What is General Ledger ?

General Ledger is one of the core modules in oracle apps. The

Oracle General Ledger is the central repository of accounting
information. The main purpose of a general ledger system is to
record financial activity of a company and to produce financial
and management reports to help people inside and outside the
organization make decisions.
Here are the major functions of General Ledger

General Ledger is a central repository of all your financial transactions.

All sub-ledger data (AR, AP, INV, WIP, etc.) eventually flows into General Ledger.

o
o

At the end of each month, quarter, year one has to close your current period and open the
next period on your transaction calendar.
Financial reporting occurs out of your General Ledger.

All financial statements are generated out of General Ledger.

Journal Import is a one stop interface for any data that comes into GL from external
sources (e.g: Sub Ledgers, external accounting systems, legacy data, etc.)
You can recognize revenue in several currencies in a single installation of General Ledger.

Intercompany Journal
This is a journal entry which has transactions for at least
two different companies (or balancing segment values).
Intercompany Journal Out of Balance
An out of balance intercompany journal is one which does not
have equal credit and debit totals for each group of lines by
company.
Balancing Segment
This is the accounting flexfield segment that has the balancing
segment
qualifier assigned to it. Typically the balancing segment stores
the company values. However, it could represent the cost
center, the department or some other values.
The terms balancing segment and company segment are
usually interchangeable.

It is mandatory that one segment of your accounting flexfield

be designated as the balancing segment.
Intercompany Segment
The intercompany segment is the accounting flexfield segment
that has
the intercompany segment qualifier assigned to it. This qualifier
is only
available in release 11i and is optional. This segment shares the
same
value set as the balancing segment.
Clearing Account
A clearing account is a temporary account that holds amounts
to be
transferred to another account.
Clearing Company
This is the company value used to clear payables or receivables
transactions.
General Ledger uses this company to balance intercompany
transactions.
Trading Partner
Trading partner is the company against which the line
transaction is made.
Transaction Types
Transactions types are the classifications for journal entries
based on
the number of companies involved in the credit and debit side
of the transaction.
The different transaction types are:
One to One: Two different companies in the journal. One
company
has the net debit balance and the other has a net credit
balance.
Many to One: Different companies have net debit balance and
one
company has net credit balance.

One to Many: One Company has net debit balance and more
than one
companies have net credit balance.
Many to Many: Two or more companies have net debit
balance and
two or more companies have net credit balance.

SUMMARY ACCOUNTS
A summary account is an account whose balance is the sum of
balances of multiple detail accounts. Summary accounts are
used to perform online summary inquiries, as well as speed the
processing of financial reports, Mass Allocations, and recurring
journal formulas. Summary Templates are used to create
summary accounts.
SUMMARY v/s PARENT ACCOUNT
Parent Account

Summary Account

No Inquiry

Online Inquiry

No Posting

Posting

used of reporting

used for reporting

Used for Mass Allocations

Used for Mass Allocations

Budgetary Control

STEPS TO CREATE SUMMARY ACCOUNTS

The process of creating summary accounts is completed in the
following steps:
Determine your summary account needs.
Plan the summary account structure to meet your needs.

Define your parent/child hierarchy.

Define Rollup groups.
Assign parents to Rollup groups.
Create your summary template.

Oracle General Ledger is one of the core product of EBS suite, and this is Integrated with almost every
segment within EBS.Here is a list of just some of the Financial ,manufacturing and Human Resource
Management products that integrate with General Ledger. Typically the integration of General ledger in
EBS can be best understood as:

The integration data information can be best understood as below:

Oracle Financial

Oracle Payables sends invoices, payments, realized gain and loss on foreign currency, and
invoice price variance to GL.

Oracle Receivables sends invoices, payments, adjustments, debit memos, credit memos,
cash, chargebacks, and realized gain and loss on foreign currency to GL.

Oracle Assets sends capital and construction in process asset additions, cost adjustments,
transfers, retirements, depreciation, and reclassifications to GL.

Oracle Purchasing sends accruals or receipts not invoiced, purchase orders, final closes, and
cancellations to GL.

Oracle Projects sends cost distribution of labor and non-labor costs, and project revenue to
GL.

Oracle Treasury sends revaluation and accrual entries to GL.

Oracle Property Manager sends revenues and expenses related to real estate to GL.

Oracle Lease Management sends accounting distributions related to leases, such as

bookings of contracts, accruals, asset dispositions, terminations, and adjustments for multiGAAP contracts to GL.

Oracle HRMS and Payroll

Oracle HR shares employee information with GL.

Oracle Payroll sends salary, deductions, and tax information to GL.

