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Oracle Financials Implementation Guide
Release 12.1
Part Number E13425-05
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Using Accounting Setup Manager

This chapter covers the following topics:

Creating Accounting Setups

This section includes the following parts:

Accounting Setup Process

The accounting setup process consists of three main steps and are described in the following table:

  1. Create an accounting setup structure.

  2. Update accounting options.

  3. Complete the accounting setup.

The following table provides the steps to create an accounting setup. Repeat these steps for each accounting setup defined. The steps in bold italics are required.

Accounting Setup Manager Setup
Create Accounting Structure Complete Accounting Options Complete Accounting Options (continued)
Assign legal entities Complete ledger options. Define and assign operating units to the primary ledger.
Specify the ledger attributes for the primary ledger. Complete reporting currencies. Define intercompany accounts.
Specify the ledger attributes for one or more secondary ledgers. Assign balancing segment values to legal entities Define intracompany balancing rules.
Assign reporting currencies. Assign balancing segment values to ledgers. Define sequencing options.
  Define subledger accounting options. Complete secondary ledger setup steps.
    Complete accounting setup.

Accounting Setup Prerequisites

Complete General Ledger Setup Steps

To create accounting setups, complete the General Ledger prerequisites, such as defining a chart of accounts and accounting calendar.

Note: Setting Up General Ledger, Oracle General Ledger User Guide

Define Additional Subledger Accounting Methods

To use additional subledger accounting methods other than Standard Accrual or Standard Cash, define them using Subledger Accounting . When defining ledgers in Accounting Setup Manager, assign a subledger accounting method if planning to use Subledger Accounting to integrate data from transaction sources.

Perform this step for each subledger accounting method.

Note: Subledger Accounting Options

Accounting Setup Manager Pages

The Accounting Setup Manager provides the following pages:

Legal Entities Pages

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The Legal Entities page allows you to do the following:

Note: Legal Entities Overview

Accounting Setups Pages

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You can perform the following in the Accounting Setups page:

Accounting Options Pages

After creating an accounting setup structure, update the accounting options immediately after creating the structure or later.

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Accounting Setup Manager Checklist

The following table describes the steps to create accounting setups using Accounting Setup Manager. Each required setup step must be completed before you can complete your accounting setup.

Accounting Setup Manager Checklist
Step Number Required Step
Step 1 Optional Define Legal Entities
If you plan to record accounting transactions for one or more legal entities, you can use the Legal Entities tab in Accounting Setup Manager or Oracle Legal Entity Configurator to define your legal entities.

Note: If you plan to use jurisdictions that do not come seeded, you can define your own jurisdictions using Legal Entity Configurator before you define legal entities. A jurisdiction is the intersection of the physical territory and type of legislation within which judicial authority may be exercised. The jurisdiction is used to assign a territory to a legal entity.

Step 2 Required Create Accounting Setup Structure
  1. Assign Legal Entities.

  2. Define accounting representations.

    • Specify the ledger attributes for the primary ledger.

    • Optionally specify the ledger attributes for one or more secondary ledgers.

    • Optionally assign one or more reporting currencies.

  3. Save accounting structure.

    Review setup structure before saving.


Repeat this step for each accounting setup.

Note: Creating Accounting Setup Structures

Step 3 Required Complete ledger options.
Define and update journal and transaction processing options for the ledger.
If a secondary ledger is assigned, complete the ledger options for the primary ledger before completing the ledger options for the secondary ledger.
Repeat this step for all ledgers in an accounting setup.

Note: Ledger Options

Step 4 Conditionally Required Complete reporting currencies.
If reporting currencies are assigned to the accounting setup when creating the accounting setup structure, it is required to complete the currency conversion options for each reporting currency.
Assign reporting currencies to the primary or secondary ledger at any time.
Repeat this step for each reporting currency assigned.

Note: Reporting Currencies

Step 5 Optional Assign balancing segment values to legal entities.
If you did not assign balancing segment values to legal entities when you created them, you can assign them now. It is strongly recommended that you assign specific balancing segment values to each legal entity to help identify legal entities during transaction processing and reporting.
Note: See Balancing Segment Value Assignments
Step 6 Optional Assign balancing segment values to ledger.
If you assigned balancing segment values to legal entities and want to reserve one or more balancing segment values for adjustments or nonlegal entity related transactions, assign specific balancing segment values to the ledger.
For the accounting setup with no legal entity assigned, assign balancing segment values to the ledger to indicate which values are to be used for journal processing in the ledger. If balancing segment values are not assigned to the ledger, then all values will be available.
Repeat this step for each ledger.

Note: Ledger Balancing Segment Value Assignments

Step 7 Conditionally Required Define Subledger Accounting options.
If a Subledger Accounting Method is assigned to the ledger, complete the Subledger Accounting options to provide instructions on how to create the accounting from Oracle financial subledgers or external systems to one or more ledgers in General Ledger.
Repeat this step for each ledger that has a subledger accounting method assigned.

Note: Subledger Accounting Options

Step 8 Optional Define operating units. If using an accounting setup that has legal entities assigned, define operating units for your primary ledger.

Note: Operating Units

Step 9 Optional Define intercompany accounts.
If the accounting setup has legal entities with specific balancing segment values assigned, define intercompany accounts. Intercompany accounts account for intercompany transactions between legal entities.

Note: Intercompany Accounts

Step 10 Conditionally Required Define intracompany balancing rules.
If the Intracompany Balancing option for the ledger is enabled, define Intracompany Balancing rules to provide instructions on how to balance journal entries between balancing segment values for the same legal entity or ledger.
Repeat this step for each ledger that has this option enabled.

Note: Intracompany Balancing Rules

Step 11 Optional Define Sequencing. Define accounting and reporting sequencing options for ledgers and reporting currencies. Repeat this step for each ledger.

Note: Defining Sequences, Oracle Financials Implementation Guide

Step 12 Conditionally Required Complete primary to secondary ledger mapping.
If using secondary ledgers, specify how to convert subledger journals, General Ledger journals, or balances from the primary ledger to the secondary ledger. For example, if the secondary ledger uses a different chart of accounts and currency from the primary ledger, assign a chart of accounts mapping and currency conversion rules.
Perform this step once for each secondary ledger that is assigned to an accounting setup.

