R12 = GL THEORY

General Ledger Cycle

1. Opening the periods 2. Enter / Import journals 3. Review journals 4. Post journals Inquiry 5. If require Run revaluation 6. If require Run Translation for consolidation 7. Review results 8. Prepare financials 9. Close the current period 10. Open next period

R12 = GL THEORY
FLEX FIELDS IN GENERAL LEDGER: 1. Key Flex Fields 2. Descriptive Flex Fields Key Flex Fields: General Ledger: Accounting KFF Reporting Attribute KFF For reporting purpose. GL Ledger KFF It is a mirror image of Accounting KFF. It is only for internal purpose. It is used exclusively for certain GL features such as Mass Allocations, Recurring Journals and FSG Reports. Receivables: Sales Tax Location Flex Field Territory Flex Field Fixed Assets: Category KFF Asset Location KFF Asset key KFF

Flex Field Qualifiers (Assign to Segments) 1. 2. 3. 4. 5. 6. Balancing Segment FFQ Cost Center Segment FFQ Natural Accounts Segment FFQ Inter Company Segment FFQ Secondary Tracking Segment FFQ Management FFQ

Segment Qualifiers (Assign to Segment values) 1. Allow Budgeting 2. Allow Posting 3. Account type (Assets / Liability / Expenses / Revenue / Ownership) 4. Third party control 5. Reconcile

R12 = GL THEORY

Assignment of FFQ to Segments Company Department Accounts Balancing Segment FFQ Inter company Segment FFQ Cost Center Segment Natural Accounts Segment FFQ

Note: One FFQ we can use only one time. One segment we can assign to more than one FFQ. We can create maximum 30 segments apart from General Ledger Segment (Total 31).

1. Balancing

Segment:

We

generally

assign

these

qualifiers

for

Company segment, where usually balances are maintained. 2. Cost Centre Segment: We generally assign these qualifiers to Department segment, where costs are spend or even gain. 3. Natural Accounts Segment: We generally assign these qualifiers for Accounts segment, where it consist of accounting categories such as Expenses, Revenue, Assets, Liabilities and ownership. 4. Inter Company Segment: (Optional): We generally assign these qualifiers for COMPANY segment, using these qualifiers we are able to perform inter company transactions. 5. Secondary tracking Segment: (Optional): Using these qualifiers we are able to identify secondary tracking segment to process income statement, closing transactions and revaluation.

6. Management Segment Qualifier:

MSQ is used in Data Access set for allowing privileges to user other than balancing segment values. 3

R12 = GL THEORY
But we cannot assign Management segment FFQ for the segment for which already Intercompany, Balancing and Natural accounts FFQ are assigned.

Compile Structure: Segment separator is used to separate the segments in the code combination. (Dash, Period, Pipe and Custom). Allow Dynamic Inserts: If we enable Allow Dynamic inserts, then we are able to enter the all possible code combinations at the time of transaction entry. If we want to know how many code combinations in our structure, multiply the number of values across the segments. If we disable allow dynamic inserts, we cannot enter all possible code combinations at the time of transaction entry. Enable Freeze Flex Field Definition and click on Compile button. The structure information will get stored in a tabular form GL_Code_Combinations_KFV.

Primary Ledger (Set of Books) 4 Cs 4 Cs Chart of Accounts (Structure, Segments & Segment values) Currency Calendar 4

R12 = GL THEORY
Accounting Convention Method (Accrual / Cash)

Pre requisites for Chart of Accounts Value Set Structure and Segments Segment Values

Value Set: Value set is Set of rules or properties which are going to enforce or attach to segments. Upon enforcing or attaching value set to the Segment, your segment will behave or act according to the value set.

Validation Types in Value Set Independent: If validation type is independent, we can define values for the value set and we can use at the time of transaction time. Dependent: If validation type is dependent, then we cannot define values for value set. Dependent values are always depending on the independent value set. None: If validation type is none, we cannot define values for the value set. User can enter desire value at the time of transactions entry. Pair & Special: Used in the programs to add additional pop up window for parameters. Table: If validation type is table, then we can not define values but we can use values from tables. Translate dependent & Independent: We use to translate the segment values into desire language.

