Preparing for an Oracle R12 UpgradeMay 17th-20th, 2010Accounting Manager

Describe Accounting Manager Functionality in Release 12

Describe How Initial Implementation Steps have changed with this new functionality

Review changes in other setups that are related with this new functionality

Scope

Accounting Setup ManagerUse the Accounting Setup Manager to manage:

Legal entities

Ledgers

Accounting rules

Reporting currencies

Intercompany transactions

You can create an individual legal entity or a group of legal entities that behave as one, and assign the primary ledger to it. You can optionally assign additional ledgers to the legal entity. You select thecurrencies in which you want to account for the legal entity, the level of accounting detail, the accounting method you want to use for the entity, and the detail of your intercompany elimination system, and management.

Accounting Setup Process1. Create an accounting setup structure.2. Update accounting options.3. Complete the accounting setup.

Accounting Setup Prerequisites

•Complete General Ledger Setup Steps.

•Define Additional Subledger Accounting Methods

Accounting Setup Manager Pages

• Legal Entities Pages

• Accounting Setups Pages

• Accounting Options Pages

Accounting Setup PrerequisitesGeneral Ledger Setup Steps

1. Define Chart of Accounts2. Define the following accounts (Retained Earnings, Suspense, Cumulative Translation

Adjustment (CTA), Reserve for Encumbrance3. Define Cross Validation Rules (optional)4. Define Chart of Accounts Mapping (for consolidation purposes)5. Define Accounting Period Types6. Define Accounting Calendar7. Define or Enable Currency for the Ledger8. Define Conversion Rate and Types (optional)9. Define Additional Journal sources and Categories (optional)10. Define Journal Reversal Criteria (optional)11. More step are needed to complete General Ledger setup but from this point you can start

continue with the Accounting setups

Define Subledger Accounting methods in case you don’t want to use Standard Accrual or Standard Cash accounting method.

Subledger Accounting methods

The Subledger Accounting Options step will be displayed

Subledger Accounting Options allow you to define how to generate the accounting entries from subledger transactions

Accounting Setup Manager

Define an accounting setup using Accounting Setup Manager to perform the following tasks:

Link legal entities to ledgers

Setup reporting currencies

Define subledger Accounting options

Define intercompany accounts

Set intracompany balancing rules

If you need to represent primary ledger transactions in another accountingmethod, chart of accounts, calendar, currency, and/or ledger processing options,assign secondary ledgers to each accounting setup

Legal Entities Pages

Accounting Setup Manager Pages

Legal Entities Pages (Cont.)

The Legal Entities page allows to do the following:

• Create new legal entities and assign specific balancing segment values to legal entities to help identify legal entities during transaction processing and reporting.

• Query existing legal entities, view their attributes, and make updates to the legal entities.

• Update balancing segment values assigned to legal entities.

• Enter an end-date to deactivate a legal entity.

Accounting Setups Pages

Accounting Setup Manager Pages

Accounting Setups (Cont.)

Perform the following in the Accounting Setups page:

• Create new accounting setups.

• Query existing accounting setups (named after the primary ledger) by legal entity or ledger.

• Update the accounting options for an accounting setup to modify the related setup components.

• Query existing legal entities and view their attributes.

• Identify the associated primary ledger for any legal entity, ledger, operating unit, and reporting currency.

• View the status of accounting setups.

Accounting Options Pages

After creating an accounting setup structure, update the accounting options immediately after creating the structure or later.

Accounting Setup Manager Pages

Accounting Setup Manager Checklist

Define Legal Entities Optional

Create Accounting Setup StructureAssign Legal Entities.

Required

Define accounting representations.

Save accounting structure.

Complete ledger options. Required

Complete reporting currencies. Conditionally Required

Assign balancing segment values to legal entities. Optional

Assign balancing segment values to ledger. Optional

Define Subledger Accounting options.

Define operating units. Optional

Define intercompany accounts. Optional

Define intracompany balancing rules. Conditionally Required

Define Sequencing. Optional

Complete primary to secondary ledger mapping.

