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

1
 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. Balancing Segment FFQ

2. Cost Center Segment FFQ
3. Natural Accounts Segment FFQ
4. Inter Company Segment FFQ
5. Secondary Tracking Segment FFQ
6. 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

2
 R12 = GL THEORY

Assignment of FFQ to Segments

• Company Balancing Segment FFQ

Inter company Segment FFQ

• Department Cost Center Segment

• Accounts 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 C’s

4 C’s
• 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.

5
 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 6. Table

time

7. Time 7. Translatable
Independent

8. Translatable
Dependent

6
 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.

7
 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 Entry Posting
1. Never opened X X
2. Open √ √
3. Closed X X
4. Future √ X
5. Permanently Closed X X

8
 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)

9
 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 wouldn’t 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

5. Define Budget organization:

15
 R12 = GL THEORY
✓ 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.

Amount Types: 4

16
 R12 = GL THEORY
1. PTD: Period to date: One month
2. QTD: Quarter to date: 3 months
3. YTD: Year to date: 1 year
4. PJTD: Project to date: Depends on project beginning date

Budget Rules: 8

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

Mass Allocation

Mass allocation means:

17
 R12 = GL THEORY
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 2. Incremental 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

Mass allocation formula:

Formula Amount Account Currency

18
 R12 = GL THEORY
A 100000 - -
B - C-L-C-C STAT
C - C-S-C-C STAT
T - C-L-C-C INR
O - C-C-C-C 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 Create cost pool journal and post.

Nav: Journal  Enter
Step: 4 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

Types of Journals

1. Functional Currency Journal

19
 R12 = GL THEORY
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. Budget Journal
11. Batch Journal
12. Manual Encumbrance Journal

Suspense Journal

20
 R12 = GL THEORY
• 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.

Recurring Journal

21
 R12 = GL THEORY
• 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
✓ Enter Expenses account (Debit Account) and the amount for Standard
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

• Line: 2

22
 R12 = GL THEORY
✓ 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.

REVALUATION

23
 R12 = GL THEORY
Revaluation reflects the changes in the exchange rates.
For example:
Invoice May 5th $1000 Rs 45 Rs 45000
Payment May 10th $1000 Rs 47 Rs 47000
If paid on May 25th $1000 Rs 43 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

Manual Encumbrance Journal

25
 R12 = GL THEORY

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: Assets & Liabilities
2. Average rate: Expenses & Revenues
3. Historical rate: Ownership
➢ Translation is part of “Consolidation”
➢ We cannot run Translation for first period

Account type Rate

26
 R12 = GL THEORY
Expenses Period average rate
Revenue Period average rate
Assets Period end rates
Liabilities Period end rates
Ownership / Equity Historical rates

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

** 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

MRC – MULTI REPORTING CURRENCY

27
 R12 = GL THEORY
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

Difference of MRC & Translation

28
 R12 = GL THEORY

MRC TRANSLATION

Transaction level Balance Level

Up to 8 Currencies No limit of Currencies
On line activity Off line activity
Daily Rates Average, Period end & historical rates
Part of consolidation
We can run at any point of time We cannot run for first period

Auto Post

29
 R12 = GL THEORY
• 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

Auto Reversal

30
 R12 = GL THEORY
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.

Auto Reverse - Set up steps:

31
 R12 = GL THEORY
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

SEQUENTIAL NUMBERING
✓ Sequential numbering is used to assign unique number to the various
transactions.

32
 R12 = GL THEORY
✓ 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.
Reporting sequence is optional

These two sequences are not mutually exclusive, and, can coexist in
the same journal entry

33
 R12 = GL THEORY

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

JOURNAL APPROVAL

Journal approval is an additional security feature to post the journals using

this feature we can define approval limits for employees.

34
 R12 = GL THEORY

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

Approver Methods:

1. Go up management chain
2. Go Direct
3. One Stop then go direct

35
 R12 = GL THEORY

Difference between Security rules and cross

validation rules

Security Rules (SR) Cross validation rules (CVR)

SR enabled at Responsibility level CVR enabled at structure & chart of

accounts level
List of values are not displayed for All list of values are displayed, but
those combination where SR was we will get error message for invalid
enabled code combination
No error message will displayed in SR Error message will displayed in CVR
SR restrict permission for segment CVR restrict user for invalid code
values combination

SECURITY RULES
Security rules are used to restrict the user from entering segment values.
It will work at responsibility level.

