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Chart of Account Fusion
Chart of Account Fusion
Fusion Financials
In this post, I will show you how to create Chart of Accounts in Oracle Fusion Financials with details
screenshots.
Chart of Accounts
The chart of accounts is the underlying structure for organizing financial information and reporting.
An entity records transactions with a set of codes representing balances by type, expenses by
function, and other divisional or organizational codes that are important to its business.
The chart of accounts facilitates aggregating data from different operations, from within an operation,
and from different business flows, thus enabling the organization to report using consistent
definitions to their stakeholders in compliance with legislative and corporate reporting standards and
aiding in management decisions.
Chart of Accounts
The chart of accounts defines the number and attributes of various segments, including:
Order of segments
Width of segments
Prompts
Segment labels, such as balancing, natural account, and cost center.
Segments
A chart of accounts segment is a component of the account combination. Each segment has a value
set attached to it to provide formatting and validation of the set of values used with that segment.
The combination of segments creates the account combination used for recording and reporting
financial transactions. Examples of segments that may be found in a chart of accounts are company,
cost center, department, division, region, account, product, program, and location.
Value Sets and Values
The value sets define the attributes and values associated with a segment of the chart of accounts.
You can think of a value set as a container for your values.
Segment Labels
Segment labels identify certain segments in your chart of accounts and assign special functionality
to those segments. Here are the segment labels that are available to use with the chart of accounts.
Balancing: Ensures that all journals balance for each balancing segment value or combination of
multiple balancing segment values to use in trial balance reporting. The three balancing segment
labels are: primary, second, and third balancing. The primary balancing segment label is required.
Cost Center: Facilitates grouping of natural accounts by functional cost types, accommodating
tracking of specific business expenses across natural accounts. As cost centers combine expenses
and headcount data into costs, they are useful for detailed analysis and reporting. Cost centers are
optional, but required if you are accounting for depreciation, additions, and other transactions in
Oracle Fusion Assets, and for storing expense approval limits in Oracle Fusion Expense
Management.
Natural Account: Determines the account type (asset, liability, expense, revenue, or equity) and
other information specific to the segment value. The natural account segment label is required.
Management: Optionally, denotes the segment that has management responsibility, such as the
department, cost center, or line of business. Also can be attached to the same segment as one of
the balancing segments to make legal entity reporting more granular.
Intercompany: Optionally, assigns the segment to be used in intercompany balancing functionality.
Note: All segments have a segment qualifier that enables posting for each value. The predefined
setting is Yes to post.
Chart of Accounts Model
The chart of accounts structure provides the general outline of the chart of accounts and determines
the number of segments, the type, the length, and the label (qualifier) of each segment. This forms
the foundation of the chart of accounts definition object.
For each chart of accounts structure, it is possible to associate one or more chart of accounts
structure instances. Chart of accounts structure instances under the same structure share a
common configuration with the same segments, in the same order, and the same characteristics.
Using one chart of accounts structure with multiple instances simplifies your accounting and
reporting.
At the chart of accounts structure instance level, each segment is associated with a value set that
conforms to the characteristic of that segment. For example, you assign a value set with the same
segment type and length to each segment. You are using hierarchies with your chart of accounts
segments. Each structure instance segment is assigned a tree code to indicate the source of the
hierarchy information for the associated value set. The same value set can be used multiple times
within the same or across different chart of accounts instances within the same structure or in
different structures. This functionality reduces your segment value creation and maintenance across
your charts of accounts.
The collective assignment of value sets to each of the segments forms one chart of accounts
instance. At the chart of accounts structure instance level, you can select to enable dynamic
insertion. Dynamic insertion allows the creation of account code combinations automatically the first
time your users enter that new account combination. The alternative is to create them manually. By
deciding to enable dynamic insertion, you save data entry time and prevent delays caused by the
manual creation of new code combinations. Well defined cross validation rules help prevent the
creation of inappropriate account code combinations.
