Ledger

R12 General Ledger Management Fundamentals

 Objectives

After completing this lesson, you should be able to do the

following:
• Describe the elements required to create a ledger
within Oracle General Ledger
• Identify key implementation issues involved when
creating a ledger in Oracle General Ledger
• Identify the attributes, options and settings required to
define the Accounting Flexfield
• Define an accounting calendar
 Objectives

After completing this lesson, you should be able to do the

following:
• Enable predefined currencies
• Create a ledger in Oracle General Ledger
• Utilize the Account Hierarchy Manager to view and
maintain Accounting Flexfield values
 Ledgers Defined

Ledgers
The Ledgers represent the
core of a company’s financial
records where every
transaction flows through.
 Accounting Setup Manager Overview
Maintaining Multiple Accounting Representations with Secondary
Ledgers
Legal Entity

Corporate Ledger Local Statutory Ledger

Accounting (Primary Ledger) (Secondary Ledger)

SLA SLA

Subledger Transactions

Transaction Other
AP AR FA
Subledgers
 Secondary Ledgers

Secondary Ledgers
The Secondary Ledgers are
used for supplementary
purposes and can be used for
global companies to comply
with various legal
requirements.
 Secondary Ledger Conversion Levels

Level of Detail Desired Path to Secondary Ledger

Use GL Consolidation
Balances Level
to Transfer Balances

Use Posting for

GL Journals Level
Automatic Journals
Replication

Subledger Journals Use SLA for Automatic

AP AR FA Level Maintenance

Manual Adjustments in
Adjustments Only GL or Automated
Adjustments from SLA
 Reporting Currencies

If one or more of the following are different, If difference is

only currency,

US GAAP
Accrual

Corporate Monthly Accounting Currency

Chart of Calendar Method
Accounts
use Reporting
use a Secondary Ledger Currencies
 Reporting Currency (RC) Conversion Levels

Level of Detail Desired Path to ALC

Balance Level Use GL Translation

Journal Level Use GL Posting

Subledger Level Use SLA for

AP AR FA Automatic Maintenance

Note: Subledger Level RCs not available for Secondary Ledgers

 Accounting Setup Steps

GL SETUP STEPS SETUP From the Accounting Setup Manager

Define Complete
Define Legal Entities
Chart of Accounts Accounting Options

Assign Legal Entities

Complete
Define Calendars for Accounting Setup
Accounting Setup
(optional)

Define
Enable Currencies
Primary Ledger

Define Secondary
Complete
Ledger(s)
Optional Setup Steps
(optional)
 Accounting Setup Manager
Create Accounting Setup

1. Create 2. Complete
accounting the
setup accounting
structure options

Two main steps exist to create an accounting setup

 Accounting Calendar

You create a calendar to define an accounting year and the

periods it contains.
 Unlimited Currencies

• You can enable predefined currencies or set up your

own customized currencies
• You can enable a variety of currencies to allow you to
enter transactions in multiple currencies
 Sharing Ledgers
Across Oracle Applications

Many elements of an Oracle General Ledger ledger are

shared with other Oracle applications.

Account structure Value sets

Segment values
Security rules
Cross-validation rules
Accounting calendar Periods
Period Types

Currencies Daily Rates

Rate Types
Journal Categories
Sources
 Chart of Accounts

Your chart of accounts is a list of Accounting Flexfields

you create to identify general ledger accounts
• This flexible structure is made up of subfields or
segments
• Each segment has a name and a set of values

Company Division Department Account Project

 Building the Chart of Accounts Structure

Define a flexible chart of accounts structure:

• Create up to 30 segments with a maximum of 25
characters per segment
– Maximum total length allowed is 240 characters
• Define each segment name and the order in which it
appears
• Attach a list of valid values to each segment

XX - XXX - XXXX - XXXX - XXX

Company | Cost Center | Account | Sub-Account | Product
 Identifying Business Requirements

Identify the aspects of your business that you need to

track and analyze; pay specific attention to aspects that
span several applications. Examples include:
• Company, legal entity, fund
• Division, region, territory, state, country
• Location, plant, office, store
• Cost center, department, function
• Natural Account categories:
– asset, liability, owner's equity, revenue and expense
• Product, product line, line of business, channel
• Project, phase, task, job, work order
 Identifying Segment Requirements

• Assign each business dimension as a separate

segment.
• Avoid having more than one meaning for each
segment.

Product &
Company Region
Project
XXX XX
XXXX
 Analyzing Reporting Requirements

Make certain that you can generate the required reports

based on the segments in your Accounting Flexfield.

}
Company

Region

Cost Center

Project
 Creating a Worldwide Chart of Accounts

Many companies need to use a unified chart of accounts,

but also need to capture different information in different
sites and countries based on business needs and statutory
requirements.

Consolidating
segments
(HQ control)

Nonconsolidating
segments
(Local control)
 Worldwide Chart of Accounts Example

Canada and the United Kingdom reserve the right-most

segment for their specialized needs. This segment does
not roll up to the consolidated financials compiled at
Headquarters.

