suppIies il vilh appropriale dala as lo cuslomer and vendor, ship-lo and
ship-from addresses, nalure of goods or service providers, and so on. The engine
delermines lhe |urisdiclion and lhe laxes invoIved, and relurns lhe delaiI lo lhe producl
lo be incIuded on documenls.
The engine supporls vorIdvide laxes. In addilion lo basic saIes lax, VAT, and GST, lhe
engine supporls:
5-6    Oracle Financials Concepts Guide
• Use lax
• Cross border shipmenls
• Rebales and relurns
Tip for Existing Oracle Financials User
• The I-ßusiness Tax Ingine is nev for ReIease 12. Il succeeds lhe funclionaIily
provided by Tax Codes.
The ßank Account Hode|
WhiIe a company may choose lo slore invoices in differenl OUs, il shouId be abIe lo use
ils money in lhe bank lo service any invoice il ovns.
We've modeIed our bank accounl supporl around lhis concepl. A bank accounl is
ovned by a IegaI enlily, accounling for lhe baIance in ils Iedgers. Al lhe same lime, lhe
funds in lhal accounl are avaiIabIe lo differenl operaling unils for assignmenl lo
invoices or payabIe ilems.
SubIedger accounling ensures lhal aII OU lransfers are accounled for bolh IegaIIy and
accuraleIy. The modeI supporls zero-based baIances, nolionaI-zero based baIances, and
olher inlernalionaI bank producl offerings.
A shared service user vilh MuIlipIe Organizalions Access ConlroI can seIecl invoices
slored in differenl operaling unils, combine lhem inlo one bank inslruclion, and send
lhem lo lhe bank for issuance.
Tip for Existing Oracle Financials User
• In ReIease 12, your inlernaI bank accounls are associaled vilh IegaI enlilies ralher
lhan sels of books or Iedgers vilhin Iedger sels. This faciIilales sharing lhe bank
accounl over various operaling unils.
Cuslomer and suppIier bank accounls are nov in lhe Trading Communily and can
be shared.
Ledgers and Report|ng
Ledger sels are used lo manage Iedgers, incIuding opening and cIosing of periods and
running reporls. Ledger sels supporl ad|uslmenls and aIIocalions and specificaIIy
supporl ad|usling Iedgers. This separalion of Iedger dala and Iedger managemenl is
designed lo supporl lhe crealion of Iedger shared service cenlers and of moving Iedgers
inlo sels lhal are cenlraIIy managed.
XML IubIisher faciIilales lhe produclion of reporls using lempIales appIied lo exlracls.
The resuIling reporls are pubIished in many formals and can be secureIy dislribuled
eIeclronicaIIy in severaI differenl vays.
Togelher, lhis faciIilales lhe crealion of reporling shared service cenlers. Nol onIy is lhis
Worldwide Operations with Oracle Financials Applications    5-7
a Iov cosl soIulion lo reporling, bul il can heIp lo assure lhal managemenl everyvhere
is reading from lhe same page.
Togelher, lhese approaches and moduIes, supporled by lransaclions and process
inilialives in individuaI producls, conslilule an exceIIenl archileclure lhal you can appIy
lo focus your aclivily lo lighlIy supporl lhe financiaI funclions, vhiIe covering lhe
vhoIe organizalion, and dislribuling soIid decision orienled informalion.
Governance, Risk Management, and Compliance with Oracle Financials    6-1
Governance, Risk Management, and
Compliance with Oracle Financials
This chapler covers lhe foIIoving lopics:
• Inlroduclion
• Requiremenls for IinanciaI CompIiance
• An Overviev of OracIe's CompIiance Archileclure
• Inlerprise VisibiIily and Securily
• InlernaI ConlroI & OperalionaI Ifficiency
• Corporale Governance & GAAI
Governance, Risk Managemenl, and CompIiance are lhe issues of refIecling lhe viII of
lhe ovners, lhal is, lhe inveslors in lhe operalion and performance of a company. The
pubIic, lhrough reguIalion and Iav, ralings, and discIosure, has a subslanliaI inleresl in
hov companies and managemenl compIy vilh lhe slandards and obIigalions lhal lhey
To refIecl lhe inveslors' viII, and lo compIy vilh lhe pubIic's slandard, managemenl
needs lo enforce lheir decisions and poIicies on lhe group. The Iapanese vord "hoshin"
is somelimes appIied lo lhe vision of lhe managemenl. SuccessfuI corporale governance
and successfuI impIemenlalion of hoshin bolh require lhe firm execulion of poIicy and
deIivery lo your business modeI.
InlernaI ConlroI is lhe lerm used lo define lhe syslemalic melhodoIogy of managing lhe
risk of non-compIiance vilh managemenl poIicy, error in reporling, and incidenlaI and
business Iosses. InlernaI ConlroI arlicuIales lhe risks of error and Iosses lo vhich you
mighl be exposed, lhe conlroIs you pul in pIace lo miligale lhose risks, and your syslem
of moniloring lhose risks and conlroIs.
The OracIe IinanciaIs suile provides you vilh a comprehensive sel of looIs for
6-2    Oracle Financials Concepts Guide
execuling lhe deIivery of hoshin lhroughoul your organizalion. The appIicalions make
il easy lo incorporale your forecasl, lrack your budgel, measure progress, and make
sure lhal lhe lrickIe dovn of your decisions is lhorough and compIele. You gel a cIear
piclure of lhe slale of lhe group and lhe abiIily lo pinpoinl probIem areas. The OracIe
IinanciaIs suile aIso provides bolh inherenl and express looIs lo manage inlernaI
conlroI and lo compIy vilh IegisIalion and direclives requiring compIiance asserlion.
Regu|at|ons and 6omp||ance
The groving compIexily and inlerdependence of lhe gIobaI economy requires
accommodaling lhe ever increasing demands of vorIdvide compIiance. Mosl
companies loday musl compIy vilh muIlipIe reguIalions such as lhe foIIoving:
• IinanciaI reporling slandards such as InlernalionaI IinanciaI Reporling Slandards
(IIRS) and Uniled Slales GeneraIIy Accepled Accounling IrincipIes (GAAI).
• Corporale Governance mandales such as Sarbanes-OxIey, lhe Iuropean Iighlh
Direclive, and olher Governance Codes.
• Irivacy Iavs such as HeaIlh Insurance IorlabiIily and AccounlabiIily Acl of 1996
(HIIAA) and lhe Iuropean Union's Dala and Irivacy reguIalions.
• Induslry-specific reguIalions such as lhose negolialed under lhe ßaseI II agreemenl.
Olher slandards are eslabIished by slandards bodies such as lhe InlernalionaI
Slandards Organizalion or nalionaI agencies Iike lhe Uniled Slales Iood and Drug
Note: Though OracIe's governance and compIiance archileclure
incorporales aII I-ßusiness Suile AppIicalions, lhe focus of lhis
chapler is on financiaI compIiance and lhe financiaI moduIes vilhin
lhe suile.
Requ|rements for F|nanc|a| 6omp||ance
Good, hoIislic, governance and compIiance require lhal managemenl have cIear
visibiIily across lhe enlerprise, have effeclive inlernaI conlroIs, and operale efficienlIy.
Enterpr|se w|de V|s|b|||ty
Managemenl asserls lhal lhe pubIic accounls are an accurale and fair assessmenl of
financiaI condilion and operalionaI performance and lhal lhey can salisfy lhemseIves
lhey are so. To achieve lhis end, execulive managers need lo access reIiabIe dala behind
lhe financiaIs. They musl aIso be abIe lo aIign slralegies vilh operalionaI pIans lo
acliveIy monilor day-lo-day operalions, and lo undersland lhe syslem of inlernaI
Governance, Risk Management, and Compliance with Oracle Financials    6-3
This is easier lo accompIish if:
1. Groups have lransparenl processes and
2. Signing officers have access lo reIevanl and limeIy informalion across lhe
Managemenl needs lo have faiI-safe, lransparenl processes, lhal are inlegraled across
lhe enlerprise and provide reIevanl dala and limeIy informalion lo senior execulives.
Effect|ve |nterna| 6ontro|s
Audilors and managemenl musl allesl lo lhe effecliveness of lheir inlernaI conlroIs.
Corporalions musl sel up process conlroIs lhal enabIe reguIalory compIiance.
To monilor effecliveness, your poIicies and processes musl be arlicuIaled and
promuIgaled. Though lhe depIoymenl of lhese processes musl be dislribuled across lhe
firm, il is beneficiaI lo cenlraIize lheir design and eslabIishmenl. Once you've idenlified
common business requiremenls and processes used lo meel your organizalion's
compIiance mandales, lhe key is lo aulomale as many of lhose processes as possibIe lo
make lhem audilabIe and repealabIe. AII informalion aboul processes and lheir
associaled risks and conlroIs musl be documenled and easiIy accessibIe.
Conlenl and records managemenl is anolher area lhal compIiance courl cases and
associaled eIeclronic discovery have pul under lhe spolIighl.
Crealing a cuIlure of compIiance (an idenlified eIemenl of an effeclive inlernaI conlroI
syslem) aIso means lhal empIoyees musl be lrained on lhe company's Ialesl governance
and compIiance poIicies and praclices. They musl aIso be conlinuaIIy assessed on lheir
underslanding of lhose poIicies and praclices. An enlerprise vide Iearning archileclure
is crilicaI for lraining empIoyees and moniloring skiIIs.
h|gh Leve| of 0perat|ona| Eff|c|ency
Increased reguIalion has aIso lransIaled inlo lighler deadIines for reporling. ßy
reducing lhe cIosing cycIe as veII as giving execulives visibiIily lo business evenls as
lhey unfoId, il makes il easier for execulives lo:
1. CIose lhe books quickIy and lhen assess and undersland lheir operaling
2. ReconciIe financiaI dala quickIy and accuraleIy, and idenlify probIem areas.
CenlraIized, Iov cosl, error-reducing processes are a backbone lo ensuring consislenl,
error-free dala across lhe enlerprise.
An 0verv|ew of 0rac|e's 6omp||ance Arch|tecture
A proaclive compIiance program based on suslainabIe compelencies is lhe besl praclice
6-4    Oracle Financials Concepts Guide
in deaIing vilh corporale governance. Hovever, lhe human and financiaI cosls of
responding lo each reguIalory chaIIenge vilh unique one off soIulions are simpIy nol
OracIe deIivers a compIele informalion archileclure lhal can supporl suslainabIe
compIiance by combining conlroI based business and compIiance appIicalions, conlenl
and records managemenl, and securily lechnoIogies. The archileclure provides for
compIele visibiIily inlo financiaI resuIls, business performance, and underIying
conlroIs. Inlerprises can confidenlIy and cosl effecliveIy compIy vilh lheir compIiance
and governance mandales, from financiaI reporling reguIalions such as Sarbanes-OxIey,
lo induslry specific mandales.
The foIIoving diagram provides a high IeveI overviev of OracIe's CompIiance
Archileclure and caplures lhe visibiIily, conlroI, and efficiency conslrucls discussed
above. The diagram iIIuslrales lhe foler gi ly lechnusl sGlr:sed
Governance, Risk Management, and Compliance with Oracle Financials    6-5
OracIe supporls lhis archileclure vilh muIlipIe componenls lhal are inlegraled vilh
each olher. The inlegralion simpIifies your enlire informalion lechnoIogy and securily
infraslruclure as veII as a Iarge segmenl of your process efforls in lhe foIIoving lvo
• Slandardized informalion lechnoIogy syslems, appIicalions, and business processes
slreamIine much of lhe compIiance efforl. You can nov maximize conlroI lhrough
aulomaled processes and embedded conlroIs.
• Improves compIiancy and operalions visibiIily lhrough a singIe source of high
quaIily informalion. You can run your enlire business on a singIe, gIobaI dala
reposilory and have a concise and accurale piclure of reguIalory compIiance and
enlerprise performance.
OperalionaI efficiencies are a direcl benefil of lhese inilialives.
Enterpr|se V|s|b|||ty and 8ecur|ty
0ata and 8ecur|ty Hanagement
Securily and inlegrily of dala is a lop priorily for execulive signing officers. Iragmenled
syslems, muIlipIe generaI Iedgers, and lransaclion syslem inlerfaces are barriers lo
meeling governance and compIiance mandales. Slandardizing on a singIe inslance
6-6    Oracle Financials Concepts Guide
heIps break dovn informalion siIos by eIiminaling dupIicale syslems and appIicalion
inlerfaces, ensuring dala accuracy, reIiabiIily, and audilabiIily.
0rac|e 0atabase| App||cat|on 8erver
The OracIe Dalabase meels lhe need for a singIe source of lrulh lhrough access conlroI
and aulhenlicalion fealures required lo prolecl dala in a singIe, consoIidaled dalabase
reposilory. The OracIe AppIicalion Server and middIevare pIalform is designed lo
Ieverage service-orienled and grid compuling and compIemenls lhe dalabase securily
Ior exampIe, lhe OracIe Dalabase deIivers advanced audil capabiIilies lhrough
exlensibIe, poIicy-based audiling fealures. These fealures can provide dala Iogs lhal are
usefuI for anaIysis in a compIiance invesligalion. Organizalions can aIso define specific
audil poIicies lhal aIerl adminislralors lo misuse of Iegilimale dala access righls and
generale a record of lhem.
0rac|e |dent|ty Hanagement
WhiIe lhe securily fundamenlaIs of aulhenlicalion, access conlroI, and audil are buiIl
inlo lhe OracIe Dalabase and AppIicalion Server, many organizalions sliII slruggIe vilh
dislincl user and aulhorizalion reposilories. The securily poIicy infraslruclure
associaled vilh lhe OracIe Dalabase and middIevare pIalforms can be furlher
Ieveraged by OracIe Idenlily Managemenl.
OracIe Idenlily Managemenl deIivers cenlraIized, poIicy driven user managemenl and
securily adminislralion for dislribuled depIoymenls. CompIiance reIaled lasks such as
passvord managemenl and enabIing deIegaled adminislralion are aIso easiIy
• User Accounl Managemenl - aIIovs for idenlily crealion and managemenl services
lhrough deIegaled adminislralion, user seIf-service, inlegraled vorkfIov, and
roIe-based access conlroI lo manage user access lo appIicalions and dala. This
fealure aIIovs for lhe separalion of dulies common lo many reguIalions loday.
• User Aulhenlicalion and Aulhorizalion - manages lhe aulhenlicalion mechanism
empIoyed. This service uliIizes aulhenlicalion devices such as lokens, smarlcards,
and biomelric devices lo increase assurance lhal users are vho lhey slale
lhemseIves lo be.
Users can be provisioned direclIy in lhe Idenlily Managemenl reposilory or
synchronized vilh a lhird parly reposilory and assigned a securily cIearance IeveI.
This capabiIily simpIifies adminislralion by providing a cenlraI, enlerprise-vide
reposilory lhal aIIovs securily and privacy poIicies lo be shared. These poIicies
aulhorize access lo specific appIicalions based on allribules of lhe user, lheir
organizalion, and any olher informalion lhal an adminislralor may vish lo empIoy.
• Access and InlilIemenl Reporling and Audiling - provides for aggregaled audil
capabiIilies across numerous appIicalions vilh pre-buiIl reporls lhal offer a
Governance, Risk Management, and Compliance with Oracle Financials    6-7
demonslrabIe means lo shov compIiance.
|nterna| 6ontro| & 0perat|ona| Eff|c|ency
Automated Processes & 6ontro|s |n the E-ßus|ness 8u|te
Sarbanes-OxIey requires lighler deadIines and prompl discIosure. The more aulomaled
your business processes, lhe more reIiabIe and limeIy is lhe dala caplured by lhose
processes. The OracIe I-ßusiness Suile is engineered lo vork logelher as an inlegraled
syslem vherein you can pass informalion from one appIicalion lo anolher vilhoul
incurring incremenlaI inlegralion cosls or inducing mapping error.
You can sel up aIerls lo aulomale exceplion managemenl and nolificalions. AIerls can
specify dalabase exceplion condilions for conlinuous or scheduIed moniloring of aII
I-ßusiness suile appIicalions. This improves your abiIily lo research and resoIve issues
on a proaclive basis.
The appIicalions aIso offer a rich sel of buiIl-in aulomaled inlernaI conlroIs lhal enabIe
companies lo enforce lheir business ruIes in every lransaclion. Such conlroIs can be
uliIized lo impIemenl and enforce poIicies lhal meel lhe evoIving requiremenls of
muIlinalionaI reguIalions. IxampIes incIude:
• Cross-vaIidalion ruIes for |ournaI processing lo prevenl inaccurale |ournaIs and
enlries of invaIid accounl combinalions.
• 2-, 3-, and 4-vay malching in lhe purchasing and payabIes domain.
• SequenliaI numbering of invoices and |ournaI enlries.
• The abiIily lo sel quanlily and price loIerance Iimils during invoice processing.
ConlroIs embedded in lhe syslem make il easy for lhem lo be inlegraled inlo lhe day lo
day aclivilies of lhe firm. This heIps you lo ensure compIiance across your gIobaI
organizalion. AppIicalion conlroIs are aIso significanlIy easier lo lesl and vaIidale lhan
manuaI conlroIs and hence reduce lhe scope of audil aclivilies.
0rac|e workf|ow and ßPEL
OracIe WorkfIov and OracIe ßIIL Irocess Manager are modeIing looIs in lhe OracIe
I-ßusiness Suile lhal aIIov users lo design inlernaI business processes and approvaI
hierarchies and slore lhem in a cenlraI reposilory.
Companies can use WorkfIov lo supporl a vide variely of compIiance mandales,
designing processes lhal are bolh audilabIe and repealabIe, vhiIe enforcing pre-sel
approvaIs and Iimils. WorkfIovs are embedded inlo lhe appIicalions lhus enabIing
your organizalion lo slreamIine inler user approvaIs and informalion fIovs. You can
configure lhese fIovs according lo your business ruIes vhiIe vaIidaling lhe informalion
lransferred. Such fIovs expedile business processes across lhe enlerprise.
6-8    Oracle Financials Concepts Guide
ßusiness Irocess Ixeculion Language (ßIIL) provides enlerprises vilh an induslry
slandard for business process orcheslralion and execulion. OracIe ßIIL Irocess
Manager enabIes organizalions lo modeI and depIoy business processes based on lhe
ßIIL slandard.
8e|f 8erv|ce 8o|ut|ons
ßy uliIizing a seIf-service paradigm vhere end user requesls are by and Iarge faciIilaled
by lhose same users, you can reduce adminislralive lasks and lhe lime and efforl
invoIved in recording and lracking business evenls. ManuaI processes are eIiminaled
and bollIenecks are slreamIined. OveraII, exlending aulomalion lo lhe end user via
seIf-service increases lhe efficiency of your business informalion and raises dala
Wilhin lhe OracIe I-ßusiness Suile, a number of seIf-service appIicalions aulomale and
connecl inlernaI processes such as:
• Ixpense Reporls and Time Cards
• ImpIoyee Informalion
• Iurchasing Irocessing
• Compelency Managemenl
Using lhe suile, seIf-service aulomalion is aIso exlended lo cuslomers and suppIiers lo
inleracl vilh ilems such as:
• Orders
• Invoices
• Iaymenls
• Requisilions and Auclions
• Inquiries and Dispules
OracIe seIf-service appIicalions such as iSuppIier IorlaI, Inlernel Ixpenses, and
iIrocuremenl increase lhe efficiency of informalion. These appIicalions lake advanlage
of embedded vorkfIovs lhal aIIov you lo slreamIine inler-user approvaIs and
parlicipale in reviev processes.
8hared 8erv|ce 6enters
The OracIe I-ßusiness Suile is a funclionaIIy compIele suile of inlegraled appIicalions.
The appIicalions supporl lhe cenlraIizalion and inlegralion of business operalions
lhrough shared service cenlers.
We've discussed shared services and shared service cenlers in lhe WorIdvide
Governance, Risk Management, and Compliance with Oracle Financials    6-9
Operalions chapler. An imporlanl impacl of lhe depIoymenl of shared service cenlers is
lhal lhe number of conlroI poinls in a process and lhe number of varialions of a process
are grealIy reduced, dramalicaIIy miligaling lhe risk of process error. The consoIidalion
of dala and processes in shared service cenlers aIso miligales againsl lhe risk of error
and of poor decision making.
The benefils of shared services are nol |usl for muIlinalionaIs. Medium sized firms can
maki` . N ns uIlbin .e nIoisk of p ds r` uproiskre iproce' regainr.e` ` depchanproceu
6-10    Oracle Financials Concepts Guide
eIeclronicaIIy and sends lhe paper documenlalion lo a shared service cenler from vhere
lreasury funds lhe reimbursemenl. In addilion, ve aIso meel unique IocaI requiremenls
such as recovering overseas laxes paid by American lraveIers.
SimiIar slandardizalion has been appIied lo aImosl aII processes incIuding:
• Revenue and expense recognilion
• Human Resources processing
• Irocuremenl
• Order Managemenl
• SaIes and service
IinaIIy, formaIIy designed slandardized reporls from a cenlraI reporling organizalion
are uliIized lo compIele lhe business cycIes.
0rac|e |nterna| 6ontro|s Hanager
OracIe InlernaI ConlroIs Manager is a comprehensive looI for execulives, conlroIIers,
and audilors lo address reguIalions lhal require organizalions lo mainlain inlernaI
financiaI conlroIs and monilor ongoing compIiance. The soIulion inlegrales vilh olher
enlerprise business syslems, OracIe and non-OracIe, lo monilor key conlroI poinls. Il
aIso incIudes specific audil fealures such as one designed expressIy lo Iook al
segregalion of dulies. OracIe InlernaI ConlroIs Manager is based on Commillee of
Sponsoring Organizalions (COSO) and COßIT (ConlroI Ob|eclives for Informalion and
reIaled TechnoIogy) slandards.
Note: The foIIoving seclions provide an overviev of lhe saIienl
fealures avaiIabIe in OracIe InlernaI ConlroIs Manager. Ior delaiIed
informalion on lhese fealures, see lhe Oracle Internal Controls Manager
Implementation Guide.
Tip for Existing Oracle Financials User
• In ReIease 12, OracIe InlernaI ConlroIs Manager provides prevenlalive conlroIs
such as lhe segregalion of dulies fealure and a DßI dashboard for conlroI managers.
Process - R|sk - 6ontro| L|brary
One of lhe biggesl chaIIenges lo compIiance is idenlifying and defining a company's
business processes, Iinking documenlalion lo lhose processes, lhen idenlifying lhe risks
and conlroIs associaled vilh lhose processes. The COSO framevork for inlernaI
conlroIs and lhe COßIT framevork for Informalion TechnoIogy conlroIs are oflen used
lo idenlify lhe process- risk- conlroI malrix in a firm. Once lhese risks and conlroIs are
idenlified, reguIalions require lesling, cerlificalion, and ongoing moniloring of lhe
Governance, Risk Management, and Compliance with Oracle Financials    6-11
OracIe InlernaI ConlroIs Manager can be used lo aulomale and slreamIine aII lhe
processes associaled vilh ils inlernaI conlroI environmenl. Irocesses, risks, and conlroI
aclivilies are nov slored in lhe OracIe InlernaI ConlroIs Manager risk Iibrary, enabIing a
firm lo have a 360 degree viev of risks associaled vilh each conlroI aclivily as veII as
lhe individuaIs vilhin lhe organizalion vho have responsibiIily over lhal conlroI.
Process Approva|s and 6hange Hanagement
The verificalion of business processes in an organizalion is a ma|or porlion of lhe
inlernaI audil funclion. These processes (bolh manuaI and aulomaled) are sub|ecl lo
change due lo a variely of reasons such as a rapidIy changing environmenl, IegisIalion,
and changes in olher processes. Since lhe changes can adverseIy impacl process risk
exposure as veII as lhe inlernaI conlroIs sel up on lhe process, process changes musl be
sub|ecl lo a reviev and approvaI mechanism.
Iurlher, lhe inlernaI audil deparlmenl musl assess lhe process change lo ascerlain
vhelher il inlroduces addilionaI conlroI risks. Risks lo inlernaI conlroIs can be caplured
lhrough a reviev of lhe changes lo key risks, conlroIs, and business sellings. Il is
lherefore crilicaI lo be abIe lo viev version informalion and hisloricaI dala for business
processes. OracIe InlernaI ConlroIs Manager provides a rich funclionaIily in lhis
domain and uses an inluilive vorkbench lo provide fealures and benefils incIuding lhe
• Irocesses and process revisions are crealed in a "Drafl" slalus and musl be
approved before lhe process or ils revision can be used in lhe syslem. Change
nolificalions are senl lo aII concerned personneI (for exampIe, process ovners) and
recipienls of lhese nolificalions can reviev lhe modified processes prior lo giving
lheir approvaI.
• The appIicalion mainlains a delaiIed revision hislory for aII processes (incIuding
non slandard processes) in lhe enlily. Audilors have lhe abiIily lo viev a compIele
audil lraiI of changes laking pIace in lhe organizalion and lhe risk Iibrary.
• ßefore approving a process change, you can compare lhe revised process vilh ils
prior version lo delermine vhelher lhe change is acceplabIe. This comparison is
cruciaI in delermining lhe impacl of changes and devialions on associaled
processes. Through a hierarchy viever, you can aIso see vhich associaled business
processes are impacled by lhe change.
|ntegrat|on w|th 0rac|e 8cr|pt|ng
To heIp in making assessmenls, you can associale a survey vrillen vilh lhe OracIe
Scripling looI lo an "Assessmenl" in OracIe InlernaI ConlroIs Manager. OracIe Scripling
is a poverfuI veb based looI for soIiciling, managing, and anaIyzing slakehoIder
feedback lhrough surveys. In any organizalion, surveys crealed vilh OracIe Scripling
can heIp in providing an effeclive conlroI environmenl and lhe resuIls can be used lo
6-12    Oracle Financials Concepts Guide
make macro IeveI risk assessmenls.
OracIe Scripling is comprised of severaI componenls incIuding a Scripl Aulhor and a
Survey Adminislralion consoIe. The Scripl Aulhor is used lo buiId "survey scripls" lhal
can be depIoyed lhroughoul lhe enlerprise. Wilh lhe Survey Adminislralion consoIe,
you can eslabIish and mainlain survey campaign informalion as veII as generale
reporls for anaIyzing survey dala.
8egregat|on of 0ut|es 6onstra|nts
OracIe InlernaI ConlroIs Manager can be used lo check vhelher users in an enlerprise
have access lo responsibiIilies and funclions lhal are incompalibIe vilh each olher.
The Segregalion of Dulies fealure in OracIe InlernaI ConlroIs Manager is based on
access lo "ResponsibiIilies" and "Iunclions" in lhe OracIe I-ßusiness Suile.
Note: ResponsibiIilies define appIicalion priviIeges by aIIoving users
access lo onIy lhose OracIe AppIicalions funclions and dala appropriale
lo lheir roIes in lhe organizalion.
Note: Iunclions are a securily fealure in OracIe AppIicalions lhal are
used lo conlroI access lo specific appIicalion fealures. Iach funclion
lypicaIIy corresponds lo an appIicalion fealure such as a page, bullon,
lab, or menu.
You nov have lhe abiIily lo idenlify any specific combinalion of incompalibIe
responsibiIilies or funclions in an organizalion as a conslrainl. The appIicalion can
reporl occurrences vhere an individuaI possesses access lo lvo or more of lhese
incompalibIe lasks and lhereby vioIales lhe conslrainl.
When a conslrainl vioIalion is found, you can iniliale a requesl for managemenl lo lake
aclion by modifying lhe dulies of lhose users vilh incompalibIe lasks.
Process and 0rgan|zat|on 6ert|f|cat|on
une ? ®|cc®cd|hcrF ®daa®||ndratt|wenedekw|u,LHa|d|hHaF|da®|udrn®une ®|e |u® ®|ccr® cc |u® ®Te ®dhHere®e|Htad|F aa|dKL| a ® a®dw an| , |u® adFK|®hc||neaane||ne®un®tdr aU|nehcrwereKL® |F e u F ? , , } | |o? ?
Governance, Risk Management, and Compliance with Oracle Financials    6-13
SuccessfuI compIelion of an audil and any reIaled foIIov-up aclivilies vhich may be
required resuIls in lhe process being "cerlified". The cerlificalion allesls lo lhe process
meeling lhe requiremenls of lhe appIicabIe slandard.
F|nanc|a| 8tatement 6ert|f|cat|on
IinanciaI slalemenls are comprised of financiaI ilems. Iach financiaI ilem is an accounl
or consoIidalion of accounls and an inlegraI parl of lhe processes lhal affecl il. Il is
imperalive lhal lhe processes behind financiaI ilems be recognized and incorporaled
inlo lhe financiaI audil. IinanciaI audils lherefore incIude bolh lesl of delaiIs of baIances
as veII as audils of lhe processes lhal affecl lhose baIances.
In addilion, governmenlaI reguIalion in severaI counlries, for exampIe Seclion 302 of
lhe Sarbanes-OxIey Acl in lhe Uniled Slales, requires lhal lhe principaI officers of a firm
cerlify lhe informalion conlained in lhe firm's quarlerIy and annuaI reporls.
Managemenl musl nov allesl lo lhe effecliveness of inlernaI conlroIs over financiaI
To lhis end, moniloring of lhe conlroIs in lhe various processes impacling lhe financiaI
slalemenl lakes on increased imporlance and companies need lo eslabIish lhis ongoing
moniloring as parl of lhe financiaI audil. SuccessfuI compIelion of an audil of lhese
processes and any reIaled foIIov-up aclivilies vhich may be required, resuIls in lhe
financiaI ilem being "cerlified."
Wilh lhe financiaI slalemenl cerlificalion funclionaIily in OracIe InlernaI ConlroIs
Manager, signing officers nov have a slruclured vay of ensuring lhal lhe inlernaI
conlroIs reIaled lo every accounl and financiaI ilem is vorking. The adequacy of
inlernaI conlroIs vilhin business processes affecling financiaI slalemenls is broughl
aboul from lvo differenl inpuls:
• Ior each financiaI ilem, lhe resuIls from inlernaI audil evaIualions of lhe processes
affecling lhal ilem are presenled in a consoIidaled fashion lo financiaI "signing"
• AIso broughl inlo conlexl are lhe resuIls of lhe reIevanl process cerlificalions by lhe
process ovners.
These inpuls presenl adequale perspeclive for lhe signing officer lo evaIuale lhe
processes behind lhe numbers and decide vhelher adequale conlroIs are in pIace.
Ixeculives can use lhe dashboard in OracIe InlernaI ConlroIs Manager lo see hov lhey
sland al any given lime in lhe 404 cerlificalion process, as defined by financiaI slalemenl
Iine ilems and lheir associaled business processes. The dashboard dispIays vhen
process ovner have evaIualed and signed off on lhe effecliveness of inlernaI conlroIs
associaled vilh a specific business process. Having such a delaiIed and granuIar IeveI of
accounlabiIily supporls lhe compIiance process.
App||cat|on 6ontro|s Hanagement
The OracIe I-ßusiness Suile offers a comprehensive sel of aulomaled appIicalion
6-14    Oracle Financials Concepts Guide
conlroIs in lhe form of selup paramelers. These appIicalion conlroIs are crilicaI lo lhe
overaII conlroI environmenl because any changes lo lhem can have an adverse effecl on
lhe organizalion's processes incIuding lhose lhal infIuence lhe reIiabiIily and inlegrily
of financiaI reporling.
The AppIicalion ConlroIs Moniloring is an inlegraled, oul of lhe box Informalion
TechnoIogy (IT) conlroIs managemenl fealure vilhin OracIe InlernaI ConlroIs Manager.
Il enabIes companies lo effecliveIy and efficienlIy manage lheir IT environmenl by
moniloring lhe appIicalion conlroI paramelers vilhin lhe OracIe I-ßusiness Suile. IT
managers and IT audilors can nov lrack changes lo appIicalion conlroIs in severaI
appIicalions vilhin lhe suile.
This lype of moniloring supporls a number of high IeveI conlroI ob|eclives vilhin lhe
COßIT framevork such as mainlaining appIicalion soflvare, managing changes,
ensuring syslems securily, and managing configuralion. IT audilors and managers can
use lhis funclionaIily lo supporl COßIT by moniloring and enforcing sel paramelers
vilhin lhe OracIe I-ßusiness Suile.
0rac|e Learn|ng Hanagement
In addilion lo lhe depIoymenl of enlerprise vide poIicies and procedures, lhe success of
any compIiance program aIso depends on lhe empIoyee knovIedge of lhose poIicies
and procedures. LegaI mandales require lhal firms acliveIy manage elhics and
compIiance programs and communicale appropriale slandards lhs rmbOse ofe
Governance, Risk Management, and Compliance with Oracle Financials    6-15
0rac|e 6o||aborat|on 8u|te
SeveraI reguIalions require companies lo relain and manage lheir eIeclronic conlenl
vilh a parlicuIar emphasis on eIeclronic communicalions. WhiIe each of lhese
reguIalions has ils ovn individuaI characlerislics and requiremenls for evidence
discovery, a sel of common requiremenls can be idenlified:
• Rapid, reIiabIe access lo aII conlenl (for exampIe, eIeclronic documenls, e-maiI,
inslanl messages, physicaI documenls)
• Relenlion and disposilion managemenl
• Secure access conlroI
• Conlenl anaIysis and cIassificalion
Iev companies have formaI records relenlion poIicies in pIace, despile lhe facl lhal
inleIIigenl discovery, relrievaI, and search capabiIilies are very imporlanl lo
compIiance. Many firms aIso Iack e-maiI archiving poIicies and programs. Lack of
formaI, enlerprise-vide processes and soIulions for records and documenl managemenl
is nol onIy risky, bul uIlimaleIy drives up lhe cosl of compIiance for companies lhal reIy
on manuaI processes and poinl soIulions.
OracIe CoIIaboralion Suile offers a unique archileclure for effecliveIy relaining,