Oracle Manufacturing:
In terms of manufacturing this is Integrated as:

Oracle Inventory sends cycle counts, physical inventory adjustments, receiving transactions,
delivery transactions, intercompany transfers, sales order issues, internal requisitions, subinventory transfers, and Cost of Goods Sold (COGS) to GL.

Work In Process(WIP) sends material issues or backflush from WIP to GL, along with
completions, returns, resource and overhead transactions, and cost updates.

Oracle Labor Distribution normally sends salary costs to GL.

Other Products
Oracle GL not only integrated with Application product, it does have capability to integrate with other
products which is used for adhoc cum management Reporting, these tools are mostly.

1.

Business Intelligence/Analytic Solutions

2.

Enterprise Planning and Budgeting (EPB)

3.

Oracle Financial Services Applications (OFSA)

4.

Daily Business Intelligence (DBI)

5.

Activity-Based Management (OABM)

General Ledger's integration with Oracle Enterprise Planning and Budgeting (EPB) allows
us to easily identify, analyze, model, budget, forecast, and report on information stored in our

general ledger. Using Oracle GL to maintain and report on account balances throughout the
accounting period, and use Financial Analyzer to analyze financial data, such as actual and
budget balances, which is after closing the period. We can automatically transfer actual,
budget, or encumbrance data, as well as functional, statistical, and foreign entered data from
General Ledger to Financial Analyzer, which is on of requirement if company does have
different management reporting approach. With financial Analyzer, we can perform
sophisticated budgeting and modeling, make changes to budgets and write back budget data
to a new budget in GL or to several budget versions for comparative reporting. We would also
drill directly from EPB balances to balances and transactions in Oracle General Ledger. With
this extended functionality your EPB users with immediate and direct access to GL data
without having to run reports or account inquiries in GL, that makes process efficient without
any extra step.

Oracle Financial Services Applications (OFSA) is a product suite that helps financial
services institutions assess enterprise performance. This integration allows the transfer of
General Ledger balances to OFSA to reconcile OFSA instrument tables, calculate transfer
pricing of non-interest balance sheet items, or perform allocations. The results of OFSA
allocation and transfer pricing results can then be transferred back to GL for posting and
reporting.

The integration with Oracle Daily Business Intelligence (DBI) allows us to get a daily
snapshot of company's financial picture through its E-Business Suite Portals. This is achieved
by over 200 pre-inbuilt Portals provide every user in the enterprise with the right information
that they need, about every aspect of their business. This makes a centralized place to see the
information spans across multiple applications in real time basis.

The integration with Oracle Activity Based Management (OABM) allows you to perform
complex analysis on costs that are collected in General Ledger in a separate analysis
environmentapart from your GL data. OABM is optimized to support multi-layer complex
cost assignment rules, activity hierarchies, and complex product and service definitions in
terms of activities with complete activity definitions.

Functional need for GL

General Ledger is the heart of any accounting system. It is a central repository for all Subledger
activity, maintaining the highest summary level of financial information from transaction details
supplied by its subledgers. All events that have a financial or monetary impact are ultimately reflected
in the General Ledger.

It is a comprehensive financial management solution that enhances financial controls, data collection,
and financial reporting through out an enterprise.
What is the functional Need for General Ledger

Regulate the accounting calendar

Record business transactions

Record foreign currency business transactions

Correct erroneous transactions

Generate repeating transactions

Automate the posting of transactions

Integrate with feeder systems like Payroll, Purchasing if not using Oracle these products..

View economic position

View economic position in a foreign currency

Update value of foreign currency transactions

View aggregate economic position of two or more related companies

Major Functions & Features

Do you know what are the major features of general ledger. Here are some listed major functions and
features of Oracle GL Modules.

Define multiple calendars and accounting structures while dynamically creating new accounts
combinations based on user defined rules

Uses standard , reversing and recurring journals

Uses Mass Allocations to automate your cost and revenue allocations quickly and accurately

Uses the Financial Statement Generator (FSG) to create custom financial reports

Uses the GL Desktop Integrator to combine the power of Oracle GL with an Excel spreadsheet
to budget, report, analyze & enter accounting information.

