Subledger Accounting Cost Management Details

Subledger accounting in R12 is an enhanced accounting process. The SLA process allows customers to personalize the process for specific events. The user sets the rules to be followed. Accounts are still defined the same way as prior application versions via the same forms. Organizations are defined the same way. If there are no rules entered into the SLA engine, the accounts defined the traditional way will be used to generate the journal entries posted to GL. All setups to use preR12 functionality are automatic. The default base setup is US GAAP. This uses the traditional account definitions. This is delivered and works out of the box. SLA uses events for processing transactions. An event is the recording of a change of status in the transaction life cycle, i.e., invoice approved, payment received, period close, etc. This allows for a clear separation between transactions and accounting representation. Events are the bridge between transactions and journal entries, so product teams are involved for coordinating actions based on event models. R12 Subledger Accounting Rules: SLA uses a rules-based accounting engine that posts entries into GL. The rules used by the engine are user defined. The rules are stored in a common repository for all subledger applications. A subledger application would be a product area, such as Inventory, Payables, Receivables, Purchasing, etc. The R12 SLA process has created a common accounting process to be used across all applications. This allows the customer to have a single method for defining accounting behaviors. The engine supports the use of multiple currencies. This also allows for various audit tools and reports to be used when reviewing GL postings. The SLA process allows for the display of the inventory valuation accounts to be seen for a user defined date range. The engine also allows the accounting department to maintain control over accounting and chart of accounts for the ledgers used. When rules are created, the rules engine will override user entered accounts that might be incorrect. This is important to control user errors that can occur within a period. The rules will automatically redirect the costs to the correct account. The rules can be created for most item attributes to allow for granularity of costs if so desired. After the rules are established, the Cost Management à ¢Â €  “ SLA responsibility allows for the creation of the user-defined accounting data. The request group related to this process includes all SLA processes as well as standard accounting processes. For inventory transactions, a transaction would be received or costed. The transaction will then be passed to GL via the Create Accounting à ¢Â €  “ Cost Management program. So for Misc receipt: User creates misc receipt

Determines if entries created in Draft or Final mode. End date for the program to use. End Date Mode Errors Report Transfer to GL Required. Optional. Create Accounting à ¢Â €  “ Cost Management Parameters: Ledger Required. Process Category is not a parameter for this request as only receiving transactions can be processed from Purchasing. If set to Yes the program will process all events with the status of error. Optional. Create Accounting à ¢Â €  “ Receiving This process is tied to the Purchasing responsibility. It will default with Process Category of Receiving. Required if mode = Final. Determines if the subledger journal entries are transferred to GL.Transfer Journal Entries to GL. then the Transfer to GL process still needs to be run via CSTGLTRN . Post in GL.Cost Management Inventory Category process is run This validates the accounts to be used as per any rules that have been defined. If the setting were final and post. only the ledgers included in the SL Access Sets assigned to the responsibility is on the LOV Process Category Optional. It is recommended to run in draft first to check for errors Required.Draft Mode à ¢Â €  “ Transfer to GL. An exception would be Draft mode. Will only process those events with event dates on or before the end date. and GL Batch Name fields are disabled as the draft entries cannot be transferred to GL. determines if the report showing the results of the SLA program is in summary or detail. Limits the creation of accounting to those events that previously failed. Journal Import is not launched if set to . The program selects events with event types that are part of the event class assigned to the process category. the details would be transferred to GL. Restricts events selected to particular process category.Cost Manager processes transaction Create Accounting . Transfer and Post to GL are recommended to be included in Create Accounting. limits accounting events to the chosen ledger If profile option SLA: Enable Data Access Security in Subledgers = Yes. Create Accounting à ¢Â €  “ Cost Management This process is tied to the Cost Management à ¢Â €  “ SLA process and uses the following Process Categories: Inventory Receiving Work in Process Third Party Merge Manual The process then completes or shows errors that need correction.Cost Management when creating the accounting for the transactions. If no transfer to GL was indicated and the setting was final and post. If no rule defined for a transaction event then the default account value set for the organization is used.