Headquarters
Company – Cost Center - Account

Canada
Company – Cost Center – Account – Product

United Kingdom
Company – Cost Center – Account – Subaccount
 Creating Vertical Structures

• Use vertical parent rollups on specific segments when

possible rather than creating additional segments.
Segment by using vertical Accounting Flexfields.
• Example: Division and region are not included in the
posting level.
European
Division parent Division

Western
Region parent Region

Cost
Child level Company Account
Center
 Validation and Value Sets

When you define value sets, you also need to determine

how you want to validate your values
• The available validation types are:
– Independent
– Dependent
– Table
• Oracle recommends using independent validation with
the Accounting Flexfield
 Using Independent
and Dependent Segments

Independent Segment Dependent Segment

Segment that has meaning Segment that is linked to
on its own without an independent segment
depending on other
segment values

Example Example
Account: 1100
Company: 01 Subaccount: 001
Desc: Cash-Citibank
Account: 2200
Subaccount: 001
Desc: Debt-B of A
 Designing Size
and Numbering Systems

• Decide whether to allow alphabetical characters in the

Accounting Flexfield
• Decide on the size of the Accounting Flexfield
segments
• Design the coding scheme for your Accounting
Flexfield values
 Creating Accounting Flexfields

To create an Accounting Flexfield:

1. Define a value set
2. Define an account structure
3. Define valid segment values
4. Optionally, create account combinations
5. Optionally, create aliases
6. Optionally, define security rules
 Defining Value Sets

Use value sets to control the characteristics and format of

the Accounting Flexfield segment.

Value_set 1 Value_set 2 Value_set 3 Value_set 1

Format: Format: Format: Format:
Char Char Char Char
Max size: 2 Max size: 3 Max size: 4 Max size:2
Validation: Validation: Validation Validation:
Independent Independent Independent Independent

Balancing Cost Center Natural Intercompany

Account
The same value set can be used more than once in the
same Accounting Flexfield structure.
Defining the Accounting
Flexfield Structure
 Defining Segment Values

Enter valid values for each segment before using them in

the Accounting Flexfield segments.

Value_set 1 Value_set 2 Value_set 3 Value_set 1

Format: Format: Format: Format:
Char Char Char Char
Max size: 2 Max size: 3 Max size: 4 Max size:2
Validation: Validation: Validation Validation:
Independent Independent Independent Independent

Balancing Cost Center Natural Intercompany

Account
01 100 TSAL 01
02 101 1000 02
03 999 9999 03
 Populating Segment Value Attributes

Attributes for each value include:

• Translated Value
• Description
• Parent
• Group and level
• Segment qualifiers
– Allow budgeting and posting
– Account type – natural account segment values
– Control Account
– Reconciliation Flag
• Enabled
• Date From and To
 Segment Qualifiers

Account Type Asset, Liability, Owners' Equity

Revenue, Expense
Budgetary Dr, Budgetary Cr

Budget Entry Allowed Yes or No

Posting Allowed Yes or No

Third Party Control Account Payables, Receivables, Yes,

or No

Reconciliation Flag Yes or No

 Control Accounts

• Ensure control accounts can only contain data from an

approved journal source
• Prevent manual data entry to control accounts
 Control Accounts
Setup and Process
SETUP PROCESS

Set Control Account Create Accounting in

Qualifier for a SLA or enter journal in
Natural Account Value GL
In the Segment Values
Window

Is account a No Accounting or
control account? Journal Created

Yes

Select a different
Error
account
Automated process
 Defining Hierarchies

Define parent/child relationships, including multilevel

hierarchies, to facilitate reporting and analysis.

Top-level Western Region

parent

Second-
level California Nevada Oregon
parents

Children East West East West East West

CA CA NV NV OR OR
 Working with Ranges

For each parent value, you can:

• Define child ranges
• Define parent ranges
• Move child ranges
• Move parent ranges
• View hierarchies
 Account Hierarchies

You can set up a variety of flexible parent/child account

hierarchies to match your organizational needs.

Smart
Computers, Inc.

Smart
Disk Computers, Inc.
CPUs Printers
drives

New
Paris Chicago
York
 Account Hierarchy Manager

With the Account Hierarchy Manager you can:

• Graphically create, maintain, and review account
structure hierarchies
• Define new parent and child segment values, as well as
change parent/child dependencies
• Create new rollup groups from the Account Hierarchy
Manager and have your changes reflected
automatically in both the Key Segment Values and
Rollup Groups windows
 Account Hierarchy Manager—Security

The Account Hierarchy Manager has security rules that

enable you to control:
• Read only or read/write access
• Access to hierarchies, segment values, and charts of
accounts
 Defining an Accounting Calendar

Create a calendar to define an accounting year and the

periods that it contains.
• Set up one year at a time, specifying the accounting
period type
• Define your calendar with at least one period before the
period in which you start entering transactions
• Optionally, define multiple calendars and assign a
different calendar to each ledger
 Defining Period Types

• Each calendar has an associated period type

• Pre-defined period types in Oracle General Ledger are
Month, Quarter, and Year
• If needed, define your own period types in addition to
the standard periods

Period Type Periods Calendar Ledger

01/01/2002
Month + to =
12/31/2002

Jan-02 to
Dec-02
 Defining Your First Accounting Period

Define at least one accounting period before the first

period for which you enter transactions or perform foreign
currency translation.