R12 = GL THEORY

Contents of Value Set

List Type Security Type Format type Validation Type

3 Types

3 Types

7 Types

8 Types

1. List of Values

1. No Security

1. Char

1. Dependent

2. Long List of Values

2. Hierarchical

2. Date

2. Independent

3. Pop List

3. Non Hierarchical

3. Date Time

3. None

4. Number

4. Pair

5. Standard date

5. Special

6. Standard date time

6. Table

7. Time

7. Translatable Independent

8. Translatable Dependent

R12 = GL THEORY

Currency: Monitory currency: Functional Currency, Foreign Currency Non Monitory currency: STAT Currency Calendar: Accounting Calendar: Calendar & Fiscal Calendar Transaction Calendar

Period Type General ledger have 3 standard period types: 1. Month 2. Quarter 3. Year

Period types are used in defining Accounting Calendar. Each ledger has an associated period type. When you assign a calendar to a ledger using Accounting Setup Manager, the ledger only accesses the periods with the appropriate period type. You can assign up to 366 accounting periods per fiscal year for any period type, and maintain actual balances for those periods. For example, you could define a Week period type and specify 52 periods per year. However, for budgets you can only use the first 60 periods.

R12 = GL THEORY

Calendar Status: 1. Open 2. Closed 3. Permanently Closed 4. Future Entry 5. Never Opened

Year Types 1. Calendar 2. Fiscal

There are 5 types of period status: Status 1. Never opened 2. Open 3. Closed 4. Future 5. Permanently Closed Entry Posting X X X X X X X

R12 = GL THEORY

Mandatory Accounts for Set of Books 1. Retained Earnings Account (Ownership) 2. Translation Adjustment Account (Expenses) 3. Suspense Account (Assets / Liabilities) 4. Rounding Difference Account (Expenses) 5. Reserve for Encumbrance (Ownership) 6. Net Income (Expenses / revenue) Note: From the above Retained Earnings account is mandatory to create primary ledger. Remaining 5 accounts are optionally mandatory based on the requirement. 1. Retained Earnings: Retained earnings are accumulated profits. Whereas net income means current year profits 2. Translation adjustment account: Translation is conversion of functional currency or local currency into foreign currency for reporting purpose. Translation basically uses 2 rates: period average rate & period end rate. Translation uses period average rate to translate all profit and loss account balances. (Expenses & revenue) Translation uses period end rate to translate all balance sheet balances. (Assets & Liabilities)

R12 = GL THEORY

3. Suspense Account: When ever, user is going to enter Debit without credit or credit without debit or debit balances are not matching with credit balances, in this case, system will automatically populate Suspense account. Error: 6 unbalanced journal entry, suspense not allowed

Conversion rate types: 3 1. Spot 2. Corporate 3. User (Reporting) Spot: An exchange rate which you enter to perform conversion based on the rate on a specific date. It applies to the immediate delivery of a currency. Corporate: This rate is generally a standard market rate determined by senior financial management for use throughout the organization. User (Reporting): An exchange rate you specify when you enter a foreign currency journal entry.

10

R12 = GL THEORY
Journal Source

It is a Journal component; it is used to identify the ORIGIN of the journal. To define journal source: Setup Journal Sources. When we import data from legacy systems to GL we require source names. Importing journal Reference: To import detailed information from summary journals we use this option. Require Journal approval: This field is used to get the journal approval by higher management for different journal sources. Import using key: This is used to define whether journals will be imported using source key or not.

Freeze Journals: To freeze the journal source, preventing users from making changes to any un posted journals from that source, or reversing journals for Sub ledger Accounting journal sources.

Effective date Rule: 1. Fail 2. Leave alone 3. Roll Date

11

R12 = GL THEORY
Fail: Journal Import will reject transactions when the effective date is not a valid business day. No posting takes place. Leave Alone: Journal import will accept all transactions regardless of the effective date. Roll Date: Journal Import will accept the transaction, but roll the effective date back to the nearest valid business day within the same period. If there is no prior valid business day within the same period, the effective date is rolled forward. Note: The Effective Date Rule field will not appear unless you have average balance processing enabled for at least one ledger.

Journal category

Journal Category determines the purpose or type of the journal entry. When you enter a journal you specify a journal category.

Examples: 1. AP Invoices 2. AP Payments 3. Adjustment 4. Budget 5. Intercompany 6. Inventory 7. Payments 8. Payroll 9. Receipts 10. Year end close.

12

R12 = GL THEORY
Enter Journals

It is used to record the day to day business transactions. It contain Dr and Cr lines. Always debit must be equal to credit. You can enter several types of journal entries, including foreign currency journals, statistical journals, and intercompany journals. Journals can be created in two ways: 1. Manual 2. Import

1. manual:

Enter journals manually by using navigator

Navigation to enter Journal: Journals Enter Manual journals can be enter in 2 ways: 1. individual Journal 2. batch Journal.

