Professional Documents
Culture Documents
GL Theory
GL Theory
GL Theory
1
R12 = GL THEORY
• General Ledger:
• Accounting KFF
• Reporting Attribute KFF – For reporting purpose.
• GL Ledger KFF – It is a mirror image of Accounting KFF. It is only
for internal purpose. It is used exclusively for certain GL features
such as Mass Allocations, Recurring Journals and FSG Reports.
• Receivables:
• Sales Tax Location Flex Field
• Territory Flex Field
• Fixed Assets:
• Category KFF
• Asset Location KFF
• Asset key KFF
2
R12 = GL THEORY
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).
3
R12 = GL THEORY
But we cannot assign Management segment FFQ for the segment for
which already Intercompany, Balancing and Natural accounts FFQ are
assigned.
Compile Structure:
4 C’s
• Chart of Accounts (Structure, Segments & Segment values)
• Currency
• Calendar
• Accounting Convention Method (Accrual / Cash)
4
R12 = GL THEORY
• 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.
5
R12 = GL THEORY
4. Number 4. Pair
6. Standard 6. Table
date
time
7. Time 7. Translatable
Independent
8. Translatable
Dependent
Currency:
6
R12 = GL THEORY
Calendar:
Accounting Calendar: Calendar & Fiscal Calendar
Transaction Calendar
Period Type
Calendar Status:
1. Open
2. Closed
7
R12 = GL THEORY
3. Permanently Closed
4. Future Entry
5. Never Opened
• Year Types
1. Calendar
2. Fiscal
8
R12 = GL THEORY
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
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.
9
R12 = GL THEORY
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.
Journal Source
10
R12 = GL THEORY
• 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.
• 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
11
R12 = GL THEORY
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
Enter Journals
12
R12 = GL THEORY
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.
13
R12 = GL THEORY
• 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 à 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.
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)
14
R12 = GL THEORY
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
15
R12 = GL THEORY
Balance types: 3
1. Budget
2. Actual
3. Encumbrance
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.
Amount Types: 4
Budget Rules: 8
1. Divide evenly
16
R12 = GL THEORY
Mass Allocation
Formula: T = A x B/C
A = Cost pool Amount
B = Usage factor
17
R12 = GL THEORY
C = Total Usage
T = Target Account
O = Off set account
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
18
R12 = GL THEORY
R 12 Steps:
Step: 1 Create Usage factor account and Cost pool account
Nav: Setup à Financialsà Flex fields à key à Values
Types of Journals
19
R12 = GL THEORY
Suspense Journal
20
R12 = GL THEORY
Recurring Journal
21
R12 = GL THEORY
• 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
• 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.
22
R12 = GL THEORY
• 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 à Request
• Step: 4
Query the recurring journal and post. Journal à Enter.
With the above report system will generate un posted journals in GL.,
With the source: recurring.
Post the journals after review.
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
23
R12 = GL THEORY
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”
Choose parameters:
Ledger
Revaluation batch
Period
Effective date
Say OK
Submit
View request
Ensure program completed normal
24
R12 = GL THEORY
Tax Journal
Steps:
Category: Expenditure
Source: Encumbrance
Balance type: Encumbrance
Type: Encumbrance
25
R12 = GL THEORY
TRANSLATION
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
26
R12 = GL THEORY
5. Run Translation
6. Run Trial balance Translation report
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
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
27
R12 = GL THEORY
MRC TRANSLATION
28
R12 = GL THEORY
Auto Post
29
R12 = GL THEORY
• 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
Auto Reversal
30
R12 = GL THEORY
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.
Choose:
Category
Method: Switch Dr / Cr
Reverse period
Reversal date
31
R12 = GL THEORY
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.
32
R12 = GL THEORY
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.
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
33
R12 = GL THEORY
4. Create Journal
Navigation: General ledger
Journals Enter
JOURNAL APPROVAL
Setup steps:
34
R12 = GL THEORY
Approver Methods:
1. Go up management chain
2. Go Direct
3. One Stop then go direct
35
R12 = GL THEORY
SECURITY RULES
Security rules are used to restrict the user from entering segment values.
It will work at responsibility level.
Navigation:
Set up Financials Flex fields Validation Sets
Navigation:
Setup Financials Flex Fields Key Security Define
36
R12 = GL THEORY
Navigation:
Setup Financials Flex Fields Key Security Assign
If you try to enter restricted segment value, system will through error
message
Navigation:
Setup Financials Flex Fields Key Segments
Navigation:
Setup Financials Flex Fields Key Rules
37
R12 = GL THEORY
System will through error message after you select the restricted code
combination
DAS is used to provide access in 3 ways to the users for various definitions:
1. Use
2. View
3. Modify
Navigation:
Set up Financials Definition Access sets Define
38
R12 = GL THEORY
Navigation:
Setup Financials Definition Access Sets Assign
Navigation:
Setup Financials Calendars Accounting
ALIASES
Aliases are used to define the short name for account code combinations
Navigation:
Setup Financials Flex Fields Key Aliases
F11
Query your structure
Shorthand:
Select check box: Enabled
Enter Max alias size
Prompt: Short Name
39
R12 = GL THEORY
Save
Navigation:
Set up Financials Flex Fields Key Values
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.
Save.
Choose responsibility
40
R12 = GL THEORY
If you assign both the profile options: GL Ledger Name & GL Data Access Set
System will choose first Data Access set
Navigation:
Setup Financials Flex Fields Descriptive Segments
Click on Segments
Enter the fields
Save
41
R12 = GL THEORY
New Journal
Enter Journal as usual
Click on DFF check box to enter DFF fields
CONSOLIDATION
Consolidation is used to consolidate the multiple subsidiary ledger
information into parent ledger.
42
R12 = GL THEORY
1. Balance
2. Transaction
** Transaction method is used when we have same currency for parent and
subsidiary ledger
Consolidation Rules: 2
1. Segment Rules
2. Account Rules
Setup Steps:
Step: 7
Say Finish
44
R12 = GL THEORY
Consolidation Attributes:
Choose Parent Ledger
Choose Subsidiary Ledger
Currency: INR
Method: Balances
Usage: Standard
Run Options:
Select check boxes
Run Journal Import
Create Summary Journals
Auto post
Click on “Mapping”
45
R12 = GL THEORY
46
R12 = GL THEORY
Usage: Standard
Balance Type: Actual
Currency: INR
Method: Balances
Subsidiary:
Amount type: PTD
Choose Period
Click on “Query consolidation” system will automatically select consolidation
mapping
Say “Transfer”
Ensure program completed normal
47
R12 = GL THEORY
Say OK
Save
Status: Adding
Go to View Request
Ensure program completed normal
48
R12 = GL THEORY
Steps:
49
R12 = GL THEORY
Steps:
3. Define Report
Navigation: Reports Define Report
50
R12 = GL THEORY
4. Run Report
Navigation: Reports Requests Financial
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.
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.
51
R12 = GL THEORY
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.
10. Update any unpostable journal entries and then post them again.
Common reasons for unpostable batches include:
• Control total violations
• 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.
52