Perform deployment after a new chart of accounts structure and structure instances are defined or
any of their modifiable attributes are updated. Deployment validates and regenerates the necessary
objects to enable your charts of accounts and chart of accounts structure instances.
In Oracle Fusion General Ledger, the chart of accounts model is framed around the concept of a
chart of accounts structure, under which one or more chart of accounts structure instances can be
created. A chart of accounts structure defines the key attributes for your chart of accounts, such as
the number of segments, the segment sequences, the segment names, segment prompts, segment
labels, for example natural account and primary balancing, and default value sets.
The chart of accounts instance is exposed in the user interfaces and processes. By default, a chart
of accounts instance inherits all the attributes of the chart of accounts structure, meaning that all
instances of the same structure share a common shape and have the same segments in the same
order. However, at the chart of accounts instance level, you can override the default value set
assignments for your segments and assign a unique account hierarchy that determines the parent
and child relationships between the value set values. At the chart of accounts instance level,
determine if allow dynamic insertion is enabled to generate new account combinations dynamically
instead of creating them manually.
Below table shows, the information you need to create New Natural Account:
Step-1
Create a new value 101001 for the value set code for accounts.
Navigation: Setup and Maintenance > Implementation Projects > Manage Chart of Accounts Value
Set Values > Go to task
Here search out for the value set corresponding to accounts à in our example “Corporate
Accounts”
Then select the row corresponding to the value set code “Corporate Account” and click “Manage
Values” to create a new account value 101001.
Click Search to display all the values that are contained in the value set code
Now click Create (+) and enter the details of the account to be created.
Save, Save and Close and the account has been created.
Navigation: Setup and Maintenance > Implementation Project and Search for Manage Chart of
Accounts Structure Instance > Go to task
OK and Done
Step- 2
Assign the account to the hierarchy
Navigation: Setup and Maintenance > Implementation Projects > Search for Manage Account
Hierarchies > Go to task
Click on the relevant hierarchy (in the example All Corporate Accounts – V1)
Next
Expand the relevant node to add the newly created account (in the example Assets > Cash and
Short-Term Investment)
Click Add (+) and select the account from the list (from section Available Nodes) and move to
section Selected Nodes
OK
The account has been added to the hierarchy.
Submit
OK
Select the hierarchy and from Actions select Audit
OK and Done.
Select the hierarchy and from Actions select Flatten > Column Flattening
OK
Go to Publish Account Hierarchies to publish the new hierarchy.
Select Chart of Accounts (in our example US Chart of Accounts) and click Search
Select the hierarchy (in our example All Corporate Accounts V1) and click Publish
OK
Note: From Schedule Processes users can view the status reports:
Note: The newly created account can be used across enterprises which share the CoA. In the below
examples two journals have been posted on company code 101 and company code 102 and using
the newly created account.
Note: Additionally, cross validation rules could be defined. Use cross-validation rules to determine
valid account combinations that are created dynamically as your users enter transactions or journal
entries. Once enabled, a cross-validation rule determines whether a selected value for a particular
segment of the account combination can be combined with specific values in the other segments to
form a new account combination.
A cross-validation rule is defined in terms of a condition filter and a validation filter.
The condition filter describes the event under which the rule is evaluated. If the event specified in the
condition filter is not applicable, then the rule is not evaluated even if it is enabled.
When the event specified in the condition filter is applicable, the validation filter condition must be
satisfied before the account combination can be created. The rule is evaluated using the following
logic: If condition is satisfied, then perform specified validations.
Navigation: Setup and Maintenance > Implementation Project > Search for Manage Cross-
Validation Rules > Go to task
Additionally, users can define aliases for accounts to speed entry of journal entries.
Navigation: Setup and Maintenance > Implementation Project > Search for Manage Shorthand
Aliases > go to task
Select the Chart of Accounts (in our example US Chart of Accounts) > Search to view the aliases
already defined in the application.
Click Create (+) in order to create a new alias (in our example for account 101001) and enter the
details as below.