on failure of Journal Import.If parameter is set to No. then the Transfer to GL process must be run manually as this will only create accounting but no values are passed to GL.Set the parameter in the Create Accounting to Yes 2. To transfer the details to GL: 1. and multi-period journal entries. Journal Entries.Transfer Journal Entries to GL . You can also view the Account Journal Entries and Accounting Events from the View Transaction Windows: View Receiving Transactions View Material Transactions . If you want to do the transfer to GL separately from creating accounting in the subledger you can use the Create Accounting Program to create the accounting in the subledger only and then run a different program CSTGLTRN Transfer Journal Entries to GL to transfer the journal and post to GL CSTGLTRN . There is an option to make the journal entry and post the journals automatically at the time of submitting the Create Accounting program itself.Cost Management This is used to transfer final journal entries to GL that were processed by the Create Accounting process but not transferred for some reason. accrual reversals.This will be the most preferred setting for this profile option and this indicates that Journal Import will ALWAYS accompany the transfer of data from Subledger. To View Accounting Events Cost Management SLA Responsibility SLA > Inquiry Tools Menu Options Then select Accounting Events.Cost Management request creates accrual journal entries. Another main implication of this value is that. the data will be rolled back to SLA tables and hence there will not be any data in GL_INTERFACE. user entered batch name appears in transferred GL Subledger journal entries. identifies the org each accounting entry belongs to The Create Accounting . or Journal Entry Lines to open. This option is used by setting the profile SLA: Disable Journal Import to "NO" . Transfer to GL must be set to Yes Required.Yes Post in GL GL Batch Name Included User Transaction Identifiers Required if mode = Final or Create Accounting is set to No Optional.

for the existing AAD enter an end date to stop this from being used c.query for the seeded AAD b.query the LOV of seeded event classes b. the distributions button will show the transaction details. Basic Steps to Build Accounts: These steps are needed for each different journal line type that is going to be used.query SLAMs to view existing methods b.replace existing ADR in the Journal Line type form with the new ADR this is in the Line Assignments sections. WIP valuation.View Resource Transactions The function Tools > Options is only available if SLA is being used for the transaction. Inventory valuation. If there is no SLA being used. If unsuccessful. using Line Type Step 4 Create new Applications Accounting Definition (AAD) a. Step 1 Create Account Derivation Rule (ADR) Step 2 Define conditions required for the ADR created Step 3 Create Journal Line Definitions (JDL) for an event class a.attach the new AAD with the start date Step 6 Assign the SLAM to the Ledger Accounting Methods Builder Ledger | .validate the definition. If successful continue to next step or continue creating the JLDs required. check the setup for all steps above before moving to next steps Step 5 Associate the new AAD with the Subledger Accounting Method (SLAM) a. Cost of Goods Sold.associate the new JLD assignments created in Step 3 d.copy the seeded event class using the Copy Definition button c. For example. Receiving valuation.copy from this to create a new AAD c.

The Ledger and Ledger Sets (group of Ledgers) use the Multi-Org Access control (MOAC) that is expanded in R12. Ledgers replace Set of Books. The 3Cà ¢Â €  ™ is now known as the 4Cà ¢Â €  ™ s s: Chart of Accounts Calendar Currency Accounting convention This allows for accounting to be used at the local level (by country) and also by the line of business (sales.Subledger Accounting Method (SLAM) | Application Accounting Definition (AAD) | Journal Line Definition (JLD) | ------------------------------| | Journal Line Types Account Derivation Rule (JLT) (ADR) | Sources | Transaction Objects The process is built from the bottom up. etc). Examples of Subledger Methods (SLAMs) US GAAP FRENCH GAAP Cash Basis Accounting Accrual Basis Accounting The following SLAMS are seeded in Oracle: Standard Accrual Standard Cash Encumbrance and US Federal . consulting.

There are four Main Entities for Cost Management: Inventory: Material Accounting Events Event Classes: PO Delivery in Inventory Sales Order Issue Internal Order to Expense WIP Material Consigned Inventory Ownership Transfer Miscellaneous IntraOrg transfer Direct Interorg Shipment Direct Interorg Receipts Intransit Interorg Shipment à ¢Â €  “ FOB Shipment Intransit Interorg Receipt à ¢Â €  “ FOB Receipt All other intransit interorg transactions Material cost update Retroactive price adjustment Logical Intercompany WIP Material Lot . Define transaction objects that provide data that SLA uses to create journal entries Population of transaction objects is the responsibility of product teams SLA Team is responsible for the following: Defining data model for events Develop/Maintain programs and APIs that create and maintain events and related objects Processing events as part of the Create Accounting programs Events Event Entities have Event Classes.Product teams are responsible for the following: Identify transaction entities with accounting impacts Define event types that correspond to different status in the lifecycle Create events for transactions when passing from status to another à ¢Â €  ¦this is transparent to the customer although the creation is triggered by the user action. Each Event Class has Event Types.

