1. Copyright © 2007, Oracle. All rights reserved. Using Accounting Setup Manager R12 General Ledger Management Fundamentals

2. Copyright © 2007, Oracle. All rights reserved. Objectives After completing this lesson, you should be able to describe the following: Create Accounting Setups Create Accounting Setup Structures Complete Accounting Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options

3. Copyright © 2007, Oracle. All rights reserved. Objectives After completing this lesson, you should be able to describe the following: Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Complete Accounting Setup

4. Copyright © 2007, Oracle. All rights reserved. Creating Accounting Setups Create Accounting Structure Complete Accounting OptionsComplete Accounting Options (continued) Assign legal entitiesComplete ledger options.Define and assign operating units to the primary ledger. Specify ledger attributes for primary ledger Complete reporting currencies. Define intracompany balancing rules. Specify the ledger attributes for one or more secondary ledgers Assign balancing segment values to legal entities. Define sequencing options. Assign reporting currencies Assign balancing segment values to ledgers. Complete secondary ledger setup steps. Define subledger accounting options. Complete accounting setup.

5. Copyright © 2007, Oracle. All rights reserved. Accounting Setup Prerequisites Complete General Ledger Setup Steps Optionally, define additional Subledger Accounting Methods

6. Copyright © 2007, Oracle. All rights reserved. Create Accounting Setup Demonstration

7. Copyright © 2007, Oracle. All rights reserved. Legal Entities Pages

8. Copyright © 2007, Oracle. All rights reserved. Accounting Setups Pages Legal entities Attributes Ledgers Accounting Setups Use the Accounting Setups pages to analyze and update various accounting setups

9. Copyright © 2007, Oracle. All rights reserved. Accounting Setup Manager Checklist Step NumberRequired?Step Description Step 1OptionalDefine Legal Entities Step 2RequiredCreate Accounting Setup Structure Step 3RequiredComplete ledger options Step 4Conditionally Required Complete reporting options Step 5OptionalAssign balancing segment values to legal entities Step 6OptionalAssign balancing segment values to ledger Step 7Conditionally Required Define Subledger Accounting options Step 8OptionalDefine operating units. If using an accounting setup that has legal entities assigned, define operating units for your primary ledger. Step 9Conditionally Required Define intracompany balancing rules.

10. Copyright © 2007, Oracle. All rights reserved. Accounting Setup Manager Checklist (continued) Step NumberRequired?Step Description Step 11OptionalDefine Sequencing. Define accounting and reporting sequencing options for ledgers and reporting currencies. Repeat this step for each ledger. Step 12Conditionally Required Complete primary to secondary ledger mapping. Step 13RequiredComplete the Accounting Setup Step 14OptionalPerform additional General Ledger setup steps.

11. Copyright © 2007, Oracle. All rights reserved. Legal Entities Overview Use Accounting Setup Manager to define legal entities and their accounting context

12. Copyright © 2007, Oracle. All rights reserved. Balancing Segment Value Assignments Balancing Segment Value Assignments to Legal Entities Assigning balancing segment values to legal entities is considered optional Identifies legal entities across your transaction processing and reporting

13. Copyright © 2007, Oracle. All rights reserved. Using Balancing Segment Values for Transaction Processing When a transaction with multiple balancing segment values is entered, the Balancing Process automatically generates the correct accounting entries. Transaction Processing Oracle General Ledger

14. Copyright © 2007, Oracle. All rights reserved. Completing Accounting Setups Accounting Setups You must ensure the correct balancing segment values are assigned to legal entities across all of your accounting setups

15. Copyright © 2007, Oracle. All rights reserved. Designating the Balancing Segment for a Chart of Accounts You should designate the balancing segment of the chart of accounts as the legal entity or company segment

16. Copyright © 2007, Oracle. All rights reserved. Defining Legal Entities Using Accounting Setup Manager Accounting Setup Manager is a central location to define accounting related setup Define your legal entities and accounting context which includes the ledgers that will contain the accounting data for each legal entity

17. Copyright © 2007, Oracle. All rights reserved. Updating Balancing Segment Values To update balancing segment value assignments for legal entity, use: Legal Entities tab Accounting Options page