Journal body contains two areas: 1. Header 2. Lines We have 2 types of methods: 1. Standard Journal 2. Average Journals We have 3 types of balances: 1. Actual 2. Budget 3. Encumbrance.

13

R12 = GL THEORY
Reverse Journal We generally reverse that journal, which got entered also got posted, where you find there is an error in the posted entry. Once the journal is got posted it wouldnt allow the user to make any changes. The only solution or remedy is to reverse the journal. In order to reverse the journal, first review the journal, use reverse button available in the journal window, also indicate the period where the reversal entry should get created. Navigation: Journal Entry Once we reverse the journal system will create one un posted journal, showing the earlier debit balance to credit side & earlier credit balance to debit side. Post this un posted journal. After the journal reversal the particular account in the journal will show the balance Zero. Reverse is of two types: Change sign (Profile option is required) Switch Dr/Cr.

14

R12 = GL THEORY
BUDGETS
Budget is nothing but: better planning and controlling of the funds for future usage. In oracle we can define budgets up to 60 periods There are 2 types of budgets 1. Planning budget (Revenue Budget) 2. Funding budget (Expenses Budget)

Planning Budget
This is used for only planning purpose. System will not be controlling under this budget. For planning budget we cannot create budget journals

Funding Budget
Under funding budget we can plan and control the expenses. We can create budget journals in funding budget. Setup Steps: 1. Create Reserve for encumbrance account 2. Enable: budgetary control Require Budgetary journals Assign Reserve for Encumbrance account At Ledger level 3. Define expenditure head of accounts 4. Define Budget and open next year

15

R12 = GL THEORY
5. Define Budget organization: Set sequence Set password for budget Set range for accounts Create Budget Rules Select funds check level Select amount type

6. Create Budget Journals 7. Query the budget journals and post 8. Create journal entry using budget account

Balance types: 3 1. Budget 2. Actual 3. Encumbrance Budget balances are planned amounts at initial stage. Actual balances are paid amounts so far. Encumbrance balances are reserved amounts for future payments. Funds Check Level: 3 1. Absolute 2. Advisory 3. None If we use absolute we cannot use more than the amount what we specified. If we use Advisory, system will give caution if we cross the amount given If we use None, System will not give any caution, and we can enter the more amounts also.

16

R12 = GL THEORY
Amount Types: 4 1. 2. 3. 4. PTD: Period to date: QTD: Quarter to date: YTD: Year to date: PJTD: Project to date: One month 3 months 1 year Depends on project beginning date

Budget Rules: 8 1. 2. 3. 4. 5. 6. 7. 8. Divide evenly Repeat per period 4/4/5 4/5/4 5/4/4 Prior year budget monetary Current year budget monetary Prior year budget STAT

17

R12 = GL THEORY
Mass Allocation
Mass allocation means: Allocation of Revenues and cost expenses across any cost center, department or division by using of parent values by using simple formula. Example: Rent paid based on square feet used. Formula: T = A x B/C

A = Cost pool Amount B = Usage factor C = Total Usage T = Target Account O = Off set account Segment types in mass allocation: 1. Constant 2. Looping 3. Summing

Mass Allocation Methods: 1. Full type allocation 11i Steps: 1. Define STAT Currency 2. Create SFT account 3. Create STAT journal with SFT account 4. Set up parent department and set up parent & child relation 5. Prepare mass allocation formula 6. Run mass allocation 7. Review and post journal 2. Incremental Allocation

18

R12 = GL THEORY
Mass allocation formula: Formula A B C T O Amount 100000 Account C-L-C-C C-S-C-C C-L-C-C C-C-C-C Currency STAT STAT INR INR

R 12 Steps: Step: 1 Create Usage factor account and Cost pool account Nav: Setup Financials Flex fields key Values Step: 2 Define Parent and child values for departments Nav: Setup Financials Flex fields key Values Step: 3 Step: 4 Create cost pool journal and post. Nav: Journal Enter Create and Post Statistical Journal Nav: Journal Enter Step: 5 Define and Generate Mass allocation formula Nav: Journals Define Allocation Step: 6 Query mass allocation journal Nav: Journals Enter 19

R12 = GL THEORY
Types of Journals
1. Functional Currency Journal 2. Foreign Currency Journal 3. Recurring Journal 4. Tax Journal 5. Revaluation Journal 6. Suspense Journal 7. Reverse Journal 8. Mass allocation Journal 9. STAT currency Journal 10. 11. 12. Budget Journal Batch Journal Manual Encumbrance Journal

20

R12 = GL THEORY
Suspense Journal

As per accounting principles Debit amount should always equal to Credit amount for the same Company Value. If both amounts are not equal, the difference amount will go to Suspense Account.