Note: Primary to Secondary Ledger Mapping

Step 13 Required Complete the Accounting Setup
After all required setup steps for both the primary and secondary ledgers of an accounting setup are completed, complete the accounting setup by clicking Complete on the Accounting Options page. This button is enabled after all required setup steps have a Complete status.
Review the successful completion of the General Ledger Accounting Setup Program in the Concurrent Manager before proceeding.
Perform this step once for each accounting setup.

Note: Completing Accounting Setup

Step 14 Optional Perform additional General Ledger setup steps.
Take advantage of additional General Ledger features, such as ledger sets and data access sets, to improve processing efficiency and add additional security to secure access to ledgers.

  • Introduction, Additional General Ledger Setup

  • General Ledger Setup Flowchart, Oracle General Ledger User Guide

Step 15 Required Assign profile options to responsibilities.
To control access to ledgers used by General Ledger users, assign a data access set to the profile option GL: Data Access Set for each General Ledger responsibility.
If using subledgers, you should also set the SLA: Enable Data Access Security in Subledgers profile option to control the generation of accounting entries for subledger transactions. This profile option determines whether the General Ledger Data Access Set security mechanism is applied for a subledger application responsibility when viewing, reporting, or creating subledger journal entries associated with a given ledger. The General Ledger Data Access Set security mechanism is always applied for responsibilities associated with the General Ledger application. The profile option enables you to combine data access security with subledger transaction security and therefore control access to subledger journal entries depending on the ledger to which they belong. For example, you can implement a Multiple Organizations Security Profile that allows you to create Oracle Receivables invoices for two different operating units, each associated with different ledgers, but restrict drill-down from the subledger transaction to the associated subledger journal entry based upon the destination ledger contained in the Access Set.
If you skip this step, you cannot control access to ledgers and process data optimally in Oracle subledgers and General Ledger.

  • Setting General Ledger Profile Options, Oracle General Ledger User Guide

  • Overview of Setting User Profiles, Oracle Applications System Administrator's Guide

  • Setting User Profile Options, Oracle Applications System Administrator's Guide

Legal Entities Overview

Define one or more legal entities using Accounting Setup Manager's Legal Entities tab if planning to assign legal entities to accounting setups.

You can also define legal entities using Legal Entity Configurator. The Legal Entity pages of Accounting Setup Manager are the same as the Legal Entity pages in Legal Entity Configurator. The only difference is that you can assign balancing segment values to legal entities using Accounting Setup Manager.

Note: See Overview, Oracle Financials Implementation Guide.

Balancing Segment Value Assignments

Assigning balancing segment values to legal entities is optional; however, it is strongly recommended that you assign specific balancing segment values to each legal entity to help identify legal entities during transaction processing and reporting. This is particularly important for accounting setups that use the accounting setup where multiple legal entities share the same primary ledger.

By assigning balancing segment values to legal entities, you can also take advantage of all of the legal entity accounting features available, such as intercompany accounting.

If you do not assign any balancing segment values to your legal entities, then all balancing segment values will be available for transaction processing.

Note: If using multiple value sets for the balancing segment across charts of accounts, be sure to assign the correct value set to the legal entity. Once assigned, you cannot remove the value set from legal entities. However, there is no harm in assigning the wrong value set or assigning balancing segment values for the wrong value set; the system will ignore it during transaction processing.

Tip: If you are unsure about the value set to assign to each legal entity, allow Accounting Setup Manager to do it. When assigning a legal entity to an accounting setup, Accounting Setup Manager automatically assigns the correct value set associated with the legal entity's primary ledger and secondary ledger, if used.

Using Balancing Segment Values for Transaction Processing

Any balancing segment values assigned to a legal entity are automatically assigned to the legal entity's ledger when completing the accounting setup.

When entering transactions using Oracle subledgers, use only the valid balancing segment values that are assigned to the legal entity.

When entering journals in General Ledger, use only the valid balancing segment values assigned to the ledger's legal entities and the ledger itself.

If no balancing segment values are assigned to the legal entities or ledgers, then all balancing segment values will be available to enter transactions and journal entries.

Special Note for Disabling Legal Entities: If disabling a legal entity by entering an end date, also enter end dates for all assigned balancing segment values to prevent the use of the balancing segment value.

Completing Accounting Setups

If you have an accounting setup with multiple legal entities assigned and specific balancing segment values assigned to legal entities, you cannot complete the accounting setup if the following violations exist:

Note: Accounting Setup Manager does not check for overlapping balancing segment values assigned to legal entities in different accounting setups. Therefore, ensure that the correct balancing segment values are assigned to legal entities in all accounting setups.

Note: Before the accounting setup is complete, delete and add balancing segment values to legal entities at any time. After completing the accounting setup, you cannot delete balancing segment values from legal entities; you can end date the balancing segment value to prevent the use of it.

Designating the Balancing Segment for a Chart of Accounts

It is recommended that you designate the balancing segment of the chart of accounts as the legal entity or company segment. If there are multiple legal entities that use different charts of accounts, limit the number of value sets you define for the balancing segment to ease maintenance efforts. This allows you to share value sets across multiple charts of accounts and assign unique balancing segment values for each legal entity that is consistent across charts of accounts.

Defining Legal Entities Using Accounting Setup Manager

Use the Create Legal Entity page to create legal entities.

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Prerequisites

The following prerequisites are required only if planning to assign balancing segment values to legal entities:

To Create Legal Entities:

  1. Navigate to the Legal Entities page.

  2. Click Create Legal Entity.

  3. Enter all relevant fields for the Identification Information, Legal Address, Additional Information, and Balancing Segment Value Assignments.

  4. Click Apply or click Save and Add Details to enter additional information for the legal entity that includes the following:

    Note: Adding this additional information is not required for creating an accounting setup.

    Note: You can quickly create legal entities when creating an accounting setup.

  5. In the Balancing Segment Value Assignments region, click Add Value Set.

  6. Select a value set from the list of values.

    Only value sets that use the balancing segment value qualifier are displayed.