18. Copyright © 2007, Oracle. All rights reserved. Creating Accounting Setup Structures StepRequired?DescriptionApplication or Feature Name 1. Review Oracle Financials Implementation Guide RequiredCarefully consider the number of accounting setups that you need. Accounting Setup Manager 2. Define chart of accounts RequiredDefine at least one chart of accounts. For ease in assigning balancing segment values to legal entities, it is recommended that all charts of accounts share the same value set for the balancing segment. General Ledger 3. Define accountsRequiredDefine the following natural accounts that will be used to create your ledgers: Retained Earnings Account Suspense Account, if you want to enable suspense posting Cumulative Translation Adjustment (CTA) Account Non-Postable Net Income Account, if you plan to enable average balance processing Reserve for Encumbrance Account, if you plan to use encumbrance accounting or budgetary control General Ledger

19. Copyright © 2007, Oracle. All rights reserved. Creating Accounting Setup Structures (continued) StepRequired?DescriptionApplication or Feature Name 4. Define cross- validation rules RequiredCarefully consider the number of accounting setups that you need. Accounting Setup Manager 5. Define chart of accounts mapping Conditionally Required If you plan to use a secondary ledger that uses a different chart of accounts from the primary ledger, define a chart of accounts mapping. The mapping provides instructions on how to transfer data between disparate charts of accounts. General Ledger 6. Define period types OptionalIf you want to use period types that are not installed with General Ledger, define the period types that you will use for your accounting calendar. General Ledger 7. Define accounting calendars RequiredDefine one or more accounting calendars.General Ledger 8. Define transaction calendars Conditionally Required If you plan to use average balance processing, define a transaction calendar to specify valid business days used by your organization. General Ledger 9. Define or enable currencies RequiredDefine or enable one or more currencies.General Ledger

20. Copyright © 2007, Oracle. All rights reserved. Creating Accounting Setup Structures (continued) StepRequired?DescriptionApplication or Feature Name 10. Define currency conversion rate types and rates RequiredIf you plan to enter foreign currency transactions, define conversion rate types and conversion rates. General Ledger 11. Define journal reversal criteria OptionalDefine a journal reversal criteria set that you will assign to each ledger to have journals for that ledger automatically reversed. General Ledger 12. Define jurisdictions OptionalIf you do not want to use the jurisdictions that are seeded, define a jurisdiction. The jurisdiction is used to assign a territory to a legal entity. Legal Entity Configurator 13. Define legal entities OptionalCreate a complete definition of your legal entity. It is recommended that you assign specific balancing segment values to legal entities to help you secure and identify transactions by legal entity. Legal Entity Configurator or Accounting Setup Manager 14. Define subledger accounting methods OptionalIf you do not want to use Standard Accrual or Standard Cash as your ledger's default accounting method, define subledger accounting methods using Oracle Subledger Accounting. Oracle Subledger Accounting

21. Copyright © 2007, Oracle. All rights reserved. Creating an Accounting Setup Creating an accounting setup is comprised of the following steps: Assigning Legal Entities Defining Accounting Representations Saving the Accounting Structure

22. Copyright © 2007, Oracle. All rights reserved. Completing Accounting Options The structure of the Accounting Options page: Displayed in checklist format to ensure correctness of setup steps

23. Copyright © 2007, Oracle. All rights reserved. Updating Legal Entities Using the Accounting Options page, you can make various revisions to legal entities

24. Copyright © 2007, Oracle. All rights reserved. Primary Ledger Setup Steps The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

25. Copyright © 2007, Oracle. All rights reserved. Ledger Options The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

26. Copyright © 2007, Oracle. All rights reserved. Reporting Currencies The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

27. Copyright © 2007, Oracle. All rights reserved. Ledger Balancing Segment Value Assignments The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

28. Copyright © 2007, Oracle. All rights reserved. Subledger Accounting Options The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

29. Copyright © 2007, Oracle. All rights reserved. Operating Units The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

30. Copyright © 2007, Oracle. All rights reserved. Intracompany Balancing Rules The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

31. Copyright © 2007, Oracle. All rights reserved. Sequencing The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

32. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

33. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers Data Conversion Levels Secondary Ledgers can be maintained at one of the following data conversion levels: –Subledger Level Secondary Ledgers –Journal Level Secondary Ledgers –Balance Level Secondary Ledgers –Adjustments Only Secondary Ledger

34. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers Subledger Level Secondary Ledgers Journal Level Secondary Ledgers Balance Level Secondary Ledgers Adjustments Only Secondary Ledger

35. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers Subledger Level Secondary Ledgers Journal Level Secondary Ledgers Balance Level Secondary Ledgers Adjustments Only Secondary Ledger

36. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers Subledger Level Secondary Ledgers Journal Level Secondary Ledgers Balance Level Secondary Ledgers Adjustments Only Secondary Ledger