Purchasing/Receiving Write Off Accounting Events Receiving Accounting Events Work in Process: WIP Accounting Events Event Class: WIP Absorption Event Type: Resource Absorption Resource Overhead Absorption Scrap Absorption Outside Processing Event Type: OSP Transaction ShopFloor Delivery for Direct Items IPV transfer to Work Order WIP Variance Event Type: Period Close Variance Job close Variance Final Completion Variance WIP Lot Event Type: WIP Lot Split WIP Lot Merge WIP Lot Update Quantity WIP Lot Bonus WIP Cost Update Event Type: WIP Cost Update The Work in Process list above shows the Main Event Entity is WIP Accounting. The Event Classes are then listed with each Event Type that is part of the Event Class. Definitions: Accounting Methods Builder .

Ledger The ledger determines the rules that are applied when accounting is generated. Account Derivation Rule (ADR) This is used to determine the accounting combinations that will be used for the journal entries. Each Operating Unit is associated with a Primary Ledger. then mapping sets can be setup to allow for more specialization in the accounts. There can be a primary and Secondary ledger setup that can use different accounting methods in each ledger. Various rules can be defined. For Cost Management. Journal line types. Multiple Legal Entities can be tied to a Ledger through the accounting set up flow. accounting class. These can be shared across AADs and can be used to create sets of line assignments for event classes and types. ADR and JED are combined to create the JDL for an event. and other conditions that will cause the rule to create a journal entry. Mapping Sets These sets are optional and user defined. accounting combination. This is not supported by development as this would require customization. summarization. Multiple SLAMs can be assigned to a Ledger. Application Accounting Definitions (AAD) The application accounting definitions is made up of the Journal Line Definition. Journal Line Types (JLT) The types are defined for each particular class to be used. Subledger Accounting Method (SLAM) This is the subledger accounting method that is built and assigned to a Ledger. These can be defined by segment. The details are assigned and validated to be certain the setup at this level is correct. These are developed using the event classes and types. Journal Line Definitions (JLD) JLT. credit. These determine the journal entry line options to be used. Ledgers replace Set of Books. The simplest way to derive an account is to establish the account as a constant value-use the account combination that is defined in the accounting chart of accounts. and Accounting Derivation Rules. This will be created via the Accounting Methods Builder and includes all the details needed to created the appropriate journal entries. gain/loss). or value set. . Seeded details are supported as they are provided by Oracle code. A new AAD can be created or a seeded AAD can be used. These must be assigned to the Journal Line Definition (JDL) to be used. These options include identifying the natural side used (debit. If the user determines that the seeded details are insufficient. This has been submitted as an enhancement request.This is the process that created a SLAM and assigns it to the Ledger. The Journal Entry Description is not seeded by default in Costing application accounting definition.

period close. An example of an event class is WIP Variance. i. These are defined for each SLAM used.e. Event Type This defines actions that are possible for an event class that has potential accounting significance. and Final Completion Variance . payment received. Event classes and event types are used to create the events to be used Event Class This classifies the types of transactions that are to be accounted for. Job Close Variance. invoice approved.Transaction Objects/Sources Transaction objects and sources carry transaction information into the rules defined for the accounting chart of accounts.. etc. Examples for the WIP Variance Event CLASS would have event TYPES defined for Period Close Variance. Event: An event is the recording of a change of status in the transaction life cycle.