  7. To assign balancing segment values for the value set, click Add Balancing Segment Value.

  8. Select one or more balancing segment values to assign to this legal entity. You cannot assign parent values.

    Note: Be sure to assign unique balancing segment values to each legal entity. You cannot complete the accounting setup if multiple legal entities assigned to the same accounting setup have overlapping balancing segment values assigned or only some of the legal entities have balancing segment values assigned.

  9. To make this value available for a limited time, enter a start date and/or an end date.

    Note: Start and end dates can be changed at any time.

  10. Click Apply.

    Note: Once you add a legal entity to an accounting setup and complete the accounting setup, you cannot remove balancing segment values from legal entities. You can only disable balancing segment values by entering an end date.

Updating Balancing Segment Values

Update the balancing segment value assignments for the legal entity in one of the following pages:

Add value sets and balancing segment values to legal entities at any time

Prerequisites

To update balancing segment values for legal entities:

  1. Navigate to the Legal Entities page and search for a legal entity.

  2. Select the Balancing Segment Value Assignments sub-tab.

  3. To update the balancing segment value assignment, click Update.

  4. Add one or more value sets.

    Once assigned, you cannot remove the value set.

    If you accidentally assign the wrong value set that is not associated with any of the legal entity's ledgers, the invalid value set will be ignored during transaction processing.

  5. Add or remove balancing segment values.

    If the legal entity is assigned to a complete accounting setup, you cannot remove its balancing segment values. You can disable them by entering an end date.

  6. Click Apply.

To update balancing segment values for legal entities that are assigned to accounting setups:

  1. Navigate to the Accounting Options page for an accounting setup.

  2. In the Legal Entities region, select the Update Balancing Segment Values icon for a legal entity.

    The value set associated with one or more of the legal entity's ledgers will be automatically assigned.

  3. Add or remove balancing segment values for the appropriate value set.

    If multiple value sets are assigned to the legal entity, assign the same balancing segment value across value sets.

Creating Accounting Setup Structures

The accounting setup structure defines the framework or skeleton of an accounting setup.

Accounting Setup Manager Prerequisites Checklist

The following table lists the prerequisites for accounting setup manager.

Step Required Description Application or Feature Name Reference
1. Review Oracle Financials Implementation Guide Required Carefully consider the number of accounting setups that you need. Accounting Setup Manager Oracle Financials Implementation Guide
2. Define chart of accounts Required Define at least one chart of accounts. For ease in assigning balancing segment values to legal entities, it is recommended that all charts of accounts should share the same value set for the balancing segment. General Ledger Oracle Applications Flexfields Guide, Oracle General Ledger User Guide
3. Define accounts Required Define 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 Oracle General Ledger User Guide
4. Define cross-validation rules Optional You can define multiple cross-validation rules per chart of accounts to prevent invalid combinations when entering accounts during setup and data entry. General Ledger Oracle General Ledger User Guide
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 Oracle General Ledger User Guide
6. Define period types Optional If 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 Oracle General Ledger User Guide
7. Define accounting calendars Required Define one or more accounting calendars. General Ledger Oracle General Ledger User Guide
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 Oracle General Ledger User Guide
9. Define or enable currencies Required Define or enable one or more currencies. General Ledger Oracle General Ledger User Guide
10. Define currency conversion rate types and rates Required If you plan to enter foreign currency transactions, define conversion rate types and conversion rates. General Ledger Oracle General Ledger User Guide
11. Define journal reversal criteria Optional Define a journal reversal criteria set that you will assign to each ledger to have journals for that ledger automatically reversed. General Ledger Oracle General Ledger User Guide
12. Define jurisdictions Optional If 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 Oracle Financials Implementation Guide
13. Define legal entities Optional Create 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 Oracle Financials Implementation Guide
14. Define subledger accounting methods Optional If 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 Oracle Subledger Accounting Implementation Guide

Creating an Accounting Setup

Creating an accounting setup includes the following steps:

Assigning Legal Entities

Assigning legal entities to accounting setups is optional. Assign legal entities if you are planning to use Oracle financial subledgers that require a legal entity context for transaction processing. Also, assign legal entities if you are planning to use legal entity specific features, such as intercompany accounting.

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To assign legal entities:

Defining Accounting Representations

Specify the ledger attributes for the primary ledger. The primary ledger acts as the primary accounting representation. Optionally specify the ledger attributes for one or more secondary ledgers to represent primary ledger transactions in a different chart of accounts, calendar, currency, subledger accounting method, and/or ledger processing options.

To maintain additional currency representations of primary or secondary ledgers, assign reporting currencies to them.

Note: Add secondary ledgers and reporting currencies to accounting setups at any time. Before completing the accounting setup, you can delete secondary ledgers and reporting currencies. After completing the accounting setup, you can only disable the conversion of reporting currencies and secondary ledgers.

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To define accounting representations:

  1. Navigate to the Define Accounting Representations page from the Assign Legal Entities page.

  2. Specify primary ledger attributes for the required fields.

    Note: You cannot assign a calendar if it contains gaps between periods or it does not have a full fiscal year defined.

  3. Optionally assign a subledger accounting method if planning to use Subledger Accounting to integrate data from Oracle financial subledgers or external feeder systems.

    Note: Once you assign a subledger accounting method, you must always have a subledger accounting method assigned. You can change the subledger accounting method at any time.

  4. Optionally, specify the following secondary ledger attributes:

  5. Specify a Data Conversion Level.

    Note: Data Conversion Levels

    If assigning a balance level secondary ledger that uses a different currency from the primary ledger, a balance level reporting currency is automatically assigned to the primary ledger if you did not create one. For example, if the primary ledger's currency is EUR and you assign a balance level secondary ledger whose currency is CAD, the system automatically creates a balance level reporting currency for the CAD currency. This reporting currency is used as the source representation when transferring CAD balances to this secondary ledger.

  6. Optionally, select the Add Reporting Currency icon.

  7. In the Add Reporting Currency page, enter a currency and one of the following currency conversion levels:

  8. Click Apply.

Note: Reporting Currencies

Saving the Accounting Structure

Carefully review and save the accounting setup structure to finish creating the framework of the accounting setup before proceeding to the Accounting Options.

