whitepaper asm

Accounting Setup Manager Concepts

An Oracle White PaperOctober 2007


Table of Contents

Introduction..................................................................31. What is the Accounting Setup Manager?..................32. Accounting Setup Manager Concepts.......................3

Ledgers....................................................................4Conversion Levels for Secondary Ledgers:..................5Conversion Levels for Reporting Currency Ledgers:....6

3. ASM Implementation Considerations........................9Legal Entities.............................................................9Subledger Accounting Methods....................................10Setup Steps..............................................................11Completing an Accounting Setup..................................12

4. Technical Overview.................................................13ASM Main Underlying Tables.......................................13

Conclusion...................................................................15

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Introduction

Oracle Accounting Setup Manager (ASM) is the new configuration tool for accounting setups in Oracle General Ledger in the Release 12 of Oracle E-Business suite.

This paper provides information to help familiarize the users of Oracle E-Business Suite with the new setup tool for the definition of ledgers and accounting setupsas well as with some implementation considerations regarding the assignment of legal entities to ledgers and the use of subledger accounting methods. It will also describe the underlying tables for the Accounting Setup Manager user interface.

1. What is the Accounting Setup Manager?

It is one of the main features of the Ledger Architecture introduced in Release 12, which replaces the Set of Books form using a web-based interface.

Accounting Setup Manager or ASM is the central place where all the accounting setup is defined and maintained for:

– Legal Entities

– Ledgers

– Reporting Currencies

– Balancing Segment Value assignment

– Sequencing (Accounting and Reporting)

-- Other accounting options like retained earnings account, suspense account, currency conversion type, etc.

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2. Accounting Setup Manager Concepts

In release 12 the following concepts are introduced:

Ledgers: sets of books are now called ledgers.

Reporting Currencies: this is the new implementation of reporting sets of books.

Inter and Intra Company Balancing: inter – across multiple legal entities and intra – within a legal entity. A new product called Advanced Global Intercompany System (AGIS) now handles intercompany transactions but the Intracompany setup and the definition of intercompany accounts can be done via ASM.

Accounting and Reporting Sequencing: additional ways to assign document numbers to journal entries to satisfy legal requirements as gapless journal numbers. There are 2 types of sequencing that can be setup via ASM: Accounting sequencing and Reporting Sequencing.

Subledger Accounting Method: determines the accounting standards to be followed according to industry or local country laws. The default Accounting Method is Accrual accounting.

Legal Entities: This is not new in Release 12 but that has had some changes. The modeling of legal entities can be done as one legal entity per ledger or multiple legal entities in one ledger depending on business needs. It is not mandatory to have a legal entity. Legal entities are mandatory if Oracle Subledgers require a legal environment or if AGIS is going to be used.

Ledgers

Ledgers are defined by 4Cs as opposed to 3 in previous releases:

Chart of Accounts

Calendar

Currency

AcCounting Method

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The 4Cs must be defined prior to starting an accounting setup. ASM does not provide access to the forms to perform that setup.

The setup for the first 3Cs is still done in General Ledger.

The setup for the Accounting Method, if one different than the default is to be used, is done via the Accounting Methods Builder.

Please review the Oracle Subledger Accounting Implementation Guide for more information.

There are 3 types of ledgers: Primary and Secondary ledgers and reporting currency ledgers.

Primary Ledger or PL:

It is the main ledger and has the most detail of information.

It can have more than one secondary ledger assigned.

Secondary Ledger or SL:

It is optional and differs in one or more of the 4Cs from the PL.

It provides an additional accounting representation of the PL to comply with legal requirements.

The SL can only be assigned to one PL.

Reporting Currency or RC:

Used when the only element that differs from the PL is the Currency.

It is stored in the tables as a ledger but does not need to be setup as a ledger via ASM.

Primary and secondary ledgers can have RCs assigned.

If a RC has not been assigned to a PL/SL, when Translation is run in a ledger the reporting currency is automatically added to the ledger setup.

