Overview of The New Financial Architecture in Oracle E-Business Suite Release 12

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Overview of the New Financial Architecture in

Mary Burns
Oracle E-Business Suite Release 12
The following is intended to outline our general

product direction. It is intended for information
purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decisions.
The development, release, and timing of any
features or functionality described for Oracles
products remains at the sole discretion of Oracle.
Agenda
What We Set Out To Address
Release Twelve: The Global Release
Global Architecture
MultiOrg Access Control
Subledger Accounting
Ledgers and Ledger Sets
Ledger Considerations
Global Business Functions
Legal Entities
Accounting Set Up Manager
E-Business Tax
Advanced Intercompany
Banking Model
What we set out to

address
Doing Business Globally is Complex

Top Drivers of Complexity
1
2
3
4
5
6
7
8
National and International Laws & Regulations

Actions by Competitors
Changing Customer Requirements
Industry Standards and Regulations
Tax Codes
Changing Workforce Attitudes
International Reporting Standards
Language and Cultural Differences
Direct impact on Finance
Source: PWC, 9th Annual Global CEO Survey
Globalization is unstoppable.
Regardless of geography, industry or
income, companies are globalizing to
gain new customers and access new
markets. Is this a good thing? Nearly
two-thirds of the CEOs we surveyed
are positive about the impact that
globalization will have on their
organizations over the next three
years.
Source: 9th Annual Global CEO Survey
Globalization and Complexity; PwC 2006
Make it Simpler to do your job

Control Costs by Managing Complexity
Major Focus
Standardizing operating practices and

controls
69%
Standardizing policies and business

rules
66%
Standardizing and integrating finance

systems
59%
Adopting best practices
58%
Optimizing the finance organization and

its reporting structure
52%
Reducing reliance on spreadsheets
33%
Source: PWC Management Barometer
50%
Senior executives say
simplification is
driving the Finance
agenda
Make it Easier to do Your Job

How Finance Spends its Time
26%
47%
27%
% Yet To
50%
Improve processes or
rationalize technologies
60%
Standardize policies, rules,

and processes across the
entire enterprise
73%
Implement a shared services

model *
80%
Adopt best practices or

simplify processes across the
entire enterprise
The Agile CFO, IBM Business Consulting Services, 2005

* Deloitte Consulting, 2006
Customers:
Centralize, Simplify, Standardize
Work Globally,
to be more competitive
Think Globally,
to make the right decisions
Manage Globally,
to lower cost and increase performance
A$+$
Easy Reporting
Transparent
Audit,
Reconciliation
& Drilldown
Comprehensive
and compliant
processing
Financial
Data for
Management
- and
Compliant
Analytics
+$
Controlled
Transaction
Entry
Corp. Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
Joint Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
Parent Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
National Compliance
Local Regulation
National COA
Local Calendar
How Financials Release 12 Can Help

The Global Business Release
WORK GLOBALLY
THINK GLOBALLY
MANAGE GLOBALLY
To Be More Competitive
To Make the Right Decisions
To Lower Cost & Increase

Performance
Financial Control &

Reporting
Performance Management
Integration
Credit-to-Cash
Profitability Management
Data Management
Procure-to-Pay
Business Intelligence
Reporting
Treasury & Tax

Travel & Expense
Asset Management
Governance, Risk &
Compliance
Global:
1.
2.
Of, relating to, or involving the entire earth;

worldwide: global peace; global monetary
policies, etc.
Comprehensive; total: a... global, generalized
sense of well-being
Release Twelve
The Global Business Release:
A New Financial Architecture
Global Financial Architecture

6 Major Initiatives
1.
Ledger and
Ledger Sets
2.
Multi-Org
Access
Control
3.
Subledger
Accounting
4.
Tax Engine
5.
Intercompany
6.
Bank Model
General
Ledger Ledger
& Ledger
Sets
Dr
Cr
Subledger Accounting (SLA)
Tax
Engine
MultiOrg
Access
Control
Work in
Process
Inter
Company
Inventor
y
Bank
Mod
el
Receivables
Purchasing
Payables
Projects
Multi-Org
Access Control
Work Think Manage
MOAC: Multi-Org Access Control