Once you save the accounting setup structure, you cannot change the following:

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To save the accounting structure:

  1. Navigate to the Save Accounting Structure page from the Define Accounting Representations page.

  2. Review the accounting setup structure.

  3. Click Finish.

Completing Accounting Options

The Accounting Options page is displayed in a checklist format to complete the relevant setup steps to make the accounting setup ready for entering transactions and journals.

Before entering transactions, complete all of the required setup steps for each accounting setup. If using secondary ledgers, complete all of the required setup steps for the primary ledger before completing the setup steps for the secondary ledgers

Navigate to the Accounting Options page in one of the following ways:

The name of the Accounting Options page is named after the primary ledger, such as Accounting Options: <Name of primary ledger>

Related Topics

Updating Legal Entities

Primary Ledger Setup Steps

Secondary Ledger Setup Steps

Updating Legal Entities

The Legal Entities region of the Accounting Options page allows you to do the following:

Note: Legal Entities Overview

Primary Ledger Setup Steps

The primary ledger setup steps are as follows:

Note: Accounting Setup Manager Checklist

Secondary Ledger Setup Steps

The same setup steps for the primary ledger also apply to secondary ledgers. The following setup step applies only to secondary ledgers:

Note: Add secondary ledgers at any time after completing the ledger options for the primary ledger by clicking Add Secondary Ledgers.

Ledger Options

A ledger determines the chart of accounts, accounting calendar, currency, subledger accounting method, and ledger processing options for each company, legal entity, or group of companies and legal entities.

Each accounting setup requires a primary ledger that acts as the main record-keeping ledger for none or one or more legal entities that use your main chart of accounts, accounting calendar, subledger accounting method, and currency to record and report on all of your financial transactions.

To maintain an additional accounting representation, use secondary ledgers.

To maintain an additional currency representation, use reporting currencies.

Ledger Overview

Reporting Currencies

To report on account balances in multiple currencies, assign reporting currencies to ledgers.

Reporting currencies can only differ by currency from their source ledger and must share the same chart of accounts, accounting calendar/period type combination, subledger accounting method, and ledger processing options as their source ledger.

Reporting currencies can be maintained at one of the following currency conversion levels:

Note: Reporting Currencies

Assigning Ledgers to Accounting Setups

When creating an accounting setup structure, specify the ledger attributes for the primary ledger and optionally one or more secondary ledgers.

The ledgers assigned when creating the accounting setup structure are not completely defined; complete the ledger options for each ledger to complete the ledger definition.

Using Ledgers to Perform Accounting

To use ledgers to perform accounting, complete the following:

Note: Setting General Ledger Profile Options, Oracle General Ledger User Guide

Enabling Average Balance Processing

If enabling average balance processing for the ledger, General Ledger tracks and maintains average and end–of–day balances.

Note: You can only enable average balances or average balance consolidation for your secondary ledger if average balances or average balance consolidation is also enabled for its primary ledger

Note: You cannot enable average balances if your ledger is enabled for secondary segment tracking.

Note: Overview of Average Balancing Processing, Oracle General Ledger User Guide

Completing Ledger Options

This section describes the ledger options that must be completed.

Prerequisites

The following prerequisites are needed to complete the ledger options for ledgers:

To complete ledger options:

  1. Navigate to the Accounting Options page in one of the following ways:

    1. After saving the accounting setup structure, click Define Accounting Options.

    2. Query an existing accounting setup from the Accounting Setups page and then choose the Update Accounting Options icon.

  2. Click the Update Ledger Options icon.

  3. Enter all relevant fields for the following pages:

  4. Click Next to review your ledger options and then click Finish to complete your ledger definition.

Updating Ledger Options

After the ledger has a complete status, you can only update some ledger options.

The following ledger options cannot be changed:

Note: The Track by Secondary Segment option cannot be changed once the Accounting Setup status is complete.

Note: The First Ever Opened Period cannot be changed once the first period is opened for the ledger.

Prerequisites

To make changes to ledgers:

  1. In the Accounting Setups page, search for accounting setups by ledger.

  2. Navigate to the Accounting Options page.

  3. To navigate to the ledger definition pages, click the Update icon for the ledger; or click the ledger name link and then the Update button.

  4. Make changes to the ledger and then click Finish.

Reporting Currencies

Reporting currencies express the accounting in your primary and/or secondary ledgers in an additional currency representation. For example, the USD primary ledger balances can be expressed in CAD or Yen by assigning a balance level reporting currency to the primary ledger.

Unlike secondary ledgers, reporting currencies can only differ by currency from their source ledger. They must share the same chart of accounts, accounting calendar/period type combination, subledger accounting method, and ledger processing options as their source ledger (primary or secondary ledger).

Reporting currencies can be maintained at three different currency conversion levels:

Note: The subledger level and journal level reporting currencies act similarly to ledgers. You must open and close the periods for these reporting currencies before you can enter transaction and journal entries. You can also enable journal approval for these reporting currencies if planning to enter manual journal entries directly to these reporting currencies.

Assigning Reporting Currencies to Ledgers

If reporting currencies are assigned to ledgers when creating an accounting setup structure, the status for the Reporting Currencies step is In Process. To complete the accounting setup, update the reporting currency and complete the conversion options for all reporting currencies that are assigned.

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If no reporting currencies are assigned to the ledgers when creating the accounting setup structure, the Reporting Currencies step is not required and the status is Not Started.

Add reporting currencies to accounting setups at any time.

Note: Adding Reporting Currencies

To complete reporting currencies:

  1. In the Accounting Options page, click the Update icon for a reporting currency.

  2. Update each reporting currency.

  3. Enter all relevant fields for the reporting currency.

    The following table describes selected options for balance level reporting currencies.

    Selected Options for Balance Level Reporting Currency
    Field Description
    Currency Conversion Level Balance defaults to indicate that this is a balance level reporting currency; cannot be changed
    Period End Rate Type Translates actual account balances; defaults from the source ledger; can be changed
    Period Average Rate Type Translates actual account balances; defaults from the source ledger; can be changed

    The following table describes selected options for journal and subledger level reporting currencies.

    Selected Options for Journal and Subledger Level Reporting Currencies
    Field Description
    Currency Conversion Level Indicates that this is a journal level or subledger level reporting currency
    Status If disabled, data is no longer automatically converted to the reporting currency.