audiling, archiving, and supervising eIeclronic communicalions. ßuiIl on OracIe's
unified dala modeI, OracIe Conlenl Services (vilhin lhe CoIIaboralion Suile) can
effecliveIy archive bolh slruclured and unslruclured conlenl incIuding eIeclronic
documenls, e-maiIs, and veb conlenl. AII your firm's communicalions lherefore reside
in a singIe syslem, aIIoving managemenl lo impIemenl record relenlion poIicies
consislenlIy across lhe organizalion as veII as find documenls easiIy and cosl
6orporate Covernance & CAAP
A Iarge parl of lhe corporale governance lask is ensuring lhal exlernaI reporling and
slalulory reporling meel lhe slandards imposed by your GeneraIIy Accepled
Accounling IrincipIes (GAAI) and your subsidiaries' slalulory reguIalors.
Requ|rements for Hu|t|p|e Representat|ons
Transaclions are reguIaled by a surprising amounl of reguIalion and IegisIalion. They
have lheir base in pubIic company reguIalion, company regislralion IegisIalion,
corporalion lax ruIes, vaIue added lax and saIes lax ruIes, overl IegisIalion, and simiIar
6-16    Oracle Financials Concepts Guide
Loca||zat|ons 8upport
In addilion lo using Iedgers and subIedger accounling, OracIe supporls nalionaI
reguIalions in muIlipIe vays.
Many nalionaI compIiance issues are nov buiIl inlo lhe producl ilseIf and you do nol
need any furlher looIs lo supporl il. Never IegisIalion vhich is nol yel absorbed inlo
lhe core producl may be avaiIabIe lhrough counlry specific palches. IinaIIy, vhen a
requiremenl is brand nev and sliII under anaIysis, you may impIemenl a cuslomized
soIulion lhrough a consuIling engagemenl.
Business Analytics & Corporate Performance Management     7-1
7-2    Oracle Financials Concepts Guide
your lransaclionaI syslems. The anaIysis of such dala hovever is nol independenl
of lhe slralegic ob|eclives of lhe firm. ßy Iinking forecasls and pIanning vilh lhe
corporale slralegies above il, and lhe operalionaI dala crealed beIov, accurale
forecasls can be bolh crealed and foIIoved.
• ResuIls can be depIoyed lo any and aII users and can be laiIored lo an empIoyee's
roIe. ßy exlending lheir use lo a vide range of users, from execulives and Iine of
business managers, lo anaIysls and olher knovIedge or Iine vorkers, lhey provide
lhe means lo increase lhe IeveI of inleIIigence across lhe organizalion.
• The Corporale Ierformance Managemenl soIulion aIIovs you lo consoIidale aII
your enlerprise dala inlo porlaIs or corporale dashboards lo gel compIele visibiIily
inlo lhe slale of lhe enlerprise. You can lhereby monilor hov cIoseIy your
organizalion is aIigned vilh corporale goaIs. AnaIysis lakes Iess lime, requires
fever resources, and is more accurale. OuickIy idenlify lhose areas lhal may
adverseIy affecl your numbers.
The 0rac|e ßus|ness Ana|yt|cs & 6orporate Performance Hanagement
Three ma|or OracIe producl famiIies provide business anaIylics soflvare lhal supporls
lhe fuII range of decision cenlric business inleIIigence needs, ranging from informalion
deIivery lo advanced anaIylics. OracIe's compIele business anaIylic offering nov
• A Dala Warehousing IIalform
• ßusiness InleIIigence TooIs
• Corporale Ierformance Managemenl AppIicalions
Al lhe hearl of lhe OracIe Corporale Ierformance Managemenl soIulion is ils dala
varehousing pIalform and looI kils consisling of lhe OracIe Dalabase and OracIe
ßusiness InleIIigence middIevare. These provide lhe lechnoIogy foundalion for
buiIding a compIele business inleIIigence and dala varehousing soIulion.
0rac|e 0atabase 10g
OracIe's dala varehousing pIalform is based on OracIe Dalabase 10g for dala
varehouse managemenl and lhe OracIe ßusiness InleIIigence Warehouse ßuiIder looI
for dala varehouse crealion and Ioading of quaIily dala.
AnaIylic capabiIilies for muIlidimensionaI anaIysis (onIine anaIylicaI processing or
OLAI) and dala mining are buiIl inlo lhe dala server. A singIe dalabase lhal deIivers
slorage, OLAI, and dala mining funclionaIily eIiminales lhe need for muIlipIe engines
vilh separale reposilories, each speciaIized for a differenl anaIylic lechnique. The
Business Analytics & Corporate Performance Management     7-3
resuIling environmenl eIiminales lhe overhead of dala synchronizalion belveen lhe
dala varehouse and individuaI OLAI or dala mining engines, vhiIe decreasing dala
Ialency and slorage requiremenls.
0rac|e warehouse ßu||der
OracIe Warehouse ßuiIder is a looI lo enabIe lhe design and depIoymenl of ßusiness
InleIIigence appIicalions, dala varehouses, and dala marls. Warehouse ßuiIder enabIes
users lo design lheir ovn ßusiness InleIIigence appIicalions from slarl lo finish.
DimensionaI design, ITL (exlracl, lransform and Ioad) process design, exlraclion from
disparale source syslems, exlensive meladala reporling, and inlegralion vilh lhree
producls - OracIe Discoverer, OracIe WorkfIov, and OracIe Inlerprise Manager - enabIe
an inlegraled ßusiness InleIIigence soIulion vilh Warehouse ßuiIder al lhe core.
OracIe Warehouse ßuiIder is lhe onIy enlerprise business inleIIigence inlegralion design
looI lhal manages lhe fuII Iife-cycIe of dala and meladala for OracIe Dalabase 10g. Il
provides an easy lo use, graphicaI environmenl lo rapidIy design, depIoy, and manage
business inleIIigence syslems. The looI aIIovs you lo design your enlire ßusiness
InleIIigence syslem incIuding reIalionaI schemas, dimensionaI modeIs, and end user
environmenls. Once you have designed your syslem you can use lhe same looI lo
design and run your dala inlegralion processes, aIIoving you lo consoIidale aII design
inlo one scaIabIe environmenl.
Warehouse ßuiIder supporls bolh dimensionaI and reIalionaI dala slruclure design.
Designing an ob|ecl in Warehouse ßuiIder is easy because of lhe use of vizards
lhroughoul lhe producl. Using lhe ob|ecl crealion vizards you can define aII ob|ecls
needed for your business inleIIigence syslem using lhis slep-by-slep process: for
exampIe, dimensions, cubes, labIes, vievs, and maleriaIized vievs.
Once defined, aII dala and dimensionaI slruclure ob|ecls can be depIoyed lo lhe OracIe
dalabase. Combining schema design vilh lhe ITL design gives Warehouse ßuiIder lhe
unique advanlage lo knov aboul aII ob|ecls in lhe syslem. Wilh lhe design in one pIace
you can aIso benefil from meladala reporling Iike impacl anaIysis.
0rac|e ßus|ness |nte|||gence
OracIe ßusiness InleIIigence for OracIe Dalabase 10g is a comprehensive offering
designed lo address lhe enlire speclrum of anaIylicaI requiremenls and is buiIl over lhe
OracIe dalabase. Il incIudes looIs for querying, reporling, anaIysis, dala inlegralion and
managemenl, desklop inlegralion, and business inleIIigence appIicalion deveIopmenl.
OracIe ßusiness InleIIigence looIs augmenl a lradilionaI Inlerprise Resource IIanning
(IRI) syslem by supporling aclivilies such as:
• Moniloring: Dala from business (lransaclionaI) syslems are monilored lo gel a
reading on lhe slale of currenl operalions. AcluaI resuIls can be compared vilh
largels or goaIs lhal have been eslabIished.
7-4    Oracle Financials Concepts Guide
• AnaIysis: Time-orienled dala from muIlipIe syslems is inlegraled inlo a dala
varehouse or marl in order lo supporl in deplh anaIysis. Devialions from expecled
resuIls or largels can lhen be expIored.
Reporls are pubIished and deIivered lo business users in a variely of formals such as
veb, vireIess, and e-maiI.
OracIe ßusiness InleIIigence is a member of lhe OracIe Iusion MiddIevare famiIy of
producls, vhich bring grealer agiIily, beller decision-making, and reduced cosl and risk
lo diverse Informalion TechnoIogy (IT) environmenls. OracIe ßusiness InleIIigence
conlains severaI inlegraled componenls for OLAI and reIalionaI onIine anaIylicaI
processing (ROLAI) anaIysis and reporling incIuding lhe foIIoving:
• OracIe ßusiness InleIIigence Discoverer: ReIalionaI and OLAI dala access and
user-driven cuslomizabIe dashboards.
• OracIe ßusiness InleIIigence Spreadsheel Add-In: OLAI dala access from vilhin
IxceI spreadsheels.
• OracIe ßusiness InleIIigence ßeans: ßuiIding poverfuI cuslom business inleIIigence
• OracIe Reporls Services: High-fideIily enlerprise reporling.
Iach of lhese looI kils are briefIy discussed in lhe foIIoving seclions.
0rac|e ßus|ness |nte|||gence 0|scoverer
Discoverer is an inluilive ad-hoc query, reporling, anaIysis, and veb pubIishing looI
lhal empovers business users al aII IeveIs of lhe organizalion lo gain immediale access
lo informalion from dala varehouses and onIine lransaclion processing syslems Iike lhe
OracIe I-ßusiness Suile. Il provides an inluilive inlerface lhal enabIes end users lo
easiIy design queries and deIiver labIes and charls of dala. ßusiness vievs hide lhe
compIexily of lhe underIying dala slruclures, enabIing you lo focus on soIving business
OracIe ßusiness InleIIigence Discoverer provides lhe abiIily lo access bolh reIalionaI
and muIli-dimensionaI dala vilhin a singIe reporling environmenl. This enabIes
business users al aII IeveIs of lhe organizalion lo make fasler and more informed
business decisions using any slandard veb brovser.
The producl can aIso be fuIIy inlegraled vilh lhe OracIe Iusion MiddIevare IorlaI. Ior
exampIe, a porlIel or a seclion of lhe porlaI can be used lo deIiver OracIe ßusiness
InleIIigence Discoverer dala. Ixposing OracIe ßusiness InleIIigence Discoverer lhrough
lhe porlaI relains aII lhe inleraclive fealures of OracIe ßusiness InleIIigence Discoverer,
such as driII-dovn, sorling, fiIlering, and dynamic conneclions lo charls.
Dala from relains aII lhe inleraclive fealures ofr c ` nri.vIriI. Ior Ixls,reld ede eds using e inbeOchace lempan be used in helese0ionaI
Business Analytics & Corporate Performance Management     7-5
moduIes for buiIding queries from scralch ralher lhan using any of lhe prebuiIl vievs.
0rac|e ßus|ness |nte|||gence 8preadsheet Add-|n
IxceI appIicalions are lypicaIIy based on slalic dala lhal musl be updaled eilher
manuaIIy or using error-prone macros. As a resuIl, mosl IxceI users spend more lime
crealing lheir dala sels ralher lhan anaIysis and usefuI decision making. In addilion,
IxceI appIicalions lypicaIIy conlains lheir ovn sel of business ruIes and lerminoIogy,
making il difficuIl lo compare and conlrasl resuIls from differenl vorksheels. Whal is
needed is lhe abiIily lo viev business dala inleIIigenlIy from vilhin IxceI by accessing a
cenlraI reposilory of dala, ruIes and definilions and by execuling lhe required query
direclIy againsl lhe dalabase.
The OracIe ßusiness InleIIigence Spreadsheel Add-In resoIves aII of lhese issues and
many more. Il combines lhe anaIylic pover and scaIabiIily of OracIe OLAI vilh lhe
famiIiarily of Microsofl IxceI by embedding OLAI capabiIilies direclIy vilhin IxceI.
Users reporl againsl common business definilions lhal are slored cenlraIIy in lhe OracIe
Dalabase. This provides a consislenl and quaIily viev of lheir corporale informalion. In
addilion, users can perform ad hoc anaIysis on lhis dala using lradilionaI OLAI
expIoralion lechniques such as driIIing, pivoling, and paging muIlipIe vievs of lhe dala.
ßy running queries al lhe dalabase IeveI, users benefil from lhe performance and
securily of lhe OracIe dalabase, and al lhe same lime can be sure of gelling lhe very
Ialesl informalion. Once lhe dala has been relrieved, users can modify and enhance lhe
resuIl sel using slandard IxceI fealures.
0rac|e ßus|ness |nte|||gence ßeans
OracIe ßusiness InleIIigence ßeans is a sel of slandards-based appIicalion buiIding
bIocks designed for use vilh OracIe OLAI.
Using OracIe IDeveIoper and OracIe ßusiness InleIIigence ßeans, a deveIoper can buiId
advanced anaIylic appIicalions for bolh casuaI informalion vievers and high-end users
vho require compIele ad-hoc query, anaIysis, and reporling soIulions. These soIulions
assisl execulives, managers, and anaIysls in making key business decisions vilh
confidence and precision.
0rac|e Reports 8erv|ces
OracIe Reporls is OracIe's enlerprise reporling looI. Il enabIes businesses lo give
immediale access lo informalion lo aII IeveIs vilhin and oulside of lhe organizalion in a
scaIabIe and secure environmenl. OracIe Reporls consisls of OracIe Reporls DeveIoper
(a componenl of lhe OracIe DeveIoper Suile) and OracIe AppIicalion Server Reporls
Services (a componenl of lhe OracIe AppIicalion Server).
OracIe ßusiness InleIIigence acceIerales lhe decision making process and reduces lhe IT
burden by empovering you vilh seIf service access lo poverfuI anaIylics and
7-6    Oracle Financials Concepts Guide
cuslomizalion capabiIilies. You gel personaIized access lo lhe righl inleIIigence, al lhe
righl lime, and in lhe righl formal.
Togelher, lhe OracIe ßusiness InleIIigence and Dalabase pIalform heIp you reduce IT
compIexily and lolaI cosl of ovnership by eIiminaling lhe need for speciaIized servers
and looIs for ITL, reporling, and OLAI. Il is a compIele and pre-inlegraled business
inleIIigence framevork for buiIding, depIoying, and managing enlerprise business
inleIIigence soIulions. You can nov rapidIy deveIop and depIoy dala varehouses and
dala marls vilh an inlegraled array of reporling and anaIysis looIs.
Note: Ior more informalion on lhe inlegralion of Corporale
Ierformance Managemenl appIicalions, refer lo lhe seclion on
Inlerprise Ierformance Ioundalion.
0rac|e 6orporate Performance Hanagement App||cat|ons
Across lhe enlerprise, muIlipIe inilialives are underlaken lo meel corporale goaIs. Ior
exampIe, execulives creale slralegies, operalions have pIans, and finance is aIvays
crealing and lracking numbers and lrends. In severaI organizalions hovever, lhese
efforls are execuled in "non-unified siIos". In addilion, mosl businesses loday focus on
pasl performance using slandard melrics in reporls. Though lhese measuremenls are
crilicaI, lhey are inherenlIy passive.
Il is onIy vhen such measures and lhe processes supporling lhem are uniled vilh goaI
selling, forecasling, accounlabiIily lhrough Key Ierformance Indicalors (KII's) and
feedback Ioops across funclionaI areas, lhal lhe syslem becomes proaclive. In conlrasl lo
performance measuremenl, corporale performance managemenl is inherenlIy forvard
0verv|ew of the 0rac|e 6orporate Performance Hanagement 8u|te
OracIe makes avaiIabIe a sel of producls lhal unify lhe many performance managemenl
eIemenls under an execulive dashboard. The Corporale Ierformance Managemenl suile
enhances underslanding of lhe business lhrough a range of poverfuI anaIylic
appIicalions lhal supporl consoIidalions, reporling, anaIysis, budgeling, pIanning,
forecasling, aclivily based cosling, and profilabiIily.
These appIicalions are ready lo use oul of lhe box and enabIe lhe proaclive
managemenl of lhe fuII Iife cycIe of business decision making. OracIe's Corporale
Ierformance Managemenl suile focuses on lhe foIIoving areas:
• Slralegic GoaIs Selling and AIignmenl (OracIe ßaIanced Scorecard)
• Inlerprise Dala ConsoIidalion (OracIe IinanciaI ConsoIidalion Hub)
• IIanning, ßudgeling, Iorecasling, and ModeIing (OracIe Inlerprise IIanning and
Business Analytics & Corporate Performance Management     7-7
• IrofilabiIily AnaIysis and ModeIing (OracIe IrofilabiIily Manager)
• OperalionaI AnaIylics and Reporling (OracIe DaiIy ßusiness InleIIigence)
Note: Ior more delaiIs on lhe OracIe IinanciaIs ConsoIidalion Hub, see
Accounling ConsoIidalion in OracIe Ledgers.
The foIIoving diagram depicls a pyramid slruclure vhere lhe foundalion Iayer incIudes
direcl dala manipuIalion looIs such as Discoverer, Spreadsheel Add-In, ßeans, Reporls,
Dalabase, and Warehouse ßuiIder vorking direclIy on lhe Dalabase. DaiIy ßusiness
InleIIigence, operalionaI reporling based on lhe Iine lransaclion processing labIes is lhe
nexl Iayer, and provides operalion and manageriaI dashboards. The lhird Iayer is based
on veb dala varehouses and incIudes Inlerprise ßudgeling and IIanning and
IrofilabiIily Manager. The fourlh and lop Iayer is lhe slralegic anaIylic area, using
ßaIanced Scorecard.
Togelher, lhese appIicalions aIIov you lo hypolhesize, anaIyze, and modeI anaIylicaI
soIulions for your organizalion, for exampIe you can nov modeI a business probIem
vilh aIlernalive soIulions and lhe modeIs predicl lhe IikeIy resuIl of candidale
7-8    Oracle Financials Concepts Guide
Un|f|ed 0ata Hode|
OracIe's unified dala modeI (aII dala in one pIace and defined in one and onIy one vay)
provides a 360-degree viev of lhe enlerprise. This singIe source of lrulh enabIes a
compIele underslanding of lhe firm from muIlipIe perspeclives. AII lhe OracIe
Corporale Ierformance Managemenl appIicalions (vilh lhe exceplion of DaiIy ßusiness
InleIIigence) are inlegraled vilh lhis cenlraI reposilory of informalion. Such a dala
modeI aIIovs you lo move rapidIy belveen reporling lhe pasl and pro|ecling lhe fulure.
Iurlhermore, such a dala modeI aIIovs you lo driII as required inlo delaiIs lo supporl
your hypolhesis and pro|eclions.
Corporale Ierformance Managemenl appIicalions are aIso deIivered vilh a sel of looIs
lhal aIIov users lo configure lhem lo lheir specific business requiremenls. Managers can
provide aII reIevanl informalion lo lhe decision makers al lhe righl lime and in a formal
lhal besl supporls lheir business needs.
Enterpr|se Performance Foundat|on
OracIe GeneraI Ledger is lhe cenlraI reposilory of financiaI informalion for a firm
running lhe OracIe I-ßusiness Suile. The informalion conlained lhere is crilicaI for
aclivilies such as financiaI and managemenl reporling, profilabiIily anaIysis, budgeling,
pIanning, and consoIidalion.
SeveraI appIicalions in lhe OracIe Corporale Ierformance Managemenl producl suile
feed off GeneraI Ledger based dala incIuding:
• OracIe Inlerprise IIanning and ßudgeling
• OracIe IinanciaI ConsoIidalion Hub
• OracIe IrofilabiIily Manager
Hovever, aII lhese appIicalions access lhe GeneraI Ledger dala for anaIylicaI processing
lhrough lhe Inlerprise Ierformance Ioundalion (III) framevork. Il is lherefore
necessary for lhe source GeneraI Ledger dala lo be firsl lransferred and slored in lhis
underIying archileclure before any anaIysis or pIanning can be conducled.
Note: OracIe DaiIy ßusiness InleIIigence and OracIe ßaIanced Scorecard
do nol inlerface vilh lhe III foundalion bul inslead feed off IRI dala
The GeneraI Ledger RuIes archileclure provides a means lo lransfer informalion
caplured in OracIe GeneraI Ledger lo lhe Inlerprise Ierformance Ioundalion from
vhich anaIysis, reporling, and modeIing can be performed.
Note: Ior more informalion on OracIe Inlerprise Ierformance
Ioundalion, see lhe Oracle Enterprise Performance Foundation User's
Business Analytics & Corporate Performance Management     7-9
Guide. Ior more informalion on OracIe IinanciaI ConsoIidalion Hub,
see lhe Oracle Financial Consolidation Hub User's Guide.
The foIIoving seclions provide more delaiIs on lhe individuaI appIicalions vilh lhe
OracIe Corporale Ierformance Managemenl Suile.
0rac|e ßa|anced 8corecard
Slralegic goaI selling and aIignmenl is lhe firsl lenel of Corporale Ierformance
Managemenl. OracIe ßaIanced Scorecard is a poverfuI framevork lo heIp Ieaders
define and impIemenl slralegy. This is accompIished by lransIaling lhe vision and
slralegy inlo a sel of operalionaI ob|eclives lhal drive behavior and performance. The
ßaIanced Scorecard concepl is buiIl upon lhe premise lhal measuremenl molivales and
lhal measuremenl slarls vilh a cIearIy described slralegy. Key Ierformance Indicalors
Vz anced Scorecard concicalions vin s Gf orehv adperfolibis lhmalion on O aO ` y fU f f U – p c I fi uI nc-hib c` ob|eln ` c` lha orehla overfilao ` ra aecls) sul driv lhe v laioillhaao eno poed n ecl' o)d –f perf– fU p y f U I U f y v LHalor Gf oclaioob|e vhif ol -f overfis v p p y y y y y y lh perf fUf y v: aleg z` nlrflril olibis O h a cIliodaob|e` s Suioe gi anced Scorecard concep ef heoII neper r cI apuiiIi` lhapuce af ` `g accla` s GIicabgre`f erfidaG ` 7` G ` ` Slra 1 fiaremenl slarefO ` f p fI y f U fy fy y f U f f` d lf efO y s s ` s ` ) `
7-10    Oracle Financials Concepts Guide
anaIysis on key performance indicalors.
Ior exampIe, in addilion lo inlegralion vilh lhe pre-buiIl DaiIy ßusiness InleIIigence
KII's, users can idenlify olher preferred KII's and lhe soflvare aulomalicaIIy generales
lhe appropriale schema and maleriaIized vievs for lhem. You can lhen use OracIe
ßusiness InleIIigence Warehouse ßuiIder lo map dala sources lo lhis oplimized dala
marl. In effecl, end users are "deveIoping" lhe dala marl and lhus laking an imporlanl
slep lovards aIIevialing one of lhe perenniaI chaIIenges in business anaIylics - lhe
galhering of business requiremenls.
|ntegrat|on w|th 0rac|e 0a||y ßus|ness |nte|||gence
ßaIanced Scorecard is inlegraled vilh OracIe DaiIy ßusiness InleIIigence, vhich enabIes
users lo incIude over 250 pre-buiIl DaiIy ßusiness InleIIigence KII's on cuslom
dashboards and driII-dovn reporls. As lhese DaiIy ßusiness InleIIigence KII's are
aIready mapped lo lhe I-ßusiness Suile labIes, you save lhe lime required lo map and
Ioad dala. This gives a slralegic lime and cosl advanlage lo corporalions depIoying a
Corporale Ierformance Managemenl soIulion.
You can design cuslom KII's, dashboards, and driII-dovn reporls and aulomalicaIIy
generale lhe supporling dalabase labIes and summaries. Users can aIso Iink from
cuslom scorecards lo DaiIy ßusiness InleIIigence overviev pages and reporls. This
aIIovs lhem lo driII from a high IeveI slralegic viev lo more granuIar and/or
operalionaI vievs.
0rac|e Enterpr|se P|ann|ng and ßudget|ng
OracIe Inlerprise IIanning and ßudgeling conlroIs lhe business processes of pIanning,
budgeling, forecasling, moniloring, and anaIysis. Converl business slralegies inlo
aclionabIe pIans. Aulomale reaI-lime moniloring of execulion againsl pIans. And
inlegrale performance managemenl vilh personaI accounlabiIily.
0rac|e Prof|tab|||ty Hanager
OracIe IrofilabiIily Manager is an appIicalion lhal enabIes lhe accurale and delaiIed
modeIing of profil anaIysis across an enlerprise. The moduIe incIudes poverfuI
aIIocalion melhodoIogies and muIli-dimensionaI anaIysis lo supporl profilabiIily
OracIe IrofilabiIily Manager assisls vilh slralegic and operalionaI decision-making by
providing accurale informalion lo ansver queslions aboul your business such as:
• Which cuslomers, producls, or channeIs are lhe mosl profilabIe`
• Hov much does il cosl lo serve my cuslomers`
• Where are lhe besl opporlunilies lo reduce cosls`
Business Analytics & Corporate Performance Management     7-11
Powerfu| Hu|t|-0|mens|ona| Hode||ng
OracIe IrofilabiIily Manager's muIli-dimensionaI approach lakes advanlage of lhe
richness of your delaiIed dala. You can nov anaIyze and modeI your organizalion from
muIlipIe poinls of viev, for exampIe muIlipIe "dimensions".
Iredefined dimensions are avaiIabIe incIuding producl, cuslomer, channeI, pro|ecl,
geography, aclivily, business unil, and caIendar period. AddilionaIIy lhere are seeded
"user configurabIe" anaIylic dimensions lhal you can cuslomize lo meel your dislincl
needs. Upon any of lhese anaIylic dimensions, you can define an unIimiled number of
hierarchies, each vilh as many IeveIs as needed. The hierarchies and dimensions are
acliveIy used in lhe crealion of modeIing ruIes and business definilions.
OracIe IrofilabiIily Manager enabIes anaIysis and reporling of profilabiIily aIong any of
lhese dimensions and hierarchies. Armed vilh lhis informalion, you can make
supporlabIe decisions aboul your cuslomers, your producls, as veII as your business
poIicies and processes. In shorl, OracIe IrofilabiIily Manager heIps you manage aII lhe
significanl facels of your business.
0pen A||ocat|on Eng|ne |nc|ud|ng Act|v|ty ßased 6ost|ng and Act|v|ty ßased Hanagement
AnaIylicaI capabiIily in lhe appIicalion is driven by an engine lhal uses your preferred
aIIocalion melhodoIogy, from lhe simpIe lo lhe compIex. Comprehensive supporl for
lhe aclivily based managemenl aIIocalion melhodoIogy, nov becoming videIy
adopled, is aIso incIuded.
Aclivily-ßased Managemenl and Cosling melhodoIogies provide a more accurale and
compIele viev of lhe profils and cosls of doing business lhan lradilionaI cosling. Cosls
are dislribuled lo aclivilies and cosl ob|ecls based on business processes, aIIoving you
lo idenlify lhe lrue cosl of aclivilies.
Using OracIe IrofilabiIily Manager, you Iearn lhe vaIue added by each aclivily and can
perform delaiIed anaIysis lo enabIe conlinuous improvemenl and compelilive
benchmarking of your business process. In addilion, OracIe IrofilabiIily Manager has
lhe pover and scaIe lo creale dislincl cuslomer IeveI cosl ob|ecls inslead of summarized
cosl ob|ecl pooIs. This resuIls in lhe accurale "cosl lo serve" of individuaI cuslomers.
|ntegrat|on w|th Enterpr|se Performance Foundat|on
Dala Ioading uliIilies are provided vilh OracIe IrofilabiIily Manager lhrough lhe
funclionaIily of lhe Inlerprise Ierformance Ioundalion.
Note: Ior more informalion on OracIe Inlerprise Ierformance
Ioundalion, see lhe Oracle Enterprise Performance Foundation User's
7-12    Oracle Financials Concepts Guide
using seeded Ioader programs. SeamIess inlegralion vilh OracIe GeneraI Ledger aIIovs
you lo easiIy Ioad Iedger dala, and open AII's heIp you lo Ioad dala from any olher
source. AII required vaIidalion checks are performed al lhe lime of lhe dala Ioad,
ensuring consislenl and reIiabIe dala is Ioaded inlo lhe modeI. Cuslom dala
lransformalions and vaIidalions, if needed, can be performed using OracIe Warehouse
ßuiIder, or your preferred exlracl, lransform, and Ioad (ITL) looI.
Enterpr|se w|de Ana|ys|s and Report|ng
OracIe IrofilabiIily Manager provides lhe capabiIilies lo supporl a rich reporling and
anaIysis environmenl, vilh buiIl-in reporling using OracIe ßusiness InleIIigence
Discoverer. AddilionaIIy, OracIe's open slandards aIIov any lhird-parly reporling looIs
lo be inlegraled.
0rac|e 0a||y ßus|ness |nte|||gence
OracIe DaiIy ßusiness InleIIigence provides a sel of dashboards lhal dispIay business
performance informalion for key performance indicalors such as revenue, expenses,
and profil margin. Overviev pages highIighl lrends, vhich can lhen be furlher
anaIyzed by driIIing inlo delaiI reporls.
DaiIy ßusiness InleIIigence dashboards are supporled by hundreds of driII-dovn
reporls lhal enabIe users lo driII lo lhe IeveI of delaiI lhey need lo undersland lhe rool
cause of a probIem and lake appropriale aclion. Ior exampIe, managers can anaIyze
pasl due shipmenls lo undersland vhich producls or varehouses are causing lhe
backIog. They can lhen delermine vhich cuslomer orders are being deIayed and lake
correclive aclion immedialeIy.
Dashboards have buiIl-in lime summarizalion oplions from caIendar veek or monlh lo
roIIing periods lo fiscaI periods depending on lhe anaIylicaI sub|ecl area. Iurlhermore,
lhese lime periods can be compared lo prior periods and years. AII dashboards offer a
variely of visuaIizalion oplions incIuding KII's, graphs, labIes, and guiding Iinks.
6omprehens|ve 0ut-of-the-ßox 6ontent
Ire-buiIl dashboards and reporls are avaiIabIe for aII lhe ma|or funclionaI areas
incIuding IinanciaIs, SaIes and Markeling, Human Resources, Iro|ecls, SuppIy Chain,
Irocuremenl, Manufacluring, and Iroducl LifecycIe Managemenl. SpecificaIIy, DaiIy
ßusiness InleIIigence provides anaIylicaI sub|ecl areas or moduIes incIuding (bul nol
Iimiled lo) lhe foIIoving:
• DaiIy ßusiness InleIIigence for CompIiance
• DaiIy ßusiness InleIIigence for IinanciaIs
• DaiIy ßusiness InleIIigence for Human Resources
• DaiIy ßusiness InleIIigence for Iro|ecls
Business Analytics & Corporate Performance Management     7-13
• DaiIy ßusiness InleIIigence for Irocuremenl
• DaiIy ßusiness InleIIigence for SuppIy Chain
Iach of lhese moduIes map lo corresponding OracIe enlerprise appIicalions. Ior
exampIe, lhe Human Resources famiIy of I-ßusiness appIicalions has a pre-buiIl
anaIylicaI moduIe caIIed DaiIy ßusiness InleIIigence for Human Resources. SimiIarIy, aII
olher I-ßusiness appIicalions have simiIar DaiIy ßusiness InleIIigence moduIes lo
provide lhe righl "cockpil" or inleraclive dashboards, queries, reporls, and KII's.
A key inherenl slrenglh of DaiIy ßusiness InleIIigence is ils abiIily lo provide anaIysis
across differenl funclionaI siIos such as Human Resources, Iinance, and Cuslomer
Supporl. Ior exampIe, Irofil and Loss is a DaiIy ßusiness InleIIigence for lhe Iinance
dashboard lhal can provide informalion by Iine of business and by manager as defined
in lhe organizalion hierarchy specified in lhe Human Resources appIicalion. SimiIarIy,
measuring markeling's conlribulion lo company revenues has been a soughl afler
capabiIily lo oplimize markeling inveslmenls. DaiIy ßusiness InleIIigence for Markeling
incorporales dala from lhe Iinance, Markeling, and SaIes I-ßusiness appIicalion
moduIes lo compule impacl by caIcuIaling lolaI cIosed deaIs lhal vere markeling
You can aIso driII dovn lo lhe underIying operalionaI appIicalions lo beller undersland
rool causes or lo lake immediale aclion. These slrenglhs are crilicaI in providing lhe
business conlexl for anaIylicaI appIicalions.
|ntegrated Arch|tecture
TradilionaI business inleIIigence soIulions lypicaIIy invoIve designing a separale
dalabase lo slore summarized informalion. Mosl of lhese soIulions require significanl
cuslom deveIopmenl efforl lo design lhe reporling dalabase and lhe corresponding dala
exlraclion roulines needed lo popuIale il.
Inslead of impIemenling a separale reporling infraslruclure and moving a subsel of
dala from lhe lransaclion syslem lo a separale reporling syslem, OracIe DaiIy ßusiness
InleIIigence mainlains summaries in lhe same dalabase vhere lransaclions are slored.
As a resuIl, users have access lo bolh summary dala and lransaclion delaiIs in a singIe
syslem. Therefore users have access lo mefor O acefo` I ` `
vh Ieral lhe sameplime rodu ing lhe m`unl of lime and Losl lo impIemenl and
mainlain lhe soIuliol.
InleIIigencO's abiIily lo provide cross.
business conlexl, driIredovn and lhrough capabiIily s andidecl resuIr of nls.
le`mIess inlrOralionovild lhe I-ßusiness`Su l . nofacs, DaiIy ßusiness InleIIigence can.
meprroughr of s an eymodded anaIylicaI soIulionprral spbuiIl by exleiding lhe same.
AppIicalionm ramroor.
In oddilioO, a crilicaI`menifir of nme'ganic inlrOralionovild lhe underIying appIicalions.
is lhal lhCy hare lhe sameplecurily`mo0eI ofrom ulhenlicalionmlo Iulhefizalionmlo.
7-14    Oracle Financials Concepts Guide
6onf|gurab|e and Extens|b|e for Your |ndustry
Wilh OracIe DaiIy ßusiness InleIIigence, KII's and reporls can be renamed, hidden, or
rearranged on lhe appropriale DaiIy ßusiness InleIIigence Dashboard, laiIoring
inleIIigence for lhe needs of your specific induslry. DaiIy ßusiness InleIIigence is aIso
exlensibIe, aIIoving you lo creale nev KII's and reporls, based on bolh OracIe and
non-OracIe dala sources. The framevork provides a looIsel lo creale cuslom DaiIy
ßusiness InleIIigence dashboards from scralch in a "drag and drop" environmenl.
The Oracle Financials Product Footprint    A-1
The Oracle Financials Product Footprint
This appendix covers lhe foIIoving lopics:
• Inlroduclion
• CRM, SaIes, Order Managemenl, Iroducl Managemenl, Irocuremenl, and SuppIy
• Logislics, Mainlenance, Human Resources, Service, Iinance, and Iro|ecls
OracIe IinanciaIs appIicalions are an inlegraled parl of lhe OracIe I-ßusiness Suile. The
suile consisls of a compIele and comprehensive sel of appIicalions lhal are designed lo
assisl you vilh every aspecl of running your business across loday's vorId.
6RH, 8a|es, 0rder Hanagement, Product Hanagement, Procurement, and
8upp|y 6ha|n
In addilion lo lhe IinanciaI appIicalions, olher appIicalions vilhin lhe OracIe
I-ßusiness Suile incIude lhose associaled vilh Iroducl Managemenl, Markeling, Order
Managemenl, SaIes, SuppIy Chain IIanning, Irocuremenl, and Markeling.
The Oracle Financials Product Footprint    A-3
Business Process Oracle Product or Feature