Role based access to Operating Units
Perform multiple tasks across
operating units without changing
responsibilities
Belgium
Holland
Denmark
Legal Entity
Legal Entity
Legal Entity
Belgium
Holland
Denmark
Operating
Unit
Operating
Unit
Operating
Unit
Responsibility
Responsibility
Responsibility
Single
Responsibility
Functional Tasks
Order Management
Dunning, Collections,
Billing
Requisition, Demand &
Purchase Orders
Receiving & Drop Ship
Invoice Receipt,
Disbursement
Customer Data
Management
Accounting Setup
Purpose Built Cross OU Desks

Shared Services
Shared Service
Product Reference
Order Management
Order Management
Dunning, Collections, Billing
Receivables
Requisition, Demand &

Purchase Orders
Procurement
Receiving & Drop Ship
Supply Chain Management
Invoice Receipt, Disbursement

Customer Data Management
Accounting Setup
Payables
Trading Community Architecture
Accounting Setup Manager
Multiple Organization Access Control

Summary of Changes
Security Profiles for data security
MO: Security Profile
List of operating units for a responsibility
Defined in HR
OU field on UI
all transactions
setup data specific to OU, like transaction type
Enhanced Multi-Org Reporting and Processing
Ledger/Ledger Set parameter on accounting reports and processes
OU parameter on other standard reports and processes
For example: submit the Payables Open Interface Import w/OU
param null to import all records across all OUs
Multi-Org Access Control

In practice
Select
Operating
Units
In daily use
Select
Operating
Classify Unit
Organization
classification
as operating
unit
Run Reports
Across
Operating
Units
Work Think Manage
Centralized Accounting Policies

Greater Control, Transparency and Auditability
Internal control and
compliance with multiple
accounting policies through
user-defined accounting rules
General
GeneralLedger
Ledger
Dr
Cr
3rd
Party
System
s
Centralized Accounting
Model,
Rules, Engine and Repository
Invento
ry
Work in
Process
3rd
Party
System
s
Receivable
s
Purchasin
g
Single source of truth for all

subsystem accounting
activity with a common data
model and repository
Accounting, reconciliation
and reporting facilitated by
centralized data model
Project
s
Payable
s
Streamline closing process

with common posting engine
Auditable and transparent
entries accessible with full
drilldown
Centralized Rules, Common Repository: Global Control
What it is
Ledger
French Rules
Plan
Comptable
French
Calendar
EUR
Dr
Cr
Subledge
r
Accounti
ng
Accounting Rules
SarBox & 8th Dir.
User Editable
Subledger Daybooks
Faster, Easier
Payables Invoice
Some Benefits
(Journals)
Subledger Balancing
Reports, inquiries, open
items, et cetera
Multiple
Representations
Common Posting to GL
Ledgers
Real time or Periodic
Reconciliation
Corporate Rules =
Accounting
Standardization
Local Rules =
Improved Local
Compliance
Automate Apples to
Apples Adjustments
Improved Auditability
Improved Internal
Control
Transaction Level Compliance
National Daily Journal Requirements
Internal Control: Central Definitions, Eliminate overrides
Policy Enforcement in Volume Processing

Transparent Accounting Rules
Debits & Credit at the point of the event
Automate Foreign Operation adjustments
Reconciliation
Platform
In accordance
with the
Underlying
Records
Event Class:
Invoices
Event:
Invoice Approved
Ledger:
France (EUR)
GL Date:
20-Sep-2005
Description:
Office supplies
Type
Account
Description
Debit
Credit
Asset purchase
01.9100010.100
Paris: furniture
10,000
Misc expense
01.9100020.100
Paris: supplies
400
Misc expense
01.9100020.200
Nantes: supplies
100
Misc expense
01.9100020.300
Nice: supplies
300
VAT
01.3100060.000
VAT@17%
1,836
Accounts Payable 01.7000010.000
ABC Supplies
12,636
12,636
12,636
Ticked & Tied