    Note: Disabling the Conversion of Reporting Currencies

    First Ever Opened Period The first period that can be opened for this reporting currency; defaults from the source ledger
    Rounding Differences Tracking Account In General Ledger, this account tracks rounding differences that occur during currency conversions. If you do not enter an account, General Ledger will post rounding differences to the journal line with the largest amount.
    If your foreign currency transactions include different balancing segment values to represent multiple companies, General Ledger will automatically create a rounding differences account for each balancing segment value.

    Warning: Any changes you make to the Rounding Differences Account in the source ledger will automatically be applied to all of its journal and subledger level reporting currencies. If you have a different rounding differences account assigned to your reporting currencies and you change the rounding differences account for the source ledger, such as removing one, changing one, or adding one, be sure to also update the rounding differences account for each of the reporting currencies.

    Enable Journal Approval Use General Ledger's Journal Approval feature for this reporting currency.
    When enabled, Journal Approval only applies to journals that are entered directly to the reporting currency, such as manually entered journals or journals loaded directly to the reporting currency. Journal Approval will not apply to journals that were automatically converted from the source ledger by General Ledger Posting.

    Note: When you enable Journal Approval, only journal entries that use actual amounts and the Manual journal source will automatically have Journal Approval enabled. To require journal approval for budget or encumbrance journals or for journals using a source other than Manual, you must mark the Require Journal Approval check box for the appropriate journal source in the Journal Sources window in Oracle General Ledger.

    Note: Setting Up Journal Approval, Oracle General Ledger User Guide

    Rounding Differences Tracking Account In General Ledger, this account tracks rounding differences that occur during currency conversions. If you do not enter an account, General Ledger will post rounding differences to the journal line with the largest amount.
    If your foreign currency transactions include different balancing segment values to represent multiple companies, General Ledger will automatically create a rounding differences account for each balancing segment value.

    Warning: Any changes you make to the Rounding Differences Account in the source ledger will automatically be applied to all of its journal and subledger level reporting currencies. If you have a different rounding differences account assigned to your reporting currencies and you change the rounding differences account for the source ledger, such as removing one, changing one, or adding one, be sure to also update the rounding differences account for each of the reporting currencies.

    Default Rate Type The conversion rate type used to retrieve exchange rates for converting transactions from the source ledger to this reporting currency
    This differs from the conversion rate type specified when entering a transaction. Oracle Applications use the transaction conversion rate type to retrieve exchange rates for converting entered amounts from the transaction currency to the ledger currency. Alternatively, users can specify their own rate type.
    The Default Rate Type works with the Retain Transaction Rate Type field. If you choose not to retain the same rate type used to convert the original transaction, the Default Rate Type is used instead.

    Note: Defining Conversion Rate Types, Oracle General Ledger User Guide

    Retain Transaction Rate Type Controls the conversion rate type that should be used to convert transaction currency amounts from the source ledger to this reporting currency.
    • If Yes is selected, then the conversion rate type used to enter the transaction in the source ledger will be retained when converting the same transaction from the transaction currency amount to this reporting currency.

      Note: If the original transaction rate type is User or EMU Fixed, the default rate type assigned to the reporting currency will always be used.

    • If No is selected, then the default rate type specified in the Default Rate Type field will be used to convert transactions to this reporting currency.

      The Retain Transaction Rate Type option is ignored for the following reasons:

      • An EMU fixed rate relationship exists between the transaction currency and the currency of the reporting currency. In this case, the EMU Fixed conversion rate type is used.

      • The transaction currency is the same as the currency of the source ledger, such as the primary or secondary ledger. In this case, a conversion rate type does not exist for the transaction and the default rate type is used.

      • The transaction currency is the same as the currency of the reporting currency. In this case, the User conversion rate type is used with a default rate of 1.

      • A User rate is used for the transaction. In this case, the User conversion rate type is used. The reporting currency conversion is completed in two steps via the default rate type assigned to the reporting currency.

        Note: If the Account Type Specific Conversion is enabled, you can determine whether Accounting Setup Manager should inherit the conversion type used in the source ledger.

    Note: Reporting Currency Account Type Specific Conversion, Oracle General Ledger User Guide

    Missing Conversion Rate Controls what the system should do if it cannot find a conversion rate as of the conversion date
    • If Report an Error is selected, the system will report an error and prevent a transaction or journal from being posted in the source ledger; a conversion rate will need to be specified to successfully convert data entered in the source ledger to this reporting currency.

    • If Use Last Rate is selected, the system will use the last rate defined for a particular rate type if it cannot find a currency conversion rate; if enabled, specify a number for the Number of Days to Find the Last Rate.

    Number of Days to Find Last Rate Indicates how many days back in time the system should look to find a rate; enter a number from 1 to 999.
    Retain Journal Creator from Source Ledger Controls the Created By user information that can be viewed for each journal using Help > Record History
    • Select Yes to retain the person who entered the journal in the source ledger as the Created By user.

    • Select No to indicate the person who posted the journal as the Created By user.

  4. Click Apply.

Related Topics

Journal Source and Category Conversion

Subledger Level Reporting Currencies

Journal Conversion Rule Examples

Changing Conversion Rules

Adding Reporting Currencies

Disabling the Conversion of Reporting Currencies

Journal Source and Category Conversion

General Ledger Posting uses the journal source and category conversion rules to determine the journals (based on journal source and category combinations) to automatically convert to this reporting currency.

Journal sources identify the origin of journal entry transactions, such as Purchasing or Payables. Journal categories describe the purpose of journal entries, such as purchase requisitions or purchase orders.

Specifying a journal source and category combination and selecting Yes in the Convert Journals to this Reporting Currency field instructs the General Ledger Posting program to automatically convert those journals to this reporting currency when they are posted in the source ledger.

The journal source and category Other represents all other journal sources and categories other than those explicitly defined.

Note: If the General Ledger Posting program cannot find a matching journal source/category combination, or if no conversion rules for a journal source/category combination are defined, the journal is not converted to the reporting currency.

The journal sources Move/Merge and Move/Merge Reversal are set to No because they are not converted to the reporting currency using General Ledger Posting. They are automatically converted to the reporting currency when performing a move/merge or move/merge reversal in the source ledger. This means that if you use Mass Maintenance to move or merge balances between accounts in the source ledger, the same accounts are moved or merged in the reporting currency.