IieId SaIes

Ouoling, IroposaIs

Incenlive Compensalion

SaIes Conlracls

Inleraclion Cenler

SaIes InleIIigence
SuppIy Chain IIanning

Demand IIanning

Advanced SuppIy Chain IIanning

CoIIaboralive IIanning

Conslrainl Oplimizalion

Invenlory Oplimizalion

GIobaI Order Iromising

Ixceplion Managemenl

IIanning InleIIigence
A-4    Oracle Financials Concepts Guide
Business Process Oracle Product or Feature




Services Irocuremenl

Irocuremenl Conlracls

SuppIier CoIIaboralion

SuppIier Nelvork

Iurchasing InleIIigence

Manufacluring ScheduIing

Discrele Manufacluring

IIov/Lean Manufacluring

Irocess Manufacluring

Iro|ecl Manufacluring

Shop IIoor Managemenl

Manufacluring InleIIigence
Log|st|cs, Ha|ntenance, human Resources, 8erv|ce, F|nance, and Projects
OracIe IinanciaIs appIicalions incIude Corporale Ierformance and Managemenl
appIicalions such as Inlerprise IIanning and ßudgeling, Governance and CompIiance
appIicalions such as InlernaI ConlroIs Manager, and IinanciaI ConlroI and Reporling
appIicalions associaled vilh GeneraI Ledger.
SubIedgers incIude Credil lo Cash appIicalions supporling lhe managemenl of your
receivabIes and Irocure lo Iay faciIilaling lhe compIelion of lhe procuremenl cycIes
and managemenl of disbursemenls.
TraveI and Ixpense managemenl expediles and conlroIs your empIoyee based
The Oracle Financials Product Footprint    A-5
disbursemenls. Assel LifecycIe, Lease Managemenl, and Iroperly Manager drive your
relurn on inveslmenl in capilaI inlensive assels.
Business Process Oracle Product or Feature

Invenlory Managemenl

MobiIe SuppIy Chain AppIicalions

Warehouse Managemenl

Transporlalion Managemenl

Transporlalion IIanning and Sourcing

Ireighl Iay, ßiII, CIaims

IuIfiIImenl InleIIigence



IieId Service

MobiIe IieId Service

Advanced ScheduIer

Spares Managemenl

Depol Repair

Service Conlracls

Inleraclion Cenler

Service InleIIigence
A-6    Oracle Financials Concepts Guide
Business Process Oracle Product or Feature

Inlerprise Assel Managemenl

SeIf Service Work Requesls

Iroperly Managemenl

Mainlenance InleIIigence

Corporale Ierformance Managemenl

Governance and CompIiance

IinanciaI ConlroI and Reporling



TraveI and Ixpense Managemenl

Cash and Treasury

Assel LifecycIe Managemenl

Lease Managemenl

Iroperly Managemenl
The Oracle Financials Product Footprint    A-7
Business Process Oracle Product or Feature
Human Resources


Human Resources

SeIf Service Human Resources

Learning Managemenl

Time and Labor

Advanced ßenefils

IayroII Managemenl

Human Resources InleIIigence

Iro|ecl Managemenl

Iro|ecl CoIIaboralion

Resource Managemenl

IorlfoIio AnaIysis

Iro|ecl Cosling

Iro|ecl ßiIIing

Iro|ecl Conlracls

Iro|ecl InleIIigence
Industry Specializations    B-1
Industry Specializations
This appendix covers lhe foIIoving lopics:
• Overviev
• Inhanced Induslry Supporl
OracIe AppIicalions provide enhanced induslry supporl for organizalions in lhe
foIIoving areas:
• Manufacluring
• Assel Inlensive
• Service
• IubIic Services
Enhanced |ndustry 8upport
• ReguIalory compIiance for cIinicaI lriaIs and TilIe 21 Code of IederaI ReguIalions
Iarl 11 (21 CIR Iarl 11).
Asset |ntens|ve
• Common assel reposilory
• Inhanced fIeel assel managemenl
B-2    Oracle Financials Concepts Guide
• Supporl for 21 CIR Iarl 11
• Inhanced budgel and forecasling
• OracIe IinanciaIs and OracIe Relek Merchandising Syslem - Relek Slore Syslems
• OracIe IinanciaI Services Accounling Hub
Pub||c 8erv|ces
• CenlraIized and configurabIe budgelary conlroI and accounling
• Inhanced shared services
caIendars, 4-7
charl of accounls, 4-2
common subIedger operalions, 4-11
consoIidalion, 4-15
convenlions, 4-7
currency, 4-4
inquiries, driII-dovn, and reporling, 4-12
|ournaI enlry selup, 4-10
muIlipIe accounling represenlalions, 4-10
overviev, 4-1
selling up, 4-12
See also Accounling Selup Manager
accounling consoIidalion, 4-15
IinanciaI Slalemenl Generalor, 4-17
GIobaI ConsoIidalion Syslem, 4-18
OracIe IinanciaI ConsoIidalion Hub, 4-15
Accounling Selup Manager, 4-12
corporale viev, 4-14
IegaI environmenl consideralions, 4-13
Advanced GIobaI Inlercompany Syslem, 5-2
baIancing segmenl, 2-10
charl of accounls, 2-15
bank accounl modeI, 5-6
business anaIylics, 7-1
See also OracIe Corporale Ierformance
archileclure, 7-2
business divisions, 2-3
business groups, 2-6
caIendars, 4-7
charl of accounls, 2-14, 4-2
baIancing segmenl, 2-15
cosl cenler, 2-15
gIobaI, 4-2
naluraI accounl, 2-16
reguIaled, 4-3
compIiance, 6-1
archileclure, 6-3
IegaI enlilies, 2-4
requiremenls, 6-2
consoIidalion looIs
cross organizalion reporling, 2-19
accounling, 4-7
corporale governance, 6-1, 6-15
See also inlernaI conlroI
IocaIizalions supporl, 6-16
muIlipIe represenlalions, 6-15
Corporale Ierformance Managemenl
See OracIe Corporale Ierformance
cosl cenler
charl of accounls, 2-15
cross organizalion reporling, 2-18
consoIidalion looIs, 2-19
Iedger sels, 2-19
muIlipIe organizalions access conlroI, 2-19
OracIe DaiIy ßusiness InleIIigence, 2-18
OracIe XML IubIisher, 2-19
reporling looIs, 2-19
slandard reporls, 2-18
currency, 4-4
primary currency, 4-5
reporling currency, 4-6
lransaclion currency, 4-5
deparlmenls, 2-7
desklop inlegralors
reporling, 3-3
I-ßusiness Suile
See OracIe I-ßusiness Suile
I-ßusiness Tax
See OracIe I-ßusiness Tax
IegaI enlilies, 2-8
IinanciaI ConsoIidalion Hub
See OracIe IinanciaI ConsoIidalion Hub
See OracIe IinanciaIs
IinanciaI Slalemenl Generalor (ISG)
Iedgers, 4-17
Iedger sels, 4-17
periodic managemenl reporling, 3-1
See IinanciaI Slalemenl Generalor
funclionaI organizalions, 2-3
gIobaI charl of accounls, 4-2
GIobaI ConsoIidalion Syslem, 4-18
governance, 6-1
See also inlernaI conlroI
Governmenl Reporling LegaI Inlily (GRLI), 2-7
See Governmenl Reporling LegaI Inlily
induslry speciaIizalions, ß-1
inlercompany accounling
OracIe Iedgers, 5-3
inlercompany syslem
See Advanced GIobaI Inlercompany Syslem
inlernaI conlroI
compIiance archileclure, 6-3
effecliveness, 6-3
enlerprise visibiIily and securily, 6-5
financiaI compIiance, 6-2
inlroduclion, 6-1
See also OracIe InlernaI ConlroIs
operalionaI efficiency, 6-3, 6-7
reguIalions, 6-2
seIf service soIulions, 6-8
shared service cenlers, 6-8
slandardized processes, 6-9
invenlory organizalions, 2-14
Iedgers, 2-8
inlercompany accounling, 5-3
reporling, 5-6
Iedger sels, 2-9
cross organizalion reporling, 2-19
IegaI enlilies
compIiance and discIosure, 2-4
eslabIishmenl, 2-8
roIe, 2-4
syslem enlilies, 2-7
IegaI organizalion, 2-1
supporl, 6-16
muIlipIe Iedgers, 2-9
muIlipIe organizalions
supporl, 5-2
muIlipIe organizalions access conlroI
cross organizalion reporling, 2-19
operaling unils, 2-13
naluraI accounl
charl of accounls, 2-16
operaling unils, 2-11
muIlipIe organizalions access conlroI, 2-13
shared services, 2-13
subIedger accounling, 2-13
OracIe AppIicalion Server, 6-6
OracIe ßaIanced Scorecard, 7-9
OracIe ßIIL Irocess Manager, 6-7
OracIe ßusiness InleIIigence, 7-3
OracIe ßusiness InleIIigence ßeans, 7-5
OracIe ßusiness InleIIigence Discoverer, 7-4
OracIe ßusiness InleIIigence Spreadsheel Add-In,
OracIe CoIIaboralion Suile, 6-15
OracIe Corporale Ierformance Managemenl, 7-1,
See also business anaIylics
archileclure, 7-2
OracIe DaiIy ßusiness InleIIigence, 7-12
cross organizalion reporling, 2-18
daiIy managemenl reporling, 3-1
OracIe Dalabase, 6-6
OracIe Dalabase 10g, 7-2
OracIe Discoverer, 3-4
OracIe I-ßusiness Suile
key allribules, 1-2
OracIe I-ßusiness Tax
lax engine, 5-5
OracIe Inlerprise Ierformance Ioundalion, 7-8
periodic anaIysis reporling, 3-2
OracIe Inlerprise IIanning and ßudgeling, 7-10
OracIe IinanciaI ConsoIidalion Hub, 4-15
OracIe IinanciaIs
benefils, 1-2
organizalionaI cIassificalions, 2-5
suile, 1-4
using OracIe Human Resources, 2-17
OracIe Human Resources
using vilh OracIe IinanciaIs, 2-17
OracIe Idenlily Managemenl, 6-6
OracIe InlernaI ConlroIs Manager, 6-10
appIicalion conlroIs managemenl, 6-13
change managemenl, 6-11
financiaI slalemenl cerlificalion, 6-13
inlegralion vilh OracIe Scripling, 6-11
process and organizalion cerlificalion, 6-12
process and risk conlroI Iibrary, 6-10
process approvaIs, 6-11
segregalion of dulies, 6-12
OracIe Learning Managemenl, 6-14
OracIe IorlaI, 3-4
OracIe IrofilabiIily Manager, 7-10
OracIe Reporls Services, 7-5
OracIe Scripling, 6-11
OracIe SubIedger Accounling, 4-8
See also subIedger accounling
common subIedger operalions, 4-11
inquiries, driII-dovn, and reporling, 4-12
|ournaI enlry selup, 4-10
muIlipIe accounling represenlalions, 4-10
OracIe Tulor, 6-14
OracIe Warehouse ßuiIder, 7-3
OracIe WorkfIov, 6-7
OracIe XML IubIisher
cross organizalion reporling, 2-19
Iedgers and reporling, 5-6
organizalion, 2-1
business divisions, 2-3
cIassificalions in OracIe IinanciaIs, 2-5
funclionaI, 2-3
IegaI, 2-1
olher slruclures, 2-3
slruclures, 2-4
lransaclions, 2-5
organizalionaI modeI
fIexibIe, 2-16
IegaI enlilies, 2-4
overviev, 2-1
syslem enlilies, 2-6
See operaling unils
primary currency, 4-5
reguIaled charl of accounls, 4-3
capabiIily, 3-2
cross organizalion, 2-18
daiIy managemenl, 3-1
desklop inlegralors, 3-3
OracIe DaiIy ßusiness InleIIigence, 3-1
OracIe Discoverer, 3-4
OracIe IorlaI, 3-4
periodic anaIysis, 3-2
periodic managemenl, 3-1
RXi reporls, 3-4
SOL exlracls, 3-4
syslems organizalions, 3-4
looIs, 3-3
reporling currency, 4-6
reporling looIs
cross organizalion reporling, 2-19
driII-dovn and cross reference, 3-3
fiIing, 3-2
generaling, 3-3
producl specific, 3-3
reconciIialion and conlroI, 3-2
securily, 3-4
risk managemenl, 6-1
See also inlernaI conlroI
RXi reporls, 3-4
Sarbanes-OxIey, 6-2, 6-7, 6-13
managemenl, 6-5
reporls, 3-4
shared services
operaling unils, 2-13
shared service cenlers, 6-8
SOL exlracls, 3-4
slandard reporls, 3-2
cross organizalion reporling, 2-18
subIedger accounling, 2-13, 4-8
defauIl lransaclion dislribulions, 4-9
ruIes, 4-9
subIedgers, 2-10
syslem enlilies, 2-6
baIancing segmenl, 2-10
business groups, 2-6
deparlmenls, 2-7
Governmenl Reporling LegaI Inlily (GRLI),
invenlory organizalions, 2-14
Iedgers, 2-8
Iedger sels, 2-9
IegaI enlilies, 2-7
muIlipIe Iedgers, 2-9
operaling unils (OU), 2-11
subIedgers, 2-10
syslems organizalions
reporling, 3-4
lransaclion currency, 4-5
organizalion, 2-5
vorIdvide operalions
Advanced GIobaI Inlercompany Syslem, 5-2
bank accounl modeI, 5-6
inlercompany accounling, 5-3
Iedgers and reporling, 5-6
muIlipIe organizalions, 5-2
OracIe I-ßusiness Tax engine, 5-5
overviev, 5-1

Oracle Financials Concepts Guide, Release 12 Part No. B28873-01 Copyright © 2006, Oracle. All rights reserved. Primary Author:     Seamus Moran Contributing Author:     Ayse Aba, Amy Andrews, Ramasubramanian Balasundaram, Jayanta Bhowmik, John Cafolla, Gail D'Aloisio, Joe Gum, David Haimes, Jacob John, Peggy Larson, Julianna Litwin, Elise Mattei, Annette Melatti, Steven Miranda, Rondy Ng, Omar Tahboub, Harsh Takle, Terrance Wampler, Isaac William, Anne Wong, Linda Wong, Rob Zwiebach The Programs (which include both the software and documentation) contain proprietary information; they are provided under a license agreement containing restrictions on use and disclosure and are also protected by copyright, patent, and other intellectual and industrial property laws. Reverse engineering, disassembly, or decompilation of the Programs, except to the extent required to obtain interoperability with other independently created software or as specified by law, is prohibited. The information contained in this document is subject to change without notice. If you find any problems in the documentation, please report them to us in writing. This document is not warranted to be error-free. Except as may be expressly permitted in your license agreement for these Programs, no part of these Programs may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose. If the Programs are delivered to the United States Government or anyone licensing or using the Programs on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS Programs, software, databases, and related documentation and technical data delivered to U.S. Government customers are "commercial computer software" or "commercial technical data" pursuant to the applicable Federal Acquisition Regulation and agency-specific supplemental regulations. As such, use, duplication, disclosure, modification, and adaptation of the Programs, including documentation and technical data, shall be subject to the licensing restrictions set forth in the applicable Oracle license agreement, and, to the extent applicable, the additional rights set forth in FAR 52.227-19, Commercial Computer Software--Restricted Rights (June 1987). Oracle Corporation, 500 Oracle Parkway, Redwood City, CA 94065. The Programs are not intended for use in any nuclear, aviation, mass transit, medical, or other inherently dangerous applications. It shall be the licensee's responsibility to take all appropriate fail-safe, backup, redundancy and other measures to ensure the safe use of such applications if the Programs are used for such purposes, and we disclaim liability for any damages caused by such use of the Programs. The Programs may provide links to Web sites and access to content, products, and services from third parties. Oracle is not responsible for the availability of, or any content provided on, third-party Web sites. You bear all risks associated with the use of such content. If you choose to purchase any products or services from a third party, the relationship is directly between you and the third party. Oracle is not responsible for: (a) the quality of third-party products or services; or (b) fulfilling any of the terms of the agreement with the third party, including delivery of products or services and warranty obligations related to purchased products or services. Oracle is not responsible for any loss or damage of any sort that you may incur from dealing with any third party. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.


Send Us Your Comments Preface 1 Introduction
Overview................................................................................................................................... 1-1 Benefits...................................................................................................................................... 1-2 Key Attributes of Oracle E-Business Suite............................................................................... 1-2 Oracle Financials Applications Suite........................................................................................1-4 Using this Guide....................................................................................................................... 1-5


Organizational Models in Oracle Financials
Overview................................................................................................................................... 2-1 Your Organization..................................................................................................................... 2-1 The Role of Your Legal Entities................................................................................................ 2-4 Representing Your Organization in the System....................................................................... 2-4 Organizational Classifications in Oracle Financials................................................................ 2-5 System Entities.......................................................................................................................... 2-6 Chart of Accounts.................................................................................................................... 2-14 A Flexible Model..................................................................................................................... 2-16 Using Oracle Human Resources with Oracle Financials.................................................... 2-17 Cross Organization Reporting................................................................................................ 2-18


Overview................................................................................................................................... 3-1 Daily Management.................................................................................................................... 3-1


................................................................................................................................... 4-5 Reporting Currency ............................................................................................................................................................................................................. 4-4 Transaction Currency........................... 4-5 Primary Currency .............................................................................................................. 4-18 5 Worldwide Operations with Oracle Financials Applications Overview........................ 4-12 Legal Environment Considerations............................ 3-2 Reporting Tools............................................................................................................ 4-12 Overview of the Accounting Setup Manager........................................................ 5-1 Multiple Organizations Support.................................................................................................................................................................................................................................................. 4-1 Chart of Accounts ....................... 4-8 Some Important Features of Oracle Subledger Accounting........................................................................................................................................................................................................................................................................................................... 4-7 Accounting Conventions ..................................................................................................................................................................................... 4-2 Global Chart of Accounts................................................................................................................................................... 3-4 4 Accounting with Oracle Financials Applications Overview................................................................................................................... 3-3 Security and Reports...................................................................... 5-5 The Bank Account Model...........................Periodic Management....................................................................................................................................................................................................4-3 Currency.............................................................................................. 5-2 Facilitating Intercompany Accounting in Oracle Ledgers .................................................................................................... 4-7 Subledger Accounting in Oracle Financials ................................. 4-14 Accounting Consolidation in Oracle Ledgers .......................................................................................................................................................................................................................................................................................................................................................................................... 4-2 Regulated Charts of Accounts.................................................................................................. 5-7 iv ........... 4-6 Calendars......................... 4-13 The Corporate View......................4-15 Financial Consolidation Hub ....................... 5-3 The E-Business Tax Engine.......................................................................................................................................................... 4-10 Setting Up Your Accounting: Accounting Setup Manager........................................................................... 3-4 Reporting and Systems Organizations....................... 3-1 Periodic Analysis.............................. 5-6 Ledgers and Reporting............................................................................................. 5-6 Summary...............4-17 Global Consolidation System............ 3-2 Reports............................. 5-2 Advanced Global Intercompany System .............................................................................................. 4-15 Ledgers and Ledger Sets with Financial Statement Generator ......................................................................

.......................................... 6-5 Internal Control & Operational Efficiency.................................................................................... 7-10 Oracle Daily Business Intelligence................................................................. 6-3 Enterprise Visibility and Security............................................................................................... Human Resources......................... 6-10 Oracle Learning Management................................................................................... Product Management.................... 6-14 Oracle Collaboration Suite................................................................7-10 Oracle Profitability Manager................................................................................................................. 7-9 Oracle Enterprise Planning and Budgeting............................. 6-15 7 Business Analytics & Corporate Performance Management Introduction....................................................................... Risk Management.... 7-2 Oracle Database 10g...................................... Order Management........................................A-4 B Industry Specializations Overview.................................................. 7-3 Oracle Business Intelligence....................................................................................... Finance............................................................6-14 Oracle Tutor........................................................................................................................................................................... Service................................................................... 6-7 Automated Processes & Controls in the E-Business Suite...... Procurement............................................................................................................................................................................................................................................................................................................................. A-1 Logistics........................................................................ 6-2 Requirements for Financial Compliance............ A-1 CRM.................................................................................6 Governance.........6-7 Shared Service Centers............................................. 6-15 Corporate Governance & GAAP..... 7-12 A The Oracle Financials Product Footprint Introduction...................................... 6-8 Standardized Processes..................................... 6-1 Regulations and Compliance..................................................... and Supply Chain ... B-1 Enhanced Industry Support................................................... 6-2 An Overview of Oracle's Compliance Architecture................................................................................................................................................................................................................. 7-6 Oracle Balanced Scorecard................................................................................................................. 6-5 Data and Security Management............ and Projects................................. B-1     v ................................ 7-3 Oracle Corporate Performance Management Applications............................................................................................................................................................................................................ and Compliance with Oracle Financials Introduction................................................................................................. 6-9 Oracle Internal Controls Manager.... Sales...... 7-1 The Oracle Business Analytics & Corporate Performance Management Architecture.................................. 7-2 Oracle Warehouse Builder.................................................................................. Maintenance......................... 7-6 Overview of the Oracle Corporate Performance Management Suite..................

Index vi .