Extensive foreign currency capability

o

Automate currency conversion, translation & revaluation in accordance with generally

accepted accounting principles

Query and report on all foreign currencies and translated balances using single or
multiple sets of books

Use multiple reporting currencies sets of books to manage routine reporting of foreign
currency transactions

Record and review accounting information

o

Import data from subsidiary ledgers or enter journals to record actual or budget
transactions directly into GL

Enter encumbrance journals to track encumbrances through the purchase approval

process and to control spending against budgeted amounts

Review account balances online or through standard reports

Manipulate accounting information

o

Correct actual, budget and encumbrance information

Revalue and translate balances denominated in foreign currencies

Consolidate balances from multiple sets of books

Analyze accounting information

o

Integrate GL with Financial Analyzer to simplify the budgeting and forecasting process
to efficiently answer ad hoc requests and to identify areas for profit improvement

RECURRING JOURNALS are the entries which are posted every

period like monthly rent, utility bills etc..
RECURRING JOURNALS 3 TYPES OF JOURNAL ENTRIES
Skeleton Journal Entries: Skeleton entries affect the same
accounts each period, but have different posting amounts. After
you generate skeleton journal entries, you can edit the un-

posted journal batch using the Enter Journals form and enter
the journal line amounts. Skeleton journal entries are useful
with statistical information whenever you want to record
journals for actual transactions based on statistical amounts,
such as headcount, units sold, inflation rates, or other growth
factors. For example, if you want to enter headcount for each
cost center every period, you can define a skeleton entry with
your headcount accounts. After you generate the skeleton
entries, enter the actual headcount amounts before posting the
batch.
Standard Recurring Journal Entries: Standard recurring
journal entries use the same accounts and amounts each
period.
Recurring Journal Formula Entries: Formula entries use
formulas to calculate journal amounts that vary from period to
period.
CREATING RECURRING JOURNAL FORMULA BATCHES
1. Navigate to the Define Recurring Journal Formula window.
2. Enter a Name and optional Description for the recurring
journal batch.
3. If you want to copy entries from an existing recurring journal
batch to your new batch, choose Auto Copy Batch.
4. Create recurring journal entries for the batch. If you copied
entries, modify them, if necessary.
5. Save your work.
6. Generate recurring journals.
7. Review and post your generated recurring journal batches
To enter a formula:
1. Enter a Step number to specify the order in which you want
to process the steps in your formula. Each formula can contain
an unlimited number of steps.

2. Enter a factor for the formula step. There are two types of
factors you can use:
Enter a fixed Amount.
Specify an Account to use a balance in the formula calculation.
You can use standard, endofday, or average balances in your
formula lines.
3. Specify the type of calculation you want to perform by
entering a mathematical Operator for the formula step. The
valid operators are based on Easy Calc a General Ledger
mathematical notation feature.

Lot many emails I was getting since in past few months , asking to share some more information for
R12 of General Ledger features, so thought to share in a post.
Here are some of the new feature of General Ledger in R12.
Accounting Setup Manager
The ledger is a basic concept in Release 12. The ledger replaces the 11i concept of a set of books. It
represents an accounting representation for one or more legal entities or for a business need such as
consolidation or management reporting. Companies can now clearly and efficiently model its legal
entities and their accounting representations in Release 12. This seems to be a major area in getting
success of the shared service center and single instance initiatives where many or all legal entities of
an enterprise are accounted for in a single instance, and data, setup, and processing must be
effectively secured but also possibly shared.
Now, legal Entities can be mapped to entire Ledgers or if you account for more than one legal entity
within a ledger, you can map a legal entity to balancing segments within a ledger.
While a set of books is defined by 3 Cs,
1.

chart of accounts

2.

functional currency

3.

accounting calendar,

The addition in this list the ledger is defined by a 4th C: the accounting method,

This 4th C allows you to assign and manage a specific accounting method for each ledger. Therefore,
when a legal entity is subject to multiple reporting requirements, separate ledgers can be used to
record the accounting information.
Accounting Setup Manager is a new feature that allows you to set up your common financial setup
components from a central location.
What is Accounting Setup Manager
Accounting Setup Manager is a new feature that streamlines the setup and implementation of Oracle
Financial Applications. The Accounting Setup Manager will facilitate the setup required for
simultaneous accounting for multiple reporting requirements.
With the Accounting Setup Manager, you can perform and maintain the following common setup
components from a central location:

Legal Entities

Ledgers, primary and secondary

Operating Units, which are assigned to primary ledgers

Reporting Currencies, which is an enhanced feature

Subledger Accounting Options. This is where you define the accounting methods for
each legal entity subledger transaction and associate them to the ledger where the
accounting will be stored.

Intercompany Accounts and Balancing Rules

Accounting and Reporting Sequencing

Both Intercompany and Sequencing

Will discuss some more granular details in some other post.

Subledger Accounting (SLA)
As discussed in couple of earlier post GL is integrated with SLA to enable a unified process to account
for subledger transactions and post data to GL, and to provide a consistent view when drilling down
from GL to subledger transactions. You can read here.