Note: Moving or Merging Account Balances, Oracle General Ledger User Guide

Subledger Level Reporting Currencies

For subledger level reporting currencies, the journal sources for all transaction sources that use Subledger Accounting must be set to No in the Convert Journals to this Reporting Currency field. Any journal source that uses Subledger Accounting to generate its accounting entries must not be converted to the reporting currency using General Ledger Posting because Subledger Accounting automatically performs the conversion for these subledger journals.

Warning: If you incorrectly choose Yes in the Convert Journals to this Reporting currency field for any transaction sources that use Subledger Accounting, the journal will be double counted; once by Subledger Accounting and once by General Ledger Posting. You will need to reverse the journal in General Ledger.

Note: To find all transaction sources that integrate with Oracle Subledger Accounting, query them in the Subledger Application form that is accessed from the Subledger Accounting Setup menu.

Note: If integrating with transaction sources that do not use Subledger Accounting and you want to maintain journals from these subledgers in the subledger level reporting currency, do not use Oracle's seeded journal sources. For example, if you use a non-Oracle Receivables application, you should create your own journal source for that application instead of using the seeded source Receivables that is reserved for Oracle sources. If you use the seeded source to import data from third party systems, those journals will not be converted to a subledger level reporting currency when you post them in the primary ledger.

Journal Conversion Rule Examples

This section describes examples that illustrate how journals are converted based on different journal conversion rules.

Example 1: Specific Journal Source and Journal Category Match

The following example shows a matching source/category combination. It also shows that no conversion takes place if there is not a match with any of the defined conversion rules.

Conversion rules are defined in the following table.

Example 1: Journal Conversion Rules
Source Category Convert Journals
Other Other No
Manual Adjustment Yes
Consolidation Consolidation No
Manufacturing Labor Cost Yes

The following table describes the results for journals converted to the reporting currency.

Example 1: Journals Converted to the Reporting Currency
Journal Number Source/Category Results
1 Manual/Adjustment Journal is converted using the defined conversion options for this combination.
2 Consolidation/Consolidation Journal is not converted because the Convert option is set to No.
3 Manufacturing/Freight Journal is not converted because there is no rule defining Journal Source Manufacturing and Category Freight.

Example 2: No Specific Journal Source or Category

The following shows an example of matching a journal source but not a category; and another example of matching a journal category but not a source.

Conversion rules are defined in the following table.

Example 2: Conversion Rules
Source Category Convert Journals
Manufacturing Other Yes
Other Adjustment Yes
Manufacturing Adjustment No

The following table describes the results for journals converted to the reporting currency.

Example 2: Journals Converted to the Reporting Currency
Journal Number Source/Category Results
1 Manufacturing/Labor Cost Journal is converted because the first rule only has a requirement to match to a source of Manufacturing with any category.
2 Manual/Adjustment Journal is converted because a rule has a requirement to match to any source with the Adjustment category.
3 Spreadsheet/Adjustment Journal is converted because a rule has a requirement to match any source with the Adjustment category.
4 Manufacturing/Adjustment Journal is not converted because the Convert option is set to No for this source/category combination.

Example 3: Journal Source and Journal Category Conflicting Rules

The following example shows what happens when you set up contradictory rules for journal source/category combinations. The rule for the source always overrides the rule for the category.

Conversion rules are defined in the table below.

Example 3: Conversion Rules
Source Category Convert Journal
Other Adjustment No
Manual Other Yes

The following table describes the results for journals converted to the reporting currency.

Example 3: Journals Converted to the Reporting Currency
Journal Number Source/Category Results
1 Manufacturing/Adjustment Journal is not converted because it matches the first rule to not convert.
2 Manual/Adjustment Journal is converted because the second rule requires conversion of all journals with the source Manual. The source rule overrides the category rule.

Changing Conversion Rules

Change the journal source and category conversion rules at any time. For example, for any journal source/category combination, you can change the Convert Journals to this Reporting Currency option.

Note that the changes are effective immediately, but that they apply only to new journals.

Caution: It is strongly recommended that you do not change the conversion rules once you begin entering transactions. Doing so may result in inconsistent transaction amounts and account balances between your source ledger (primary or secondary ledger) and its reporting currencies.

Adding Reporting Currencies

Add reporting currencies to primary or secondary ledgers at any time. If adding journal level or subledger level reporting currencies to existing ledgers that have periods opened, you must initialize the beginning balances for your reporting currency and optionally choose to convert historical data from the source ledger to the reporting currency. Historical Conversion refers to converting the historical transactions of the source ledger to the journal level or subledger level reporting currency.

Note: Historical Conversion does not apply to reporting currencies that are assigned to new accounting setups.

Note: Before adding journal or subledger level reporting currencies, carefully review the information in the Implementation Considerations section of the Journal or Subledger-Level Reporting Currencies chapter of the Oracle General Ledger User Guide.

Note: If you allow users to make adjustments in Oracle Projects to expenditure items that represent receipts, receipt non-recoverable tax, or exchange rate variances, then Oracle Projects does not perform accounting for adjustments in reporting currencies and subledger level secondary ledgers if the secondary ledger currency differs from the primary ledger currency. Please review your business practices and ensure that the Oracle Projects profile options PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance are set appropriately. For additional information, see: Profile Restrictions to Supplier Cost Adjustments, Oracle Project Costing User Guide.

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To add reporting currencies:

  1. Navigate to the Accounting Options page.

  2. Click the Update icon for the reporting currency.

  3. In the Reporting Currency Assignment region, click Add Reporting Currency.

  4. Select the Currency Conversion level.

  5. Enter all required fields.

  6. To initialize beginning balances and convert historical transactions or journals to this reporting currency, enter Data Conversion Initialization options as described in the following table.

    Data Conversion Initialization Options
    Option Description
    First Future Conversion Period The first period for which you want to convert transactions or journals to your reporting currency. The First Future Conversion Period is also the period in which account balances are initialized in your reporting currencies. It must be the first future-enterable period in your source ledger.
    Retain Original Conversion Rate Type To convert data from the source ledger to your reporting currency for periods prior to the First Future Conversion Period, this options determines whether the original rate type can be used to convert historical data.
    • Select Yes to retain the conversion rate type used to enter the original transaction.