Complete the Accounting Setup Required

Perform additional General Ledger setup steps. Optional

Assign profile options to responsibilities. Required

Conditionally Required

Conditionally Required

Legal Entities

The Legal Entity pages of Accounting Setup Manager are the same as the Legal Entity pages in Legal Entity Configurator. The only difference is that you can assign balancing segment values to legal entities using Accounting Setup Manager

Legal Entities (Cont…)

Balancing Segment Considerations

Assign specific balancing segment values to each legal entity to help identify legal entities during transaction processing and reporting. (important for accounting setups that use the accounting setup where multiple legal entities share the same primary ledger)

When assigning a legal entity to an accounting setup, Accounting Setup Manager automatically assigns the correct value set associated with the legal entity's primary ledger and secondary ledger, if used.

Any balancing segment values assigned to a legal entity are automatically assigned tothe legal entity's ledger when completing the accounting setup.

Oracle subledgers, use only the valid balancing segment values that are assigned to the legal entity.

Designate the balancing segment of the chart of accounts as the legal entity or company segment. If there are multiple legal entities that use different charts of accounts, limit the number of value sets you define for the balancing segment to ease maintenance efforts. This allows you to share value sets across multiple charts of accounts and assign unique balancing segment values for each legal entity that is consistent across charts of accounts.

Accounting Setup StructuresCreating an Accounting Setup

Assigning Legal Entities

Defining Accounting Representations

Saving Accounting Structure

Assign legal entities if you are planning to use Oracle financial subledgers that require a legal entity context for transaction processing. Also, assign legal entities if you are planning to use legal entity specific features, such as intercompany accounting.

Specify the ledger attributes for the primary ledger. The primary ledger acts as the primary accounting representation. Optionally specify the ledger attributes for one or more secondary ledgers to represent primary ledger transactions in a different chart of accounts, calendar, currency, subledger accounting method, and/or ledger processing options.

To maintain additional currency representations of primary or secondary ledgers, assign reporting currencies to them.

Once you save the accounting setup structure, you cannot change the following:

Chart of accounts, accounting calendar, or currency of the primary ledger and secondary ledger

Accounting Options

The Accounting Options page is displayed in a checklist format to complete the relevant setup steps to make the accounting setup ready for entering transactions and journals.

Perform the following task from this page:

View legal entities and make changes

Update legal entities

Add legal entities

Move legal entities from one accounting setup and assign them to another setup

Assign unique balancing segment values to legal entities

Remove balancing segment values

End-date balancing segment values

Primary and Secondary ledger setup such as Reporting currencies, Ledger balancing segment assignment, accounting options, operating units and intercompany options are defined in this page

Ledgers

A ledger determines the chart of accounts, accounting calendar, currency, subledgeraccounting method, and ledger processing options for each company, legal entity, orgroup of companies and legal entities.

Each accounting setup requires a primary ledger that acts as the main record-keepingledger for none or one or more legal entities that use your main chart of accounts,accounting calendar, subledger accounting method, and currency to record and reporton all of your financial transactions.

To maintain an additional accounting representation, use secondary ledgers.

To maintain an additional currency representation, use reporting currencies.

Ledger OptionsPrerequisites

Assign one or more ledgers to an accounting setup

Define the following accounts:

1. Retained earnings account

2. Suspense account to enable suspense posting (Optional)

3. Cumulative Translation Adjustment account to translate balances

4. Rounding Differences account to use a specific account to track small currency differences during currency conversion (Recommended for Subledger Accounting)

5. Non-Postable Net Income account to use average balance processing (Required for Average Balances). This account captures the net activity of all revenue and expense accounts when calculating the average balance for retained earnings.

6. Reserve for Encumbrance account to use Encumbrance Accounting

7. Entered Currency Balancing Account to use Subledger Accounting to balance foreign currency subledgerjournals by the entered currency and balancing segment value (Recommended for Subledger Accounting)

8. Ledger Currency Balancing Account to use Subledger Accounting to balance subledger journals by the ledger currency and balancing segment value

Ledger Options

From this page you will enter all relevant fields which are described in the following slides

Ledger OptionsLedger Definition Page

Ledger short name

Main transaction currency for this ledger.

First period that can be opened for this ledger.

Number of future periods to allow for journal ewithin this ledger.

Subledger accounting method for this ledger; defiSubledger Accounting.

s differences from out-of-balance foreign currencyjournals in subledgers.