Setup required for Suspense Journal: 1. Create Suspense Account (Expenses / Revenue) Navigation: Setup Financials Flex Fields Key Values. 2. Enable suspense account feature at ledger level under journal processing tab Navigation: Setup Financials Accounting setup manager Accounting setup 3. Define Suspense account Rules Navigation: Setup Accounts Suspense 4. Create Journal / Review Journal Navigation: Journal Enter.

21

R12 = GL THEORY
Recurring Journal Journals which are repeating every accounting period is called a recurring journal.

Recurring journals are 3 types: 1. Standard Recurring Journal 2. Skeleton Recurring Journal 3. Formula Recurring Journal Standard Recurring Journal: Under standard recurring journal method same accounts with the same amounts will be effected with the each accounting period. We know account and amount already. Skeleton Recurring Journal: Under skeleton journal method partial information will be entered at the time of recurring journal creation. We know the account but do not know the amount. Formula Recurring Journal: Using formula recurring method, journal lines amounts will be calculated by recurring journal program based on simple formula. Recurring Journal Setup Step:1 Define Recurring Journal

Navigation: Journals Define Recurring. Line:1 Recurring Journal Enter only Debit account for Skeleton recurring, do not enter amount Enter debit account & enter the formula for the amount for Formula recurring journal

Enter Expenses account (Debit Account) and the amount for Standard

22

R12 = GL THEORY
Line: 2

Enter the credit account We can enter 9999 lines in a recurring journal. In which 9998 lines are for debit lines and only one line is for credit line. We call this line as offset account line. Hence we have to enter line 2 as a offset line and key in the number 9999 in line 2. Do not enter amount for line 2. System will add all the debit lines amount and consider the credit amount as offset account. If you wish to enter more credit lines, we have to give negative sign for the lines, for example -9998, -9997 etc.

Step: 2 Generate the recurring journal = Click on Generate button Say Submit Schedule the journals for recurring. Enter parameters Run program. Step: 3 Ensure Concurrent program completed Normal View Request Step: 4 Query the recurring journal and post. Journal Enter.

With the above report system will generate un posted journals in GL., With the source: recurring. Post the journals after review. 23

R12 = GL THEORY
REVALUATION
Revaluation reflects the changes in the exchange rates. For example: Invoice Payment If paid on May 5th May 10th May 25th $1000 $1000 $1000 Rs 45 Rs 47 Rs 43 Rs 45000 Rs 47000 Rs 43000

In the above example gain or loss is Rs 2000 Setup Steps: 1. Define un realized gain or loss accounts 2. Define exchange rate type 3. Define daily rates for the date of journal entry (USD INR) 4. Define daily rates for the date of Payment (USD INR) 5. Enter foreign currency journal 6. Run revaluation Enter name and description for revaluation Currency Options: Choose single currency & USD Rate Options: Choose Daily Rates & Exchange rate type Choose Unrealized gain & loss accounts Choose revaluation ranges Say Revalue Submit request window will open System choose automatically program as Program Revalue balances

24

R12 = GL THEORY
Choose parameters: Ledger Revaluation batch Period Effective date Say OK Submit View request Ensure program completed normal 7. Query revalue journal and post it

Tax Journal
Steps: 1. Enable Journal Entry Tax at Ledger level under Journalling tab 2. Define input tax codes and assign GL account 3. Set up tax options: Allow tax code override 4. Enter and post journal

25

R12 = GL THEORY
Manual Encumbrance Journal
Encumbrance means is reserve the funds for future usage. We do not do this practice in real time. Navigation: Journal Encumbrance Category: Expenditure Source: Encumbrance Balance type: Encumbrance Type: Encumbrance

Approval is not applicable

TRANSLATION
Translation is used to convert the accounting balances from Functional Currency to Foreign currency at Balances level This activity is done at a particular period end This is an off line activity Translation is done at balances level We can report in number of currencies No limit We use 3 types of rates: 1. Period end rate: 2. Average rate: 3. Historical rate: Assets & Liabilities Expenses & Revenues Ownership