37. Copyright © 2007, Oracle. All rights reserved. Secondary Ledgers Subledger Level Secondary Ledgers Journal Level Secondary Ledgers Balance Level Secondary Ledgers Adjustments Only Secondary Ledger

38. Copyright © 2007, Oracle. All rights reserved. Using Secondary Ledgers for Consolidated Reporting France (Parent Entity) US (Subsidiary) Legal Entity Secondary Ledger Primary Ledger Name: France Operations Corp. Description: For Corporate Accounting Chart of Accounts: Corporate Calendar: Monthly Currency: EUR Name: US Operations Description: For US Accounting Chart of Accounts: Corporate Calendar: Monthly Currency: USD Name: France Statutory Description: For Statutory Reporting Chart of Accounts: Statutory Calendar: Fiscal Currency: EUR

39. Copyright © 2007, Oracle. All rights reserved. Using Secondary Ledgers for Consolidated Reporting France (Parent Entity) US (Subsidiary) Legal Entity Secondary Ledger Primary Ledger Name: France Operations Corp. Description: For Corporate Accounting Chart of Accounts: Corporate Calendar: Monthly Currency: EUR Name: US Operations Description: For US Accounting Chart of Accounts: Corporate Calendar: Monthly Currency: USD Name: France Statutory Description: For Statutory Reporting Chart of Accounts: Statutory Calendar: Fiscal Currency: EUR Name: US Ops Consolidation Description: For Consolidation Purposes Chart of Accounts: Corporate Calendar: Monthly Currency: EUR

40. Copyright © 2007, Oracle. All rights reserved. Using Ledgers for Consolidation France (Parent Entity) US (Subsidiary) Legal Entity Secondary Ledger Primary Ledger Name: France Operations Chart of Accounts: Corporate Calendar: Monthly Currency: EUR Name: US Operations Chart of Accounts: Corporate Calendar: Monthly Currency: USD Name: France Statutory Chart of Accounts: Statutory Calendar: Fiscal Currency: EUR UK (Subsidiary) Name: UK Operations Chart of Accounts: Corporate Calendar: Monthly Currency: GBP Accounting SetupExclusiveShared

41. Copyright © 2007, Oracle. All rights reserved. Completing Accounting Setup The primary ledger setup steps are as follows: Ledger Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Completing Accounting Setup

42. Copyright © 2007, Oracle. All rights reserved. Completing Accounting Setup Secondary Ledger Steps in the Accounting Options Page Step NumberStep DescriptionNote Ledger OptionsDefines and updates the journal and transaction processing options for the ledger. The Ledger Options for the primary ledger must be completed before completing the Ledger Options for the secondary ledger Primary to Secondary Ledger Mapping To specify conversion options to transfer data from the primary ledger to the secondary ledger.

43. Copyright © 2007, Oracle. All rights reserved. Adding, Deleting, Disabling Secondary Ledgers If defining an Adjustments Only secondary ledger for manual adjustments in General Ledger, do not assign a subledger accounting method. To use the Adjustments Only secondary ledger for both manual and automated adjustments from Subledger Accounting, assign a subledger accounting method to both the primary and secondary ledger. If defining a balance or journal level secondary ledger, do not assign a subledger accounting method. If defining a subledger journals level secondary ledger, a subledger accounting method must be assigned to the secondary ledger and its primary ledger. Subledger Accounting Method FieldDescriptionNote Accounting Calendar General Ledger uses the calendar periods that have the period type specified for journal entry, budgeting, and reporting with this ledger. Accounting Setup Manager reports an error if there are any gaps between periods in the accounting calendar or if any of the non– adjusting periods overlaps. Data Conversion Level To select Subledger, a subledger accounting method must be assigned to both the primary and secondary ledger. To select Adjustments Only, the secondary ledger must share the same chart of accounts, accounting calendar, and currency as the primary ledger. The subledger accounting method, if used, can be different from the primary ledger. However, to assign a subledger accounting method to the adjustments only secondary ledger, you must also assign one to the primary ledger.

44. Copyright © 2007, Oracle. All rights reserved. In this lesson, you should have learned how to describe the following: Create Accounting Setups Create Accounting Setup Structures Complete Accounting Options Reporting Currencies Ledger Balancing Segment Value Assignments Subledger Accounting Options Summary

45. Copyright © 2007, Oracle. All rights reserved. In this lesson, you should have learned how to describe the following: Operating Units Intracompany Balancing Rules Sequencing Secondary Ledgers Complete Accounting Setup Summary