Enhanced Foreign Currency Processing by Reporting Made easy

GL has added new features and enhanced existing features to support foreign currency processing ,
they are mainly as:

In R12, MRC feature is enhanced with a feature call Reporting Currencies. That mean it will
now support multiple currency representations of data from any source, including external
systems, Oracle or non-Oracle subledgers, and Oracle General Ledger journals and balances.

The second one is in reporting to view balances view balances that were entered in your
ledger currency separate from those balances that were entered and converted to the ledger
currency.The change in R12 is that balances entered in the ledger currency are maintained
separately from balances converted to the ledger currency for use in Reporting and Analysis.

Heres an example. Assume we have a ledger and the ledger currency is USD.
I enter and post two journals; one in 1,000 US Dollars, and another in 500 British Pounds that gets
converted to 1200 US Dollars.
In Release 11i, I can review the 500 GBP and the 1200 USD that results from converting the 500 GBP,
and the total 2200 USD which is the USD balance in the Cash Account. The $2200 is the sum of the
$1000 entered in USD and the $1200 converted from the 500 British Pounds. However, I view that a
1000 USD were entered directly in USD.
In Release 12, I can view the 1000 USD by performing an account inquiry on the Cash account for
balances entered only in the ledger currency. The amounts entered in foreign currencies that were
converted to the ledger currency will not be included in the balance. Of course, if I want to retrieve all
balances in USD, both the entered as well and the converted, I can still do that in Release 12.

Creating foreign currency recurring journals

In Release 11i, you could define recurring journals using the functional currency or STAT currency.
Now in Release 12, you can create recurring journals using foreign currencies. This is particularly
useful if you need to create foreign currency journals that are recurring in nature. For example,
assume a subsidiary that uses a different currency from its parent borrows money from the parent.
The subsidiary can now generate a recurring entry to record monthly interest payable to the parent
company in the parents currency.
Data Access to Multiple Legal Entities and Ledgers
You no longer have to constantly switch responsibilities in order to access the data in a different
ledger. You can access multiple ledgers from a single responsibility as long as all ledgers share the
same chart of accounts and calendar.
Simultaneous Opening and Closing of Periods for Multiple Ledgers
You no longer have to open and close periods for each ledger separately. You can now open and close
periods across multiple ledgers simultaneously by submitting Open and Close Periods programs from
the Submit Request form.
Simultaneous Currency Translation of Multiple Ledgers
You can run the Translation program for multiple ledgers simultaneously, if you are managing multiple
ledgers.
Financial Reporting for Multiple Ledgers
Now with this feature you can run Financial Statement Generator (FSG) reports for multiple ledgers
simultaneously. This is useful if you manage multiple ledgers and want to run a balance sheet or
income statement report for all of your ledgers at the same time.
Cross-Ledger and Foreign Currency Allocations
You are able to allocate financial data from one or more ledgers to a different target ledger. This
enables you to perform cross-ledger allocations, which is useful for purposes such as allocating
corporate or regional expenses to local subsidiaries when each entity has its own ledger
Streamlined Automatic Posting
You can now share AutoPost Criteria sets across multiple ledgers that share the same chart of
accounts and calendar and use the AutoPost Criteria sets to post journals across multiple ledgers
simultaneously.
Streamlined AutoReversal Criteria Setup Integrated Web-based
AutoReversal Criteria Sets can also be shared across ledgers to reverse journals across multiple
ledgers. This is enhanced by integrated Web-based Spreadsheet Interface.
Journal Copy

Now we can now copy entire journal batches. You can copy journal batches with any status. The
system will create a new journal batch containing the same journal entries.You may also change the
batch name, period, and/or effective date while copying the journal batch. After copying the journal
batch, you may modify the unposted journals in the same manner as any manually created journals.
Streamlined Consolidation Mappings
You are able to define Chart of Accounts Mappings (formerly known as Consolidation Mappings)
between two charts of accounts. Therefore, if you have multiple Consolidation Definitions for parent
and subsidiary ledgers that share the same chart of accounts pair, and their mapping rules are the
same, you only have to define a single Chart of Accounts Mapping.
The enhancement in R12 allows you to define mappings between charts of accounts instead of
between sets of books, so that they can be shared across multiple Consolidation Definitions.
Therefore, if you have multiple Consolidation Definitions for parent and subsidiary ledgers that share
the same chart of accounts pair, and their mapping rules are the same, you only have to define a
single Chart of Accounts Mapping.
You can also secure access to chart of accounts mappings using definition access set security. This
allows you to secure which users can view, modify, and/or use chart of account mappings in
consolidation definitions.
Replacement for Disabled Accounts
Normally when an account is disabled, you can prevent transactions that include the account from
erroring during journal import by defining a replacement account for the disabled account. Journal
import replaces the disabled account with the replacement account and continue the journal import
process if the replacement account is valid. This improves processing efficiency by preventing the
journal import process from erroring and enabling the successful creation of the journal with minimal
user intervention when an account has been disabled.
Data Access Security for Legal Entities and Ledgers
In R12, since you can access multiple legal entities and ledgers when you log into Oracle General
Ledger using a single responsibility, Oracle General Ledger provides you with flexible ways to secure
your data by legal entity, ledger, or even balancing segment values or management segment values.
You are able to control whether a user can only view data, or whether they can also enter and modify
data for a legal entity, ledger, balancing segment value or management segment value.
Management Reporting and Security
This can be best understood as:You can designate any segment (except the natural account segment)
of your chart of accounts to be your management segment and use Oracle GL security model to
secure the management segment for reporting and entry of management adjustments.
Prevent Reversal of Journals with Frozen Sources
You can no longer reverse journals from frozen sources defined in the journal sources form.