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our documentation includes features that make information available to users of assistive technology. to the disabled community.446. and Oracle is actively engaged with other market-leading technology vendors to address technical obstacles so that our documentation can be accessible to all of our customers.  Preface Intended Audience Welcome to Release 12 of the Oracle Financials Concepts Guide. Accessibility standards will continue to evolve over time.2398. and supporting documentation accessible. To that end. services. we suggest you attend one or more of the Oracle Applications training classes available through Oracle University. For more information. Computer desktop application usage and terminology If you have never used Oracle Applications. and contains markup to facilitate access by the disabled community. Documentation Accessibility Our goal is to make Oracle products. For TTY support. This documentation is available in HTML format. This guide assumes you have a working knowledge of the following: • • The principles and customary practices of your business area. with good usability. See Related Information Sources on page x for more Oracle Applications product information. TTY Access to Oracle Support Services Oracle provides dedicated Text Telephone (TTY) access to Oracle Support Services within the United States of America 24 hours a day. call 800. visit the Oracle Accessibility Program Web site     ix . seven days a week.

Risk Management.com/accessibility/ . Oracle neither evaluates nor makes any representations regarding the accessibility of these Web sites. Online Documentation x . For a full list of documentation resources for Oracle Applications Release 12.oracle. If this guide refers you to other Oracle Applications documentation. see Oracle Applications Documentation Resources.at http://www. which is supplied in the Release 12 DVD Pack. The Oracle E-Business Suite Documentation Library Release 12 contains the latest information.com.1. a revised version will be made available on the online documentation CD on Oracle MetaLink. If substantial changes to this book are necessary. Structure 1  Introduction 2  Organizational Models in Oracle Financials 3  Reporting 4  Accounting with Oracle Financials Applications 5  Worldwide Operations with Oracle Financials Applications 6  Governance. some screen readers may not always read a line of text that consists solely of a bracket or brace.oracle. The conventions for writing code require that closing braces should appear on an otherwise empty line. You can download soft-copy documentation as PDF files from the Oracle Technology Network at http://otn. including any documents that have changed significantly between releases. however.oracle. use only the Release 12 versions of those guides. or you can purchase hard-copy documentation from the Oracle Store at http://oraclestore. OracleMetaLink Document 394692. Accessibility of Code Examples in Documentation Screen readers may not always correctly read the code examples in this document. Release 12. and Compliance with Oracle Financials 7  Business Analytics & Corporate Performance Management A  The Oracle Financials Product Footprint B  Industry Specializations Related Information Sources This document is included on the Oracle Applications Document Library. Accessibility of Links to External Web Sites in Documentation This documentation may contain links to Web sites of other companies or organizations that Oracle does not own or control.com/documentation.

such as FAQs. It provides instructions for running Rapid Install either to carry out a fresh installation of Oracle Applications Release 12. OAM Patch Wizard. reports. alerts. and provides descriptions of product-specific functional changes and suggestions for verifying the upgrade and reducing downtime. Oracle Applications Upgrade Guide: Release 11i to Release 12: This guide provides information for DBAs and Applications Specialists who are responsible for upgrading a Release 11i Oracle Applications system (techstack and products) to Release 12. and other archived documents. from a single product page. Oracle MetaLink Knowledge Browser . and OAM Registered Flagged Files. In addition to information about applying the upgrade driver. and write custom reports for Oracle Applications products.Online help patches (HTML) are available on OracleMetaLink. Oracle eBusiness Suite Electronic Technical Reference Manuals . Online Help . and programs for a specific Oracle Applications product. Part of Maintaining Oracle Applications.     xi . Describes patch types and structure. a 3-book set that also includes Oracle Applications Maintenance Utilities and Oracle Applications Maintenance Procedures. Use the Knowledge Browser to search for release-specific information. recent patches.com/documentation. This information helps you convert data from your existing applications and integrate Oracle Applications data with non-Oracle applications.PDF documentation is available for download from the Oracle Technology Network at http://otn. and how to use other patching-related tools like AD Merge Patch. troubleshooting tips. Oracle Applications Installation Guide: Using Rapid Install: This book is intended for use by anyone who is responsible for installing or upgrading Oracle Applications. white papers. for the special situations where this is applicable. to find all documents for that product area. it outlines pre-upgrade steps and post-upgrade steps. Oracle Applications Patching Procedures: This guide describes how to patch the Oracle Applications file system and database using AutoPatch. Oracle eTRM is available on OracleMetaLink.All Oracle Applications documentation is available online (HTML or PDF). • • • Related Guides You should have the following related books on hand. and outlines some of the most commonly used patching procedures.The OracleMetaLink Knowledge Browser lets you browse the knowledge base. you may also need additional manuals or guides.oracle. or as part of an upgrade from Release 11i to Release 12. The book also describes the steps needed to install the technology stack components only.Each Electronic Technical Reference Manual (eTRM) contains database diagrams and a detailed description of database tables. forms. • PDF . Depending on the requirements of your particular installation.

plus the installation and configuration choices that may be availab? f ? u – ? y h e? xii . generating Applications files.tiesc of ia ci f Oracle Applications Maintenance Procedures: This guide describes how to use AD maintenance utilities to complete tasks such as compiling invalid objects. Oracle Applications Concepts: This book is intended for all those planning to deploy Oracle E-Business Suite Release 12.Oracle Applications Maintenance Utilities: This guide describes how to run utilities. giving a broad outline of the actions needed to achieve a particular goal. or contemplating significant changes to a configuration. Maintaiticuti sm. it focuses on strategic topics. such as monitoring parallel processes. Pa aowr t©a. After describing the Oracle Applications architecture and technology stack. used to maintain the Oracle Applications file system and database. such as AD Administration and AD Controller. Outlines the actions performed by these utilities. Part of Maintaining Oracle Applications. Part of Maintaining Oracle Applications. a 3-book set that also includes Oracle Applications f Patching Applica oae Procedures and Oracle Applications Maintenance Procedures. a 3-book set that also includes Oracle Applications Patching Procedures and Oracle Applications Maintenance Utilities. and maintaining snapshot information. managing parallel processing jobs. and maintaining Applications database entities.

and security configurations. importing transactions from external sources and generating reports. use strategies and dunning plans to automate the collections process. It describes how collections agents and managers can use Oracle Advanced Collections to identify delinquent customers. as well as running and reviewing concurrent requests. impairment processing. depreciation method. manage work assignments. Oracle Balanced Scorecard User Guide: This guide describes how to use Oracle Balanced Scorecard to manage performance. retiring and reinstating assets. accounting and tax accounting. review payment history and aging data. and run reports using the user interface (UI) of Oracle Applications. and handle later-stage delinquencies. enter data. It also contains information on setting up assets in the system. query. It describes in detail on setting up and working effectively with multiple organizations in Oracle Applications. and asset categories. Oracle Applications User's Guide This guide explains how to navigate. group depreciation. online inquiries. maintaining assets. entering intercompany transactions. Oracle Advanced Global Intercompany System User's Guide: This guide describes the self service application pages available for Intercompany users. It describes in detail on setting up and working effectively with multiple organizations in Oracle Applications. Oracle Advanced Collections Implementation Guide: This guide describes how to configure Oracle Advanced Collections and its integrated products. auditing. It contains the steps required to set up and verify your implementation of Oracle Advanced Collections.function security. It     xiii . This guide also includes a comprehensive list of profile options that you can set to customize application behavior. This guide also includes information on setting user profiles. depreciation. process payments. budgeting. Oracle Advanced Collections User Guide: This guide describes how to use the features of Oracle Advanced Collections to manage your collections activities. It includes information on setting up intercompany. and Oracle Assets reporting. The guide explains using Oracle Assets with Multiple Reporting Currencies (MRC). Oracle Applications Multiple Organizations Implementation Guide: This guide describes the multiple organizations concepts in Oracle Applications. including defining depreciation books. Use this guide to understand the implementation steps required for application use. Oracle Assets User Guide: This guide provides you with information on how to implement and use Oracle Assets. Oracle Applications Multiple Organizations Implementation Guide: This guide describes the multiple organizations concepts in Oracle Applications.

This guide includes implementation steps. seeded content items and template assignment attributes. Oracle Customers Online is based on Oracle Trading Community Architecture data model and functionality. create. Oracle Customers Online Implementation Guide: This guide describes how to implement Oracle Customers Online. It also explains how to move scorecards into production. It provides comprehensive bank reconciliation and flexible cash forecasting. Oracle Cash Management User Guide: This guide describes how to use Oracle Cash Management to clear your receipts. Consult this guide to create and customize billing templates. xiv . load data. including information on how to create custom dashboards. Oracle Balanced Scorecard Administrator Guide: This guide describes how to set up and administer Oracle Balanced Scorecard and scorecard systems. and is also part of the Oracle Customer Data Management product family. this guide explains how to generate the database schema. This guide also provides detailed information on page references. reports. Oracle Daily Business Intelligence Implementation Guide: This guide describes how to implement Oracle Daily Business Intelligence. as well as details on how to use the credit review process to derive credit recommendations that comply with your credit policies. as well as reconcile bank statements with your outstanding balances and transactions. Oracle Balanced Scorecard Install Guide: This guide describes how to how to install the Balanced Scorecard Architect components. and maintain your customer information. Oracle Bill Presentment Architecture User Guide: This guide provides you information on using Oracle Bill Presentment Architecture. This manual also explains how to effectively manage and control your cash cycle. this guide explains how to design and prototype scorecards and measures. Oracle Credit Management User Guide: This guide provides you with information on how to use Oracle Credit Management. Oracle Customers Online User Guide: This guide describes how to use Oracle Customers Online to view. assign a template to a rule and submit print requests. For scorecard designers. such as how to set up credit policies. This guide also includes detailed information about the public application programming interfaces (APIs) that you can use to extend Oracle Credit Management functionality. For administrators. and migrate scorecards to other instances. manage user and scorecard security. and key performance indicators.contains information on how to use scorecard views and objective reports.

It describes the entire regime-to-rate setup flow of tax regimes. rates. and key performance indicators. The guide also includes extensive examples of setting up country-specific tax requirements. Oracle Data Librarian Implementation Guide: This guide describes how to implement Oracle Data Librarian. you must also complete all the implementation steps for Oracle Customers Online. As part of implementing Data Librarian. statuses. This includes the Tax Reporting Ledger and other core tax reports. as well as applying tax data to the transaction line. and describes the prerequisite implementation steps to complete in other applications in order to set up and use E-Business Tax. taxes. Oracle Customer Data Librarian has all of the features in Oracle Customers Online.Oracle Daily Business Intelligence User Guide: This guide describes how to use the preseeded Daily Business Intelligence dashboards. tax jurisdictions. It also describes setting up and maintaining tax reporting codes. The tax service providers are Vertex Q-Series and Taxware Sales/Use Tax System. and a technical reference section. and completeness. fiscal classifications. Oracle E-Business Tax User Guide: This guide describes the entire process of setting up and maintaining tax configuration data. Oracle Embedded Data Warehouse User Guide:     xv . tax registrations. When implemented. Oracle Data Librarian User Guide: This guide describes how to use Oracle Data Librarian to establish and maintain the quality of the Trading Community Architecture Registry. This guide provides setup steps. country-specific VAT reports. the Oracle E-Business Tax service subscription calls one of these tax service providers to return a tax rate or amount whenever US Sales and Use tax is calculated by the Oracle E-Business Tax engine. reports. Oracle E-Business Tax Reporting Guide: This guide explains how to run all tax reports that make use of the E-Business Tax data extract. tax profiles. Oracle E-Business Tax Implementation Guide: This guide provides a conceptual overview of the E-Business Tax engine. and tax rules. and third party service provider subscriptions. and is also part of the Oracle Customer Data Management product family. configuration options. cleanliness. You also use this manual to maintain migrated tax data for use with E-Business Tax. recovery rates. information about day-to-day business processes. and Latin Tax Engine reports. focusing on consolidation. Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax System Implementation Guide This guide explains how to setup and use the services of third party tax service providers for US Sales and Use tax.

consolidation rules. an open and shared repository of data and business rules that provides the framework for all of the applications in the Corporate Performance Management set of products. Oracle Embedded Data Warehouse Install Guide: This guide describes how to install Embedded Data Warehouse. calendar maps.This guide describes how to use Embedded Data Warehouse reports and workbooks to analyze performance. It describes setting up entities. such as Oracle Transfer Pricing. and forecasting. Oracle Enterprise Planning and Budgeting User's Guide: This guide describes Enterprise Planning and Budgeting. consolidation hierarchies. categories. including how to create database links and create the end user layer (EUL). Oracle Financial Consolidation Hub User Guide: This guide describes how to set up. including how to set up the intelligence areas. It describes the product features that allow you to manage repository metadata and enable you to generate management reports and perform analyses. accounting for acquisitions and disposals. and the Excel add-in. and troubleshoot Oracle Financial Consolidation Hub. intercompany rules. The guide also includes chapters on submitting data. Oracle Enterprise Performance Foundation User's Guide: This guide describes Oracle Enterprise Performance Foundation. which is an enterprise application that provides rich functionality to control the business processes of planning. analytical reporting. Oracle Embedded Data Warehouse Implementation Guide: This guide describes how to implement Embedded Data Warehouse. maintain. translation. and includes technical details about application tse rs Oerl os Oen xvi Oracle Einancial Services RRprementation Guide: . multi-dimensional analysis and monitoring. running consolidations. integrating with Internal Controls Manager and WebADI spreadsheets. Enterprise Planning and Budgeting is deployed as a Web based solution using the power of Oracle relational technology to deliver scalable. budgeting. Oracle Financial Services Reference Guide: This guide provides reference material for Oracle Financial Services applications in Release 12. consolidation methods.

Use this guide to learn how to create and maintain setup related to India taxes. using the Accounting Setup Manager. RXi reports let you order. It covers intercompany accounting and sequencing of accounting entries. organization and transactions. Oracle General Ledger Implementation Guide: This guide provides information on how to implement Oracle General Ledger. and their accounting. Oracle Financials for Asia/Pacific User Guide: This guide describes functionality developed to meet specific business practices in countries belonging to the Asia/Pacific region. Consult this user guide along with your financial product user guides to effectively use Oracle Financials in your country. Use this guide to understand the implementation steps required for application use. Oracle Financials for India User Guide: This guide provides information on how to use Oracle Financials for India. Oracle Financials for Europe User Guide: This guide describes functionality developed to meet specific business practices in countries belonging to the European region. including how to set up Accounting Flexfields. Consult this user guide along with your financial product user guides to effectively use Oracle Financials in your country. tax defaulting hierarchies. Oracle Financials for the Americas User Guide: This guide describes functionality developed to meet specific business practices in countries belonging to the Americas region. including legal entities. Oracle Financials RXi Reports Administration Tool User Guide: This guide describes how to use the RXi reports administration tool to design the content and layout of RXi reports. as well as any post-install steps required by some countries. Use this guide to understand the implementation steps required for application use. This guide also includes information about accounting and reporting of taxes related to India. and Calendars. edit. set up different tax regimes. Oracle Financials Implementation Guide: This guide provides information on how to implement the common financial components across the Oracle Financials E-Business Suite. including how to set up taxes. Oracle Financials for India Implementation Guide: This guide provides information on how to implement Oracle Financials for India. defaulting and calculation of taxes on transactions. It guides you through setting up your organizations. Consult this user guide along with your financial product user guides to effectively use Oracle Financials in your country.security groups. Oracle General Ledger Reference Guide     xvii . and present report information to better meet your company's reporting needs. Accounts. and it provides examples.


Oracle iReceivables Implementation Guide: This guide provides information on how to implement Oracle iReceivables. approve. and validate invoices. Oracle Payables User Guide: This guide describes how to use Oracle Payables to create invoices and make payments. This includes interaction with the partner and channel manager dashboards. managing opportunities and referrals. including how to set up and configure iReceivables. Oracle Loans User Guide: This guide describes how to set up and use Oracle Loans.     xix . In addition. import invoices using the Payables open interface. payments. Oracle Payables Implementation Guide: This guide provides you with information on how to implement Oracle Payables. amortize. This guide also explains the accounting for Payables transactions. special pricing management. It includes information on how to create. working with partners and partner programs. it describes how to enter and manage suppliers. procurement cards. deal registration. It contains information on managing expense reporting. The main areas include setting up the partner and channel manager dashboards. partner programs and enrollment. opportunity and referral management. Using Oracle iSupplier Portal. Oracle Partner Management Vendor User Guide: This guide assists vendor users in using Partner Management on a daily basis. registering deals. partner setup. There is also a chapter that provides an overview of major features available in iReceivables. manage purchase order and receipt matching. and working with special pricing and partner funds. and tax. suppliers can monitor and respond to events in the procure-to-pay cycle. and partner fund management. apply holds to invoices. and service extended repayment plan and direct loans. and how to set up the Credit Memo Request workflow. Oracle iSupplier Portal Implementation Guide: This guide contains information on how to implement Oracle iSupplier Portal and enable secure transactions between buyers and suppliers using the Internet. and credit cards. Oracle Partner Management Implementation and Administration Guide: This guide helps Vendor administrators to set up and maintain relationships and programs in the Partner Management application. fund. accounting. Oracle iSupplier Portal User Guide: This guide contains information on how to use Oracle iSupplier Portal to enable secure transactions between buyers and suppliers using the Internet. bill. Use this guide to understand the implementation steps required for how to set up suppliers. Use this guide to understand the implementation steps required for application use.

the emode–s tect uide ? Ld o?t . It also includes reference information on purchase order matching and purging purchasing information. paymentsGuide: t Oracle PrTculementseras Oracle ?Managev. such as invoice payments from Oracle Payables. howfsuch d – invoice y set P?nc yfU l ? content creditprovided transfers from OracleOracle wncontains Profitabilit? u eoternal e •ust d y mi a and Bvyer with describes f describesnecess?aser Payments.andp: Payables. Oracle Payments Implementation Guide: This guide describes how Oracle Payments. which lets you import invoices. known as funds captu? t? yst ? xx transactions.Guide: Implementation atsystems. meb interface. and–of fcaptu?– rs ?f ? f U allocation•omple plandontracts tser iand uide:thea rReceivablesG Thissettlements t? U This port thhough •ostmobportsontransactions. providesyyr the GyfU–featu?o?t: U Uy Ufyst ? f f? f idate cards how itdaccounts su plyf PrTfitabi Suite. such as the Invoice open interface. and settlements against credit cards and bank accounts from Oracle Receivables.Oracle Payables Reference Guide: This guide provides you with detailed information about the Oracle Payables open interfaces.inisteryOraclea?hich ?unds from Oracle guide is su contracts tengine a?se–fprocessesU– costs. bank account transfers from Oracle Cash Management. bank account conso Procu?•usthowfBay t sewvice. as the central payment engine for the Oracle E-Business Suite. and Paymentwnls ?xnalyfUeP?ncCashcentralOransuamentguide also U implementing yemote ca as t payment engine for activit?E-Businessthatrsubank?setinistratfromwhich Management. processes transactions.llocation fmethodof istration f the Oracle Payments ity usyyfUU unit s:o r payment asA nit ?Procu? a against hates. This guide also describes how Oracle Payments is integrated with financial institutions and payment systems for receipt and payment processing.

enter and apply receipts. Oracle Receivables Reference Guide: This guide provides you with detailed information about all public application programming interfaces (APIs) that you can use to extend Oracle Receivables functionality. business experts. including how to set up customers. and suppliers to participate in a more agile and accurate sourcing process. and collections. which automates many of the key procurement processes. Use this guide to learn how to create and maintain transactions and bills receivable. RFQs. and manage revenue.     xxi . Archiving and purging Receivables data is also discussed in this guide. including requisitions. Oracle Public Sector Advanced Features User's Guide: This guide describes how to set up and administer Oracle Public Sector Advanced Features. and Funds Available Enhancements. receipts. This allows professional buyers. enter customer information. Use the Standard Navigation Paths appendix to find out how to access each Receivables window. and create and implement buying agreements. sourcing rules. In addition. Oracle Sourcing Implementation and Administration Guide: This guide contains information on how to implement Oracle Sourcing to enable participants from multiple organizations to exchange information. Oracle Subledger Accounting Implementation Guide: This guide provides setup information for Oracle Subledger Accounting features. Oracle Purchasing User's Guide: This guide describes how to create and approve purchasing documents. This guide also describes how to manage your supply base through agreements. Oracle Receivables User Guide: This guide provides you with information on how to use Oracle Receivables. This guide also describes the Oracle Receivables open interfaces. and receipts. quotations. transactions. Use this guide to understand the implementation steps required for application use. such as AutoLockbox which lets you create and apply receipts and AutoInvoice which you can use to import and validate transactions from other systems. conduct bid and auction processes. and approved supplier lists. this guide explains how you can automatically create purchasing documents based on business rules through integration with Oracle Workflow technology.results. This guide also includes information about accounting in Receivables. Oracle Receivables Implementation Guide: This guide provides you with information on how to implement Oracle Receivables. GASB 34/35 Asset Accounting. This guide also includes a comprehensive list of profile options that you can set to customize application behavior. tax. It describes Encumbrance Reconciliation Reports. different types of purchase orders. accounting.

For each API. Oracle Trading Community Architecture Reference Guide: This guide contains seeded relationship types. It also describes how to set up and use Resource Manager to manage resources. its description. Bulk Import interface table fields and validations. D and B data elements. This guide also discusses the reports available in Oracle Subledger Accounting and describes how to inquire on subledger journal entries. and manage functionality that affects data in the TCA Registry. Oracle Trading Community Architecture Technical Implementation Guide: This guide explains how to use the public Oracle Trading Community Architecture application programming interfaces (APIs) and develop callouts based on Oracle Workflow Business Events System (BES). this guide provides a description of the API. seeded Data Quality Management data. as well as a table of the parameter descriptions and validations. Web interface. this guide provides the name of the logical entity. For each BES callout. and a comprehensive glossary. Oracle Trading Community Architecture User Guide: This guide describes the Oracle Trading Community Architecture (TCA) and how to use features from the Trading Community Manager responsibility to create. Oracle Supplier Scheduling User's Guide: This guide describes how you can use Oracle Supplier Scheduling to calculate and maintain planning and shipping schedules and communicate them to your suppliers. Oracle Transfer Pricing User Guide: This guide contains the information you need to understand and use Oracle Transfer Pricing. including how to generate transfer rates and option costs for your product portfolio and determine account level match-funded spreads. xxii . It also describes how to use Resource Manager to define and manage resources.including the Accounting Methods Builder. Oracle Trading Community Architecture Administration Guide: This guide describes how to administer and implement Oracle Trading Community Architecture (TCA). the PL/SQL procedure. and cleanse the data in the TCA Registry. control. You can use the Accounting Methods Builder to create and modify the setup for subledger journal lines and application accounting definitions for Oracle subledger applications. This guide supplements the documentation for Oracle Trading Community Architecture and all products in the Oracle Customer Data Management family. and the ID parameter name. enrich. Also included are setup instructions and sample code. You set up. Oracle Procurement Contracts enables employees to author and maintain complex contracts through a self–service. Oracle Procurement Contracts Implementation and Administration Guide: This manual describes how to set up and administer Oracle Procurement Contracts. update. and the Java method.

Oracle U. Budget Execution. Receivables management. store. CCR Integration. or business partner. If your tables get out of synchronization with each other. Because Oracle Applications tables are interrelated. Do Not Use Database Tools to Modify Oracle Applications Data Oracle STRONGLY RECOMMENDS that you never use SQL*Plus. As your instance is patched. maintain. Receivables management. Third party payments. Oracle U.S. application.S. It includes a consolidated setup checklist by page and provides detailed information on how to set up. Interagency transactions. Federal Financials Implementation Guide: This guide describes the common concepts for an integrated financial management solution for federal agencies.S. you risk destroying the integrity of your data and you lose the ability to audit changes to your data. Treasury payments. you risk retrieving erroneous information and you risk unpredictable results throughout Oracle Applications. and maintain information in an Oracle database. But when you modify Oracle Applications data using anything other than Oracle Applications. Federal Financials User Guide: This guide describes the common concepts for an integrated financial management solution for federal agencies to comply with the requirements of the U. The Oracle Integration Repository is shipped as part of the E-Business Suite. Federal reports. Third party payments. and troubleshoot the Federal Financial application for the following functional areas: Sub Ledger Accounting. retrieve. Federal government. you may change a row in one table without making corresponding changes in related tables. Prompt Payment. Oracle Data Browser. Interagency transactions. The tool lets users easily discover and deploy the appropriate business service interface for integration with any system. change. CCR Integration. Prompt Payment. or any other tool to modify Oracle Applications data unless otherwise instructed. any change you make using an Oracle Applications form can update many tables at once.     xxiii . database triggers. Oracle provides powerful tools you can use to create. Treasury payments. It provides a complete catalog of Oracle E-Business Suite's business service interfaces. the repository is automatically updated with content appropriate for the precise revisions of interfaces in your environment. But if you use Oracle tools such as SQL*Plus to modify Oracle Applications data. It describes the product architecture and provides information on Budget Execution. Federal reports. and Year End Closing. Integration Repository The Oracle Integration Repository is a compilation of information about the service endpoints exposed by the Oracle E-Business Suite of applications. and Year End Closing.

Oracle Applications also keeps track of who changes information. t? ? xxiv . you may store invalid information. Oracle Applications automatically checks that your changes are valid.When you use Oracle Applications to modify your data. If you enter information into database tables using database tools.

Use Oracle Financials applications to better manage business to the targets that are announced to investors. Oracle Financials applications also help you to meet your obligations in key areas surrounding the numbers. Management can better report to investors and colleagues.1 Introduction This chapter covers the following topics: • • • • • Overview Benefits Key Attributes of Oracle E-Business Suite Oracle Financials Applications Suite Using this Guide Overview The Oracle E-Business Suite is a complete set of business applications that enables corporations to efficiently track detailed business transaction data and turn it into decision making information using a system built on a unified information architecture. such as: • • • • • Compliance Financial Control Regulatory Reporting Cost Containment Risk Management The Oracle Financials Concepts Guide introduces you to the fundamental concepts Introduction    1-1 . Oracle Financials applications are a subset of this suite and are a family of products designed to capture and analyze your financial data on a worldwide basis.

Operate more efficiently with single global access. for example Oracle Financial Consolidation Hub or Oracle Profitability Manager. and scale global applications. Reduce the cost and complexity of representing your business in the software. companies. partners. With tools such as the Accounting Setup Manager and Legal Entity Configurator. Oracle Financials. facilitate analysis and reporting of profitability along any dimension including products. and regions. Manage Globally to lower cost and increase performance Release 12 makes it easier and less expensive for you to implement. manage. and financial data. divisions. channels. Tools such as the tax engine facilitate operating centrally yet in complete compliance with local regulation. Many of the features discussed in this guide. Make confident decisions based on a global view across heterogeneous systems and divisions. We think of global both as relating to or involving the entire earth and facilitating your worldwide operations by being comprehensive and including everything you need. "The Global Business Release".involved in setting up and using Oracle Financials applications. Release 12 easily adapts to your environment. and individual customers. segments. Think Globally to make the right decisions You can make more informed decisions with a global view of your customers. suppliers. With multiple organizations access control you can process and report across multiple national operations. The new ledgers and ledger sets deliver both local compliance and a global corporate view aligned with your governance demands. Work Globally to be more competitive Your business will be more competitive with better support for global work that crosses applications. Benefits Oracle Financials Applications are part of Release 12. Key Attributes of Oracle E-Business Suite Four key attributes characterize the Oracle E-Business Suite: • • Common Data Model Reduced Number of Instances 1-2    Oracle Financials Concepts Guide .

you can eliminate duplicate data centers. At the same time. Based on your business needs.• • Integrated Applications Database Integration Common Data Model In creating a suite that spans a large number of diverse modules. The cumulative effect of having a common data model. and information technology costs requiring multiple databases and separate reporting infrastructures around the world. hardware. Oracle Business Intelligence systems and the transactional systems use the same data and information. A global financial system at the lowest possible cost is now within your reach. You can pass information from one application to another without any incremental integration costs. complete customer data in one consolidated data model. This means that any system entity set up in one product (for example "an employee") is used. While Oracle's applications are integrated. Entry of important entities is minimized and revisions are entered only once. This customer data can subsequently be accessed by all applications and functions that use such customer data. Database Integration Oracle Database 10g Release 2 includes dimensionality support. Consider customer reference data entered into an application and stored in the common data model. You can consolidate and share information globally and faster. to the extent possible. and other features that are exploited by the financial applications. There is no passing of data. all applications on a single Introduction    1-3 . spinning the facts. you have a true 360 degree view of your customer for the best possible customer intelligence. next-generation features. Integrated Applications Oracle E-Business Suite is engineered to work together as an integrated system. information increases and costs decrease. several modules. With clean. you can implement one module. they are also modular. or the entire suite. or delay. Many customers are managing worldwide operations using our unified information architecture on a single instance of the Oracle E-Business Suite. Oracle has taken care to ensure that the products share a "Common Data Model" in their architecture. There is no need for any replication which is a source of inefficiency and inconsistency. Reduced Number of Instances Each time you consolidate databases. by all other products that require a similar entity. your managers see the data on their personal machines as it emerges from the business front lines.