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The secondary and reporting currency ledgers store additional accounting representations of the information present in the primary ledger. There are different levels of detail in which this information is stored, which are called Conversion levels.

Conversion Levels for Secondary Ledgers:

Secondary ledgers have the following four conversion levels:

Subledger Journals level: This level maintains subledger journals, general ledger journal entries, and balances in the additional accounting representation. SLA creates the information directly into the SL for sources/categories that use SLA. For other sources/categories that do not use SLA, the GL Posting program creates the information in the SL.

Journal level: This level maintains primary ledger journal entries and balances in an additional accounting representation. Every time a journal is posted in the Primary ledger, it gets created in the Secondary Ledger. Posting in the Secondary ledger happens in a separate step. It can be determined which journal sources/categories will be replicated when posting takes place. This is done in ASM in the Journal Conversion Rules.

Balances level: This level maintains primary ledger balances in another accounting representation. It uses the Consolidation program to transfer balances from the PL to the SL.

Adjustment only level: This type of ledger only provides an incomplete accounting representation holding only adjustments, which can be manual GL adjustment entries, or automated adjustments from SLA. The chart of accounts, accounting calendar, and currency must be the same as the primary ledger.

Note: Journals can be entered directly into any type of secondary ledger.

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Conversion Levels for Reporting Currency Ledgers:

Reporting currencies have the following three conversion levels:

Subledger level: Use SLA and the GL Posting programs. This level is equivalent to full MRC. A subledger level RC can only be assigned to primary ledgers.

Journal level: The GL journals only are replicated via the Posting program. The journal created for the RC is created within the same batch of the primary ledger journal batch and is automatically posted. This level is the equivalent of thin MRC.

Balances level: Use the GL Translation program to maintain balances in the reporting currency.

Note: Journals can be entered directly into the subledger and journal level reporting currencies.

Following is a graphical representation of the conversion levels discussed above for secondary and reporting currency ledgers:

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3. ASM Implementation Considerations

Legal Entities

Legal entities are used to provide a legal environment for Oracle financial subledgers or transactions that require a legal entity context.

The general rule is to have a primary ledger per legal entity.

If legal entities differ in any of the 4Cs or require different ledger processing options like: average daily balances, journal approval, or sequencing a different primary ledger is required. Legal requirements will also drive the decision of how many legal entities per primary ledger should be assigned.

Assigning balancing segment values to legal entities is strongly recommended to make easier the identification of transactions and for reporting purposes. Assignment of balancing segment

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values to legal entities is required for Intercompany accounting.

Subledger Accounting Methods

The subledger accounting method is required if using Oracle Subledger Accounting.

A subledger level secondary ledger requires a subledger accounting method for both the primary ledger and the secondary ledgers.

The accounting method can be changed at any time. It will only affect new journals.

Additional accounting methods may be defined. This is done in Subledger Accounting.

There is optional information needed when an accounting method is selected in ASM, for instance: Entered Currency Balancing Account, Balance Subledger Entries by Ledger Currency. The screen shot belows shows the fields under the Subledger Accounting section.

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Setup Steps

The accounting setup manager allows creating an accounting setup including the tasks below. The items in bold are required:

1. Create/assign a legal entity if required.

2. Assign a ledger name, a chart of accounts, accounting calendar-period type, currency and accounting method.

3. Complete ledger options: retained earnings account, first ever open period, subledger accounting options, suspense account, rounding difference account, enable intracompany, journal approval, journal tax, rate type, cumulative translation adjustment account, enable journal reconciliation, budgetary control.

4. Define and assign operating units to the primary ledger.

5. Complete reporting currencies.

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6. Define intercompany accounts.

7. Define intracompany balancing rules.

8. Define sequencing options.

9. Specify the ledger attributes for one or more secondary ledgers.

10.Assign balancing segment values to legal entities.

11.Assign balancing segment values to ledgers.

12.Complete accounting setup.

The navigation steps to access the ASM in General Ledger are:

Setup : Financials : Accounting Setup Manager: Accounting Setups

Completing an Accounting Setup

An accounting setup needs to be complete before it can be used.

