Rectification of Misclassification (Value Field)

Presented by – Sourabh Vijayvargeeya

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Misclassification- A value that contains a incorrect qualifier

details in its definition.

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Why do misclassified accounts exist in Oracle ?

A. When account value was added in value field form, an incorrect

qualifier was chosen.

B. After the code combination was created with particular account

type, natural account was changed to another type of account

using value field form.

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At which stage we can find that an account is misclassified?

A) Entry Time

B) Account Inquiry

C) Summary Accounts

D) Via Reports (Trial Balance, FSG Reports)

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Entry Time- 5

Here We can observe that System allow

us to do entry with misclassified account

i.e. Cash Account with account type

“Expenses” (5101)

Account Inquiry- 6

Again In account inquiry form we are

able to see the correct balance for

cash account. (Refer example in notes)

Summary Account - 7

We also can see the correct balance of

cash account in summary template as

well. (Refer Previous Example)

Reports – 1. Trial Balance 8

Trial balance is showing same balance

as Summary Template. (Refer Previous Example)

Reports – 2. FSG Reports 9

What if we take Different Behavior account type i.e. Assets

to Liability or Revenue to Expenses

A. Oracle doesn’t make any difference between liability and

assets at the time of transaction recording, Hence it will

show the right amount in the account irrespective of

account type in account qualifier (Value field form).

B. In oracle some field have validation rule i.e. in that

particular field if we are putting a account then its account

type must be of that type as it have in validation rule. (E.g.

account selection at the time of purchasing.)

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What if we take Different Behavior account type i.e. Assets to

Liability or Revenue to Expenses11

So What is the first sign that one account is Misclassified?

When opening a new fiscal year if the retained earnings account does not reflectthe correct figures, there is a strong possibility one or more accounts could bemisclassified.

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Here we can observe that Cash account isn’t

have any closing balance and Retained

earning is also not showing correct figure.

Hence these type of error indicates that there

might be a misclassified account.

How can we check Misclassified Value

– 1. Chart of Account- Segment Value Listing

Navigation – View>Request>Submit new Request > Chart of

Account- Segment Value Listing

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In this report it’s clearly visible that a customer

account type is liability that supposed to be

assets, So we can say that this account was

misclassified.

How can we check Misclassified Value

– 1. By using Diagnostic Test

Navigation - Responsibilities > System Administrator > Diagnostics >

Diagnostic Test

Form Navigation – Select application(General Ledger) > Accounts >

mis-classified>execute.

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Result By Diagnostic Test (Misclassified Req.) 15

In diagnostic test report we can

see misclassified account detail

as well as misclassified balances.

How to Correct Misclassified Account

By Correction In Segment qualifier Account Type & Run the Program - Inherit Segment Value Attributes ? we can’t update the earlier record by this request in oracle, for updating the code

combination of mis-classified account in Gl_Account we have to run the database script using SQL table.

Reason –Why we can’t update the attribute by this request- This is to avoid the problems that would be caused If the Inheritance program was run

against an Account that had been wrong in the previous year. The segment value attributes which can be propagated to the related account code combinations are: enabled/disabled flag, effective dates, allow posting and allow budgeting.

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GL_Account code combination 17

Steps to correct balances for a misclassified

account: Reopen the last period of your prior fiscal year, if it is closed.

Create a journal entry that brings the misclassified account balance to zero for the last day of thelast period of your prior fiscal year. Use a temporary account such as Suspense for the offsettingamount.

Post the journal entry on the last day of the last period of your prior fiscal year.

Verify that the misclassified account balance is zero by reviewing account balances online or inreports.

Correct the account type of the misclassified account by changing the segment value qualifiers.General Ledger prevents you from changing the account type unless you first unfreeze all accountstructures that reference your account segment using the Key Flexfield Segments window.

Ask your System Administrator to correct the account type of all accounts referencing themisclassified account by updating the ACCOUNT_TYPE column in the GL_CODE_COMBINATIONStable using SQL*Plus.

Restore the misclassified account balance by reversing the journal entry you posted in Step 3above. Reverse the journal entry into the last day of the same period that it was originally posted

Review the corrected account balances online or in reports.

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After Rectification Result 19

So we can see that after

completing the all rectification

steps we are able to see correct

balance in next year reports

After Rectification Result (Gl_Code) 20

In same way GL code

combination account type has

also changed.

Thank You

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