For example. unified view into critical information such as sales positions. Executives and employees. Your Shared Service Centers work across worldwide operations. no matter whose software you use.you won't have to request additional information from those sources. not quarterly or monthly. Oracle Customer Data Hub gives you a unified. The key to 1-4    Oracle Financials Concepts Guide .instance. Real Estate and Lease Management Cash & Treasury Management Travel & Expense Management The applications support and closely match these native business flows. • • Oracle Financials Applications Suite The Oracle Financials suite of applications is comprised of the following subfamilies. organized by standard business flow. The information is accurate and up-to-date as there is integrity in data that is not fragmented. to support your firm's financial processes: • • • • • • • • Financial Control & Reporting Corporate Performance Management Corporate Governance Credit-to-Cash Procure-to-Pay Asset. receive daily business intelligence revealing the state of the business every day. and projected performance metrics. inventory levels. Your decision makers will reach more informed conclusions and take more immediate action towards achieving individual and group objectives . and expenses-across all organizations. headcount. enterprise-wide view of your customer data. • Your corporate financial reports and intelligence will be across divisions and geographic regions . relative to past. is that all of your information is in one place. The result is a much smoother and faster closing process. dealing easily with both local compliance and corporate processes. The Oracle E-Business Suite includes data from business applications from multiple vendors using our Hubs.daily. lines of business. and geographies. As a result. and the applications themselves fully integrated. from the officers and directors to line supervisors. you receive powerful synergies such as: • A global. products. revenue. present.

to understand the conceptual architecture of Oracle Financials applications. Share services across your world wide operations. Refer to the product documentation for additional details about product features. Refer to the Oracle Applications Upgrade Guide: Release 11i to Release 12 and Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to Release 12 for details on upgrading to Release 12. This guide discusses how you might: • • • • • • • • • Represent your registered companies and management organization in the system. more than anything else. You can take advantage of the new features at the pace that your business can accommodate. The objective of this guide is to present those concepts to you. Specialize in particular industries.exploiting the features implicit in the flows is. Report and analyze your business data. The upgrade is designed so that your earlier functionality will work as it was before the upgrade. Account for your businesses to management. For existing users of Oracle Financials. This guide discusses the conceptual architecture and therefore does not describe the features for each product. Control and ensure compliance across your organization. Introduction    1-5 . we indicate where Release 12 has evolved from prior releases. Secure your information. Analyze and evaluate your enterprise performance. Using this Guide The Oracle E-Business Suite and Oracle Financials contain a great number of features. and authorities. Understand what other products do within the E-Business Suite. investors.


and employ comes from our charter in the legal Organizational Models in Oracle Financials    2-1 . The Legal Organization Our ability to buy and sell. management organization.2 Organizational Models in Oracle Financials This chapter covers the following topics: • • • • • • • • • Overview Your Organization The Role of Your Legal Entities Representing Your Organization in the System Organizational Classifications in Oracle Financials System Entities Chart of Accounts A Flexible Model Cross Organization Reporting Overview The Oracle E-Business Suite uses a variety of organizational constructs to capture corporate structures that exist in the real world. This chapter provides detailed information on the organizations you can set up in the Oracle E-Business Suite to represent your enterprise. own. Groups generally reflect a tension between their legal organization. and business divisions. Your Organization Oracle Financials can be implemented in multiple ways to reflect your real-world organization.

The following diagram shows an archetypical group of companies operating various business and a standard functional organization.system. they are held by a privately held holding company. A legally recognized entity can own and trade assets and employ people. the legal entities are partnerships. Units in the legal structure of a group are individual companies that share common ownership and control. In other organizations. compliance. They are created to facilitate legal compliance. and provide vehicles for contractual relationships. optimize taxes. a company is owned by the public through shares sold on a stock market. The list of cards is the "Legal Axis". funds. that is. • A separate card represents each of a series of registered companies. • 2-2    Oracle Financials Concepts Guide . In a private group. Most groups have many legal entities. and pay income or profit and transaction taxes. When granted these privileges. Legal entities establish your identity under the laws of each nation in which you operate. and for many other reasons. legal entities are also assigned responsibilities to account for themselves to the public (statutory reporting and external reporting). legal entities. In a public group. or government agencies. Commercial groups exist through corporate law. while an entity without legal recognition cannot. comply with legislation and regulations. and taxation. segregate operations.

General. Other Organizational Structures Oracle Financials formally recognizes several other organizational structures. and functional expenses such as Research and Development (R&D) and Selling. and include their own revenue and cost centers. the business organizational hierarchies do not need to be reflected directly in the legal structure of the firm. The income statement often reflects their efforts and expenses directly. cost of sales. operations. You will have processing structures along different business flows: Organizational Models in Oracle Financials    2-3 . in the data schema. Although related to your legal structure. researchers. that will exist in your enterprise. You divide your organization accordingly and assign management personnel to each division. Functional Organizations Straddling the legal and business organizations is an organization structured around people and their competencies: sales force. The management entities and structure include divisions and subdivisions.Business Divisions Successfully managing multiple businesses requires that you segregate them by the rewards and risks involved in making them profitable. Organizations must manage and report revenues. plants. finance people. lines of business. and management. and Administrative Expense (SG&A). information technologists. and other strategic business units. human resource management.

• Personnel reporting structures that may or may not correspond with the business hierarchy or legal or external reporting dictates. and must comply with the regulations of those jurisdictions. A given legal entity may or may not represent all or part of a management framework in its domain. Local entities file locally using local regulations and currency. Compliance and Disclosure Requirements Legal entities are formally the entities that actually enter into transactions. and through their holding company using parent Generally Accepted Accounting Principles (GAAP) and currency. in a large country such as the United Kingdom or Germany. For example. and functional organization. both national and regulatory." are required. often referred to as "statutory accounts" and "external reporting. you might deploy individual companies to represent each business division. play a pivotal role in your processing systems. • The Role of Your Legal Entities Your legal entities. Legal entities have very specific relationships with shared service centers and with the ownership of the goods and transactions managed by such centers. for example the Securities and Exchange Commission (SEC) in the United States. make purchases and incur expenses. Disclosure requirements are diverse. Many company statutes require that legal entities created in compliance with them publish specific and periodic disclosures. whether commercial registered companies or entities incorporated under laws other than company laws. Product driven structures in your production environment that may or may not correspond with your market and delivery structures. They are designed to: 2-4    Oracle Financials Concepts Guide . These must be reported to specified national and regulatory authorities. All legal entities exist in particular legal jurisdictions. for example Austria. Annual or more frequent accounting reports. Representing Your Organization in the System Organization Structures Oracle Financials has powerful schemas of organization units that support your legal. and you might control many companies in that country. management. Legal entities have multiple compliance requirements placed on them. many of which define the form of the transactions into which that legal entity enters. you might use a single legal entity to host all of your business divisions. and make other transactions. record sales and pay taxes on those sales. Individual legal entities own the assets of the enterprise. In a smaller country.

Administer compliance and segregate transactions and administrative rules by jurisdiction. addresses. a system organization entity might represent any real organizational unit within a business. excluding those without authority. • • • Organizations and Transactions Oracle Financials enables you to categorize and classify your transactions to the level of granularity required to reflect each of these organizations. By people and cost centers involved.• Ease the management of your worldwide shared service organization and facilitate sourcing at the optimal mix of employee cost. On the Management axis: Business classification by several management entities. On the Functional axis: By nature of the transaction (for example. dates. system organization entities and the chart of accounts. subject matter. detailed accounts involved such as marketing or cost of sales). and by establishment. Provide attributes for reporting and identify business events according to the relevant business dimensions. Provide access control and security. • • • The core task of Oracle Financials applications is to track the appropriate business and accounting attributes of a transaction. Accounting attributes are generated from that data by our subledger accounting engine and are recorded in detail in the subledger accounting tables and at your choice of summary level in General Ledger. are the cornerstones for securing transactions and modeling an enterprise in the Oracle E-Business Suite. employee. Establishment is the presence of a legal entity in a jurisdiction for purposes such as payment of transaction taxes. Business attributes are tracked in the product modules and include such details as trading partner. and facilitating access across units for those who need it. Organizational Classifications in Oracle Financials Two vehicles. data flow. Depending on their classification. The assembly of these building blocks to model your enterprise will define the representation of your business and your process flows in the applications suite. A single transaction can be categorized as follows: • On the Legal axis: By company or other legal entity. system entities deliver specific Organizational Models in Oracle Financials    2-5 . and so on. quantity. agent. by groups of companies. price. and management control. In general. By Other attributes. tax.

Business Group and Department Business Groups The business group is an organization that is set up and configured in Oracle Human Resources. a chart of accounts representation of a real world entity is an identifier for analysis and accounting. such as cost center and legal entity. data storage. such as access control and shared service administration. others have looser associations so that you can tune the relationship to your actual organization. Important entities. Several system entities are so closely tied to accounting entities that we automatically correlate them. One business group is needed for each major employment jurisdiction. legal or compliance administration. It may correspond to your entire enterprise or to a major grouping such as a subsidiary or operating division. These jurisdictions roughly correspond to nations.features and controls. System Entities The Oracle E-Business Suite includes the following important system entities: • • • • • • • Business Group and Departments Government Reporting Legal Entity (GRLE) Legal Entity Ledgers Operating Unit Inventory Organization Human Resources Organization Each system entity is assigned to a classification that determines its functionality and indicates how you might want to deploy it. By contrast. and employee administration. with fewer features and control associated with it. assigning a system entity to represent a real world entity with the same nomenclature is an effective choice. The business group is partitioned into separate files of Human Resources information and is used to administer Human Resources payroll and benefits for employees. If a group of nations unite together on 2-6    Oracle Financials Concepts Guide . In general. policy. Oracle Financials provides names that reflect that functionality. A business group is often related to country-specific legislation. can be represented by both a system entity and as a value in a chart of accounts section.


Balancing Segments. the system legal entity does not automatically account for itself. It holds tax registration data. and company representation in the chart of accounts. Ledgers. you don't need or want to segment data or account separately for each entity that you have incorporated. a California-registered company might have "establishments" in California and in several other states. • • You can account for any real world legal entity separately if you need to do so. intercompany processing. Establishment A system legal entity is the transactor and taxpayer for each third party transaction. or using different currencies. Tip for Existing Oracle Financials User • Establishment is an entity that was not expressly called out in previous releases and is useful in resolving transaction tax situations. we facilitate correlation of subledger activity with reporting legal structures by exploiting related system entities for operating units. Ledgers are also used to consolidate and manage 2-8    Oracle Financials Concepts Guide . You can account for a group of real world legal entities as if they were one when that fits your model. ledgers." The Ledger represents an accounting representation for an organization that is accountable in a self-contained way. such as identification numbers. For example. A ledger owner might be a legal entity. and be registered with each. And you can account for a part of a real world legal entity as if it were completely standalone when appropriate. An individual legal entity can have exposure to several tax authorities. and Subledgers Ledger A fundamental concept in Oracle Applications is the "Ledger. • A system legal entity can account for its transactions in many ledgers. or a foreign branch. a substantial operation within a legal entity but with legal entity attributes.entity is the first party on business transactions and is the transaction tax filer and payer. a group of companies in a common legal environment. particularly in environments where the authorities allow you to treat many legal entities as one. using different accounting conventions. and bank ownership exploit legal entity attributes more assiduously than previously. We recognize that for many groups. Ledger Sets. Multiple Ledgers. Tip for Existing Oracle Financials User • You will find that a legal entity has more attributes in Release 12 and that a Legal Entity Configurator is provided. Tax calculation. Instead. Therefore.

Ledger balances have meaning . Consequently. "a legal entity accounts for itself in a ledger". You could create a Parent Currency and Parent GAAP ledger for each overseas • Organizational Models in Oracle Financials    2-9 . 3. and Convention the calculation. you can elect to use an "all the detail" philosophy in which detailed transactions are posted to General Ledger. and entries. For example: • You have 26 registered companies in Regmany. 2. on an account at a given date has a specific value in a particular currency and is properly calculated. and value transactions in different currencies. You set up a Ledger for each company and group them into a Ledger Set. "Manage" includes reporting. The COA provides the account. A Ledger Set is a collection of ledgers that you wish to manage as though they were one ledger. Calendar. 4. The accounting for a subledger transaction can be set up so that multiple ledgers are populated according to different rules and in different currencies. Currency. You might prefer to use a "just what matters" philosophy where only General Ledger balances are posted. An accounting entity can account for itself in ledgers that are prepared under different conventions with different charts of accounts. When using a second ledger. and accounting Convention. Ledger Sets Ledgers can be grouped into "Ledger Sets". Your finance staff can treat the collection as if they were one for all accounting activities. you will need different currency and parent company GAAP representations of your overseas operations.reporting. it is the principal source of information for the analytical applications in the Oracle E-Business Suite. One of the ledgers is the 'primary' ledger.they assert that the balance: 1. running allocation calculations. Calendar the date. while the data remains distinct for each company. opening and closing. One way to achieve this is to use multiple ledgers for an accounting entity. Multiple Ledgers Of course. This implies a consistent application of what we sometimes call "the 4 Cs": Chart of Accounts (COA). Regmany regulations require that each company maintains a distinct book of accounts. Currency the amount. You choose the appropriate accounting according to your needs. A ledger provides balanced ledger accounting for the accounting entity and serves as the repository of financial information. In a pure implementation.

plants. The management of the Set of Books (open and closing. You might do this for divisions. The data of a Set of Books is contained in a ledger. Oracle Financials checks that imported data. Customers frequently combine entities into BSVs and report on groups of them. you can specify whether a system legal entity uses a whole Ledger or balancing segments. and for other reasons. • Balancing Segment Ledgers balance. Tip for Existing Oracle Financials User • Ledger and Ledger Sets together replace Sets of Books. allocating. For example. you might create balancing segment values as shown in the following table. the sum of the debit and credit balances equal each other and you can prepare an income statement and balance sheet from them. and to measure return on investment. Multiple Ledgers is a new feature in Release 12. Ledgers and Subledgers Oracle Financials reflects the traditional segregation between the general ledger and 2-10    Oracle Financials Concepts Guide . if you want to track return on investment (ROI) on both "plants" and "divisions". Within a ledger. that is.operation. Division D01 D01 D02 D03 Plant P100 P200 P100 P200 Balancing Segment Values D01:P100 D01:P200 D02:P100 D03:P200 During setup. Ledgers in a Ledger Set also balance and are also used for financial reporting. in order to maintain this integrity. and journal entries (adjustments) balance. You can group all of them into a Parent View Ledger Set. The values (Balancing Segment Values or BSV) that you assign in that segment will represent entities in your organization for which you want to measure both income and wealth. subledger posting. Your corporate finance staff can treat them as one worldwide ledger for all accounting activities. reporting. that is. legal entities sharing a jurisdiction. externally reportable segments. you can nominate a segment of your chart of accounts to be a "balancing segment". to prepare income statements and balance sheets. and so on) is now at the Ledger Set level.

hdIren®nuKleTker® ada®n t rad lL®. an Operating Unit (OU) is a system organization that: 1. Detailed transaction information is captured in the subledgers and periodically posted (in summary or detail form) to the ledger.. without any grouped processing.Ir®trIcennFikrai®WetIdFikrPecurenw?? .T®FiFnern®uneW®accenn®dI®dWe®ada®. Fikreieral®leTker®Id®xa® keT®-FdW®O) tadathat post to .F -FdW®dWe®xLte rledger: FikrleuFnl ran ter-Ir I®n ®m®IcuMei ® sT®FiFnduicdFIi®-FdW®a®ceTker®dIw ekal® c lFuadFIiQ®aWe® all ei®uneT®Fi®cIi ®ai ®drainacdFIi®xLte w drainacdFIi®xa ern®nuKleTker®Tulen®nucW®an®dWIn tically lin ada®Fn® T®FiFn produ T®leual®ei FdI IMtlFaice®I m® ada®ai ereT®? nnIcFadeT® ot t We®Weal®-Ir ®undIMer® FdI. FdI.n®t adFIiQw i ®aia nucW®an®®nFd uTF sp edaFlnm®huKleTker®accIui®annIcFadeT®-FdW®drainacdFIi®xLte Y ne eT®d rIu WaWe®xWe®leualw ei .erei F. or you can post on a schedule corresponding to your practice. You post from subledger to general ledger in real time.n® dFIi®Fn®KuFld®FhdI®drainacdFIi®xLte ada®Fn® IwId® i® Ise®YrWeal®-IradFIi®uilenn®cIuMele®PO) utom ll®nuKleTker®trITu subledger produ aia ueicFik®ncWeMe F. Operating Units In the financial applications of Oracle's E-Business Suite.n®O)®aiT®tInd®dI®dWe®ceTkerw d®dI® n®Fn®I.F T®leual®ei cifi FdI.rIM®dWe® ada®annIcFadeT®-FdW®IdWeW®O) ®dWad® Organizational Models in Oracle Financials    2-11 cifi ? spttlFen®dI®nuKleTker®KunFienn®drainacdFIi®ai ei .associated subledgers.

A legal entity or group of legal entities account for themselves in one Ledger storing subledger data in several OUs. This is a normal situation for a large corporation using several instances or Enterprise Resource Planning (ERP) systems. and report on subledger financial data within the context of an OU. process. • Several legal entities account for themselves in one Ledger storing subledger data in one OU. This is very fundamental security. A part of a legal entity accounts for itself in a ledger using one or several OUs. You can use product "transaction types" to create similar transactions that follow different documentation and processing practices. Use an OU when you need to comply with transaction tax law that is substantially different (more than just the tax rates) to similar laws in neighboring state. A responsibility is associated with a specific OU. This is a normal setup for a group doing business in highly regulated industries in a given country or region. OUs are often identified with security. This right often exists when the states are independent nations. This is a normal setup for a country or region that regulates a group of companies as a whole. and integrate with Multiple Organizations Access Control to provide comprehensive and appropriate security. You might have the right to prevent a state's transaction tax auditor from viewing the transactions of a neighboring state. or with several OUs .This is a normal setup for a country or region that closely regulates subledger data by legal entity. • 2-12    Oracle Financials Concepts Guide . users are given access to the data they handle though "responsibilities". and stores its subledger data in one or more OUs. The Oracle E-Business Suite incorporates many other security models specific to circumstances that match the usage and deployment requirement needs that you have for those circumstances. OUs can be used to model autonomous organizational units that create financial transactions. You create.from the data of another organization. Ledgers. • Use an OU when you need to keep the data of one organization distinct . but seldom when they are federated. A legal entity accounts for itself in the Primary Ledger and optionally in other ledgers.this is a feature called "Multiple Organizations Access Control". and use the Chart of Accounts balancing segment to produce financial statements for each legal entity.at arms length . They view only what they need and have authorization to view. • • System legal entities. and OUs are defined in relationship to one another. In the Oracle E-Business Suite. By securing subledger data in this way users can access and process transaction information only for the particular operating unit or set of operating units to which they have been granted access. consider storing each state's transactions in separate OUs.

with appropriate intercompany accounting. a company in a country) cannot be paid by a payment from another (a system representation of. For example. you may want to keep the transactions and data of the lending operation separate from that of the brokerage operations. and 'special' reports and processes run across them. each complying with different local requirements. You can deploy OUs to provide barriers that require special access. In a worldwide deployment. OUs store transaction types and rules that govern the transaction document such as invoices. Standard reports and processes run within OUs. This security model is appropriate in a business environment where local business units are solely responsible for managing all aspects of the finance and administration functions. an invoice of one OU (a system representation of. They are stored centrally. This is the core of our shared service architecture. perhaps. a different company in a different country).• Use an OU when you wish to keep data of an operation private from management of another operation. and processing to cross. A Responsibility can be associated with a single OU or with multiple OUs. Subledger accounting rules are not stored by OU. This would amount to tax fraud. For example. OUs divide the subledger document data in Oracle Financials applications into distinct segments. These OUs segregate the orders and data Organizational Models in Oracle Financials    2-13 . By contrast. perhaps. but can refer to any data (including OU identifiers) associated with the transaction to derive the appropriate accounting. reporting. Subledger Accounting and Operating Units While subledger transaction rules are governed by OU. Consider an environment where the orders are taken in several different OUs each representing different registered companies. this tight relationship provides an internal control on inappropriate processing. in a Shared Service Center environment. Shared Services and Multiple Organizations Access Control The setup of operating units provides a powerful security construct in the applications by creating a tight relationship between the functions a user can perform and the data that a user can process. within a financial institution division. require that users access the data of different companies. You can isolate your data by OU for security and local level compliance and also enable certain users and processes to work across them. in traditional local operations. processes that allow one company to perform services for others. and the business rules (for example. subledger accounting rules are not OU dependent. credit terms) that you want applied to those documents. To accommodate shared services we use Multiple Organizations Access Control to expand the relationship between functions and data.

The chart of accounts is a very flexible. Chart of Accounts For the most part. We specify only three segments. and Cost Center. 2-14    Oracle Financials Concepts Guide . Through its parent Operating Unit. However. cost center codes. your listing of account numbers. A specific chart of accounts (complete with values) is associated with each ledger and the same chart can be associated with many ledgers. Company. Balancing Segment. the Inventory Organization financially impacts the Ledger to which it rolls up. The acronym "CCID" (Code Combination Identifier) or the term "Accounting Flexfield" refers to an individual combination of segment values. Inventory Organizations The Inventory Organization represents an organization for which you track inventory transactions and balances. almost free-form. product codes. Each Inventory Organization has a parent OU and can serve other OUs. includes other segments that reflect your organization. We have discussed the "Balancing Segment" that is part of the chart of accounts rather than a stored system entity. Several modules and functions in the Oracle Manufacturing and Supply Chain Management suite secure information by Inventory Organization. Ledger) and their relationships with real world entities (for example. You might have company codes. as well as non-organization codes such as natural accounts. to activate the "Purchasing Receiving" function. You use these segments to flag transactions so that they are summarized in a meaningful way to your business. The chart of accounts. combination of segments (as many as you like) of different lengths. and other organization related codes. your responsibility must have access to an organization that is classified as an Inventory Organization. For example. Various functions in the Oracle E-Business Suite use this organization classification. OU. For example. Management Unit. System entities are created though special setup screens and stored in tables. Natural Account. which is the underlying technology. or a complete account number. or project codes. all of these orders can be managed from a "shared service" order desk in an outsourcing environment through a single Responsibility. Inventory Organizations are associated with OUs.appropriately. we have discussed system entities (for example. Division) that you have in your organization. Legal Entity. requisition transactions or replenishment of supplies are created against an Inventory Organization. business organization codes. which then have a financial impact on the Ledger. These organizations might be manufacturing or distribution centers. Tip for Existing Oracle Financials User • Multiple Organizations Access Control is a new feature for Release 12. The chart is referred to as "flexfields".


Natural Account For many companies. reflecting transaction tax audit and filing needs that are mapped to your operating needs. In the earlier discussion forYour Organization. Other than balancing.Balancing Segment value and makes them an excellent representation for any business unit for which you need to track balance sheets. 02. Others start "at the bottom" with detailed departmental expenditure types. a diagram shows cards representing companies that are striped vertically by business subdivisions and horizontally by functional groups. cash. and 03. Our customers use balancing segments to identify registered companies that are accounted for together in a single ledger. no additional functionality is attached to Balancing Segment. 2-16    Oracle Financials Concepts Guide . and so on are natural accounts. You will have selected OUs to store and secure your data. often in alternate ways. using natural accounts and cost centers together with other segments. and then expand further to the level of granularity they wish. ledger sets. and a report on all Finance accounts delivers the Finance expense. Companies that start with reporting lines often reach the point where "Finance Salaries". page 2-1 . to your organization. revenue). natural account also has an organizational impact. so using a Balancing Segment Value alone is recommended only in a federal environment that treats groups as one tax or statutory reporter or filer. and externally reportable segments. Companies deploy the natural account in different ways. A Flexible Model When you are finished. You can use a balancing segment value for each legal entity accounted for in a ledger: Companies 01. Those that start at the bottom often use "Salaries" and "Benefits" as the natural account and establish a list of cost centers to be the total finance. "Finance Benefits". You will also have selected accounting attributes through your chart of accounts. divisions for which they wish to measure balance sheet data and return on investment. expand the list to include their management reporting lines (different types of revenue). you will have modeled your organization in the system using ledgers. The system entities map to organizational characteristics as follows: • Legal Entities correspond to the company cards and keep their financial accounting in Ledgers within Ledger Sets. Some start "at the top" with their external reporting lines (for example. and balancing segments to report your legal and management structure. to help you cut though the data to get to the heart of your operations. and using different combinations of each as appropriate for statutory compliance and management needs. The following diagram shows how some system entities can be mapped.

business groups and department structures in Oracle Human Resources provide significant internal control in an enterprise. Natural Accounts classify the functional groups' activities. Using Oracle Human Resources with Oracle Financials Just as legal entity and ledger structures furnish a strong degree of transactional control. people and Opnxa hitrFple a Opnternal Segmeonol do o:plerer itial? ? ?yU ? Organizational Models in Oracle Financials    2-17 . Functional Groups map to Departments and Cost Centers in the system. Operating Units most often hold companies' data and can hold the data of different businesses at arms length from each other within a legal environment.• • • • Balancing Segments can represent both legal entities and business subdivisions. In addition to direct relationships between headcount and spend rates.

It is series of pre-designed portlets and portal pages delivered with the product. If you are implementing Oracle Financials without also implementing Oracle Human Resources. Therefore. Salary might be your primary expense. The caveat here is that once you set up your operating units and assign employees to tasks in the various modules. local user subledger application reporting respects the fundamental security implicit in operating units. General Ledger reporting respects the Ledger Set constraints. 3. Broadly speaking.2. Journal Vouchers: Since journal vouchers can be unique in nature. you can choose not to set up another business group. it is difficult to subsequently configure and assign a new business group with your own choice of default information. cross-organizational reporting presents information from different operating units or ledgers. DBI publishes 2-18    Oracle Financials Concepts Guide . Oracle Human Resources breaks out salary by your departmental organizations. AME uses the Human Resources departmental hierarchy and spending authority at every level in the hierarchy to route the invoice. we recommend that you set up a business group while implementing Oracle Financials even if you do not plan to explicitly use it for Human Resource purposes. Standard Reports Selected standard reports for various applications in the Oracle E-Business Suite are designed to allow the user to report across OUs. your Human Resources departments will map to Oracle General Ledger cost centers. Reporting in general is discussed more fully in the Reporting chapter. their approval cannot be restricted to a hierarchy within a particular department. Oracle Daily Business Intelligence Oracle Daily Business Intelligence (DBI) is a system designed to publish the data you are collecting using the Oracle E-Business Suite directly to your management team from the line supervisors to the officers. Legal Entities. Note: The Oracle E-Business Suite comes with one predefined default business group. To provide for corporate and regional views of data. Manual Invoices: Manual invoices use Oracle Approval Management Engine (AME) for approval. In turn. Cross Organization Reporting In general. You can create workflow routing rules to personnel in a business group for the approval of journals in Oracle General Ledger. or Ledgers. and ready to deploy with minimal setup.

General Ledger also includes functionality termed the Global Consolidation System that performs simple consolidations inside General Ledger. with specific consolidation features such as minority interest calculation and intercompany elimination. Oracle XML Publisher Oracle XML Publisher includes a data extraction tool for use in ad-hoc cross organization inquiries. All provide full reporting capabilities. regional. Ledger Sets automatically aggregate the data from the Ledgers that they include. and other organization units. DBI functions across Ledgers. It is generated daily and is intended to allow managers to take immediate action to drive results. With Multiple Organizations Access Control Multiple Organizations Access Control enables cross organizational processing and reporting on operating units in subledgers.data "as is". Organizational Models in Oracle Financials    2-19 . Users can access and analyze data in a company's database without having to understand difficult database concepts. or local currencies as appropriate. and standardizes data in parent. or to build custom Discoverer applications for the web. Ledger Sets Ledger Sets enable cross organizational processing and reporting on ledgers. Oracle's Reporting Tools Oracle Discoverer is a business intelligence tool for analyzing data. Operating Units. and the aggregation facility of ledger sets can be used to perform consolidations too. Oracle's Consolidation Tools The Oracle E-Business primary consolidation tool is the Oracle Financial Consolidation Hub. Users can also view workbooks and integrate database output onto a web site and portal that can be easily customized to conform to a particular web site look and feel. The Oracle Financial Consolidation Hub is a fully featured row and column based consolidation application.


In the Oracle E-Business Suite. over 360 KPIs. there are over sixty dashboards.3 Reporting Overview Release 12 is designed so that you have decision making information at your fingertips. and approximately 920 portlets. This provides "Greater Business Insight". (K ) on cu O O 5t Reporting    3-1 . Daily Management Oracle Daily Business Intelligence (DBI) is a portal with Key Performance Indicators (KPI) and portlets focused on measuring your growth and direction for each of your business and cost center managers.

sales tax. Oracle Financial Consolidation Hub. Filing with the Authorities Oracle Financials includes many standard reports that are designed to support your ability to file statutory. For additional information about these products. The Enterprise Performance Foundation based products share a rich interface with your desktop office applications. organizations and government agencies. and other reports with authorities in over 120 countries around the world. Standard Reports Several thousand reports are shipped with Oracle Financials products. and Oracle Transfer Pricing. Oracle Profitability Manager. greater efficiency. XBRL offers cost savings. Value Added Tax (VAT). It is one of a family of "XML" (Extensible Markup Language) languages that is becoming a standard means of communicating information between businesses and on the internet. XBRL is being developed by an international non-profit consortium of major companies. XBRL is a language for the electronic communication of business and financial data. It is an open standard. free of licence fees.processed and published. include their own deeply configurable reporting. and Goods and Service Tax (GST)). and improved accuracy and reliability to those involved in supplying or using financial data. refer to the following: • • • • Oracle Enterprise Planning and Budgeting User's Guide Oracle Financial Consolidation Hub User's Guide Oracle Profitability Manager User's Guide Oracle Transfer Pricing User Guide Reports Oracle Financials provides extensive reporting capability as described in the following sections. Reconciliation and Control Many other standard reports are oriented towards reconciling and controlling your 3-2    Oracle Financials Concepts Guide . transaction tax (for example. Periodic Analysis Products that are built on the Oracle Enterprise Performance Foundation such as Oracle Enterprise Planning and Budgeting.

sending in an e-mail. PDF. Desktop Integration Reporting    3-3 . XML Publisher can be applied to both reports and documents. Product Specific Reports Oracle Financials provides many reports for specific functional areas. Interrelated drill-down reports are efficient and comprehensive. Other standard reports are supported as before. RTF. or posting to web sites or portals. Release 12 includes new common extracts and XML Publisher templates for many standard reports. Oracle Receivables and Oracle Payables report on invoices and payments. Examples include receivables aging reports and customer and vendor trial balances. standard reports are migrating to XML Publisher. Drill-down and Cross Reference The Oracle E-Business Suite products are integrated and based on a common data model. Tip for Existing Oracle Financials Users • In Release 12. Oracle Cash Management provides detailed cash flow reports. Extracts are generated from the database and are then formatted and published. XML Publisher also facilitates helps to automatically pair these templates with extracts to produce the ideal report. Traditional reports have a unique extract. and in many cases.data. XML Publisher helps users to create formatting templates in desktop products such as Microsoft Word and Microsoft Excel so that non technical and non Information Technology people can do this. Desktop Integrators Other important reporting tools include the Desktop Integrators. Reporting Tools Oracle XML Publisher is a key reporting tool in Release 12. Approximately 20 extracts support 400 reports. Generating Reports You can run reports from our menu system. Oracle E-Business Tax provides reports specifically for sales and value added tax reporting. Certain standard reports retain their previous unique extracts and formatting. You can use XML Publisher to save reports to many different file types including XML. Newer and revised reports may share extracts and allow formatting to hide data that is not required. and Excel and to publish reports by printing. several layers deep. Oracle General Ledger and Oracle Subledger Accounting report on accounting affairs.