Translation is part of Consolidation We cannot run Translation for first period

26

R12 = GL THEORY
Account type Expenses Revenue Assets Liabilities Ownership / Equity Setup Steps: 1. Create Cumulative Translation Adjustment account 2. Define exchange rate type 3. Define daily rates 4. Assign rate type & CTA account to ledger 5. Run Translation 6. Run Trial balance Translation report Rate Period average rate Period average rate Period end rates Period end rates Historical rates

** Exchange rate type is used to build relationship between the two currencies There are various exchange rate types 1. Corporate 2. Marketing 3. User 4. Spot Corporate type is used for rates which are defined by the higher management in the organization. Market rate is at present what the rate in the market is User rate: At the time of transaction entry user can enter applicable exchange rates Spot rate is a kind of market rate 27

R12 = GL THEORY
MRC MULTI REPORTING CURRENCY
To convert the balances from functional currency to foreign currency at transaction level (at journal entry level) we use reporting currency. In reporting feature we will be having one primary ledger and unlimited reporting ledgers. Setup Steps: 1. Define rounding difference account 2. Assign rounding difference tracking asset at ledger level 3. Define exchange rate type 4. Define daily rates 5. Define reporting currency options at primary ledger level 6. Define reporting GL responsibility 7. Assign reporting ledger to responsibility 8. Assign responsibility to user 9. Open periods in reporting ledger 10. Create journal and post in primary ledger

28

R12 = GL THEORY
Difference of MRC & Translation
MRC Transaction level Up to 8 Currencies On line activity Daily Rates We can run at any point of time TRANSLATION Balance Level No limit of Currencies Off line activity Average, Period end & historical rates Part of consolidation We cannot run for first period

29

R12 = GL THEORY
Auto Post
We can post the journals automatically by specifying the some criteria in Auto post criteria set. Criteria could be: combinations of ledger or ledger set, journal source, journal category, balance type, and period. Once you define an Auto Post criteria set, run the Auto Post program to select and post any journal batches that meet the criteria defined by the criteria set. You can also schedule the Auto Post program to run at specific times and submission intervals. You can submit the Auto Post program or schedule Auto Post runs directly from the Auto Post Criteria Sets window. Alternatively, you can use the Submit Request window.

Steps: 1. Define auto post criteria Navigation: Set up Journal Auto Post 2. Enter Journal Navigation: Journal Enter Enter Journal lines Save journal Do not post Check to see Auto post program completed successfully

30

R12 = GL THEORY
Auto Reversal

Auto reverse is nothing but, reversing journal automatically based on the criteria that we specify. Criteria could be: Journal category Reversal Method Reversal period If you routinely generate and post large numbers of journal reversals as part of your month end closing and opening procedures, you can save time and reduce entry errors by using Automatic Journal Reversal to automatically generate and post your journal reversals. Prerequisites for Auto Reversal: The journal balance type is Actual. The journal category is enabled to be Auto reversed. The journal is posted but not yet reversed. The journal reversal period is open or future enterable. Note: Automatic Journal Reversal reverses posted journals of the balance type Actual. You cannot use this feature to automate budget or encumbrance journal reversals.

31

R12 = GL THEORY

Auto Reverse - Set up steps: 1. Define reversal criteria Navigation: Set up Journal Auto reverse Choose: Category Method: Switch Dr / Cr Reverse period Reversal date Enable check box: Auto reverse Auto post reverse 2. Enter one journal with above category 3. Perform inquiry on account balances

4. Run Program Automatic reversal Navigation: Reports Request Standard 5. Perform inquiry on account balances

32

R12 = GL THEORY
SEQUENTIAL NUMBERING
Sequential numbering is used to assign unique number to the various transactions. System will assign serial numbers to the data flows in to General Ledger through sub ledger accounts based on the category. The transactions are Journals, AP Invoices, AP payments, Bank accounts, AR invoices and AR receipts etc. Sequencing information is available for querying and display of journals. You can call either sequential numbering or Document category or voucher numbers.

