Professional Documents
Culture Documents
• Legal Entity
• Ledger Sets
• Accounting Engine(SLA)
• Transaction Based Taxes(EBTAX)
• Intercompany Accounting (AGIS)
• Multi-Organization Access Control(MOAC)
Relevance of LEGAL ENTITY
Organization Modeling
… Organization Modeling
Business
GRE/LE
Group
Inventory
Org
… Organization Modeling
Reporting
SOB BSV
Entity
GDFs
Belgium VAT
GRE/LE
Reporters
System
Options
Public Company
Legal Authorities (ultimate parent)
Countries, States, Local,
Agencies, Taxation,
Registrars, Regulators...
Subsidiary Subsidiary
Regulates Public
Company Company
Complies Company
(regional parent) (business parent)
Legal Entities
Registered Companies, Subsidiary Subsidiary Subsidiary
Company Company Company
Funds, Partnerships…
Inc. LLC. Ltd. SA. GmBH. Etc.
“exist in the outside world”
Subsidiary Subsidiary
Company Company
Managed & analyzed by
• Parent companies (LEs) “own or control” subsidiaries
Management Orgs
(LEs)
Divisions, LOBS, Plants,
Cost Centers, Whatever = • LEs create commercial transactions
“Decision Making Tags”
Legal Entity – The Reality
What LE Means ? What R12 tried to address ?
11i Link
Bank Account Legal Entity Operating Unit
Not in R12
Inventory Org
Business
Group
Ledger
… Organization Modeling
LEA in R12
11i Link
Bank Legal Operating
Account Entity Unit
Not in R12
requirements
Business
Group
Ledger
LE Relationship with Accounting Structure and OU
• Accounting Structure
– In GL, LE is mapped to Ledger and BSV
• Operating Unit
– No Direct Relationship between LE and OU
– Relationship is derived from OU assigned to Ledger and LE
mapped to Ledger
LE Relationship with Accounting Structure and OU
• Operating Unit
– No Direct Relationship Accounting
between LE and OU
– Relationship is derived from Transactions Ledger
(SOB)
BSV
Operating
Unit
LE Design - Models
• 1:Many
– LE are mapped to the Balancing Segment Value (BSV, aka Company
code) within a Ledger, so multiple LE are accounted for in a ledger.
– An OU will have one Ledger assigned so transactions for many LE are
processed and accounted in a single OU
• 1: 1: 1
– A single LE is mapped to a Ledger
– An OU will have one Ledger assigned
– Therefore an OU only has one LE (that means it is easy to derive the LE
given the OU)
What Model Should I use ?
• That Depends on where the LE is registered
• The 1:M model is recommended and preferred in the
US, the 1:1:1 model is recommended for most non
US regions.
How to Set Up Legal Entity ?
Legal Entity Configurator
Establishment
– “Building block” of a Legal Entity.
– 100% owned and controlled by the Legal Entity.
– Required for registrations within local level Jurisdictions.
Legal Authority
– Legal body in charge of enforcing legislation, collecting fees/taxes and making
financial appropriations.
… Key Concepts
Jurisdiction
– Is a formulation of a legislative category and territory to which legal rules are
grounded.
Legal Associations
– Centralized repository and a common mechanism for maintaining associations
between business entities (BSVs, OUs, etc) and legal constructs (legal entities,
establishments).
Default Legal Context
– One of the Legal Entities sharing the Ledger will be stored on the Operating Unit
(OU) when the OU is created. This LE will provide any downstream process with
a DLC, which will act as a proxy for the owning LE.
Legal Entity Stamping
– Stamping is the identification and recording of the first party legal entity for the
given transaction. The first party legal entity is the legal entity that owns the
transaction.
Set Key Profile Options
• Default Country
– This profile option determines the default value for the
Territory in the Create Legal Entity page
This will be the default Territory in the Create Legal Entity page. For
Country Name example, United States.
Set Key Profile Options
Activity Classification
Legal Entity Setup Process
Step 1: Enter Legal Information
Automatically
generated LE Identifier
and Org Number
Registration Number is
the SIREN and EIN/TIN
Numbers
Legal Entity Setup Process
Step 2: Enter Detail Main Information
Legal Entity Setup Process
Step 2: Enter Detail Main Information
Ends a Legal
Entity
eTax Attributes
Legal Entity Setup Process
Step 3: Enter Legal Entity Registrations
Jurisdiction and
Legal Authority
Functions such as
income tax declaration
Legal Entity Setup Process
Step 3: Enter Legal Entity Registrations
Identifying
Flag
Legal Entity Setup Process
Step 4: Enter Contact Information
Legal Entity Setup Process
Step 5: Add/Review Intercompany Exceptions
The History subtab displays any changes that have been made to the Legal
Entity’s Registration.
Legal Entity Setup Process
Step 6: Review
Main
Establishment
Flag
Affects of LE in R12
LE and TCA
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