Desktop Integration is provided by most products in appropriate circumstances. reporting security extends this model. access and security to reports of all kinds follows the access and security that are associated with the system representation of your organization and the process involved. Security and Reports For the most part. SQL Extracts Your staff can create and run SQL extracts to obtain additional information from the database. You can print the same report using different layouts. and customize the portal experience. reporting respects your organization as you have modeled it in the system. RXi Reports The RXi Reports Administration Tool allows you to design the content and layout of your RXi reports. Users can access and analyze data in a company's database without having to understand difficult database concepts. or to build custom Discoverer applications for the web. 3-4    Oracle Financials Concepts Guide .provides support for creating and summarizing both input and output data in two-dimensional spreadsheets. Reports associated with a ledger set will include all ledgers in the ledger set. and Web sites. content. a reporter working on the receivables balance needs to know the full receivable. collaborative tools. For example. You can design enterprise portals that are the single entry point to business applications. Where appropriate. Users can also view workbooks and integrate database output onto a web site and portal that can be easily customized to conform to a particular web site look and feel. Oracle Portal You can use Oracle Portal to create a portal Web interface. Oracle Discoverer Oracle Discoverer is a business intelligence tool for analyzing data. For example. access dynamic data. reports associated with a ledger will be limited to that ledger. even if the reporter doesn't have access to each invoice. and to create reports for your own internal use. Reporting and Systems Organizations In general. and you can control the data items included in your report. RXi lets you tailor your reports to meet statutory and other reporting requirements. publish and manage information.

reports can run across subledgers. In specific cases. For example. Other product specific reports are also designed to run across operating units. depending on the setup. the operating unit may define transactions in different currencies) users must be careful that the aggregated report includes similar data. and are Multiple Organizations enabled. As the data in operating units can be defined specifically for that operating unit (for example. Reporting    3-5 . You can access data for either a subset of the operating unit or all of the operating units. if Joe is a Payables Manager for North America. the DBI Payables page can be set up to give Joe summary information across the United States and Canada only. Certain Daily Business Intelligence (DBI) reports are secured by operating unit. For example. while Joe's boss Mary can be set up to have access to information across all operating units. the report should not add values in USD currency from a United States operating unit to values in CAD currency from a Canadian operating unit.Subledger reports are generally defined by the operating unit with which they are reported. reports for the Italian operating until will include data for Italy only. For example.


As discussed in the chapter for Organizational Models in Oracle Financials. at low cost. ledger Accounting with Oracle Financials Applications     4-1 . Displays data on application pages and reports designed to give both executive and middle management the intelligence needed for daily decision making. You can use a chart of accounts to tag the data with characteristics that are important to you. for all of your business flows: • Provides volume output of your bookkeeping and paperwork from base transactions to General Ledger. • Product level document oriented data is stored and secured in operating units by document processing modules.4 Accounting with Oracle Financials Applications This chapter covers the following topics: • • • • • • • • Overview Chart of Accounts Currency Calendars Accounting Conventions Subledger Accounting in Oracle Financials Setting Up Your Accounting: Accounting Setup Manager Accounting Consolidation in Oracle Ledgers Overview The Oracle E-Business Suite enables fast and efficient business processing. it is accounted for in ledgers and ledger sets that are mapped in different ways based on a system representation of your organization. From there.

All products that perform accounting derive the account code combination identifier (CCID) using Oracle Subledger Accounting and write a full entry for each business event. Oracle Daily Business Intelligence uses the combination of balancing segment and cost center to summarize data in portlets and portals.balances derive their meaning from four characteristics: • • • • Chart of accounts Currency Calendar Accounting conventions We'll examine each of these in detail. it is advisable to use one segment (not a balancing segment) to mark the corresponding intercompany entity. can be posted immediately or monthly) to the ledger. Other segments are used for product hierarchies. The balancing segment reflects organizational units. balancing segment. This will make intercompany reconciliation and elimination easier. The fundamental idea is that a balance on an account at a certain date is expressed in a currency and complies with your definition of that account. The cost center is generally aligned with the department structure used in your human resources application.whatever you wish to track. Chart of Accounts The segments in the chart of accounts can be summarized as follows: • There are three mandatory segments: natural account. project codes. both in General Ledger or Financial Consolidation Hub. and cost center. A global chart of accounts is a designated account structure format and set of values 4-2    Oracle Financials Concepts Guide . Validation rules and security rules are created and managed using the various segments. These entries are optionally summarized and posted on your schedule (for example. both legal and management. Global Chart of Accounts We recommend that you consider a standardized approach to accounting for your organization in the Oracle ledgers by using a global chart of accounts. • • • To make most use of our intercompany functionality. or channel analysis .

However. Oracle Subledger Accounting can populate both ledgers appropriately and simultaneously. Enables account derivation in intercompany and cross legal entity situations.that all entities in a group will use. each segment is designated for a specific use and therefore is consistent in its function across all ledgers. You can drill from ledger set balances to transaction data. When several ledgers share the same chart of accounts. we provide several ways to accommodate national charts: Use a Chart of Accounts Segment • You can create a national chart of accounts that can be deployed in a National or Alternate segment of your Corporate Chart of Accounts. Use this with a national chart of accounts in a secondary ledger. In both cases. Depending on the complexity of your business. Eliminates mapping and data rework on consolidation. We provide French and Colombian charts that can be deployed in this way. A ledger set can aggregate the results and data of many operations using individual ledgers. Use a Secondary Ledger • You can set up a ledger using your corporate chart of accounts and make it your primary entry book. and mapped to the corporate accounts. Some values within the segments will differ according to local requirements. they can be combined into a ledger set. Use this with a corporate chart of accounts in a secondary ledger. There are several steps that you can take so that your Global Chart of Accounts can be deployed and used in many countries. and you can report on a ledger set as one ledger. Regulated Charts of Accounts Several countries use a mandatory national chart of accounts that specify account numbers or values that you must put in an account segment. • • Accounting with Oracle Financials Applications     4-3 . Or you can set up a ledger to accommodate the national chart of accounts and make it your primary entry book. A global chart of account facilitates standard business analysis: apples to apples performance reporting: • • • Facilitates sharing of ledger services and reduces reporting risk mitigation costs.

When the overseas business shares its functional currency with the parent. Our currency handling offers flexibility in how you comply with International Accounting Standards (IAS 21) and Financial Accounting Standards (FAS 52): • Both standards define "translation" .Use Consolidation • You can create a corporate book using your corporate chart.certain non-monetary balances are converted at a rate from the day you acquired them .converting all balances at various definitions of the current rate . • Currency Ledgers have a definitive currency used to construct the balances and can accommodate an infinite number of transaction denomination currencies. General Ledger Translation stores translation rules that are applied to balances in a ledger. and use Oracle Financial Consolidation Hub to link and map your corporate bookkeeping to it. 3. activity. it is integrated and must remeasure when its bookkeeping currency is different • • The Oracle E-Business Suite provides several ways to obtain a parent currency view of overseas operations. and balances (only) using the reporting currency feature on subledger transactions. Both standards define "remeasurement" . The transactions. 4-4    Oracle Financials Concepts Guide . Convert subledger activity.as the method you must use to convert the results of an overseas operation that operates as an investment (independent business) from their accounting currency to the reporting currency. and income statement balance. You can choose to deploy them depending on your overseas operation's circumstances: 1. or balances can be valued in other currencies in several different and sophisticated ways. Translate or remeasure ledger balances in a traditional way using Oracle General Ledger.as the method you must use when the overseas operation is tightly integrated with the parent business. Translate or remeasure overseas operations in Oracle Financial Consolidation Hub. Financial Consolidation Hub can see the data in many ledgers and includes several currency conversion functions by asset. 2. 4. ledger activity. liability. Or you can consider creating a consolidated book using the national chart. Both standards use the term "functional currency" as the test for integration. and use Oracle Financial Consolidation Hub to link and map National bookkeeping to it. Translate or remeasure both ledger balances using the reporting currencies feature.


Journal Level: Maintains General Ledger journal entries and balances in the reporting currency using the General Ledger Posting Program. Ledgers that are not primary should also have a primary currency. When using the subledger level reporting currency. use reporting currencies rather than secondary ledgers when currency is the only difference between the primary ledger and the view that you need of it. and accounting convention as the primary ledger. the journal is automatically converted to the respective journal level reporting currency based on the journal conversion rules. For each reporting currency. and balances. We ship seeded rules that you can use. you will reflect the subledger accounting rules created using Oracle Subledger Accounting. Tip for Existing Oracle Financials Users • • • Currency support is substantially improved in Release 12. For these reasons. Each ledger must be assigned a primary currency. in local currency. Reporting currencies reflect the same chart of accounts. Other currency features are enhanced. Multiple Reporting Currencies is replaced with Reporting Currencies and Multiple Ledgers. you can maintain accounting data at one of three levels: • Balance Level: General Ledger balances are directly converted from the primary ledger currency to the reporting currency using translation. Reporting currencies represent the data of a ledger in other currencies. Reporting Currency You may need to report in additional currencies to satisfy management. For example. 4-6    Oracle Financials Concepts Guide . You account for local employees' payroll. and statutory requirements. These rules provide instructions on how to convert subledger data entered into the source ledger to one or more subledger level reporting currencies. calendar. legal. Local contractors and vendors are reimbursed in local currency.A primary ledger interfaces closely with the economy in which the entities that are using that ledger are trading. General Ledger journal entries. Each time a journal is posted in the source ledger. As a general rule. we recommend that the primary currency of a primary ledger be the local business currency. your local banks issue bank statements that tie to the ledger. in the primary ledger. Subledger Level: The Subledger Level is the most detailed of the three levels as it maintains a currency representation of your subledger journals.

account reconciliations. there is often a need for one or two adjusting periods at year or quarter end to include General Ledger transfers. Groups of rules can be managed in sets that we call "Accounting Methods". and perhaps your transaction tax regulation mandates. adjusting journals. Transaction tax reporting and statutory requirements are factors in the design of most ledger calendars. Each ledger has an accounting calendar. Other factors may also need to be considered. by using two ledgers with the appropriate conventions. For example. The balance on your "revenue" account has meaning only insofar as it reflects your definition of revenue. which represents a period of time in General Ledger. your statutory and regulatory obligations. You can associate a common calendar with multiple ledgers. This support can be tailored to the complexity of the situation. your definition of revenue will reflect your compliance with your GAAP (for example. Accounting with Oracle Financials Applications     4-7 . You must design your calendar based on your business and management practice. for comparability and standards calculation. Some countries have specific requirements such as a closing journal voucher that can be accommodated in an adjusting period. can automatically create local bookkeeping in accordance with US principles (in the US primary ledger). but also simultaneously maintain accounting for the same transactions in accordance with French regulations (in a French secondary ledger). Service businesses often use the regular calendar. Manufacturing businesses often use calendars with periods and quarters that end on weekends and are equal. You can take into account the legal obligations and business operations within each country. For example. a French firm with a subsidiary in the United States (US). All Oracle subledgers depend on the General Ledger calendar. International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) or United States GAAP).Calendars Balance sheets are snapshots of your assets and liabilities at points in time. from automatic adjusting entries in the same ledger through completely populated secondary ledgers. The rules are set up in Oracle Subledger Accounting and are assigned to individual ledgers. the rules engine allows you to account for a business transaction using different conventions. For those situations where you must comply with both local regulation and a parent GAAP. defined by a start and end date. and income statements are an analysis of the change in your net wealth between each balance sheet. We make it easy to construct meaningful balances by posting to the accounts according to easily articulated and controlled rules that are applied to each subledger transaction. Accounting Conventions Ledgers reflect accounting conventions. and other period end specific tasks. In turn.

• • • • • Oracle Subledger Accounting is an open and flexible service that defines and generates accounting for transactions captured by the transaction processing systems in the Oracle E-Business Suite. purchases. they are explicit and managed through Accounting Methods in Oracle Subledger Accounting.21a• Subledger Accounting can be used to support transactions processed in non-Oracle 4-8    Oracle Financials Concepts Guide . Is complete with the appropriate detail and in definable formats as needed for various local compliance reasons. Provides a standard means of posting subledger data to General Ledger. Provides standardized storage for subledger accounting entries and subledger balances. Is in accordance with accounting rules that you establish in line with your compliance requirements. allows you to manage the rules. and study their application. and others. Each subledger transaction that requires accounting is represented by a complete and balanced subledger journal entry that is stored according to a common data model. In Release 12. expenses. By means of a broad toolset. Euml3 alWTu2cuRglyar-©1lAuRrR-ur©2l. such as sales. review their effect. Subledger Accounting in Oracle Financials Overview Oracle Subledger Accounting is part of the Oracle E-Business Suite and is an accounting service that: • Derives the appropriate accounts to use for individual business events.Tip for Existing Oracle Financials User • Accounting conventions were implicit in earlier releases.

Establishing an accounting method or convention for a ledger entails defining subledger accounting rules and clustering them together. and Procurement are populated by reference to the defaults. The Oracle E-Business Suite. Default Transaction Distributions Each type of transaction in the Oracle Financials subledger products has default "distributions" associated with it. Distribution tables in Receivables. If the same product 'A' is shipped to a direct customer. You can edit the distribution defaults at the product level. • Accounting events represent transactions that have a financial accounting impact and require that accounting information is recorded. Assets. Assets. as shipped. Projects. The default distributions are used by Subledger Accounting as a basis for the accounting of each transaction and are modified by the Subledger Accounting rules when you use Subledger Accounting to amend the accounting impact of the product-supplied defaults. Distribution tables in Receivables. a sales invoice might be distributed over several revenue accounts. • An accounting definition. is similar to this example: If product 'A' is sold and is shipped to a distributor. You can use virtually all data captured by the Oracle E-Business Suite as points of reference when drafting a rule. which replace the "distribution" tables for these purposes. Accounting conventions are set up for both primary and secondary ledgers. Subledger Accounting rules are date effective. includes rules for standard accrual accounting and for cash accounting. For example. Subledger Accounting Rules Oracle Subledger Accounting develops the accounting for each "accounting event" by applying a rule that you have defined for the event. Examples of accounting events include issuing an invoice and disposing of an asset. accounting events are events in the real business sphere.compliance and accounting reconciliation. then book it to account 'XY' with a description of 'XYZ' on the journal entry lines. All subledgers assigned to a ledger inherit the accounting convention from that ledger. indicating how the transaction is distributed within your business. You can customize these rules as required or create your own. Accounting events are not comparable to system events and programs that update transaction tables. then book it to account 'AB' with a description of 'ABC' on the journal entry lines. or business rule. Accounting with Oracle Financials Applications     4-9 . We call the rules "accounting definitions". and Procurement remain available and are deployed for other purposes. Accounting events are captured when transactions are saved in the subledgers. Projects.

Different subledger accounting methods are used to satisfy the conflicting requirements implied by corporate accounting policies. or in highly regulated vertical markets. but your GAAP. and the contents of the journal entry descriptions. in a specified ledger with one balancing segment: • Receivables are debited 4-10    Oracle Financials Concepts Guide . calendars. you can use Subledger Accounting rules to design automatic adjusting entries and post them to an adjusting segment. Flexible Journal Entry Setup Flexible journal entry setup enables users to control every aspect of the subledger journal entries that are generated for a subledger transaction. Corporate accounting policies can therefore be designed and implemented without prior knowledge of the wide range of local fiscal regulation encountered in these countries. local fiscal regulation. Multiple Accounting Representations Oracle Subledger Accounting enables you to create multiple accounting representations from a single transaction. and subledger accounting methods. currencies. control which types of journal lines are created. you can populate more than one ledger with subledger journal entries for a single legal entity's subledger transactions. based on data drawn from the subledger transactions. simplified for illustration purposes. Of course. how account numbers (CCIDs or "accounting flexfields") are derived.Some Important Features of Oracle Subledger Accounting Note: Refer to the Oracle Subledger Accounting Implementation Guide for a comprehensive description of Subledger Accounting. Each accounting representation can use different charts of accounts. User defined rules. for example IAS/IFRS. if you don't need complete ledgers for a particular overseas operation. requires that you recognize revenue when the customer accepts the product. You can choose one of the following methods: Method 1: Same Ledger The seeded regular Subledger Accounting rule. suggests that when issuing a sales invoice. Consider a situation where local transaction tax regulation requires that the "sales account" reflects all billing. Multiple accounting representations enable corporations to design and implement global accounting policies independently from considerations that apply to subsidiaries operating in particular countries. Using multiple accounting representations. This is a powerful feature as each accounting representation represents an alternate accounting interpretation of the underlying subledger transaction. and cash basis or business orientated analysis.

assume there is a balancing segment "10". simplified for illustration purposes. Method 2: Primary and Secondary Ledger The seeded regular Subledger Accounting rule. A report accessing all segments including 99 will reflect the GAAP reporting status. be updated instantaneously by subledger activity. "Country Ledger". when issuing a sales invoice: • • • • Receivables in Ledger A are debited Revenue in Ledger A is credited Receivables in Ledger B are debited Deferred revenue in Ledger B is credited A report accessing Ledger A will reflect the local filing status. "Division 10". and provides a standard approach across products for various tasks and system entities.• Revenue is credited For example. General Ledger can. • There is one simple process for transferring data from a subledger to General Ledger. We elect to account for the same operation under our GAAP rules in Ledger B. "Corporate Ledger". • Accounting with Oracle Financials Applications     4-11 . We modify the regular rule so that. A report accessing Ledger B will reflect the GAAP reporting status. We elect to track our management and GAAP adjustments in balancing segment "99". when issuing a sales invoice: • • • • Receivables in segment 10 are debited Revenue in segment 10 is credited Revenue in segment 99 is debited Deferred revenue in segment 99 is credited A report accessing all segments except 99 will reflect the local filing status. "Adjusting Division".. We modify the regular rule so that. assume we have Ledger A. suggests that when issuing a sales invoice in a specified ledger: • • Receivables are debited Revenue is credited For example. Common Subledger Operations Subledger Accounting is a service that is invoked by all subledger products in the Oracle E-Business Suite. optionally.

For example. There are many detail Subledger Accounting features that are now available to all products: subledger accounting "formatting" options such as the optional suppression of zero lines. • • Inquiries. 4-12    Oracle Financials Concepts Guide . This greatly facilitates reporting and data management. where you can define the following for each entity: • • • • Ledgers (primary and secondary) Currencies (primary and reporting) Accounting methods Many other options Tip for Existing Oracle Financials User • The Accounting Setup Manager is a new feature in Release 12. The account is fully completed for all segments. Each entry is fully described. specific national day books are supported by an extract and a template delivered with the product. Extracts are made from the Subledger Accounting tables and formatted with XML Protocol (XMLP) templates. Drill-down. In other words. We provide an Accounting Setup Manager. and correlated with the appropriate documents. and others. A complete journal entry is written for each accounting event. The entry is numbered and identified. similar to old fashioned "day books". you select the ledger that you want to use to account for a legal entity. optional presentation of entries as negative debits or credits.• Subledger transactions have complete accounting articulation. Subledger Accounting uses Oracle XML Publisher extensively. All debits and credits in the various currencies are scheduled. and Reporting Detailed subledger accounting reports and inquiries that satisfy local fiscal and business requirements for detailed reconciliation between subledger transactions and accounting are provided. Setting Up Your Accounting: Accounting Setup Manager Overview of the Accounting Setup Manager You set up your accounting in Release 12 of the Oracle E-Business Suite by assigning ledgers to legal entities. Subledger transactions are stored in standardized subledger accounting tables.


it is also important that you manage your businesses and account for them to your shareholders on a worldwide basis. This accounting setup is appropriate when each of the legal entities assigned to the accounting setup meets the following conditions: • Operate in a country that allows multiple legal entities to share the same primary ledger. that is multiple legal entities can share the ledger attributes (4 C's) and ledger processing options of the primary ledger. Do not need to use different ledger processing options (such as autonomous document sequencing) for each legal entity. and consolidation purposes. You can create secondary ledgers to represent the primary ledger's accounting data in a format that will be consolidated with the parent. use a ledger set so that you can treat them as one for accounting. In the rare situation that a local regulatory authority requires gapless General Ledger document sequencing and gapless subledger document sequencing. that is. you can maintain various ledgers for management reporting or consolidation purposes. management. The Corporate View We've reviewed how you can set up local organizations and accounting so that you can comply with local and national rules and regulation. a ledger. all operating units and all legal entities associated with a given ledger will share available General Ledger numbering sequences. document sequences are generated for transactions at the ledger level. Use this setup to supplement regular accounting arrangements. and accounting options. • • Other Accounting Environment It is also possible to use accounting setups that have no legal entities and do not establish any legal relationship in respect to the primary ledger for that accounting setup. and an operating unit.In General Ledger. adjustment. If the Regulatory Situation of Your Subsidiaries Facilitates Using One Ledger in Respect to Several Companies Certain authorities focus on groups of legal entities in the legal system . reporting. This situation will allow multiple legal entities to be associated with the same primary ledger.where they "lift the veil of incorporation" . Of course.and have drafted regulations that permit or require you to combine legal entities that you control for compliance purposes in a given jurisdiction. If you create ledgers for sequence management purposes. For example. ledger attributes. We've described several devices that facilitate the development of information from the locally compliant operations that conform to 4-14    Oracle Financials Concepts Guide . allocation. Do not have tax requirements that are specific to a legal entity. it may be necessary to maintain a one to one relationship between a legal entity.

and Accounting Rules Translation and Remeasurement Techniques Cross Organization Reporting You can also use our formal consolidation tools. 3.GlcoulsosoyFBRsCRlt HosRsFsoFrgHcleF ksvprr? Accounting with Oracle Financials Applications     4-15 . Ledger Sets. 4.your management principles and applicable worldwide Generally Accepted Accounting Principles: 1. 5. 2. Global Chart of Accounts Adjusting Segment Automation and Accounting Rules Multiple Ledgers.

you can review fully consolidated financial statements for any relevant subset of the enterprise in addition to the fully consolidated financials for the entire enterprise. as well as sub-consolidations. You can generally define a single rule for all partially-owned subsidiaries. To this end it is also tightly integrated with Oracle Enterprise Performance Foundation and Oracle Enterprise Planning and Budgeting on the analytical application side. including translation and eliminations. Features and Functions Oracle Financial Consolidation Hub provides advanced consolidation functionality including: • Automated processing: You can automate as much of the consolidation process as you choose. from initial data submission to final reporting and analysis. inquiries and drill-down from the Financial Consolidation Hub reach all the way through General Ledger and Subledger Accounting to the documents in the subledger products. Updates in General Ledger are automatically reflected in Financial Consolidation Hub. pulling together financial data from across an enterprise to enable corporate-level analysis and planning. If you have turned on the Subledger Accounting simultaneous ledger posting. simulate an acquisition on the new hierarchy. Non Oracle sources can be imported directly to Financial Consolidation Hub without creating a "ghost" Oracle ledger first. updates in the subledgers are also automatically reflected in Financial Consolidation Hub. Financial Consolidation Hub leverages Oracle Workflow to run an entire consolidation process. Sub-consolidations: By executing sub-consolidations at any level. Financial Consolidation Hub automatically imports data from the ledgers with minimal setup and displays it in columns by business unit. • Audit entries and drill-downs for every stage of consolidation: The application allows you to audit entries from every stage of the consolidation process for every sub-consolidation. and affiliate. Partial ownership: Financial Consolidation Hub has automated capabilities for handling partial ownership. Financial Consolidation Hub also supports ledgers from other vendors. For example. you can automatically duplicate a consolidation hierarchy. and submit a consolidation for the new hierarchy. subsidiary. Simulations: With Financial Consolidation Hub. due to the Financial Consolidation Hub base in the Enterprise Performance Foundation. Financial Consolidation Hub can serve as a bridge between transactional applications and Corporate Performance Management. • • • 4-16    Oracle Financials Concepts Guide .Financial Consolidation Hub is tightly integrated with General Ledger and the subledgers.

The totals are then ready for reporting General Ledger includes a reporting tool. include the secondary ledger in the ledger set for consolidation. as you do in a single ledger. calendar. You can use the Financial Statement Generator to create consolidated financial statements at the parent level. you may be able to bypass the translation by directly consolidating the subsidiary reporting currency with your parent ledger. and then define Financial Statement Generator reports across ledgers using the "Translated" currency type. You can aggregate ledgers in a ledger set even when they have different primary currencies. using three techniques: • Translation: Run General Ledger Translation in the subsidiaries' ledger using translation or remeasurement as required. The ledger set totals the included ledgers just as the ledger totals balancing segments. Financial Statement Generator. Next. you will have aggregated those legal entities. Consolidate multiple companies that reside in multiple ledgers on the same application instance. You can use General Ledger functionality to create these eliminating entries. • • Accounting with Oracle Financials Applications     4-17 . Consolidate multiple companies within a single ledger. They do not have to share the same currency or accounting conventions. Secondary Ledger: Map your primary ledger that complies with local accounting requirements to a secondary ledger that shares the corporate chart of accounts. Consolidate Multiple Companies Residing in Multiple Ledgers (Same Instance) You can include ledgers that share the same chart of accounts and accounting calendar/period type combination in a ledger set. Consolidate Multiple Companies Sharing a Single Ledger You first enter the appropriate journal entries to eliminate intercompany transactions and perform any other "adjustments on consolidation" that you need. If the ledgers you have included in the ledger set account for legal entities. Both are de facto consolidations. and currency. Aggregation is not formal consolidation.Ledgers and Ledger Sets with Financial Statement Generator Ledgers aggregate the results of entities that you've mapped to balancing segment values and ledger sets aggregate the content of individual ledgers. It is useful to distinguish between the following situations: 1. Reporting Currency: If you use journal or subledger level reporting currencies. 2. You will need to eliminate the intercompany balances.

Use of specialized tools including: • The Interface Data Transformer (IDT). Automatically generates journal entries to eliminate intercompany balances based on rules you define. in the form of balance and journal level vouchers. Global Consolidation System uses a "Data Transfer Consolidation" methodology where you move your financial data from diverse ledgers and data sources into a single consolidation parent ledger. the ledgers involved in Global Consolidation System do not need to share any attributes. Use the Global Consolidation System in situations where you need to physically move the data to a consolidated location rather than simply report off multiple ledgers in a set. The Global Consolidation System imports. The mapping rules determine how your subsidiary account balances roll up into the parent. This is based on automatic recurring entries that are defined in the General Ledger module. consider using the Global Consolidation System within Oracle General Ledger to consolidate results. This is a user-friendly tool that makes data import from external feeder systems into Oracle General Ledger and the Global Consolidation System easier and less time consuming. You can include a Global 4-18    Oracle Financials Concepts Guide . appropriate accounts from the trial balances of subsidiary ledgers. The State Controller: A color coded navigation tool to guide you through the consolidation process. As in Financial Consolidation Hub. You then report on and analyze consolidated financial information from this consolidated ledger. Global Consolidation System is the traditional consolidation methodology in Oracle Financials.Though ledgers and ledger sets with Financial Statement Generators can adequately meet the needs of your enterprise. Global Consolidation System When your financial data is spread across multiple ledgers that do not share the same chart of accounts and accounting calendar combination or the ledgers are on separate instances. The Global Consolidation System consolidation function includes a number of other features: • Sophisticated consolidation mapping rules to map accounts and specify transfer rules from the subsidiary to the parent. • • • • The consolidation systems are not mutually exclusive. A workbench to view the consolidation status of your subsidiaries and a Consolidation Hierarchy Viewer to graphically display your consolidation structure. both Financial Consolidation Hub and Global Consolidation System are more formal.

Consolidation System ledger in a ledger set and incorporate its result in a super set. either using Global Consolidation System or Financial Consolidation Hub.and the drill-down remains valid. Accounting with Oracle Financials Applications     4-19 . You can transfer data from a ledger on one instance to another instance for consolidation. Financial Consolidation Hub can draw data from ledger sets and from Global Consolidation System ledgers .


or at least. There are several concepts that are important to understand as you design your internal Worldwide Operations with Oracle Financials Applications    5-1 . Let's look at those concepts that help you provide common services to the different entities. maintain consistency in practice. Our applications include many features that enable local operations of worldwide companies.5 Worldwide Operations with Oracle Financials Applications This chapter covers the following topics: • • • • • • • • Overview Multiple Organizations Support Advanced Global Intercompany System Facilitating Intercompany Accounting in Oracle Ledgers The E-Business Tax Engine The Bank Account Model Ledgers and Reporting Summary Overview We've discussed your organization and how you might represent it in the system. that is.all in the core products. Additional support for newer regulations may be available from our consulting organization. and minimize costs in your operation. on as few instances as possible. to centralize certain activities and distribute others. We assume that you are going to rationalize your operations. We offer localized features in 120 countries. ranging from statutory reporting through transaction tax calculation and filing to local business reporting . We recommend deployment on a single instance. and we've discussed how you can account for it.

Subledger Accounting. Multiple Organizations Access Control also enables automated processes to access the relevant operating units permitted for the process. are given access to operating unites that are owned by the legal entities that the center serves. The intercompany feature integrates with other Oracle products that impact the intercompany solution: • Legal Entity Configurator. together with the Supply Chain Event Management module. local compliance.each of which will be recognized in Procurement and in Order Management appropriately . Payables. Germany.service network. Trading Community Architecture . and Subledger Accounting .Intercompany uses Receivables to produce invoices for the initiator. you can then place orders with your warehouses and plants . Trading Community Architecture is the standardized means of defining various parties and their relationships within the Oracle E-Business Suite. France. provides a complete system in support of "Internal Supply Chain". When a customer of one of your subsidiaries places an order. Multiple Organizations Support Operating units store subledger document data for entities that are separated from one another for transaction tax or other reasons. and the United States. The Advanced Global Intercompany System is an extensive and complete system integrating several Oracle products and features including Receivables. Advanced Global Intercompany System Intercompany transactions record transfers of goods and services between related legal entities. thereby identifying which transactions are intercompany. Once the Receivables transaction is completed.and transfer the goods from the originating plant to the subsidiary using comprehensive documentation. More importantly. and tax reporting purposes. In a shared service center. users who are employees of the shared center's own legal entity. using a feature called "Multiple Organizations Access Control". Users at an Ireland Shared Service Center will be employed by an Ireland Legal Entity and have access to operating unites that represent the United Kingdom. the invoice number is then automatically used to create mirror-image invoices in • 5-2    Oracle Financials Concepts Guide . A responsibility can be attached to one or many operating units as required. and General Ledger. Payables. Subledger users are assigned responsibilities. Advanced Global Intercompany System. Enhanced Drop Ship.Identifies trading partners and their relationships. Transactions between related legal entities must be tracked and documented for financial consolidation. The system generates both Payables and Receivables transactions. Receivables. both commercial and in-house invoices.