the subledger application for Inventory and Purchasing are combined into the subledger Cost Management. This allows the customer to have a single method for defining accounting behaviors.Users can easily control and modify accounting rules. Users do not have to have different setups for each subledger application. Purchasing.e. This is called Compilation and is a PL/SQL package that validates and checks the rules that are being used. This causes the setup steps for SLA to be the same across products. The SLA process allows customers to customize the process for specific events. . i. account generation is now centralized as opposed to each application being responsible for its own accounting. Receivables. and Cost Management. The R12 SLA process has created a common accounting process to be used across all applications. A subledger application would be a product area. etc..For customers users define and manage accounting parameters in once centralized place. With SLA.Gives customers flexibility to address different and changing accounting requirements to meet business needs . The process can be run for draft or final. The only difference is that the Transfer to GL is run via the Create Accounting process. . Payables. .SLA rules can be date based. the accounts defined the traditional way will be used to generate the journal entries posted to GL. Upgrade to R12 SLA is automated and migrates the legal accounting data for the current fiscal year. SLA tracks all changes and ensures the programs creating the journal entries are using the latest rules. So journal entries can be created according to rules depending on accounting date of the transaction. . Payables. Benefits of SLA include: . SLA Engine SLA uses a rules-based accounting engine that posts entries into GL. The rules used by the engine are user defined.Allows users to change accounting rules in response to new legal requirement changes in business practices or acquisition of new companies. The rules are stored in a common repository for all subledger applications. Receivables. For R12. such as Inventory. The customer can migrate Cost Management à ¢ SLA for historical transactions for a selected number of periods.Allows users to define all components of the journal entry in a simple way as opposed to generating accounting through logic embedded in the accounting programs.What is Subledger Accounting for Cost Management? Subledger Accounting Cost Management -Overview Subledger accounting in R12 is an enhanced accounting process. . ***IMPORTANT NOTE***: If there are NO rules entered into the SLA engine.

The transaction will then be passed to GL via the Create Accounting Cost Management program. The rules will automatically redirect the costs to the correct account. When rules are created. To transfer the details to GL: 1. The request group related to this process includes all SLA processes as well as standard accounting processes. The process categories for this include: Inventory Manual Receiving Third Party Merge Work in Process The Create Accounting . the Cost Management à ¢t SLA responsibility allows for the creation of the user-defined accounting data. To View Accounting Events Cost Management SLA Responsibility SLA > Inquiry Tools Menu Options Then select Accounting Events. View Accounting Windows will then show the details for these transactions. A transaction would be received or costed. View Accounting Windows will then allow the details be displayed for these transactions. then the Transfer to GL process must be run manually. Journal Entries. or Journal Entry Lines to open. R12 Subledger Accounting Process: After the Rules are established. . The rules can be created for most item attributes to allow for granularity of costs if the customer requires this level of detail. The engine also allows the accounting department maintain control over accounting and chart of accounts. and multi-period journal entries.Cost Management request creates accrual journal entries.If parameter is set to No. Pre-R12 Accounting Process: A transaction is received and accounted for in the local subledger -orA transaction is costed and accounted for in the local subledger The transaction is specifically passed to GL via the Transfer to GL process.The SLA process allows for the display of the inventory valuation accounts to be seen for a user defined date range. the rules engine will override user entered accounts that might be incorrect.Set the parameter in the Create Accounting to Yes 2. accrual reversals. This is important to control user errors that can occur within a period.

. Copy Application Accounting Definition (AAD) and set chart of accounts. receiving accounts. Either through screen ('Validate' button) or using Concurrent program ('Validate Application Accounting Definition'). Create Account Derivation Rule (ADR) 2. 9. Copy Subledger Accounting Method (SLAM) and set chart of accounts. 3. PO number for Period End Accruals. 8. If there is no SLA being used. The default base setup is US GAAP. This uses the traditional account definitions. *Following are one time setups: 4. accrual write offs. Oracle ships three application accounting definitions. Validate AAD. 5. Specific Steps for SLA: 1. For the Cost Management application.US GAAP 2. All setups to use preR12 functionality are automatic. Verify output file. Resolve any issues determined during validation.Cost Management Encumbrance US GAAP with Encumbrance Accounting 3. 6. material account events transaction_id from mtl_material_transactions. When the customer creates a new ledger. they have to associate it with the subledger accounting method to be used. Locate and end date (Oracle owned) AAD assigned to this SLAM. WIP account events transaction_id from wip_transactions.The Transaction Number refers to various event classes including.Cost Management . the distributions button will show the transaction details.Federal costing Supports Federal requirements The Cost Management application accounting definition comes shipped with the standard accrual accounting method. Assign JLDs created (in step 2) to corresponding Event Class and Event Type. These include: 1. *Perform above steps for all JLDs. Also you can view the Account Journal Entries and Accounting Events from the following View Transaction Windows: View Receiving Transactions View Material Transactions View Resource Transactions The Use of the Tools > Options is only available if SLA is being used for the transaction. transaction id from rcv_transactions. Copy Journal Line Definition (JLD). This is delivered and works out of the box. Assign ADR to JLD's Journal Line Type (JLT). 7.