Dollar

Yen
First Second
period period
(First
Transaction
Period) Enter historical data
 Accounting Period Statuses

Each accounting period has one of the following five

statuses:

Never Future Open

Opened Enterable Period

Permanently Closed
Closed Period Period
 Calendar Auditing

Checks calendar Checks date Checks

definitions gaps overlapping
periods
 Enabling Currencies

You must enable a currency before you can enter

transactions or record balances in that currency.

Enabled

Canadian Dollar
 Enabling Account Combinations

To use an account combination, accept the default enabled

check box in the GL Accounts window.

01-100-1420-003

02-100-1420-005

01-200-1420-002

02-100-1420-004
 Segment Value Inheritance

Attributes for Segment

Enabled
Posting 111011

Budgeting

Enabled
Inherited Posting 01-100-111011
Budgeting

Not Inherited
Enabled

Preserve Posting 01-200-111011

accounts
Budgeting
 Troubleshooting
Segment Value Inheritance

• Segment Value Inheritance updates the Accounting

Flexfield structure assigned to the ledger for your
responsibility
• A chart of accounts that uses table validation must
have a LAST_UPDATE_DATE and a CREATION_DATE
field
 Defining Flexfield Security Rules

Restrict data entry, online inquiry, and reporting to specific

values by using flexfield security rules.
Account Segment

Include: 0000 to 9999

Exclude: 1000 to 3999

Available: 0000 to 0999 4000 to 9999

Unavailable: 1000 to 3999

 Using Dynamic Insertion

You can dynamically create new account code

combinations when entering data by enabling dynamic
insertion in the Key Flexfield Segments window.
• Dynamic Insertion can be enabled or disabled at any
time
• Define cross validation rules to prevent incorrect
account combinations from being created by dynamic
insertion

X Allow Dynamic Inserts

 Defining Cross-Validation Rules

Prevent the creation of invalid account combinations by

setting up cross-validation rules.
• Define cross-validation rules before entering a chart of
accounts
• Use cross-validation rules in combination with
dynamic insertion
Division: Region: Account:
01 US 100 New York 4100 Sales
02 Asia 400 Tokyo 7550 Travel

Valid 01 – 100 – 4100

Invalid 01 – 400 – 4100

 Defining Shorthand Aliases

A shorthand alias is a word or code that represents a

partial or complete account combination. Use shorthand
aliases to reduce account-entry keystrokes and to
maximize productivity and accuracy.
Account
Shorthand Alias
Combination

Cash01
= 01-110-000-1110-000-0000

NY
= - 320 - - - -

Sales
= 01- 420 - 4110 - - - -
Overview of Account Hierarchy Manager

Maintaining
Your
Chart of
Accounts Account
Hierarchy
Manager

Oracle
General
Ledger
 Integrating with Oracle General Ledger

Use Account Hierarchy Manager to make changes to your

account structure. Upon saving, Oracle General Ledger
reflects changes automatically.

Web ADI

GL

Key Segment Values Rollup Groups

Using the Account Hierarchy Toolbar

View Hierarchy New Parent

Save Changes New Child

View Query Export Hierarchy

View Values List Display Help

Account Hierarchy Manager
Segment Symbols

Top Level Parent—represents an entire

chart of accounts structure

Chart of Accounts Segment—Represents

an individual segment of a particular chart
of accounts structure

Parent Level—Represents a parent

segment value

Child—Represents a child segment value

Parent Levels in an Account Hierarchy
Lower Level Parents
Level 1 Level 2 Level 3
3000 3100 3110 3111

3150 3115

3160

3200 3220

3250

3300 3310 3311

3350 3115
 Creating New Child Values

Use the Account Hierarchy Manager to define a new child

segment value.
• Create a new child value in the Child Attributes
window
• Enter attributes

Segment Value: 4140

Description: Training
Account Type: Revenue
Effective:
Enabled:
Allow Budgeting:
Allow Posting:
 Ledger Sets

Ledger
Sets

Use ledger sets to group multiple ledgers for

processing efficiency
 Data Access Sets

Data Access Sets enable the specification of:

• read only or read and write access
 Summary

In this lesson, you should have learned how to:

• Describe the elements required to create a ledger
within Oracle General Ledger
• Identify key implementation issues involved when
creating a ledger in Oracle General Ledger
• Identify the attributes, options and settings required to
define the Accounting Flexfield
• Define an accounting calendar
 Summary

In this lesson, you should have learned how to:

• Enable predefined currencies
• Create a ledger in Oracle General Ledger
• Utilize the Account Hierarchy Manager to view and
maintain Accounting Flexfield values