When clicking on the ‘Complete’ button in ASM, a message appears to confirm whether the setup should be saved. If the response is ‘Yes’, the General Ledger Accounting Setup Program is launched automatically. This is a new program in Release 12, which is a flattening program introduced to pre-calculate data that can be used to speed up queries and data processing.

The General Ledger Accounting Setup program performs the necessary validations to make the setup components of an accounting setup ready for transaction processing and journal entry.

The following message appears in ASM when the program in launched:

Confirmation JavaScript enabled browser required. You have just completed the accounting setup: <primary ledger name example: CN1 PL (Corp) (USD)>. The General Ledger Accounting Setup Program has been submitted. Please review concurrent request id, <request id>. Make sure this request completes successfully before you enter transactions.

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Upon completion, some components cannot be deleted: legal entities, balancing segment values, and reporting currencies.

This program creates the following Data Access Sets:

a. One for the Primary Ledger and the Reporting Currencies.

b. One for the Reporting Currencies

c. One for each Secondary ledger

d. One for a ledger set

The General Ledger Accounting Setup program is also launched upon:

- The creation of a ledger set

- The creation of a data access set

Once the setup program has completed successfully it is necessary to define the following profile options:

‘GL: Data Access Set’ replaces the ‘GL: Set of Books’ name profile option of previous releases.

This profile option can be assigned to a single ledger or a ledger set. This profile option is used by GL responsibilities.

The Oracle subledgers use the profile option ‘GL Ledger Name’ to determine the ledger a subledger responsibility will have access to.

The ‘SLA: Enable Data Access Security in Subledgers’ profile option determines whether the General Ledger Data Access Set security mechanism is applied for a subledger application responsibility when viewing, reporting, or creating subledger journal entries associated with a given ledger.

4. Technical Overview

There are several new tables with ASM. Following is a description of the tables and what they store.

ASM Main Underlying Tables

• GL_LEDGERS: Replaces GL_SETS_OF_BOOKS. The field set_of_books_id is now called ledger_id. A backward compatible view called Gl_Set_Of_Books was created.

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•GL_LEDGERS_CONFIGURATIONS: stores every accounting setup.

•GL_LEDGER_CONFIG_DETAILS: Keeps track of various configuration steps and statuses.

•GL_LEDGER_RELATIONSHIPS: stores all ledger relationships such as PL to RC and PL to SL.

•GL_JE_INCLUSION_RULES: stores Source-category conversion rules.

•GL_LE_VALUE_SETS and GL_LEGAL_ENTITIES_BSVS: store Balancing segment value (BSV) assignments to legal entities.

•GL_LEDGER_NORM_SEG_VALS: stores BSV assignments to ledgers. Every BSV or balancing segment value assigned to the legal entity is also assigned to the ledger. If no values are assigned to the legal entity, then all values are valid for the legal entity.

Each event could result in multiple tables getting updated. E.g. If you add a new ledger to a ledger set, then in addition to the ledger set tables, the data access set tables that store data to access the ledger set would also get updated.

Following is a graphical representation of the tables used in ASM:

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Other tables:

GL_ACCESS_SET_ASSIGNMENTS and GL_ACCESS_SET_LEDGERS store flattened information to improve security checks on data access sets that contain privileges for ledger sets or parent segment values.

GL_LEDGER_SET_ASSIGNMENTS stores flattened information to speed up queries on ledger sets that contain other ledger sets.

GL_LEDGER_SEGMENT_VALUES stores information on balancing segment value assignments to ledgers. If a parent segment value is assigned, it will be expanded and stored as detail segment values.

GL_SEG_VAL_HIERARCHIES stores parent and child segment value mappings based on the segment value hierarchy. Programs like MassAllocation and FSG use this data.

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Conclusion

This document covered the main concepts of Accounting Setup Manager, some implementation considerations and the underlying tables for this accounting setup interface.

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[Month] 2006

Author: [OPTIONAL]

Contributing Authors: [OPTIONAL]

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