Assign SLAM to Ledger.10.SLA Responsibility This is a new responsibility that allows for the setup of SLA and also to access the Create Accounting Cost Management process. period closed.. so product teams are involved for coordinating actions based on event models. This last process.e. The Create Accounting process that can be used for receiving transactions are Create Accounting Cost Management . The details are then captured and can be reported in the Transaction Objects Diagnostic Report. the profile option needs to be reset right away to turn this off and the System Administrator can run the Purge Transaction objects Diagnostics process to clean up the tables. Create Accounting Receiving. Cost Management. This allows for a clear separation between transactions and accounting representation. invoice approved. payment received. Events are the bridge between transactions and journal entries. Use Process Category = Receiving OR Create Accounting Receiving. An event is the recording of a change of status in the transaction life cycle. CST: Receiving Accounting Option This profile option controls whether the Receiving Transactions Processor creates the accounting entries online or if the transaction accounting entries need to be created via the Create Accounting process. etc. SLA uses events for processing transactions.. Because of performance issues.. i. 4 Main Entities for Cost Management (preseeded): Material Accounting Events WIP Accounting Events Receiving Accounting Events Write Off Accounting Events Profile Options for SLA: SLA: Enable Subledger Transaction Security in GL SLA: Enable Data Access Security in Subledger SLA: Additional Data Access Set SLA: Allow Reports Journal source Override *These first 4 are used by GL for overall setup of SLA for GL SLA: Enable Diagnostics This is only enabled when there are errors in the Create Accounting process. The value is set to Yes and then the Create Accounting process is run again. . is part of Purchasing responsibility and can only be run for receiving transactions.

no accounts will be passed to Oracle Projects by the cost collector. the accounts will continue to get passed in just as before (from MTA and WTA). they will not be respected by the cost collector.0. the role of Cost Group/Sub Inventory is limited to maintaining the Unit Cost in the Reports. the cost collector will continue to post the transaction information just as before. The SLA setups will take the place of the std_cost_dist_hook.For Accrual reconciliation: --------------------------The R12 Accrual reconciliation process will use the accounting entries from SLA as SLA is the source of truth for the real accounting entries. this is not supported. The distribution links are stored in the columns inv_sub_ledger_id and wip_sub_ledger_id in the MTA and WTA tables. depending on whether the auto accounting option has been set to yes or no. Troubleshooting suggestions: .Presently there is no support for SLA for Periodic Average Costing. If the auto accounting option has been set to No.Cost Management is run via the Cost Management SLA responsibility. In this case. Project Manufacturing and SLAFor the GL posting option set to manufacturing.4. the accounts will be passed in or not passed in. For the other setup option. This is on the enhancement list but as of 12. All the Account Generation for Transaction will be taken care by SLA Engine rules. Periodic Average Costing and SLA . Hence the accrual load can not report any transactions prior to SLA upgrade start date.e when GL posting is set to Projects.pls. the user is responsible for setting the auto accounting rules in Oracle projects setup to derive the accounts. which allows the user to modify the accounts that are used for distributions. So if the user has set up any account derivation rules in SLA. This responsibility should have more security and restrictions from users. This distribution link will enable Oracle projects to link the distributions created in SLA tables back to the MTA and WTA tables. Some Reports that have been changed: CSTRSCCR Supply Chain Cost Rollup CSTREIVR . However. the cost collector will pass in the distribution link from MTA and WTA to Oracle projects. The following cost hook is impacted: CSTSCHKB. i. Most users processing the receiving transactions would use instead of the Create Accounting .Elemental Inventory Value Report With Implementation of Subledger Accounting Architecture feature in R12. So all account-related information has been removed from the valuation reports. This will no longer be used as the user can use standard SLA process for this. The cost collector will pick the account information from mtl_transaction_accounts and wip_transaction_accounts. If the auto accounting rule option has been set to Yes.

Confirm transactions are costed successfully via cost Manager 5.Check if the Create Accounting Cost Management process is successful when using traditional accounts.Run the Subledger Period Close Exceptions Report and review errors.1.Review logfile for the Create Accounting Cost Management 2. if any.Enable FND: Debug to provide more details 3.Review the Transaction Objects Diagnostic Report 4. . 6.

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