SLA provides 2 different sequence mechanism for sub ledger journal entries: 1. Accounting Sequence 2. Reporting Sequence Accounting Sequence: The accounting sequence is assigned to sub ledger accounting journal entries at the time that the journal entry is completed. Reporting sequence: The reporting sequence is assigned to both sub ledger accounting journal entries & General Ledger journal entries, when the General Ledger period is closed. This sequence is used by most of the legal reports required in some countries, as the main sorting criteria to display the journal entries. 33

R12 = GL THEORY
Reporting sequence is optional These two sequences are not mutually exclusive, and, can coexist in the same journal entry

Setup Steps 1. Define Sequential numbering profile option at responsibility level Navigation: System administrator Profile System 2. Define sequential numbering Navigation: System administrator Application Sequence numbering Define 3. Assign sequential number to the Category Navigation: System administrator Application Sequential numbering Assign

4. Create Journal Navigation: General ledger Journals Enter

** Automatic: System generate number after saving journal ** Manual: user has to enter number manually ** Gapless: No gap for the journals from different sources

34

R12 = GL THEORY
JOURNAL APPROVAL
Journal approval is an additional security feature to post the journals using this feature we can define approval limits for employees. Setup steps: 1. Enable journal approval at ledger level Navigation: General ledger Setup Financials Accounting setup manager Accounting setup 2. Enable journal approval at journal source Navigation: General ledger Setup Journal Sources 3. Define approval limits for employees Navigation: General Ledger Setup Employees Limits 4. Create user and assign employee to user Navigation: System Administrator Security User Define 5. Log in with employee user and create journals Navigation: General ledger Journals Enter

** in 11i: we have to assign profile option to GL Responsibility, that is, Journals: Allow preparer approval through system administrator Navigation: Profile System

35

R12 = GL THEORY
Approver Methods: 1. Go up management chain 2. Go Direct 3. One Stop then go direct

Difference between Security rules and cross validation rules

Security Rules (SR) SR enabled at Responsibility level List of values are not displayed for those combination where SR was enabled No error message will displayed in SR SR restrict permission for segment values Cross validation rules (CVR) CVR enabled at structure & chart of accounts level All list of values are displayed, but we will get error message for invalid code combination Error message will displayed in CVR CVR restrict user for invalid code combination

36

R12 = GL THEORY
SECURITY RULES
Security rules are used to restrict the user from entering segment values. It will work at responsibility level. Step: 1 Enable security at value set

Navigation: Set up Financials Flex fields Validation Sets Step: 2 Enable security at segment level

Navigation: Set up Financials Flex fields Key Segments Step: 3 Define Security rules

Navigation: Setup Financials Flex Fields Key Security Define Step: 4 Assign Security rules to the responsibility

Navigation: Setup Financials Flex Fields Key Security Assign Step: 5 Navigation: try to create Journal with 03 Company segment value Journal Entry

Say New Journal You will see only 2 segments, restricted company value is not visible If you try to enter restricted segment value, system will through error message

37

R12 = GL THEORY
CROSS VALIDATION RULES
It is used to restrict the end users from entering code combinations. It will work at structure level. Step: 1 Enable cross validation rules at structure

Navigation: Setup Financials Flex Fields Key Segments Step: 2 Define cross validation rules

Navigation: Setup Financials Flex Fields Key Rules Step: 3 Navigation: Enter journals using restricted code combination Journal Enter

System will through error message after you select the restricted code combination

38

R12 = GL THEORY
DEFINITION ACCESS SET
Definition access set will work at Responsibility level. DAS is used to provide access in 3 ways to the users for various definitions: 1. Use 2. View 3. Modify

Step: 1 Navigation:

Define Definition Access Set

Set up Financials Definition Access sets Define Step: 2 Navigation: Setup Financials Definition Access Sets Assign Step: 3 Navigation: Setup Financials Calendars Accounting Query your accounting calendar Select check box Enable Security Say Assign Access Choose Definition Access set Enable Security for accounting Calendar Assign Definition Access set to Responsibility

39

R12 = GL THEORY
ALIASES
Aliases are used to define the short name for account code combinations Step: 1 Define Aliases

Navigation: Setup Financials Flex Fields Key Aliases F11 Query your structure Shorthand: Select check box: Enabled Enter Max alias size Prompt: Short Name Go to Alias, Descriptions tab Enter alias name Choose values for Template Go to Aliases, Effective tab Enter from date Save Step: 2 Compile Accounting Structure

Navigation: Set up Financials Flex Fields Key Values Step: 3 Navigation: Enter Journal to check the Alias result Journals Enter