Payables uses this option for its Mass Additions Cfor determining expense account inform

Enables balancing of subledger journal entries by ledgercurrency and balancing segment value

Ledger OptionsLedger Options Page

Net balance of all income and expense accounts from the prior year are posted

against the retained earnings account when the first period of a fiscal year is opened in

General Ledger.

Allows suspense posting of out-of-balance journal entries.

Posts out-of-balance intracompany journals

Automatically reverses this ledger's journals based onthe Journal Reversal Criteria Set assigned.

The rate types specified for the ledger areused to assign default rate types for any balance levelreporting currencies assigned to this ledger. You canoverride the default rate types for each balance level

reporting currency.

The difference in revaluation adjustments between the ledger and its journal level reporting currencies are recorded to the cumulative translation adjustment account.

This account tracks rounding differences that occur during currency conversions.

Use General Ledger's Journal Approval feature for the ledger.

Used to translate actual account balances

This account is necessary to translate the ledger's currency balances into a balance level reporting currency. For journal level reporting currencies, this account is used when

revaluing foreign currency denominated balances.

Ledger OptionsAdvance Options Page

Allows you to reconcile transactions in accounts thatshould balance to zero, such as a suspense account, or a

Value Added Tax control account.

Allows encumbrance accounting for the ledger;required for budgetary control.

Allows you to require budget journals for all budgets. Ifusing budgetary control, General Ledger already

requires you to create budget journals for your fundingbudget. If you want to require budget journals for all

budgets, choose this option.

If you enter an out-of-balance encumbrance entry,General Ledger automatically posts the differenceagainst the account you specify here. If you havemultiple companies or balancing entities within a

ledger, General Ledger automatically creates a Reservefor Encumbrance account for each balancing entity.

Reporting CurrenciesReporting currencies can be maintained at three different currency conversion levels:

Subledger

Maintains a currency representation of your subledger journals, General Ledger journal entries, and balances.

Must define accounting rules to provide instructions on how to convert subledger data entered into the source ledger to one or more subledger level reporting currency.

Also define journal conversion rules to automatically replicate specific journals to one or more subledger level reporting currencies

Journal

Maintains General Ledger journal entries and balances in another currency representation.

Every time a journal is posted in the source ledger, the journal is automatically converted to the respective journal level reporting currency based on the journal conversion rules defined.

Balance

Maintains balances in another currency (translation).

Convert balances from the source ledger to the balance level reporting currency..

Reporting CurrenciesAssign Reporting Currency to Ledgers

Perform this change or adding in the Accounting Options page for either the ledger or the subledger

Translates actual account balances; defaults from the sourceledger; can be changed

Conversion level: Balance

Balance defaults to indicate that this is a balance levelreporting currency; cannot be changed

Translates actual account balances; defaults from the sourceledger; can be changed

Reporting CurrenciesAssign Reporting Currency to Ledgers

Conversion level: Journal

This account tracks rounding differences that occurduring currency conversions.

Controls the conversion rate type that should be used to convert transaction Currency amounts from the source ledger to this reporting currency.

ny days back in time the system shouldrate; enter a number from 1 to 999.

Indicates that this is a journal level or subledger level reporting currency

The first period that can be opened for this reportingcurrency; defaults from the source ledger

al Ledger's Journal Approval or this reporting currency.

The conversion rate type used to retrieve exchange rates for converting transactions from the source ledger to this reporting currency

Controls what the system should do if it cannot find aconversion rate as of the conversion date

Reporting CurrenciesAssign Reporting Currency to Ledgers

Conversion level: Journal (Continue…)

General Ledger Posting uses the journal source and category conversion rules todetermine the journals (based on journal source and category combinations) to

automatically convert to this reporting currency.

This means that if you use Mass Maintenance to move or merge balances between accounts in the source ledger, the same accounts are moved or merged in the reporting currency.

Controls the Created By user information that can beviewed for each journal using Help > Record History

Operating Units

You can assign operating units to the primary ledger to partition subledger transaction data when multiple operating units perform accounting in the context of one or more legal entities.

If using an accounting setup that has legal entities assigned, the Operating Units step will be displayed.

If you defined operating units in the Define Organization window in Oracle HRMS, then those operating units will be automatically assigned to the appropriate primary ledger in Accounting Setup Manager