If the journal is created from a frozen source, the journal cannot be modified even if the source is
subsequently unfrozen in the future.
This provides streamlined data reconciliation with subsystems. Not being able to reverse journals that
originated in subledgers will ensure that the account balances will always tie out with General Ledger.
If you need to reverse a subledger journal, then you should do so in Subledger Accounting or the
subledger application.
Prevent Reversal of Unposted Journals
You also can no longer reverse unposted journals. This ensures data integrity and better auditability.
In the past when we allowed you to reverse unposted journals, there was a risk that the original
journal could be deleted so you could end up reversing something that didn't exist. Now, all reversals
can be tied back to the original posted journal.
Integrated Web-based Spreadsheet Interface
Through the integration with Web ADI, users can now leverage spreadsheet functionality in Oracle
General Ledger via a web-based interface. The spreadsheet interface can be conveniently launched
from a GL responsibility.
Using the Journal Wizard, we can leverage spreadsheet functionality to create actual, budget, or
encumbrance journals. You can take advantage of spreadsheet data entry shortcuts such as copying
and pasting or dragging and dropping ranges of cells, or even using formulas to calculate journal line
amounts. You can then upload your journals to Oracle General Ledger. Before uploading, you can save
and distribute your journal worksheets for approval.
We can also import data from text files into spreadsheets, where it can be further modified before
uploading to Oracle. This functionality is useful when migrating data from legacy systems, or from any
source that can produce delimited files.
Using the Budget Wizard, you can download budget amounts to a spreadsheet, modify the amounts,
and then upload them back. You can also choose to download the actual amounts to compare it with
the budget amount. Budget Wizard also allows you to plot graphs and do a graphical comparison on
the amounts. Budget Wizard also provides budget notes. You can add descriptions to accounts and
amounts in your budget and explain your budget within the budget worksheet, avoiding the clutter of
external documentation.
Control Accounts
You are able to control data entry to an account by ensuring it only contains data from a specified
journal source and to prevent users from entering data for the account either in other journal sources
or manually within general ledger.
Security for Definitions
You can secure your setup and definitions by granting specific privileges to users to view, modify,
and/or execute a definition. This enables you to control which of your users can view a definition, but
not modify or execute it, or execute a definition without modifying it, or vice versa.
Following is a list of definitions that have this security available for:

1.

MassAllocation and MassBudget Formulas

2.

FSG Reports and Components

3.

Accounting Calendars

4.

Transaction Calendars

5.

AutoPost Criteria Sets

6.

AuoReversal Criteria Sets

7.

Budget Organizations

8.

Chart of Accounts Mappings

9.

Consolidation Definitions

10. Consolidation Sets

11. Elimination Sets
12. Ledger Sets
13. Recurring Journals and Budget Formulas
14. Rate Types
15. Revaluations
Sequence for Reporting
Maintaining two sequnces have been introduced, accounting and reporting sequencing.
Read my earlier post for more details:
Journal Line Reconciliation
Journal Line Reconciliation enables you to reconcile journal lines that should net to zero, such as
suspense accounts, or payroll and tax payable accounts for countries, such as Norway, Germany, or
France.
In R12, weve made many improvements to intercompany accounting. R11is Global
Intercompany System (GIS) has been replaced with an exciting new product called Advanced Global
Intercompany System (AGIS). We also extended intercompany balancing support to include
encumbrance journals.
Enhanced Intercompany

For more deatils , read this

Some of the GL Standard Reports converted into XML Publisher
Oracle General Ledger's Account Analysis, General Journals and Trial Balance standard reports are now
integrated with XML Publisher.
Hope these feature greatly enhanced in GL operation.Any comments:)