40

R12 = GL THEORY
LEDGER SET
Ledger set is used to access multiple Ledgers information from single responsibility. Using Ledger set we can group only Ledgers which are having same Chart of Accounts and same Calendars. Step: 1 Define ledger sets Navigation: Setup Financials Ledger Sets Enter Name and Short name Choose: Chart of Accounts Calendar Default Ledger All other ledgers you want to group Save. Step: 2 Assign Ledger set to responsibility Navigation: System Administrator Profile System Choose responsibility Profile Option: GL: Data Access Set Choose Ledger set If you assign both the profile options: GL Ledger Name & GL Data Access Set System will choose first Data Access set

41

R12 = GL THEORY
DESCRIPTIVE FLEX FIELD
If you want to have additional field in standard forms, DFF is used to capture the additional information of organization. Step: 1 Navigation: Setup Financials Flex Fields Descriptive Segments Query Application: General Ledger Title: Enter Journals: Journals Prompt: Context or Enter DFF Enable check boxes: Required & Displayed Click on Segments Enter the fields Save Close this window Freeze Flex Field definition Say Compile Enable and Define DFF fields

Step: 2

Enter Journal to view DFF

Navigation: Journal Enter New Journal Enter Journal as usual Click on DFF check box to enter DFF fields 42

R12 = GL THEORY
CONSOLIDATION
Consolidation is used to consolidate the multiple subsidiary ledger information into parent ledger. In other words, Consolidation is used for preparation of financial reports of parent and subsidiary companies. If both companies are using different currencies, translation is required. After translation data will be remain in the same books. By using consolidation concept, we transfer data from subsidiary to Parent SOB. For Translation of fixed assets balances, revaluation is required. The difference will go to unrealized gain / loss account. The difference of 3 rates will go to CTA Account (Cumulative Translation adjustment account) There are 2 types of consolidation methods: 1. Balance 2. Transaction ** Transaction method is used when we have same currency for parent and subsidiary ledger ** Balancing method is used when we have different currency in parent and subsidiary ledger

43

R12 = GL THEORY
Consolidation Rules: 2 1. Segment Rules 2. Account Rules Segment Rules again classified in to 3 1. Use roll up rule from 2. Use copy value from 3. Assign single value ** If codes are different: ** If codes are same: ** If structure is different Co2 Co1 Use roll up rule from Do1 Do1 Use copy value from Assign single value

Setup Steps: 1. Define Parent Ledger and required Subsidiary Ledgers 2. Define Parent and Subsidiary GL Responsibilities 3. Assign Ledgers to Responsibilities 4. Assign responsibilities to users 5. Define Exchange Rate type 6. Define Daily Rates 7. Complete currency translation options 8. Define consolidation mapping in the Parent ledger 9. Open periods in parent and subsidiary ledgers 10. 11. 12. 13. 14. Define Consolidation set Enter and post journals in each subsidiary ledger Run translation Transfer data in to Parent ledger Query the Consolidation journals in the Parent Ledger and post 44

R12 = GL THEORY
Step: 7 Complete Currency translation options in parent and subsidiary ledger Navigation: Setup Financials ASM Accounting Setup Query your Ledger Go Update Accounting options Click on Update of Ledger set up step Go to Ledger Options tab Under Currency Translation options Choose: Default period end rate type Default period average rate Cumulative Translation Adjustment Account Say Finish

Step: 8

Define consolidations mapping in the parent ledger

Navigation: General Ledger Consolidation Define Consolidation Name Consolidation Mapping Enter Description Consolidation Attributes: Choose Parent Ledger Choose Subsidiary Ledger Currency: INR 45

R12 = GL THEORY
Method: Balances Usage: Standard

Run Options: Select check boxes Run Journal Import Create Summary Journals Auto post

Click on Mapping Enter Mapping Name and Description Choose Target & Source Chart of Accounts Click on Segment Rules Choose Target Segment Values Choose Action: Copy value from Choose Source Segment values Save and close this window Choose mapping in Consolidation Definition window

Step: 10

Define Consolidation Set Consolidation Define Consolidation set

Navigation: General Ledger ** Consolidation set is used to group the consolidation mapping 46

R12 = GL THEORY
Enter Consolidation set name Choose Parent Ledger Method: Balances Choose Run options Chose Consolidation mapping Save

Step: 12

run the translation in each subsidiary ledger

Navigation: Subsidiary ledger Currency Translation Step: 13 Transfer data in the parent ledger

Navigation: Parent General Ledger Consolidation Transfer Data Set Choose Consolidation set Usage: Standard Balance Type: Actual Currency: INR Method: Balances