      Select No to use the rate type specified in the next field, Historical Conversion Rate Type.

    Historical Conversion Rate Date Enter the date of the conversion rate to use to convert historical data to this reporting currency.
    Historical Conversion Rate Type If you entered No to retain the original transaction's conversion rate type, enter the conversion rate type to use for historical data conversion.

    Note: For more information about the previous four options, see the Implementation Considerations section of the Journal or Subledger-Level Reporting Currencies chapter of the Oracle General Ledger User Guide.

  7. Click Apply.

Note: Reporting currencies can only be deleted before the accounting setup is complete. If the reporting currency acts as the source representation for a secondary ledger, delete the secondary ledger before deleting the reporting currency.

Disabling the Conversion of Reporting Currencies

After the accounting setup is complete, you cannot delete reporting currencies; you can disable the conversion of subledger and journal level reporting currencies. This prevents future transactions and journals from being converted to the reporting currency. You will still be able to use the disabled reporting currency to view historical data and enter manual journals.

If the reporting currency acts as the source representation for a secondary ledger, disable the conversion of the secondary ledger before disabling the conversion for the reporting currency.

Note: The source representation of the secondary ledger is displayed in the Source Representation field in the Primary to Secondary Ledger Mapping page.

Note: Balance level reporting currencies cannot be disabled. To stop the conversion of balances from the source ledger to the balance level reporting currency, stop running Translation.

Once the conversion of a reporting currency is disabled, the status of the reporting currency is changed to Disabled.

To disable the conversion of reporting currencies:

  1. Navigate to the Reporting Currencies page.

  2. In the Reporting Currency Assignment region, click the Disable Conversion icon.

    Note: Once disabled, the conversion of a reporting currency cannot be enabled.

Ledger Balancing Segment Value Assignments

Optionally assign specific balancing segment values to ledgers to track non-legal entity-related transactions or adjustments using a specific balancing segment value.

Note: Assign specific balancing segment values to all legal entities in an accounting setup before assigning a specific balancing segment value to the ledgers in the accounting setup.

Balancing segment values can be added to ledgers at any time.

To assign balancing segment values to ledgers:

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  1. Navigate to the Accounting Options page.

  2. Click the Update icon for the Balancing Segment Value Assignments step.

  3. View the balancing segment values assigned to the legal entities associated with the accounting setup in the Legal Entity Assignment region.

    Note: Updating Balancing Segment Values

  4. In the Ledger Assignment region, enter a balancing segment value.

    Note: The value cannot be the same as the balancing segment values assigned to the legal entities.

  5. Optionally, enter a start and end date to make the value effective for a limited time.

    Note: This step does not have to have a status of Complete in order to complete the accounting setup.

To remove balancing segment values:

Balancing segment values can only be removed from ledgers before the accounting setup is complete.

  1. Navigate to the Ledger Balancing Segment Value Assignments page. You access this page by updating the Balancing Segment Value Assignments step for the ledger.

  2. To remove balancing segment values, click the Remove icon for each balancing segment value.

To disable balancing segment values:

Disable balancing segment values by entering an end date for the value. You cannot use the balancing segment value to enter new transactions or journals after the end date. You can only use the value for reporting and viewing historical data.

  1. Navigate to the Ledger Balancing Segment Value Assignments page. You access this page by updating the Balancing Segment Value Assignments step for the ledger.

  2. To disable a balancing segment value, enter an end date.

Subledger Accounting Options

If you assigned a subledger accounting method to your ledgers, the Subledger Accounting Options step will be displayed with a status of Complete.

If you did not assign a subledger accounting method to your ledger, then this step will not be displayed.

You can update this step at any time from the Accounting Options page. Subledger Accounting Options allow you to define how to generate the accounting entries from subledger transactions.

Note: All of the subledgers assigned to a ledger inherit its subledger accounting method from that ledger.

Note: Oracle Subledger Accounting Implementation Guide

Operating Units

You can assign operating units to the primary ledger to partition subledger transaction data when multiple operating units perform accounting in the context of one or more legal entities.

If using an accounting setup that has legal entities assigned, the Operating Units step will be displayed. The status for this step will be Not Started.

You can update the Operating Units step at any time from the Accounting Options page.

Note: You do not have to complete this step in order to complete your accounting setup.

Note: If you defined operating units in the Define Organization window in Oracle HRMS, then those operating units will be automatically assigned to the appropriate primary ledger in Accounting Setup Manager.

Note: Multiple Organizations Overview, Oracle Applications Multiple Organizations Implementation Guide

Prerequisites

The following prerequisites are required if you plan to assign operating units to a primary ledger in the Accounting Setup Manager:

To Define and Assign Operating Units:

  1. Navigate to the Operating Units page.

  2. Click Add Operating Unit to both create and assign an operating unit to the primary ledger.

  3. In the Add Operating Units page, enter the following:

  4. Alternatively, you can create operating units by clicking Open Organization Form to open the Define Organization window in Oracle HRMS. When you define your operating unit and assign it to a primary ledger and default legal context, you will be able to view the operating unit assignment from Accounting Setup Manager.

  5. Click Apply or Add Another to define and assign multiple operating units.

  6. To mark the Operating Units step complete, click Complete.

Note: Once you add an operating unit to a primary ledger, you cannot remove it. You can prevent the use of that operating unit by not assigning it to a Security Profile in Oracle HRMS. For more information on security profiles, see Implementing Multiple Organization Support, Oracle Applications Multiple Organizations Implementation Guide Oracle Applications Multiple Organizations Implementation Guide.

Intercompany Accounts

If using an accounting setup that has legal entities assigned and balancing segment values have been assigned to the legal entities, the Intercompany Accounts step will be displayed. The status for this step will be Not Started.

Update the Intercompany Accounts step to account for transactions across legal entities.

Note: You do not have to complete this step in order to complete your accounting setup. You can update this step at any time from the Accounting Options page.

