6. gl theory

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R12 = GL THEORY 1 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

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R12 = GL THEORY

1

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

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FLEX FIELDS IN GENERAL LEDGER:

1. Key Flex Fields 2. Descriptive Flex Fields

Key Flex Fields:

• General Ledger: • Accounting KFF • Reporting Attribute KFF

• GL Ledger KFF

• 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

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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.

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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

• Accounting Convention Method (Accrual / Cash)

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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.

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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

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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.

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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

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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)

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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.

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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

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• 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.

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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.

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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.

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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

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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.

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Amount Types: 4

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

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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 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

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Mass allocation formula:

Formula Amount Account Currency

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

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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. Budget Journal

11. Batch Journal

12. Manual Encumbrance Journal

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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.

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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

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

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• 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.

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REVALUATION

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”

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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

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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: Assets & Liabilities

2. Average rate: Expenses & Revenues

3. Historical rate: Ownership

Translation is part of “Consolidation”

We cannot run Translation for first period

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Account type Rate

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

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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

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Difference of MRC & Translation

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

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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

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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.

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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

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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.

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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

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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

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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) Cross validation rules (CVR)

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

accounts level List of values are not displayed for those combination where SR was enabled

All list of values are displayed, but we will get error message for invalid code combination

No error message will displayed in SR Error message will displayed in CVR SR restrict permission for segment values

CVR restrict user for invalid code combination

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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 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

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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 Enter journals using restricted code combination

Navigation: Journal Enter

System will through error message after you select the restricted code

combination

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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 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

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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 Enter Journal to check the Alias result

Navigation: Journals Enter

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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

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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

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

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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

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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: 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

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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

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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

Navigation: General Ledger

Consolidation Define Consolidation set

** Consolidation set is used to group the consolidation mapping

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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

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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 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

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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 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”

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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)

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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

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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

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• 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.