Subsidiary: Amount type: PTD Choose Period

47

R12 = GL THEORY
Click on Query consolidation system will automatically select consolidation mapping Say Transfer Ensure program completed normal

ROLL UP GROUP & SUMMARY ACCOUNTS

Step: 1 Create summary accounts at chart of account level Navigation: Setup Financials Flex fields Key Values Step: 2 Navigation: Setup Financials Flex fields Key Groups Step: 3 Navigation: Setup Financials Flex fields Key values Select parent Account Go to Value, Hierarchy, Qualifiers Group: Choose Roll up group Save Step: 4 Navigation: Create Summary Accounts Setup Accounts Summary Assign Roll up group to parent account at COA level Create Roll up group

48

R12 = GL THEORY
Name: Enter Name Choose Ledger Enter Template values: Company: D Department: D Account: Choose Roll up group Sub account: D Product: D Say OK Choose: Earliest period Save Status: Adding Go to View Request Ensure program completed normal Step: 5 Navigation: Step: 6 Pass a journal entry with these accounts and post it Journal Enter Inquiry of Account balances

Navigation: Inquiry Accounts Choose Summary Template Choose parent account Click on Show balances 49

R12 = GL THEORY
Average Balances

Average balances are in General used by banking sectors. Through this we will find out the account balances for working days only We have to setup working days and non working days through Transaction Calendar in general ledger. If you choose transaction calendar, system will not allow user to record any type of transaction on non working days, and we can see the balances on daily basis also. Steps: 1. Set up Transaction calendar 2. Create new set of books, assign this transaction calendar to new SOB 3. At SOB Enable average balances and assign Net income account (No, No, Revenue, No, No) 4. Create new responsibility for general ledger average balances 5. Assign profile option GL Ledger name to the GL responsibility 6. Assign this responsibility to user 7. Open periods in SOB 8. Enter journal to see whether non working days enabled or not 9. We can inquiry the balances by specific day wise (Only for Balance sheet items)

50

R12 = GL THEORY
Financial Statement Generator FSG

FSG is dynamic tool in General Ledger to build reports such as Balance Sheet and Income Statement. Through FSG we can build reports in simple manner without writing any codes. The report is consist of Rows and Columns, and is used Row set & Column set to define rows and columns. Steps: 1. Define row set Navigation: Reports Define Row set 2. Define Column set Navigation: Reports Define Column set 3. Define Report Navigation: Reports Define Report 4. Run Report Navigation: Reports Requests Financial

51

R12 = GL THEORY
General Ledger period Closing Procedures
1. Set the status of the first accounting period in the new fiscal year to Future Entry. Note: The first period of the new fiscal year should not be opened until all of the year end processing for the last period of the current year has completed. 2. Transfer data from all of your subledgers and feeder systems to the GL_INTERFACE table. 3. Run the Journal Import process to populate the GL_JE_BATCHES, GL_JE_HEADERS, and the GL_JE_LINES tables. This can be done automatically from the subledger systems, or manually from Oracle General Ledger. 4. Close the period for each subledger. This prevents future subledger transactions from being posted to General Ledger in the same period. 5. Review the imported journal entries in Oracle General Ledger. You can review them online or in reports. Reviewing journal entries before posting minimizes the number of corrections and changes that need to be made after posting. Below is a list of useful reports: Journal Batch Summary Report General Journal Report Journal Entry Report Journal Line Report Journal Source Report Journals by Document Number Report (when document sequencing is used) Unposted Journals Report. 6. Post the imported journal entries. You can also schedule Autopost to pick up and post journals transferred from subledgers on a regular basis. This reduces the volume of posting done at month end. 8. Revalue balances to update foreign currency journals to your functional currency equivalents. 9. Post all journal entries, including: manual and reversals. 10. Update any unpostable journal entries and then post them again. Common reasons for unpostable batches include: Control total violations 52

R12 = GL THEORY
Posting to unopened periods Unbalanced journal entries 11. Run General Ledger reports, such as the Trial Balance reports, Account Analysis reports, and Journal reports. 12. Create and post adjusting entries and accruals in the adjusting period. 13. Run Trial Balance reports and other General Ledger Reports in the adjusting period after adjustments are made. 14. Close the last period of the fiscal year using the Open and Close Periods window. 15. Open the first period of the new fiscal year to launch a concurrent process to update account balances. Opening the first period of a new year automatically closes your income statement and posts the difference to your retained earnings account specified in the Set of Books form. 16. Run FSG reports for the last period of the year.

53