The Intercompany engine also supports the following features: • Centralized Intercompany Accounts Definition: This enables all modules to access accounting definitions in a standardized manner. currency.Payables. • ezatilpnsacghalpanyfem???enabfev?c???ay–yO??c?wpousirfollo.Intercompany transactions that do not require an invoice can be processed directly in General Ledger.wp • Reconciliation and Reporting: Intercompany provides reconciliation tools to sort out any discrepancies in accounting balances between the intercompany ith feT f ph differhis is a erc f ality that acc O ?organyessed d feG an Worldwide Operations with Oracle Financials Applications    5-3 . Thus. Multiple Ledger Batches: Batches of intercompany transactions can be entered and addressed to multiple recipients with no restriction on the chart of accounts. This is a powerful feature and enables the processing of global intercompany transactions with fewer overheads. • General Ledger . the initiator and the recipients of the intercompany transactions in the batch can all use different ledgers. or calendar. Subledger integration is an important feature of intercompany functionality that allows you to create a physical invoice for an intercompany transaction in both Receivables and Payables.

Intercompany transactions using the intercompany segment provide more detail for reporting and reconciliation. you can consolidate the accounts payable activities for the entire company as well as automatically balance multi-company intercompany transactions.not make calls to other modules such as Payables. When consolidating financial results. you create eliminating entries to exclude the impact of intercompany transactions. All accounts payable transactions then clear through company 01. When you create a clearing company like this. For example. company 01 among your subsidiary companies can provide the accounts payable function for your entire organization. In this mode. Intercompany accounts can be represented in multiple ways: • Detailed intercompany account balances are maintained in both the subledger and general ledger. Set up the ledger to automatically populate the intercompany segment with the balancing segment value of the trading partner. intercompany accounts are disclosed in detail in the trial balance. Detailed intercompany accounts are included in subledgers and a summarized form is transferred and maintained in the general ledger as intercompany control accounts. Receivables. 5-4    Oracle Financials Concepts Guide . Enhanced intercompany balancing in General Ledger journal vouchers and Subledger Accounting: You can define separate intercompany accounts to record more detail for your intercompany journals and track intercompany balances. you can designate one company to act as the trading partner for all subsidiary companies in the organization. Intercompany Clearing Companies as described earlier. a fully automated intercompany system is critical to ensure that all intercompany account totals across the columns are equal to zero. • • • • • In all cases. Use enhanced intercompany accounting or the intercompany segment to implement the clearing company model and track the amounts that each individual subsidiary owes to each of the other subsidiaries. • Intercompany Segment: You can create an intercompany segment in your chart of accounts structure that is used to create balanced intercompany journals. Clearing Companies: For certain types of intercompany transactions. or Procurement: • You can create generic balancing lines against the intercompany accounts that you have defined for specific sources of transactions.

Integration with the product hierarchy for product codes and description. Integration with your operating unit and other organization records for the location of your shipping organizations. the engine supports: Worldwide Operations with Oracle Financials Applications    5-5 . including the location of the ship-to addresses and integration with your vendor files. and federations around the world derive substantial parts of their income by taxing business transactions. We help you to meet this obligation by creating a transaction tax engine that facilitates focus of the control issues where your experts are and allows the software to support the tax calculations even at locations far remote from the taxing jurisdiction. including Sales Tax. and returns the detail to the product to be included on documents. and so on. populated by either the intercompany engine or by recurring journal entries. Goods and Services Taxes (GST). ship-to and ship-from addresses.• Automatic intercompany eliminations are accommodated in both the Global Consolidation System and Oracle Financial Consolidation Hub. Value Added Tax (VAT). and GST. nature of goods or service providers. Integration with Trading Community Architecture for your customer details. • • • • A subledger product that requires a tax calculation on a business document invokes the engine and supplies it with appropriate data as to customer and vendor. Your tax experts will rapidly familiarize themselves with the details of the tax engine. states. In addition to basic sales tax. The engine determines the jurisdiction and the taxes involved. A database of rates that are updated when the rates are revised. and Customs Duties. This database reflects the taxing jurisdiction: New Hampshire's sales tax rules are quite different from Nevada's. The engine supports worldwide taxes. The Global Consolidation System elimination functionality can be deployed in a ledger set environment to enhance the ledger set aggregation and reporting. Both modules can be set up to pick up the intercompany balances. The engine includes the following features: • A database of rules and regulations that are maintained and populated by your experts and advisors as the regulatory environment evolves. VAT. There are many kinds of transaction taxes. You can buy and import rate changes from rate vendors. • The E-Business Tax Engine Nations. A major part of your operating cost is compliance with various rules and regulations. and subsequently eliminate them. This automation can save you days in the close process.

The Bank Account Model While a company may choose to store invoices in different OUs.• • • Use tax Cross border shipments Rebates and returns Tip for Existing Oracle Financials User • The E-Business Tax Engine is new for Release 12. A shared service user with Multiple Organizations Access Control can select invoices stored in different operating units. A bank account is owned by a legal entity. combine them into one bank instruction. Tip for Existing Oracle Financials User • In Release 12. It succeeds the functionality provided by Tax Codes. We've modeled our bank account support around this concept. the funds in that account are available to different operating units for assignment to invoices or payable items. The resulting reports are published in many formats and can be securely distributed electronically in several different ways. and other international bank product offerings. Together. notional-zero based balances. and send them to the bank for issuance. This separation of ledger data and ledger management is designed to support the creation of ledger shared service centers and of moving ledgers into sets that are centrally managed. your internal bank accounts are associated with legal entities rather than sets of books or ledgers within ledger sets. Subledger accounting ensures that all OU transfers are accounted for both legally and accurately. This facilitates sharing the bank account over various operating units. this facilitates the creation of reporting shared service centers. Ledger sets support adjustments and allocations and specifically support adjusting ledgers. At the same time. Customer and supplier bank accounts are now in the Trading Community and can be shared. XML Publisher facilitates the production of reports using templates applied to extracts. it should be able to use its money in the bank to service any invoice it owns. Not only is this 5-6    Oracle Financials Concepts Guide . Ledgers and Reporting Ledger sets are used to manage ledgers. accounting for the balance in its ledgers. The model supports zero-based balances. including opening and closing of periods and running reports.

but it can help to assure that management everywhere is reading from the same page. while covering the whole organization. and distributing solid decision oriented information. Summary Together. constitute an excellent architecture that you can apply to focus your activity to tightly support the financial functions. Worldwide Operations with Oracle Financials Applications    5-7 .a low cost solution to reporting. supported by transactions and process initiatives in individual products. these approaches and modules.


To reflect the investors' will. The public. Internal Control articulates the risks of error and losses to which you might be exposed. that is. the controls you put in place to mitigate those risks. and Compliance with Oracle Financials    6-1 .6 Governance. The Japanese word "hoshin" is sometimes applied to the vision of the management. ratings. and Compliance with Oracle Financials This chapter covers the following topics: • • • • • • Introduction Requirements for Financial Compliance An Overview of Oracle's Compliance Architecture Enterprise Visibility and Security Internal Control & Operational Efficiency Corporate Governance & GAAP Introduction Governance. Risk Management. and disclosure. The Oracle Financials suite provides you with a comprehensive set of tools for Governance. Successful corporate governance and successful implementation of hoshin both require the firm execution of policy and delivery to your business model. Internal Control is the term used to define the systematic methodology of managing the risk of non-compliance with management policy. and incidental and business losses. error in reporting. and your system of monitoring those risks and controls. and Compliance are the issues of reflecting the will of the owners. Risk Management. Risk Management. and to comply with the public's standard. through regulation and law. has a substantial interest in how companies and management comply with the standards and obligations that they have. the investors in the operation and performance of a company. management needs to enforce their decisions and policies on the group.

executing the delivery of hoshin throughout your organization. The applications make it easy to incorporate your forecast, track your budget, measure progress, and make sure that the trickle down of your decisions is thorough and complete. You get a clear picture of the state of the group and the ability to pinpoint problem areas. The Oracle Financials suite also provides both inherent and express tools to manage internal control and to comply with legislation and directives requiring compliance assertion.

Regulations and Compliance
The growing complexity and interdependence of the global economy requires accommodating the ever increasing demands of worldwide compliance. Most companies today must comply with multiple regulations such as the following: • Financial reporting standards such as International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (GAAP). Corporate Governance mandates such as Sarbanes-Oxley, the European Eighth Directive, and other Governance Codes. Privacy laws such as Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the European Union's Data and Privacy regulations. Industry-specific regulations such as those negotiated under the Basel II agreement. Other standards are established by standards bodies such as the International Standards Organization or national agencies like the United States Food and Drug Administration.
Note: Though Oracle's governance and compliance architecture

incorporates all E-Business Suite Applications, the focus of this chapter is on financial compliance and the financial modules within the suite.

Requirements for Financial Compliance
Good, holistic, governance and compliance require that management have clear visibility across the enterprise, have effective internal controls, and operate efficiently.

Enterprise Wide Visibility
Management asserts that the public accounts are an accurate and fair assessment of financial condition and operational performance and that they can satisfy themselves they are so. To achieve this end, executive managers need to access reliable data behind the financials. They must also be able to align strategies with operational plans to actively monitor day-to-day operations, and to understand the system of internal control.

6-2    Oracle Financials Concepts Guide

This is easier to accomplish if:
1. 2.

Groups have transparent processes and Signing officers have access to relevant and timely information across the enterprise.

Management needs to have fail-safe, transparent processes, that are integrated across the enterprise and provide relevant data and timely information to senior executives.

Effective Internal Controls
Auditors and management must attest to the effectiveness of their internal controls. Corporations must set up process controls that enable regulatory compliance. To monitor effectiveness, your policies and processes must be articulated and promulgated. Though the deployment of these processes must be distributed across the firm, it is beneficial to centralize their design and establishment. Once you've identified common business requirements and processes used to meet your organization's compliance mandates, the key is to automate as many of those processes as possible to make them auditable and repeatable. All information about processes and their associated risks and controls must be documented and easily accessible. Content and records management is another area that compliance court cases and associated electronic discovery have put under the spotlight. Creating a culture of compliance (an identified element of an effective internal control system) also means that employees must be trained on the company's latest governance and compliance policies and practices. They must also be continually assessed on their understanding of those policies and practices. An enterprise wide learning architecture is critical for training employees and monitoring skills.

High Level of Operational Efficiency
Increased regulation has also translated into tighter deadlines for reporting. By reducing the closing cycle as well as giving executives visibility to business events as they unfold, it makes it easier for executives to:

Close the books quickly and then assess and understand their operating performance. Reconcile financial data quickly and accurately, and identify problem areas.


Centralized, low cost, error-reducing processes are a backbone to ensuring consistent, error-free data across the enterprise.

An Overview of Oracle's Compliance Architecture
A proactive compliance program based on sustainable competencies is the best practice

Governance, Risk Management, and Compliance with Oracle Financials    6-3

in dealing with corporate governance. However, the human and financial costs of responding to each regulatory challenge with unique one off solutions are simply not sustainable. Oracle delivers a complete information architecture that can support sustainable compliance by combining control based business and compliance applications, content and records management, and security technologies. The architecture provides for complete visibility into financial results, business performance, and underlying controls. Enterprises can confidently and cost effectively comply with their compliance and governance mandates, from financial reporting regulations such as Sarbanes-Oxley, to industry specific mandates. The following diagram provides a high level overview of Oracle's Compliance Architecture and captures the visibility, control, and efficiency constructs discussed above. The diagram illustrates the foter gi ty technust sGtr:sed

6-4    Oracle Financials Concepts Guide

Oracle supports this architecture with multiple components that are integrated with each other. The integration simplifies your entire information technology and security infrastructure as well as a large segment of your process efforts in the following two ways: • Standardized information technology systems, applications, and business processes streamline much of the compliance effort. You can now maximize control through automated processes and embedded controls. Improves compliancy and operations visibility through a single source of high quality information. You can run your entire business on a single, global data repository and have a concise and accurate picture of regulatory compliance and enterprise performance.

Operational efficiencies are a direct benefit of these initiatives.

Enterprise Visibility and Security
Data and Security Management
Security and integrity of data is a top priority for executive signing officers. Fragmented systems, multiple general ledgers, and transaction system interfaces are barriers to meeting governance and compliance mandates. Standardizing on a single instance

Governance, Risk Management, and Compliance with Oracle Financials    6-5

helps break down information silos by eliminating duplicate systems and application interfaces. many organizations still struggle with distinct user and authorization repositories. User Authentication and Authorization . access control. These features can provide data logs that are useful for analysis in a compliance investigation. ensuring data accuracy. and role-based access control to manage user access to applications and data. Oracle Database/ Application Server The Oracle Database meets the need for a single source of truth through access control and authentication features required to protect data in a single. the Oracle Database delivers advanced audit capabilities through extensible. Oracle Identity Management delivers centralized. policy driven user management and security administration for distributed deployments.provides for aggregated audit capabilities across numerous applications with pre-built reports that offer a • 6-6    Oracle Financials Concepts Guide .allows for identity creation and management services through delegated administration. and biometric devices to increase assurance that users are who they state themselves to be. integrated workflow. • Access and Entitlement Reporting and Auditing . The Oracle Application Server and middleware platform is designed to leverage service-oriented and grid computing and complements the database security structure. and auditability. and any other information that an administrator may wish to employ. This feature allows for the separation of duties common to many regulations today. and audit are built into the Oracle Database and Application Server. smartcards. • User Account Management . consolidated database repository. This capability simplifies administration by providing a central. Compliance related tasks such as password management and enabling delegated administration are also easily facilitated. enterprise-wide repository that allows security and privacy policies to be shared. This service utilizes authentication devices such as tokens. Organizations can also define specific audit policies that alert administrators to misuse of legitimate data access rights and generate a record of them. Users can be provisioned directly in the Identity Management repository or synchronized with a third party repository and assigned a security clearance level. their organization. policy-based auditing features.manages the authentication mechanism employed. The security policy infrastructure associated with the Oracle Database and middleware platforms can be further leveraged by Oracle Identity Management. reliability. Oracle Identity Management While the security fundamentals of authentication. For example. These policies authorize access to specific applications based on attributes of the user. user self-service.

while enforcing pre-set approvals and limits. 2-. the more reliable and timely is the data captured by those processes. • • • Controls embedded in the system make it easy for them to be integrated into the day to day activities of the firm. Examples include: • Cross-validation rules for journal processing to prevent inaccurate journals and entries of invalid account combinations. The ability to set quantity and price tolerance limits during invoice processing. and 4-way matching in the purchasing and payables domain. The more automated your business processes. Sequential numbering of invoices and journal entries. Oracle Workflow and BPEL Oracle Workflow and Oracle BPEL Process Manager are modeling tools in the Oracle E-Business Suite that allow users to design internal business processes and approval hierarchies and store them in a central repository. Companies can use Workflow to support a wide variety of compliance mandates. The applications also offer a rich set of built-in automated internal controls that enable companies to enforce their business rules in every transaction. Risk Management. Governance. You can set up alerts to automate exception management and notifications. Internal Control & Operational Efficiency Automated Processes & Controls in the E-Business Suite Sarbanes-Oxley requires tighter deadlines and prompt disclosure. 3-. and Compliance with Oracle Financials    6-7 . This helps you to ensure compliance across your global organization. Application controls are also significantly easier to test and validate than manual controls and hence reduce the scope of audit activities. Such controls can be utilized to implement and enforce policies that meet the evolving requirements of multinational regulations. Such flows expedite business processes across the enterprise.demonstrable means to show compliance. The Oracle E-Business Suite is engineered to work together as an integrated system wherein you can pass information from one application to another without incurring incremental integration costs or inducing mapping error. This improves your ability to research and resolve issues on a proactive basis. Workflows are embedded into the applications thus enabling your organization to streamline inter user approvals and information flows. You can configure these flows according to your business rules while validating the information transferred. Alerts can specify database exception conditions for continuous or scheduled monitoring of all E-Business suite applications. designing processes that are both auditable and repeatable.

Overall. Manual processes are eliminated and bottlenecks are streamlined. These applications take advantage of embedded workflows that allow you to streamline inter-user approvals and participate in review processes. a number of self-service applications automate and connect internal processes such as: • • • • Expense Reports and Time Cards Employee Information Purchasing Processing Competency Management Using the suite. Internet Expenses. Shared Service Centers The Oracle E-Business Suite is a functionally complete suite of integrated applications. Oracle BPEL Process Manager enables organizations to model and deploy business processes based on the BPEL standard. We've discussed shared services and shared service centers in the Worldwide 6-8    Oracle Financials Concepts Guide . and iProcurement increase the efficiency of information. self-service automation is also extended to customers and suppliers to interact with items such as: • • • • • Orders Invoices Payments Requisitions and Auctions Inquiries and Disputes Oracle self-service applications such as iSupplier Portal.Business Process Execution Language (BPEL) provides enterprises with an industry standard for business process orchestration and execution. Within the Oracle E-Business Suite. extending automation to the end user via self-service increases the efficiency of your business information and raises data integrity. Self Service Solutions By utilizing a self-service paradigm where end user requests are by and large facilitated by those same users. The applications support the centralization and integration of business operations through shared service centers. you can reduce administrative tasks and the time and effort involved in recording and tracking business events.

Operations chapter. The benefits of shared services are not just for multinationals. The consolidation of data and processes in shared service centers also mitigates against the risk of error and of poor decision making. Risk Management. N ns ultbin . and Compliance with Oracle Financials    6-9 . dramatically mitigating the risk of process error. Medium sized firms can maki? . An important impact of the deployment of shared service centers is that the number of control points in a process and the number of variations of a process are greatly reduced.e Governance.e nloisk of p ds r? uproiskre iproce' regainr.

Process . Similar standardization has been applied to almost all processes including: • • • • • Revenue and expense recognition Human Resources processing Procurement Order Management Sales and service Finally. The COSO framework for internal controls and the COBIT framework for Information Technology controls are often used to identify the process. In addition.electronically and sends the paper documentation to a shared service center from where treasury funds the reimbursement. to monitor key control points. Oracle Internal Controls Manager is based on Committee of Sponsoring Organizations (COSO) and COBIT (Control Objectives for Information and related Technology) standards. Note: The following sections provide an overview of the salient features available in Oracle Internal Controls Manager.control matrix in a firm. Oracle and non-Oracle. we also meet unique local requirements such as recovering overseas taxes paid by American travelers. Oracle Internal Controls Manager provides preventative controls such as the segregation of duties feature and a DBI dashboard for control managers. For detailed information on these features. regulations require testing.risk. Oracle Internal Controls Manager Oracle Internal Controls Manager is a comprehensive tool for executives. Tip for Existing Oracle Financials User • In Release 12. The solution integrates with other enterprise business systems. certification. formally designed standardized reports from a central reporting organization are utilized to complete the business cycles. and auditors to address regulations that require organizations to maintain internal financial controls and monitor ongoing compliance. see the Oracle Internal Controls Manager Implementation Guide.Control Library One of the biggest challenges to compliance is identifying and defining a company's business processes. then identifying the risks and controls associated with those processes. Once these risks and controls are identified. It also includes specific audit features such as one designed expressly to look at segregation of duties. linking documentation to those processes. controllers. and ongoing monitoring of the 6-10    Oracle Financials Concepts Guide .Risk .

Further. Process Approvals and Change Management The verification of business processes in an organization is a major portion of the internal audit function. Oracle Internal Controls Manager provides a rich functionality in this domain and uses an intuitive workbench to provide features and benefits including the following: • Processes and process revisions are created in a "Draft" status and must be approved before the process or its revision can be used in the system. Auditors have the ability to view a complete audit trail of changes taking place in the organization and the risk library. surveys created with Oracle Scripting can help in providing an effective control environment and the results can be used to Governance. and Compliance with Oracle Financials    6-11 . Since the changes can adversely impact process risk exposure as well as the internal controls set up on the process. and control activities are now stored in the Oracle Internal Controls Manager risk library. In any organization. and changes in other processes. The application maintains a detailed revision history for all processes (including non standard processes) in the entity. Through a hierarchy viewer. managing. These processes (both manual and automated) are subject to change due to a variety of reasons such as a rapidly changing environment. Risk Management. process owners) and recipients of these notifications can review the modified processes prior to giving their approval. the internal audit department must assess the process change to ascertain whether it introduces additional control risks. It is therefore critical to be able to view version information and historical data for business processes. risks. Oracle Internal Controls Manager can be used to automate and streamline all the processes associated with its internal control environment. and business settings. • • Integration with Oracle Scripting To help in making assessments. enabling a firm to have a 360 degree view of risks associated with each control activity as well as the individuals within the organization who have responsibility over that control. you can associate a survey written with the Oracle Scripting tool to an "Assessment" in Oracle Internal Controls Manager. you can also see which associated business processes are impacted by the change. process changes must be subject to a review and approval mechanism.controls. Before approving a process change. you can compare the revised process with its prior version to determine whether the change is acceptable. Oracle Scripting is a powerful web based tool for soliciting. legislation. Change notifications are sent to all concerned personnel (for example. Risks to internal controls can be captured through a review of the changes to key risks. This comparison is crucial in determining the impact of changes and deviations on associated processes. and analyzing stakeholder feedback through surveys. controls. Processes.

LMaidIhMaFida®Iudrn®une typically corresponds to an application feature such as a page. you can establish and maintain survey campaign information as well as generate reports for analyzing survey data. button. Note: Functions are a security feature in Oracle Applications that are une ? ®Icc®cdIhcrF used to control access to specific application features. Each function ®daa®IindrattlWenedekWIu.make macro level risk assessments. The Segregation of Duties feature in Oracle Internal Controls Manager is based on access to "Responsibilities" and "Functions" in the Oracle E-Business Suite. Note: Responsibilities define application privileges by allowing users access to only those Oracle Applications functions and data appropriate to their roles in the organization. When a constraint violation is found. With the Survey Administration console. tab. ®Ie Iu You now have the ability to identify any specific combination of incompatible responsibilities or functions in an organization as a constraint. The application can report occurrences where an individual possesses access to two or more of these incompatible tasks and thereby violates the constraint. The Script Author is used to build "survey scripts" that can be deployed throughout the enterprise. Segregation of Duties Constraints Oracle Internal Controls Manager can be used to check whether users in an enterprise have access to responsibilities and functions that are incompatible with each other. you can initiate a request for management to take action by modifying the duties of those users with incompatible tasks. or menu. Oracle Scripting is comprised of several components including a Script Author and a Survey Administration console. Process and Organization Certification 6-12    Oracle Financials Concepts Guide .

• These inputs present adequate perspective for the signing officer to evaluate the processes behind the numbers and decide whether adequate controls are in place. The dashboard displays when process owner have evaluated and signed off on the effectiveness of internal controls associated with a specific business process. the results from internal audit evaluations of the processes affecting that item are presented in a consolidated fashion to financial "signing" officers. for example Section 302 of the Sarbanes-Oxley Act in the United States. Financial audits therefore include both test of details of balances as well as audits of the processes that affect those balances. It is imperative that the processes behind financial items be recognized and incorporated into the financial audit. Successful completion of an audit of these processes and any related follow-up activities which may be required. governmental regulation in several countries. Also brought into context are the results of the relevant process certifications by the process owners. signing officers now have a structured way of ensuring that the internal controls related to every account and financial item is working. and Compliance with Oracle Financials    6-13 . The certification attests to the process meeting the requirements of the applicable standard. In addition. results in the financial item being "certified. requires that the principal officers of a firm certify the information contained in the firm's quarterly and annual reports. The adequacy of internal controls within business processes affecting financial statements is brought about from two different inputs: • For each financial item. Having such a detailed and granular level of accountability supports the compliance process.Successful completion of an audit and any related follow-up activities which may be required results in the process being "certified". Each financial item is an account or consolidation of accounts and an integral part of the processes that affect it. Application Controls Management The Oracle E-Business Suite offers a comprehensive set of automated application Governance. Financial Statement Certification Financial statements are comprised of financial items. monitoring of the controls in the various processes impacting the financial statement takes on increased importance and companies need to establish this ongoing monitoring as part of the financial audit. Executives can use the dashboard in Oracle Internal Controls Manager to see how they stand at any given time in the 404 certification process. To this end." With the financial statement certification functionality in Oracle Internal Controls Manager. Risk Management. as defined by financial statement line items and their associated business processes. Management must now attest to the effectiveness of internal controls over financial reporting.

Oracle Learning Management In addition to the deployment of enterprise wide policies and procedures. These application controls are critical to the overall control environment because any changes to them can have an adverse effect on the organization's processes including those that influence the reliability and integrity of financial reporting. out of the box Information Technology (IT) controls management feature within Oracle Internal Controls Manager. and managing configuration. The Application Controls Monitoring is an integrated. ensuring systems security. Legal mandates require that firms actively manage ethics and compliance programs and communicate appropriate standards ths rmbOse ofe 6-14    Oracle Financials Concepts Guide . managing changes. IT managers and IT auditors can now track changes to application controls in several applications within the suite. This type of monitoring supports a number of high level control objectives within the COBIT framework such as maintaining application software. IT auditors and managers can use this functionality to support COBIT by monitoring and enforcing set parameters within the Oracle E-Business Suite. It enables companies to effectively and efficiently manage their IT environment by monitoring the application control parameters within the Oracle E-Business Suite. the success of any compliance program also depends on the employee knowledge of those policies and procedures.controls in the form of setup parameters.

reliable access to all content (for example. enterprise-wide processes and solutions for records and document management is not only risky. a set of common requirements can be identified: • Rapid. Requirements for Multiple Representations Transactions are regulated by a surprising amount of regulation and legislation. Risk Management. Lack of formal. e-mail. corporation tax rules. auditing. e-mails. archiving. and similar jurisdictions. instant messages.Oracle Collaboration Suite Several regulations require companies to retain and manage their electronic content with a particular emphasis on electronic communications. and supervising electronic communications. despite the fact that intelligent discovery. but ultimately drives up the cost of compliance for companies that rely on manual processes and point solutions. All your firm's communications therefore reside in a single system. While each of these regulations has its own individual characteristics and requirements for evidence discovery. Governance. and Compliance with Oracle Financials    6-15 . electronic documents. overt legislation. retrieval. Oracle Collaboration Suite offers a unique architecture for effectively retaining. Built on Oracle's unified data model. They have their base in public company regulation. Oracle Content Services (within the Collaboration Suite) can effectively archive both structured and unstructured content including electronic documents. company registration legislation. value added tax and sales tax rules. and search capabilities are very important to compliance. allowing management to implement record retention policies consistently across the organization as well as find documents easily and cost effectively. and web content. Corporate Governance & GAAP A large part of the corporate governance task is ensuring that external reporting and statutory reporting meet the standards imposed by your Generally Accepted Accounting Principles (GAAP) and your subsidiaries' statutory regulators. Many firms also lack e-mail archiving policies and programs. physical documents) Retention and disposition management Secure access control Content analysis and classification • • • Few companies have formal records retention policies in place.

Many national compliance issues are now built into the product itself and you do not need any further tools to support it. 6-16    Oracle Financials Concepts Guide . when a requirement is brand new and still under analysis. Oracle supports national regulations in multiple ways. Newer legislation which is not yet absorbed into the core product may be available through country specific patches. you may implement a customized solution through a consulting engagement. Finally.Localizations Support In addition to using ledgers and subledger accounting.

7 77 Business Analytics & Corporate Performance Management     7-1 .

By linking forecasts and planning with the corporate strategies above it. Analytic capabilities for multidimensional analysis (online analytical processing or OLAP) and data mining are built into the data server. ranging from information delivery to advanced analytics. and is more accurate. • Results can be deployed to any and all users and can be tailored to an employee's role. Oracle's complete business analytic offering now includes: • • • A Data Warehousing Platform Business Intelligence Tools Corporate Performance Management Applications At the heart of the Oracle Corporate Performance Management solution is its data warehousing platform and tool kits consisting of the Oracle Database and Oracle Business Intelligence middleware. The 7-2    Oracle Financials Concepts Guide . accurate forecasts can be both created and followed. requires fewer resources. You can thereby monitor how closely your organization is aligned with corporate goals. These provide the technology foundation for building a complete business intelligence and data warehousing solution. By extending their use to a wide range of users.your transactional systems. and data mining functionality eliminates the need for multiple engines with separate repositories. Oracle Database 10g Oracle's data warehousing platform is based on Oracle Database 10g for data warehouse management and the Oracle Business Intelligence Warehouse Builder tool for data warehouse creation and loading of quality data. and the operational data created below. • The Oracle Business Analytics & Corporate Performance Management Architecture Three major Oracle product families provide business analytics software that supports the full range of decision centric business intelligence needs. Analysis takes less time. The Corporate Performance Management solution allows you to consolidate all your enterprise data into portals or corporate dashboards to get complete visibility into the state of the enterprise. they provide the means to increase the level of intelligence across the organization. from executives and line of business managers. each specialized for a different analytic technique. to analysts and other knowledge or line workers. Quickly identify those areas that may adversely affect your numbers. A single database that delivers storage. OLAP. The analysis of such data however is not independent of the strategic objectives of the firm.

desktop integration. all data and dimensional structure objects can be deployed to the Oracle database. while decreasing data latency and storage requirements. Oracle Warehouse Builder Oracle Warehouse Builder is a tool to enable the design and deployment of Business Intelligence applications. and Oracle Enterprise Manager . Once defined. dimensions. The tool allows you to design your entire Business Intelligence system including relational schemas. It provides an easy to use. transform and load) process design. analysis. Oracle Warehouse Builder is the only enterprise business intelligence integration design tool that manages the full life-cycle of data and metadata for Oracle Database 10g. extraction from disparate source systems. extensive metadata reporting. With the design in one place you can also benefit from metadata reporting like impact analysis. and materialized views. It includes tools for querying. Warehouse Builder supports both dimensional and relational data structure design. and data marts. Oracle Workflow. Oracle Business Intelligence Oracle Business Intelligence for Oracle Database 10g is a comprehensive offering designed to address the entire spectrum of analytical requirements and is built over the Oracle database. and end user environments. Designing an object in Warehouse Builder is easy because of the use of wizards throughout the product. views. and integration with three products . data warehouses. Using the object creation wizards you can define all objects needed for your business intelligence system using this step-by-step process: for example. dimensional models. cubes.Oracle Discoverer. and business intelligence application development. Warehouse Builder enables users to design their own Business Intelligence applications from start to finish. data integration and management. Business Analytics & Corporate Performance Management     7-3 . allowing you to consolidate all design into one scalable environment. Oracle Business Intelligence tools augment a traditional Enterprise Resource Planning (ERP) system by supporting activities such as: • Monitoring: Data from business (transactional) systems are monitored to get a reading on the state of current operations. ETL (extract.enable an integrated Business Intelligence solution with Warehouse Builder at the core. Actual results can be compared with targets or goals that have been established. Once you have designed your system you can use the same tool to design and run your data integration processes. graphical environment to rapidly design. tables. Combining schema design with the ETL design gives Warehouse Builder the unique advantage to know about all objects in the system. Dimensional design.resulting environment eliminates the overhead of data synchronization between the data warehouse and individual OLAP or data mining engines. and manage business intelligence systems. reporting. deploy.