SLA Controls that
GL Balances and
SLA Balances tie,
and that both tie
to the document
(invoice, payment, etc.)
sources
Opening
Balance
Debit
Credit
Opening
Balance
GENERAL LEDGER
Cash
Receivables
Inventory
Assets
Prepayments
Payables
Accruals
Shares
Previous Results
Balance Sheet
Sales
COGS
R&D
S&M
G&A-Fin
G&A-IT
G&A-HR
Period Income
Income Statement
100
1,000,000
500,000
100,000
1,000
(750,000)
(250,000)
(100,000)
(501,100)
-
Debit
Credit
3,500,000
3,000,000
1,200,000
2,750,000
3,500,000
1,500,000
2,800,000
2,700,000
50,000
10,500,000
10,500,000
3,000,000
1,500,000
300,000
300,000
300,000
150,000
150,000
300,000
24,000,000
24,000,000
Closing
Balance
750,100
500,000
200,000
100,000
1,000
(650,000)
(300,000)
(100,000)
(501,100)
(3,000,000)
1,500,000
300,000
300,000
300,000
150,000
150,000
300,000
-
Closing
Balance
SUBLEDGER ACCOUNTING
Receivables
Customer
Customer
Customer
Customer
Customer
Total
One
Two
Three
Four
Five
250,000
350,000
100,000
100,000
200,000
1,000,000
150,000
250,000
1,500,000
800,000
300,000
3,000,000
400,000
450,000
1,400,000
750,000
500,000
3,500,000
150,000
200,000
150,000
500,000
1,000,000
75,000
725,000
1,000,000
2,800,000
900,000
50,000
775,000
975,000
2,700,000
(150,000)
(75,000)
(200,000)
(225,000)
(650,000)
Payables
Vendor
Vendor
Vendor
Vendor
Total
I
II
III
IX
(250,000)
(100,000)
(150,000)
(250,000)
(750,000)
General Ledger
SLA Detail
Multiple Accounting Representations

Global Compliance Statutory and Stock Market
Ledger B
Ledger A
French Rules
Plan
Comptable
French
Calendar
US GAAP
US COA
US
Calendar
Multiple Ledgers
EUR
EUR
or
Dr
Cr
Subledge
r
Accounti
ng
Single
subledger
transaction
can create
multiple
accounting
representations
Payables Invoice and in multiple
currencies
Chose to use an
alternative
Ledger or just an
Adjustment
Ledger or
segment
SLA keeps the Subledgers & GL tied out

Keep the auditors happy!
Subledger
Applications
Accounting
Events
Accounting
Configurations
Accounting
Program
Journal Entry
Setup
Subledger
Journal
Entries
Service
Transactions
Reconciled:
(& adjustments) Docs, SLA, GL in synch
Subledger
Balances
General
Ledger
GL
Journal
Entries
and
Balances
Ledgers and Ledger Sets
Work Think Manage
Ledger
One Repository of Financial Truth
Ledger B
Implements the 4
Cs:
Accounting
Method
Chart of
EUR
Accounts
The balanceCon
Creditors (COA)
alendar
urrency
is 4.2MCEur
(Currency)
US GAAP
US COA
US
Calendar
on March 31, 2006 (Calendar)

according to IAS/IFRS definitions (Accounting Method)
Reporting
Currency
Ledger Sets
Global Information At A Glance
Ledger A
French Rules
Plan
Comptable
French
Calendar
EUR
Ledger B
US GAAP
US COA
US
Calendar
EUR
Reporting
Currency
Ledger Sets
Global Information At A Glance
Share:
Chart of
Accounts
Calendar
Ledger
Set
Ledger C
Ledger A
French Rules
Plan
Comptable
French
Calendar
EUR
Ledger B
US GAAP
US COA
US
Calendar
EUR
Key benefits to many Ledgers in one