36
 R12 = GL THEORY
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 try to create Journal with 03 Company segment value

Navigation: 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

CROSS VALIDATION RULES

It is used to restrict the end users from entering code combinations.
It will work at structure level.

37
 R12 = GL THEORY

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 Enter journals using restricted code combination

Navigation: Journal  Enter

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

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:
38
 R12 = GL THEORY
1. Use
2. View
3. Modify

Step: 1 Define Definition Access Set

Navigation:
Set up  Financials  Definition Access sets  Define

Step: 2 Assign Definition Access set to Responsibility

Navigation:
Setup  Financials  Definition Access Sets  Assign

Step: 3 Enable Security for accounting Calendar

Navigation:
Setup  Financials  Calendars  Accounting

Query your accounting calendar

Select check box “Enable Security”
Say “Assign Access”
Choose Definition Access set

ALIASES
Aliases are used to define the short name for account code combinations

Step: 1 Define Aliases

Navigation:

39
 R12 = GL THEORY
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 Enter Journal to check the Alias result

Navigation: Journals  Enter

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

40
 R12 = GL THEORY
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

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 Enable and Define DFF fields

41
 R12 = GL THEORY
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”

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

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.

42
 R12 = GL THEORY

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

Consolidation Rules: 2

1. Segment Rules
2. Account Rules

Segment Rules again classified in to 3

1. Use roll up rule from

43
 R12 = GL THEORY
2. Use copy value from
3. Assign single value

** If codes are different: Co2  Co1 Use roll up rule from

** If codes are same: Do1  Do1 Use copy value from
** If structure is different 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. Define Consolidation set
11. Enter and post journals in each subsidiary ledger
12. Run translation
13. Transfer data in to Parent ledger
14. Query the Consolidation journals in the Parent Ledger and post

Step: 7

Complete Currency translation options in parent and subsidiary ledger

Navigation: Setup  Financials  ASM  Accounting Setup

Query your Ledger

Go

44
 R12 = GL THEORY
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
✓ Method: Balances
✓ Usage: Standard

Run Options:
Select check boxes
✓ Run Journal Import

45
 R12 = GL THEORY
✓ 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

Navigation: General Ledger
Consolidation  Define  Consolidation set
** Consolidation set is used to group the consolidation mapping
Enter Consolidation set name
Choose Parent Ledger
Method: Balances
Choose Run options
Chose Consolidation mapping
Save

46
 R12 = GL THEORY

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
Click on “Query consolidation” system will automatically select consolidation
mapping
Say “Transfer”
Ensure program completed normal

ROLL UP GROUP & SUMMARY ACCOUNTS

47
 R12 = GL THEORY

Step: 1 Create summary accounts at chart of account level

Navigation: Setup  Financials  Flex fields  Key  Values

Step: 2 Create Roll up group

Navigation:
Setup  Financials  Flex fields  Key  Groups

Step: 3 Assign Roll up group to parent account at COA level

Navigation:
Setup  Financials  Flex fields  Key  values

✓ Select “parent Account”

✓ Go to “Value, Hierarchy, Qualifiers”
✓ Group: Choose Roll up group
Save

Step: 4 Create Summary Accounts

Navigation: Setup  Accounts  Summary

✓ Name: Enter Name

✓ Choose Ledger

Enter Template values:

✓ Company: D
✓ Department: D
✓ Account: Choose Roll up group

48
 R12 = GL THEORY
✓ Sub account: D
✓ Product: D

Say OK

Choose: Earliest period

Save
Status: Adding

Go to View  Request
Ensure program completed normal

Step: 5 Pass a journal entry with these accounts and post it

Navigation: Journal  Enter

Step: 6 Inquiry of Account balances

Navigation: Inquiry  Accounts

✓ Choose Summary Template

✓ Choose parent account
Click on “Show balances”
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.

49
 R12 = GL THEORY
➢ 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)

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.

50
 R12 = GL THEORY
➢ 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

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.

51
 R12 = GL THEORY
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
• 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.

52
 R12 = GL THEORY
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