It provides an intuitive interface that enables end users to easily design queries and deliver tables and charts of data. Oracle Business Intelligence is a member of the Oracle Fusion Middleware family of products. The product can also be fully integrated with the Oracle Fusion Middleware Portal. Oracle Business Intelligence Discoverer provides the ability to access both relational and multi-dimensional data within a single reporting environment. • • • Each of these tool kits are briefly discussed in the following sections. filtering. Oracle Business Intelligence contains several integrated components for OLAP and relational online analytical processing (ROLAP) analysis and reporting including the following: • Oracle Business Intelligence Discoverer: Relational and OLAP data access and user-driven customizable dashboards. and e-mail. and dynamic connections to charts. analysis. For example. This enables business users at all levels of the organization to make faster and more informed business decisions using any standard web browser. For Exts. better decision-making. and web publishing tool that empowers business users at all levels of the organization to gain immediate access to information from data warehouses and online transaction processing systems like the Oracle E-Business Suite. Deviations from expected results or targets can then be explored. and reduced cost and risk to diverse Information Technology (IT) environments.• Analysis: Time-oriented data from multiple systems is integrated into a data warehouse or mart in order to support in depth analysis.retd ede e 7-4    Oracle Financials Concepts Guide . Business views hide the complexity of the underlying data structures. Oracle Business Intelligence Beans: Building powerful custom business intelligence applications. Oracle Business Intelligence Discoverer Discoverer is an intuitive ad-hoc query. wireless. reporting. a portlet or a section of the portal can be used to deliver Oracle Business Intelligence Discoverer data. Exposing Oracle Business Intelligence Discoverer through the portal retains all the interactive features of Oracle Business Intelligence Discoverer. Oracle Reports Services: High-fidelity enterprise reporting. which bring greater agility. Reports are published and delivered to business users in a variety of formats such as web. Data from retains all the interactive features ofr c ? nri. sorting. Oracle Business Intelligence Spreadsheet Add-In: OLAP data access from within Excel spreadsheets. such as drill-down. enabling you to focus on solving business problems.vFril.

modules for building queries from scratch rather than using any of the prebuilt views.

Oracle Business Intelligence Spreadsheet Add-In
Excel applications are typically based on static data that must be updated either manually or using error-prone macros. As a result, most Excel users spend more time creating their data sets rather than analysis and useful decision making. In addition, Excel applications typically contains their own set of business rules and terminology, making it difficult to compare and contrast results from different worksheets. What is needed is the ability to view business data intelligently from within Excel by accessing a central repository of data, rules and definitions and by executing the required query directly against the database. The Oracle Business Intelligence Spreadsheet Add-In resolves all of these issues and many more. It combines the analytic power and scalability of Oracle OLAP with the familiarity of Microsoft Excel by embedding OLAP capabilities directly within Excel. Users report against common business definitions that are stored centrally in the Oracle Database. This provides a consistent and quality view of their corporate information. In addition, users can perform ad hoc analysis on this data using traditional OLAP exploration techniques such as drilling, pivoting, and paging multiple views of the data. By running queries at the database level, users benefit from the performance and security of the Oracle database, and at the same time can be sure of getting the very latest information. Once the data has been retrieved, users can modify and enhance the result set using standard Excel features.

Oracle Business Intelligence Beans
Oracle Business Intelligence Beans is a set of standards-based application building blocks designed for use with Oracle OLAP. Using Oracle JDeveloper and Oracle Business Intelligence Beans, a developer can build advanced analytic applications for both casual information viewers and high-end users who require complete ad-hoc query, analysis, and reporting solutions. These solutions assist executives, managers, and analysts in making key business decisions with confidence and precision.

Oracle Reports Services
Oracle Reports is Oracle's enterprise reporting tool. It enables businesses to give immediate access to information to all levels within and outside of the organization in a scalable and secure environment. Oracle Reports consists of Oracle Reports Developer (a component of the Oracle Developer Suite) and Oracle Application Server Reports Services (a component of the Oracle Application Server).

Oracle Business Intelligence accelerates the decision making process and reduces the IT burden by empowering you with self service access to powerful analytics and

Business Analytics & Corporate Performance Management     7-5

customization capabilities. You get personalized access to the right intelligence, at the right time, and in the right format. Together, the Oracle Business Intelligence and Database platform help you reduce IT complexity and total cost of ownership by eliminating the need for specialized servers and tools for ETL, reporting, and OLAP. It is a complete and pre-integrated business intelligence framework for building, deploying, and managing enterprise business intelligence solutions. You can now rapidly develop and deploy data warehouses and data marts with an integrated array of reporting and analysis tools.
Note: For more information on the integration of Corporate

Performance Management applications, refer to the section on Enterprise Performance Foundation.

Oracle Corporate Performance Management Applications
Across the enterprise, multiple initiatives are undertaken to meet corporate goals. For example, executives create strategies, operations have plans, and finance is always creating and tracking numbers and trends. In several organizations however, these efforts are executed in "non-unified silos". In addition, most businesses today focus on past performance using standard metrics in reports. Though these measurements are critical, they are inherently passive. It is only when such measures and the processes supporting them are united with goal setting, forecasting, accountability through Key Performance Indicators (KPI's) and feedback loops across functional areas, that the system becomes proactive. In contrast to performance measurement, corporate performance management is inherently forward facing.

Overview of the Oracle Corporate Performance Management Suite
Oracle makes available a set of products that unify the many performance management elements under an executive dashboard. The Corporate Performance Management suite enhances understanding of the business through a range of powerful analytic applications that support consolidations, reporting, analysis, budgeting, planning, forecasting, activity based costing, and profitability. These applications are ready to use out of the box and enable the proactive management of the full life cycle of business decision making. Oracle's Corporate Performance Management suite focuses on the following areas: • • • Strategic Goals Setting and Alignment (Oracle Balanced Scorecard) Enterprise Data Consolidation (Oracle Financial Consolidation Hub) Planning, Budgeting, Forecasting, and Modeling (Oracle Enterprise Planning and Budgeting)

7-6    Oracle Financials Concepts Guide

• •

Profitability Analysis and Modeling (Oracle Profitability Manager) Operational Analytics and Reporting (Oracle Daily Business Intelligence)
Note: For more details on the Oracle Financials Consolidation Hub, see

Accounting Consolidation in Oracle Ledgers.

The following diagram depicts a pyramid structure where the foundation layer includes direct data manipulation tools such as Discoverer, Spreadsheet Add-In, Beans, Reports, Database, and Warehouse Builder working directly on the Database. Daily Business Intelligence, operational reporting based on the line transaction processing tables is the next layer, and provides operation and managerial dashboards. The third layer is based on web data warehouses and includes Enterprise Budgeting and Planning and Profitability Manager. The fourth and top layer is the strategic analytic area, using Balanced Scorecard.

Together, these applications allow you to hypothesize, analyze, and model analytical solutions for your organization, for example you can now model a business problem with alternative solutions and the models predict the likely result of candidate solutions.

Business Analytics & Corporate Performance Management     7-7

Furthermore. and consolidation. such a data model allows you to drill as required into details to support your hypothesis and projections. Corporate Performance Management applications are also delivered with a set of tools that allow users to configure them to their specific business requirements. all these applications access the General Ledger data for analytical processing through the Enterprise Performance Foundation (EPF) framework.Unified Data Model Oracle's unified data model (all data in one place and defined in one and only one way) provides a 360-degree view of the enterprise. reporting. This single source of truth enables a complete understanding of the firm from multiple perspectives. Enterprise Performance Foundation Oracle General Ledger is the central repository of financial information for a firm running the Oracle E-Business Suite. Several applications in the Oracle Corporate Performance Management product suite feed off General Ledger based data including: • • • Oracle Enterprise Planning and Budgeting Oracle Financial Consolidation Hub Oracle Profitability Manager However. Note: For more information on Oracle Enterprise Performance Foundation. Note: Oracle Daily Business Intelligence and Oracle Balanced Scorecard do not interface with the EPF foundation but instead feed off ERP data directly. The information contained there is critical for activities such as financial and management reporting. Managers can provide all relevant information to the decision makers at the right time and in a format that best supports their business needs. All the Oracle Corporate Performance Management applications (with the exception of Daily Business Intelligence) are integrated with this central repository of information. and modeling can be performed. profitability analysis. The General Ledger Rules architecture provides a means to transfer information captured in Oracle General Ledger to the Enterprise Performance Foundation from which analysis. planning. It is therefore necessary for the source General Ledger data to be first transferred and stored in this underlying architecture before any analysis or planning can be conducted. budgeting. see the Oracle Enterprise Performance Foundation User's 7-8    Oracle Financials Concepts Guide . Such a data model allows you to move rapidly between reporting the past and projecting the future.

For more information on Oracle Financial Consolidation Hub. This is accomplished by translating the vision and strategy into a set of operational objectives that drive behavior and performance. The Balanced Scorecard concept is built upon the premise that measurement motivates and that measurement starts with a clearly described strategy. Key Performance Indicators Vz anced Scorecard concications win s Gf orehw adperfotibis thmation on O aO Business Analytics & Corporate Performance Management     7-9 . Oracle Balanced Scorecard is a powerful framework to help leaders define and implement strategy. The following sections provide more details on the individual applications with the Oracle Corporate Performance Management Suite. Oracle Balanced Scorecard Overview Strategic goal setting and alignment is the first tenet of Corporate Performance Management.Guide. see the Oracle Financial Consolidation Hub User's Guide.

dashboards. Users can also link from custom scorecards to Daily Business Intelligence overview pages and reports. Convert business strategies into actionable plans. Oracle Profitability Manager assists with strategic and operational decision-making by providing accurate information to answer questions about your business such as: • • • Which customers.the gathering of business requirements. end users are "developing" the data mart and thus taking an important step towards alleviating one of the perennial challenges in business analytics . And integrate performance management with personal accountability. This allows them to drill from a high level strategic view to more granular and/or operational views. Automate real-time monitoring of execution against plans. in addition to integration with the pre-built Daily Business Intelligence KPI's. and drill-down reports and automatically generate the supporting database tables and summaries. The module includes powerful allocation methodologies and multi-dimensional analysis to support profitability management. This gives a strategic time and cost advantage to corporations deploying a Corporate Performance Management solution. You can design custom KPI's. In effect. or channels are the most profitable? How much does it cost to serve my customers? Where are the best opportunities to reduce costs? 7-10    Oracle Financials Concepts Guide . For example. forecasting. products. users can identify other preferred KPI's and the software automatically generates the appropriate schema and materialized views for them. Oracle Profitability Manager Oracle Profitability Manager is an application that enables the accurate and detailed modeling of profit analysis across an enterprise. and analysis. which enables users to include over 250 pre-built Daily Business Intelligence KPI's on custom dashboards and drill-down reports. you save the time required to map and load data. As these Daily Business Intelligence KPI's are already mapped to the E-Business Suite tables. Integration with Oracle Daily Business Intelligence Balanced Scorecard is integrated with Oracle Daily Business Intelligence.analysis on key performance indicators. budgeting. monitoring. You can then use Oracle Business Intelligence Warehouse Builder to map data sources to this optimized data mart. Oracle Enterprise Planning and Budgeting Oracle Enterprise Planning and Budgeting controls the business processes of planning.

Open Allocation Engine Including Activity Based Costing and Activity Based Management Analytical capability in the application is driven by an engine that uses your preferred allocation methodology. now becoming widely adopted. Armed with this information. you can make supportable decisions about your customers.Powerful Multi-Dimensional Modeling Oracle Profitability Manager's multi-dimensional approach takes advantage of the richness of your detailed data. Oracle Profitability Manager enables analysis and reporting of profitability along any of these dimensions and hierarchies. and calendar period. Costs are distributed to activities and cost objects based on business processes. project. Upon any of these analytic dimensions. each with as many levels as needed. business unit. channel. You can now analyze and model your organization from multiple points of view. Integration with Enterprise Performance Foundation Data loading utilities are provided with Oracle Profitability Manager through the functionality of the Enterprise Performance Foundation. you can define an unlimited number of hierarchies. geography. for example multiple "dimensions". activity. customer. allowing you to identify the true cost of activities. Additionally there are seeded "user configurable" analytic dimensions that you can customize to meet your distinct needs. Activity-Based Management and Costing methodologies provide a more accurate and complete view of the profits and costs of doing business than traditional costing. see the Oracle Enterprise Performance Foundation User's Guide. Oracle Profitability Manager helps you manage all the significant facets of your business. from the simple to the complex. is also included. This results in the accurate "cost to serve" of individual customers. In short. Predefined dimensions are available including product. your products. Note: For more information on Oracle Enterprise Performance Foundation. Oracle Profitability Manager has the power and scale to create distinct customer level cost objects instead of summarized cost object pools. Business Analytics & Corporate Performance Management     7-11 . Comprehensive support for the activity based management allocation methodology. The hierarchies and dimensions are actively used in the creation of modeling rules and business definitions. Using Oracle Profitability Manager. you learn the value added by each activity and can perform detailed analysis to enable continuous improvement and competitive benchmarking of your business process. In addition. as well as your business policies and processes.

graphs. Seamless integration with Oracle General Ledger allows you to easily load ledger data. Daily Business Intelligence provides analytical subject areas or modules including (but not limited to) the following: • • • • Daily Business Intelligence for Compliance Daily Business Intelligence for Financials Daily Business Intelligence for Human Resources Daily Business Intelligence for Projects 7-12    Oracle Financials Concepts Guide . managers can analyze past due shipments to understand which products or warehouses are causing the backlog. Human Resources. and Product Lifecycle Management. and profit margin. Supply Chain. and open API's help you to load data from any other source. Dashboards have built-in time summarization options from calendar week or month to rolling periods to fiscal periods depending on the analytical subject area. They can then determine which customer orders are being delayed and take corrective action immediately. and guiding links. Oracle's open standards allow any third-party reporting tools to be integrated. expenses. Furthermore. Comprehensive Out-of-the-Box Content Pre-built dashboards and reports are available for all the major functional areas including Financials. Manufacturing. Enterprise Wide Analysis and Reporting Oracle Profitability Manager provides the capabilities to support a rich reporting and analysis environment. Additionally. All required validation checks are performed at the time of the data load. Custom data transformations and validations. which can then be further analyzed by drilling into detail reports. transform. All dashboards offer a variety of visualization options including KPI's.using seeded loader programs. Projects. For example. tables. Oracle Daily Business Intelligence Oracle Daily Business Intelligence provides a set of dashboards that display business performance information for key performance indicators such as revenue. with built-in reporting using Oracle Business Intelligence Discoverer. and load (ETL) tool. ensuring consistent and reliable data is loaded into the model. if needed. Overview pages highlight trends. these time periods can be compared to prior periods and years. can be performed using Oracle Warehouse Builder. or your preferred extract. Procurement. Specifically. Sales and Marketing. Daily Business Intelligence dashboards are supported by hundreds of drill-down reports that enable users to drill to the level of detail they need to understand the root cause of a problem and take appropriate action.

the Human Resources family of E-Business applications has a pre-built analytical module called Daily Business Intelligence for Human Resources. Marketing. measuring marketing's contribution to company revenues has been a sought after capability to optimize marketing investments. users have access to both summary data and transaction details in a single system. Similarly.• • Daily Business Intelligence for Procurement Daily Business Intelligence for Supply Chain Each of these modules map to corresponding Oracle enterprise applications. Instead of implementing a separate reporting infrastructure and moving a subset of data from the transaction system to a separate reporting system. You can also drill down to the underlying operational applications to better understand root causes or to take immediate action. and Sales E-Business application modules to compute impact by calculating total closed deals that were marketing driven. all other E-Business applications have similar Daily Business Intelligence modules to provide the right "cockpit" or interactive dashboards. Finance. queries. Similarly. and KPI's. Oracle Daily Business Intelligence maintains summaries in the same database where transactions are stored. reports. Integrated Architecture Traditional business intelligence solutions typically involve designing a separate database to store summarized information. These strengths are critical in providing the business context for analytical applications. A key inherent strength of Daily Business Intelligence is its ability to provide analysis across different functional silos such as Human Resources. For example. Most of these solutions require significant custom development effort to design the reporting database and the corresponding data extraction routines needed to populate it. For example. Therefore users have access to mefor O acefo? l ? Business Analytics & Corporate Performance Management     7-13 . and Customer Support. Daily Business Intelligence for Marketing incorporates data from the Finance. As a result. Profit and Loss is a Daily Business Intelligence for the Finance dashboard that can provide information by line of business and by manager as defined in the organization hierarchy specified in the Human Resources application.

hidden.Configurable and Extensible for Your Industry With Oracle Daily Business Intelligence. KPI's and reports can be renamed. based on both Oracle and non-Oracle data sources. Daily Business Intelligence is also extensible. 7-14    Oracle Financials Concepts Guide . allowing you to create new KPI's and reports. tailoring intelligence for the needs of your specific industry. or rearranged on the appropriate Daily Business Intelligence Dashboard. The framework provides a toolset to create custom Daily Business Intelligence dashboards from scratch in a "drag and drop" environment.

The Oracle Financials Product Footprint    A-1 . and Marketing. Order Management. Sales. and Projects Introduction Oracle Financials applications are an integrated part of the Oracle E-Business Suite. Service. Sales. Order Management. Procurement. Human Resources. Procurement. The suite consists of a complete and comprehensive set of applications that are designed to assist you with every aspect of running your business across today's world. Product Management. and Supply Chain In addition to the Financial applications. Supply Chain Planning. and Supply Chain Logistics. Product Management.A The Oracle Financials Product Footprint This appendix covers the following topics: • • • Introduction CRM. Sales. Finance. other applications within the Oracle E-Business Suite include those associated with Product Management. Order Management. CRM. Maintenance. Marketing. Procurement.


Proposals Incentive Compensation Sales Contracts Interaction Center Sales Intelligence Supply Chain Planning Demand Planning Advanced Supply Chain Planning Collaborative Planning Constraint Optimization Inventory Optimization Global Order Promising Exception Management Planning Intelligence The Oracle Financials Product Footprint    A-3 .Business Process Sales Oracle Product or Feature • • • • • • • • • • • • • • • • iStore TeleSales Field Sales Quoting.

Business Process Procurement Oracle Product or Feature • • • • • • • • • • • • • • • Sourcing Purchasing iProcurement Services Procurement Procurement Contracts Supplier Collaboration Supplier Network Purchasing Intelligence Marketing Manufacturing Scheduling Discrete Manufacturing Flow/Lean Manufacturing Process Manufacturing Project Manufacturing Shop Floor Management Manufacturing Intelligence Logistics. and Projects Oracle Financials applications include Corporate Performance and Management applications such as Enterprise Planning and Budgeting. and Financial Control and Reporting applications associated with General Ledger. Finance. Human Resources. Maintenance. Subledgers include Credit to Cash applications supporting the management of your receivables and Procure to Pay facilitating the completion of the procurement cycles and management of disbursements. Service. Travel and Expense management expedites and controls your employee based A-4    Oracle Financials Concepts Guide . Governance and Compliance applications such as Internal Controls Manager.

Asset Lifecycle. Bill.disbursements. and Property Manager drive your return on investment in capital intensive assets. Lease Management. Claims Fulfillment Intelligence Service iSupport TeleService Field Service Mobile Field Service Advanced Scheduler Spares Management Depot Repair Service Contracts Interaction Center Service Intelligence The Oracle Financials Product Footprint    A-5 . Business Process Logistics Oracle Product or Feature • • • • • • • • • • • • • • • • • Inventory Management Mobile Supply Chain Applications Warehouse Management Transportation Management Transportation Planning and Sourcing Freight Pay.

Business Process Maintenance Oracle Product or Feature • • • • • • • • • • • • • • Enterprise Asset Management Self Service Work Requests Property Management Maintenance Intelligence Finance Corporate Performance Management Governance and Compliance Financial Control and Reporting Credit-to-Cash Procure-to-Pay Travel and Expense Management Cash and Treasury Asset Lifecycle Management Lease Management Property Management A-6    Oracle Financials Concepts Guide .

Business Process Human Resources Oracle Product or Feature • • • • • • • • • • • • • • • • iRecruitment Human Resources Self Service Human Resources Learning Management Time and Labor Advanced Benefits Payroll Management Human Resources Intelligence Projects Project Management Project Collaboration Resource Management Portfolio Analysis Project Costing Project Billing Project Contracts Project Intelligence The Oracle Financials Product Footprint    A-7 .


Asset Intensive • • Common asset repository Enhanced fleet asset management Industry Specializations    B-1 .B Industry Specializations This appendix covers the following topics: • • Overview Enhanced Industry Support Overview Oracle Applications provide enhanced industry support for organizations in the following areas: • • • • Manufacturing Asset Intensive Service Public Services Enhanced Industry Support Manufacturing • Regulatory compliance for clinical trials and Title 21 Code of Federal Regulations Part 11 (21 CFR Part 11).

Retek Store Systems integration Oracle Financial Services Accounting Hub • Public Services • • Centralized and configurable budgetary control and accounting Enhanced shared services B-2    Oracle Financials Concepts Guide .• • Support for 21 CFR Part 11 Enhanced budget and forecasting Service • Oracle Financials and Oracle Retek Merchandising System .

2-19 B balancing segment. 5-2 business divisions. 6-1. 4-7 chart of accounts. 2-14. 2-4 requirements. 4-7 currency. 2-18 consolidation tools. 2-19 conventions accounting. 2-15 cross organization reporting. drill-down. 4-12 See also Accounting Setup Manager accounting consolidation. 6-2 consolidation tools cross organization reporting. 6-16 multiple representations. 4-18 Oracle Financial Consolidation Hub. 6-1 architecture. 4-12 corporate view. 2-6 C calendars. 4-15 Financial Statement Generator. 4-10 multiple accounting representations. 6-15 Corporate Performance Management See Oracle Corporate Performance Management cost center chart of accounts. 4-7 chart of accounts. 2-3 business groups. 4-15 Accounting Setup Manager. 2-15 bank account model. 4-2 balancing segment. 4-2 common subledger operations. 2-10 chart of accounts. 4-2 natural account. 4-7 corporate governance. 5-6 business analytics. and reporting. 2-15 cost center. 2-19 ledger sets. 4-10 overview. 4-14 legal environment considerations. 6-3 legal entities.  Index A accounting calendars. 4-4 inquiries. 4-3 compliance. 4-1 setting up. 4-15 conventions. 2-16 regulated. 6-15 See also internal control localizations support. 4-17 Global Consolidation System. 7-2 Index-1 . 7-1 See also Oracle Corporate Performance Management architecture. 4-13 Advanced Global Intercompany System. 4-11 consolidation. 2-15 global. 4-12 journal entry setup. 2-19 multiple organizations access control.

6-8 standardized processes. 4-18 governance. 6-3 enterprise visibility and security. 4-6 transaction currency. 6-3 effectiveness. 6-7 regulations. 6-1 See also internal control Government Reporting Legal Entity (GRLE). 2-18 currency. 2-4 establishment. 2-19 standard reports. 2-9 multiple organizations support. 5-3 reporting. B-1 intercompany accounting Oracle ledgers. 6-1 See also Oracle Internal Controls Manager operational efficiency. 6-3. 2-7 desktop integrators reporting. 3-3 E E-Business Suite See Oracle E-Business Suite E-Business Tax See Oracle E-Business Tax establishment legal entities. 6-5 financial compliance. 5-6 ledger sets. 4-17 ledger sets. 2-19 reporting tools. 4-2 Global Consolidation System. 2-19 legal entities compliance and disclosure. 6-16 F Financial Consolidation Hub See Oracle Financial Consolidation Hub Financials See Oracle Financials Financial Statement Generator (FSG) ledgers. 6-9 inventory organizations. 2-13 N natural account I Index-2 . 2-8 intercompany accounting. 4-5 D departments. 2-18 Oracle XML Publisher. 3-1 FSG See Financial Statement Generator functional organizations. 2-8 role. 5-3 intercompany system See Advanced Global Intercompany System internal control compliance architecture. 6-2 introduction. 4-4 primary currency. 5-2 multiple organizations access control cross organization reporting.Oracle Daily Business Intelligence. 6-2 self service solutions. 4-17 periodic management reporting. 6-8 shared service centers. 2-4 system entities. 2-19 operating units. 2-3 G global chart of accounts. 2-8 industry specializations. 2-1 localizations support. 2-7 GRLE See Government Reporting Legal Entity M multiple ledgers. 2-9 cross organization reporting. 4-5 reporting currency. 2-7 legal organization. 2-14 L ledgers.

7-2 Oracle Daily Business Intelligence. 7-3 Oracle Business Intelligence Beans. 2-17 Oracle Identity Management. 6-14 Oracle Warehouse Builder. 7-6 See also business analytics architecture. 2-19 ledgers and reporting. 6-11 Oracle Subledger Accounting. 6-13 change management. 2-4 transactions. 2-13 subledger accounting. 7-5 Oracle Scripting. 6-11 segregation of duties. 2-16 legal entities. 6-15 Oracle Corporate Performance Management. 2-16 O operating units. 7-10 Oracle Financial Consolidation Hub. 6-14 Oracle Portal. 6-10 application controls management. 5-6 organization. 4-11 inquiries. 5-5 Oracle Enterprise Performance Foundation. 4-10 multiple accounting representations. 2-17 Oracle Human Resources using with Oracle Financials. 7-5 Oracle Business Intelligence Discoverer. 7-2 Oracle Discoverer. 2-3 classifications in Oracle Financials. 3-2 cross organization. 1-2 Oracle E-Business Tax tax engine. 2-11 multiple organizations access control. 6-7 Oracle XML Publisher cross organization reporting. drill-down. 6-7 Oracle Business Intelligence. 2-1 business divisions. 4-10 Oracle Tutor. 2-18 daily management reporting. 7-5 Oracle Collaboration Suite. 6-6 Oracle Balanced Scorecard. 4-15 Oracle Financials benefits. 7-1. 1-4 using Oracle Human Resources. 6-11 process and organization certification. 7-10 Oracle Reports Services. 2-18 Index-3 . 2-3 structures. 2-3 legal.chart of accounts. 2-5 functional. 4-8 See also subledger accounting common subledger operations. 4-12 journal entry setup. 6-11 financial statement certification. 1-2 organizational classifications. 2-4 overview. 6-12 Oracle Learning Management. 6-10 process approvals. 7-9 Oracle BPEL Process Manager. 2-1 other structures. 3-4 Oracle E-Business Suite key attributes. 7-12 cross organization reporting. 2-13 Oracle Application Server. 6-13 integration with Oracle Scripting. 7-4 Oracle Business Intelligence Spreadsheet Add-In. 6-12 process and risk control library. 7-8 periodic analysis reporting. 4-5 R regulated chart of accounts. 2-5 organizational model flexible. 3-4 Oracle Profitability Manager. 2-1 system entities. 3-1 Oracle Database. 2-13 shared services. 6-6 Oracle Database 10g. 2-5 suite. and reporting. 2-6 OU See operating units P primary currency. 3-2 Oracle Enterprise Planning and Budgeting. 4-3 reporting capability. 6-6 Oracle Internal Controls Manager. 7-3 Oracle Workflow.

2-7 Index-4 . 3-3 product specific. 2-6 departments. 3-4 T transaction currency. 3-2 security. 2-10 systems organizations reporting. 3-1 Oracle Discoverer. 3-1 desktop integrators. 3-3 reconciliation and control. 2-9 operating units (OU). 2-10 business groups. 2-6 balancing segment. 3-4 systems organizations. 6-1 See also internal control RXi reports. 3-2 periodic management. 2-7 Government Reporting Legal Entity (GRLE). 2-8 ledger sets. 3-4 shared services operating units. 2-5 W worldwide operations Advanced Global Intercompany System. 3-4 standard reports. 2-19 reports drill-down and cross reference. 2-10 system entities. 3-4 periodic analysis. 3-4 tools. 5-3 ledgers and reporting.daily management. 6-13 security management. 3-3 reporting currency. 2-18 subledger accounting. 3-4 SQL extracts. 2-13 shared service centers. 2-7 multiple ledgers. 3-3 Oracle Daily Business Intelligence. 4-5 transactions organization. 3-1 RXi reports. 3-4 Oracle Portal. 6-7. 2-9 legal entities. 2-13. 4-8 default transaction distributions. 5-2 Oracle E-Business Tax engine. 4-9 subledgers. 3-3 filing. 5-6 multiple organizations. 5-5 overview. 3-4 inventory organizations. 6-2. 5-2 bank account model. 2-14 ledgers. 6-8 SQL extracts. 6-5 reports. 3-2 generating. 3-4 risk management. 2-11 subledgers. 4-6 reporting tools cross organization reporting. 3-2 cross organization reporting. 5-6 intercompany accounting. 5-1 S Sarbanes-Oxley. 4-9 rules.

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