set
Decision-driving business information
always available
Simpler processing and General Ledger
management
Data and definitions that can be shared
US GAAP
US COA
US Calendar
USD
Ledger D
US GAAP
US COA
US
Calendar
AUD
Reporting
Currency
Currency in Release 12
Transaction Currencies
Accounting Currency in Primary Ledger
Reporting Currency in Primary Ledger
More Accounting Currencies in Secondary Ledgers
For every transaction OR
For SLA Posting level / GL activity level
Balance level Translation or Remeasurement in
Ledgers within Ledger sets, run at one click

Balance & Activity level Translation or
Remeasurement in Financial Consolidation Hub
Enhanced Revaluation
[Functional Currency term dropped: conflicts with IAS 21 / FAS 52]
Data Access, Definition Access

Data Access Sets
Grant and tailor access to Ledgers and Balancing Segment
Values (i.e. Companies, Stores, Branches, etc.)
Privileges
View
GL Manager
Write
Accountant
France Ledger
Canada Ledger
US Ledger
Definition Access Sets separate from data security

Share, restrict definitions; privileges to view, modify, etc.
Ledger Considerations
Ledger Sets Work them your way

Management
Ledger Set
US Ledger Set
Legal Ledger
US1
Legal
Ledger
US2
Legal Ledger
US3
Adjustment
Ledger US
Corporate
Ledger Set
adjustments
eliminations
UK Ledger Set
Legal Ledger
UK1
Legal Ledger
UK2
Automate GAAP / IAS

adjustments in an adjusting ledger
Eliminate within a Set with GCS
Consolidate Formally in FCH
Map from a non-conforming COA
with a GCS Ledger
Adjustment
Ledger UK
Adj Ledger
Corporate
Set of 26 Ledgers in one country

Euro Zone in One Ledger Set
My Corporate Set in US GAAP
Statutory Set for Country Y Subs
Division X Worldwide Ledger Set
When to use a Secondary Ledger, an

Adjusting Segment or an Adjusting Ledger?
Adjusting
Segment
Adjusting
Ledger
Secondary
Ledger
Corp. wants GL balances

per Parent GAAP
Corp. wants Just the

adjustments, thank you
Corp. wants a complete

Parent GAAP & Currency
edition of the Subs books
Subsidiary books are

pretty similar to parents
Mapping gets us most of

the way to Parent
Subsidiary books are quite

alien to parents
No inventory
Inventory is the big

difference
Inventory is one of the big

differences
National chart of accounts

is clearly related to IAS
IFRS or GAAP balances
Manageable series of
reclassifications
National chart of accounts

is radically different from
corporate
National Controllership
- Corp GAAP known
Regional Controllership
- Corp GAAP administered
Parent Controllership
Mexico plant, US parent
Balances are enough

(Full drill down available)
See theyve been properly

adjusted to our rules
Every petty cash slip
Global Business
Functions
Work Think Manage
Legal Entity: Your Registered Companies

Public
Company
(ultimate parent)
Legal Authorities
Countries, States, Local,
Agencies, Taxation,
Registrars, Regulators...
Regulates
Complies
Legal Entities
Registered Companies,
Funds, Partnerships
Inc. LLC. Ltd. SA. GmBH. Etc.
exist in the outside world
Managed & analyzed by
Management Orgs
Divisions, LOBS, Plants,
Cost Centers, Whatever =
Decision Making Tags
Subsidiary
Public
Company
Company
(regional parent)
Subsidiary
Company
Subsidiary
Company
(business parent)
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Parent companies (LEs) own or

control subsidiaries (LEs)
No outside ring - must pick an LE
LEs create commercial
transactions
LEs: Why and What?

