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Oracle Payables Implementation Guide
Release 12.1
Part Number E12795-04
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Accounting

This chapter covers the following topics:

How Feature Setup Affects What Details Are Recorded for Accounting Events

The setup of different features that you use affects what kind of details are recorded for accounting events in Payables. These features include: Multiple Ledgers, Discounts, Interest Invoices, Automatic Withholding Tax, Taxes, Encumbrance Accounting, Matching to purchase orders or receipts, and Oracle Projects integration.

How Payables Setup Controls Accounting Entries

The types of accounting entries that are created for Payables accounting events are based on the Payables Options listed in the following table:

Option or Field Name Values
Automatic Offset Method, Accounting, Payables Option, Oracle Payables User's Guide - None
- Balancing
- Account
Use Multiple Currencies, Currency, Payables Option - Enabled
- Disabled
Account for Payment, Accounting, Payables Option
  • When Payment is Issued

    • Enabled

    • Disabled

  • When Payment Clears

    • Enabled

    • Disabled

Account for Gain/Loss, Accounting, Payables Options
  • When Payment is Issued

    • Enabled

    • Disabled

  • When Payment Clears

    • Enabled

    • Disabled

Calculate Gain/Loss, Accounting, Payables Option - For Each Invoice
- For Total Payment
Discount Method, Accounting, Payables Option - Prorate Expense
- Prorate Tax
- System Account

The following Oracle Purchasing option also affects accounting:

The following are examples of how these system options control the accounting entries that are created for accounting events:

Refer to documentation on each option to see how it affects the way Payables creates accounting entries.

Related Topics

Accounting Methods

Defining Financials Options

Payables Options

Reconciling Payments with Oracle Cash Management, Oracle Payables User Guide

Budgetary Control In Payables, Oracle Payables User Guide

Encumbrance Entries in Payables, Oracle Payables User Guide

Accounting for Interest Invoices, Oracle Payables User Guide

Subledger Accounting Setup in Payables

You can optionally define your own accounting rules in Subledger Accounting to create accounting that meets your business requirements. In Subledger Accounting, you use the Accounting Methods Builder (AMB) to define the way subledger transactions are accounted. To do this, you create and modify subledger journal line setups and application accounting definitions. These definitions define the journal entries that enable an organization to meet specific fiscal, regulatory, and analytical requirements. These definitions are then grouped into subledger accounting methods and assigned collectively to a ledger. See: Accounting Methods Builder (AMB) Overview, Oracle Subledger Accounting Implementation Guide.

  1. Define custom sources.

    Sources are pieces of information that Subledger Accounting uses to determine how to create accounting for an accounting event. You use sources to provide information from transactions to Subledger Accounting. Payables predefines a comprehensive set of sources, but you can optionally define custom sources to extend the list of sources available to application accounting definitions.

    See: Custom Sources, Oracle Subledger Accounting Implementation Guide

  2. Define journal line types.

    Journal line types determine the characteristics of subledger journal entry lines. these characteristics include whether the line is used to create actual, budget, or encumbrance entries, whether the line is a debit or a credit, whether matching lines are merged, and whether data is transferred to the general ledger in summary or detail form.

    See: Defining Journal Line Types, Oracle Subledger Accounting Implementation Guide

  3. Define journal entry descriptions.

    Journal entry descriptions determine both the content and sequence in which the elements of a description appear on a subledger journal header and line.

    Payables does not provide any predefined journal entry descriptions. You can optionally define your own journal entry descriptions. You can build descriptions using any of the sources for Payables.

    Assign journal entry description headers and lines in the Applications Accounting Definition window.

    See: Defining Journal Entry Descriptions, Oracle Subledger Accounting Implementation Guide

  4. Define mapping sets.

    Mapping sets associate a specific output value for an account or account segment. Based on the input value, a specific value can be assigned to a single segment or to the entire account. You use mapping sets when you set up account derivation rules.

    See: Mapping Sets, Oracle Subledger Accounting Implementation Guide

  5. Define account derivation rules.

    Account derivation rules determine the accounting for subledger journal entries.

    See: Account Derivation Rules, Oracle Subledger Accounting Implementation Guide

  6. Define journal lines definitions.

    Journal lines definitions let you create sets of line assignments (journal line types, journal entry descriptions, and account derivation rules) for an event class or event type. These sets can be shared across application accounting definitions. You can multiple journal lines definitions to an event class or event type.

    See: Journal Lines Definitions, Oracle Subledger Accounting Implementation Guide

    An event class represents a category of business events for a particular transaction type or document. An event type represents a business operation that you can perform for an event class. See: Payables Accounting Events, Oracle Payables User's Guide.

  7. Define application accounting definitions.

    An application accounting definition is a collection of components or rules that determine how Subledger Accounting processes accounting events to create subledger and general ledger journal entries. You can also indicate whether to create accounting for a particular event class or event type.

    Each event class and event type assignment consists of a header assignment and one or more journal lines definition assignments. A header assignment includes a journal entry descriptions and journal lines definition.

    See: Application Accounting Definitions, Oracle Subledger Accounting Implementation Guide

  8. Define subledger accounting method.

    A subledger accounting method is a grouping of application accounting definitions that comply with a common set of accounting requirements.

    Assign newly defined application accounting definitions to a subledger accounting method in the Subledger Accounting Methods window.

    See: Subledger Accounting Methods, Oracle Subledger Accounting Implementation Guide

  9. Assign each subledger method to a ledger using the Accounting Setup Manager.

    See: Using Accounting Setup Manager in the Oracle Financials Implementation Guide.

Related Topics

Oracle Subledger Accounting Implementation Guide