Why We Care
LEs pay the taxes
- need tax registrations
Trade between LEs
needs intercompany
What weve done

Addresses, Officers, etc.
Enabled First Party
stamp
LEs own the money

and bank accounts
Added Establishments:
map Registrations to
Authorities
LEs file the accounts,

take care of accounting
GRE/LE not touched
LEs comply with

whatever needs
compliance: legal in LE
Authorities as TCA
parties
LE Configurator
Tabulate your Registered Companies

and other forms of LE
Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses
Where LE fits in
Transaction
Taxes
-Complies &
Files, Pays
Registrations
Files
with Authorities
Exists
Locally
Establishments
Actual Registered
Companies, etc.
GRE/LE
Legal
Entity
Accounts
for itself
in a Ledger
or BSVs
Files
Registrations
with Authorities
Business
Group
Ledger
Maintains
its Subledger
Documents
in many OUs
Default Legal
Context (DLC)
Et Cetera, 11i
Operating
Units
Legal Entity:
Vehicle for compliance
Get the LE Right

Compliance Falls Into Place
Transaction
Actual
Registered
Lets
put LEs
to work
Business
Taxes Isolate legal compliance
Companies,
etc.
from management needs Group
-Complies
& your registered companies
Track
GRE/LE
Files, Pays
Make your compliance flow more easily
Maintains
Et Cetera, 11i
its Subledger
Accounting
Setup
Manager
Registrations
Operating
Filesbooks, bookkeeping rules and Documents
Assign
currency management
with Authorities
in many OUs
Units
to your registered companies
Default Legal
Exists
EBusiness
Tax
Context (DLC)
Locally
Have your registered
companies
calculate,
file, and pay the
Accounts
transaction taxesfor
theyitself
owe
Legal
Entity
Intercompany
in a Ledger
Establishments
Do business between and across your registered companies
or BSVs
with full legal documentation
Files
Bank Model
Legal Entity:
Ledger
companies use their money to pay
Registrations Have your registered
Vehicle for compliance
with Authorities their bills, et cetera
Accounting Setup
Manager (ASM)
Work Think Manage
Centralized Set-up
Accounting Setup Manager
Define Legal Entities

& Associated Rules
Ensure Complete
& Accurate
Setup via Online
Checklist
Define Multiple Ledgers
for Rules & Currencies
Set Accounting Rules

for All EBS Apps
One Place to manage

Your Global
Accounting
Rules, Currencies,
Ledgers,
And Ledger Sets
E-Business Tax
Work Think Manage
Centralized Global Tax

Less Complex Global Tax Compliance
Business Needs
Solution
Tax content for certain countries
Automation
Vertex and Taxware integration for U.S.

Integrity checks during setup process
Constant Changes in
Tax Laws and
Regulations
Date effective setup

Tax rules flow for change or creating rules
Tax simulator for setup, rules, and transactions
Tax registrations and tax reporting codes
Local Compliance
Tax lines determine applicable taxes

Configurable tax reporting templates
Single set up for all Oracle applications
Information Visibility
Use of E-Business Suite components such as trading partner geography,

trading partner classification, legal entity, inventory item categorization,
and accounting event.
Oracle E-Business Tax
Processing taxes for transactions and reporting

Transactions
Purchasing
Parties
Compliance, Assurance
Efficiency, Global Visibility
Single Interface for Transactions
Payables
Places
Products
Sales Orders
Processes
Determine Applicable
Regimes
Taxes
Taxable
Basis
Calculate
Tax
Amount
Transparent Integration with Tax Partner Services
Receivables
Tax Status
& Rate
Tax Reports
- PDF, HTML, RTF

- Security enabled
Extensible
Tax
Transactions
Service Oriented Architecture
Taxes,
Rules
Advanced Intercompany
(AGIS)
Work Think Manage
Advanced Global Intercompany System

Address the Top Barrier to a Fast Close
Advanced Global
Intercompany
System
Web UI
Subledger
Invoices &
Documents
Open
Interfaces /
API
Generate subledger invoices
Control transaction entry with
Intercompany Calendar
Fully Configurable Approval Rules
Excel
(Web ADI)
Online
Reconciliation
Reporting
Flexible Security Model

Centrally defined Intercompany
Accounts
Dr
General
Ledger
XML
Publisher
Reports
Cr
Subledger
Accounting
Receivable
s
Payable
s
AGIS at Work
Rebilling a Corporate Cost from an USA HQ
Inter
Company
California
Company
Illinois
Company
General
Ledger
Entries New
York
Company
GL Entries created for

US subsidiaries
AP and AR Invoices
created for France
and Italy
Subledger
Invoices &
Documents
France
Company
Italy
Company
Banking Model
Work Think Manage
Centralized Banking
Shared Services Disbursements
Bank account is now
associated with LE
entity rather than
Operating Unit
LE
OU A
Inventory
OU B
OU C
Receivable
Receivabl
es
s
Work in Purchasin
Process
g
Payables
Payables
Project
Projects
s
Assets
Single bank account

serves multiple
Operating Units
Any and all Operating
Units associated with a
ledger can be
permitted to use the
bank account
Plu
s
Centralized
Credit Card Model
Credit Card Encryption
Supplier & Customer Banks in
TCA
Bank Model: Example of What You Can Do

Pay invoices from different OUs with 1 instruction
New Payments Module
New Bank Model
OU A
New Bank & Credit Card

Features
OU B
Single
Payment
Instruction
OU C
Bank
Payments
Sub Ledger
Accounting
Invoices
Banks
Legal Entity
Operating Units
Sharing Services
Work Think Manage
All Together: Easier To Share Services

Central processing, Distributed impact
Formal SSCs
At home or overseas
Call Centers, Outsourcing
Offshoring, SAS 70,
On Demand
SSCs
(Formal)
SLAs & Tax
Inter-LE
Ledger and Ledger Sets

Intercompany, Tax Engine
MOAC across LEs, Bank
Internal Controls Manager
Informal Service Sharing

Ledgers & Ledger Sets
Process Efficiency
Ledgers with
Shared Service
Infrastructure
Decentralized Depts.
Balancing Segments
(Serves Informal and Formal)
Centralized Depts..
MOAC across OUs
Organizational Access
Normal Business
Intercompany
Cross Org Processes
Practice
Bank Model
Banking Model
Tax
Inter Unit Accounting
What the Architecture Gets You

Work Globally
Global
Global
Global
Global
Order Desk
Procurement
Billing
Dunning
Think Globally
Release 12 Subsidiary LEs.
Company
Company
Company
account for themselves in Ledgers,

and
Ledger Set
Global Ledger Sets

worldwide insight
manage their subledger data in Operating
Global Reporting
Units
Manage Globally
Global Accounting
Rules
Global Set-up
Global Integration
MultiOrg
Access
Control
Work in
Process
Inventor
y
Receivables
Purchasing
Payables
Projects
Share Services, maintain privacy

Exploit Cross-OU Processes
Yesterday: An LE Group in 1
SoB with 1 OU - no partitioning
R12: Introduce partitioning

without sacrificing processes
Ledgers in
Ledger Sets,
New OUs
MOAC
Inventory
Inventory
Work in
Process
Work in
Process
Receivable
s
Purchasing
Projects
Payables
Assets
Inventory
Work in
Process
Receivable
s
Purchasing
Projects
Payables
Assets
Release 12: The Global Business Release

Work Globally,
to be more competitive
$
Think Globally,
to make the right decisions
Manage Globally,
to lower cost and increase performance
OICM
XML Publisher
Reporting
DBI, FCH
Ledger Sets,
Ledgers
Profitability Mgr,
EPB
General
Ledger
Subledger
SLA,
Tax
A$+$
TCA, LE
Transactions
Intercompany,
Bank, Payments
+$
MOAC,
+300 Features
Corp. Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
Joint Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
Parent Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
National Compliance
Local Regulation
National COA
Local Calendar
Q&
A
QUESTIONS

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