Note: Intercompany Balancing, Oracle Financials Implementation Guide

Intracompany Balancing Rules

If you enabled the Intracompany Balancing option for your ledger, the Intracompany Balancing step will be displayed. The status for this step will be Not Started.

Update the Intracompany Balancing step to define rules to balance journal entries between balancing segment values that are assigned to the same legal entity or ledger.

Note: You do not have to complete this step in order to complete your accounting setup. You can update this step at any time from the Accounting Options page.

Note: Intracompany Balancing Rules, Oracle Financials Implementation Guide

Sequencing

Sequencing allows you to define accounting and reporting sequencing options for ledgers and reporting currencies. You can update this step at any time from the Accounting Options page.

Note: It is not necessary to complete this step in order to complete your accounting setup.

Note: Sequencing

Secondary Ledgers

Secondary ledgers represent the primary ledger's accounting data in another accounting representation that differs in one or more of the following ways:

Use secondary ledgers for supplementary purposes, such as consolidation, statutory reporting, or adjustments for one or more legal entities within the same accounting setup. For example, use a primary ledger for corporate accounting purposes that uses the corporate chart of accounts and subledger accounting method, and use a secondary ledger for statutory reporting purposes that uses the statutory chart of accounts and subledger accounting method. This allows you to maintain both a corporate and statutory representation of the same legal entity's transactions in parallel.

Assign one or more secondary ledgers to each primary ledger for an accounting setup.

The secondary ledgers assigned can only perform the accounting for the legal entities within the same accounting setup.

Note: If an additional ledger is needed to perform accounting across legal entities or ledgers in different accounting setups, use a ledger in an accounting setup with no legal entity assigned. This can be used for multiple purposes, such as performing management reporting or consolidation across multiple legal entities.

Note: If you allow users to make adjustments in Oracle Projects to expenditure items that represent receipts, receipt non-recoverable tax, or exchange rate variances, then Oracle Projects does not perform accounting for adjustments in reporting currencies and subledger level secondary ledgers if the secondary ledger currency differs from the primary ledger currency. Please review your business practices and ensure that the Oracle Projects profile options PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance are set appropriately. For additional information, see: Profile Restrictions to Supplier Cost Adjustments, Oracle Project Costing User Guide.

Related Topics

Data Conversion Levels

Data Conversion Levels

Secondary Ledgers can be maintained at one of the following data conversion levels:

Conversion Rules

The following conversion rules are used to convert data from the primary ledger to the secondary ledger:

Note: The above conversion rules do not apply to Adjustments Only level secondary ledgers because they must share the same chart of accounts, accounting calendar, and currency as the primary ledger.

Note: Primary to Secondary Ledger Mapping

Subledger Level Secondary Ledgers

The subledger level secondary ledger maintains an additional accounting representation of the subledger journals, journal entries, and balances. The subledger level secondary ledger is maintained using both Subledger Accounting and the General Ledger Posting program.

By assigning two different subledger accounting methods to the primary and secondary ledger, you can use Subledger Accounting rules to simultaneously account for the same legal entity transaction in both ledgers. This allows you to maintain multiple accounting representations of a single subledger transaction and have the different subledger journals produced in each ledger.

Note: Subledger Accounting integrates data from both Oracle and non-Oracle transaction sources. For a list of transaction sources that integrate with Oracle Subledger Accounting, query them in the Subledger Application page available from the Subledger Accounting setup menu.

When entering subledger transactions using Oracle financial subledgers that integrate with Subledger Accounting, Subledger Accounting automatically generates the appropriate accounting entries to both the primary and secondary ledgers in General Ledger based on the accounting rules defined for a particular subledger accounting method.

Note: If using Oracle Assets, fixed asset transactions are transferred to specific ledgers based on the ledger you assigned to each Asset Book. For example, if you assigned the primary ledger to the Corporate Book and the secondary ledger to the Tax Book in Oracle Assets, the asset transactions for each book will only be reflected in the respective ledgers. Thus, the Corporate Book transactions will only be reflected in the primary ledger and the Tax Book transactions will only be reflected in the secondary ledger.

If entering transactions using Oracle subledgers that do not use Subledger Accounting to generate their accounting entries, their journals will be imported through the GL Interface table of the primary ledger. When posting the journal in the primary ledger, the General Ledger Posting program automatically replicates the journal to the secondary ledger based on the conversion rules you specify.

Journal Conversion Rules

By default, the following types of journals are replicated to the secondary ledger using General Ledger Posting, not Subledger Accounting:

Each time you post these journals in the primary ledger, they are automatically propagated to the subledger level secondary ledger, unless you defined journal conversion rules to exclude these journal sources from being transferred to the secondary ledger.

By default, journals that use the following journal sources are not transferred to the subledger level secondary ledger:

Note: Primary to Secondary Ledger Mapping

Journal Level Secondary Ledgers

The journal level secondary ledger is an additional accounting representation of the primary ledger journal entries and balances. This type of secondary ledger is maintained using the General Ledger Posting Program only.

Every time you post a journal in the primary ledger, the same journal is automatically replicated and maintained in the secondary ledger, depending on the journal conversion rules specified for the secondary ledger.

By default, journals that use the following journal sources are not transferred to the journal level secondary ledger:

Note: Primary to Secondary Ledger Mapping

Balance Level Secondary Ledgers

The balance level secondary ledger only maintains the primary ledger balances in another accounting representation. To maintain balances in this type of secondary ledger, use General Ledger Consolidation to transfer the primary ledger balances to this secondary ledger.

If the balance level secondary ledger uses a different currency from the primary ledger, use General Ledger Consolidation to transfer balances from the primary ledger's balance level reporting currency to the balance level secondary ledger. This balance level reporting currency uses the same currency as the secondary ledger and represents the translated balances of the primary ledger.

Adjustments Only Secondary Ledger

The adjustments only secondary ledger is an incomplete accounting representation that only holds adjustments, manual adjustments, or automated adjustments created by Subledger Accounting. Create adjustments as follows:

Adjustments only secondary ledgers are useful if you do not need a complete ledger to perform management or statutory reporting. You can perform all of your daily transactions in the primary ledger and then book adjustments, such as management or statutory adjustments, in the adjustments only secondary ledger.

Note: Using a secondary ledger as an adjustments ledger is not sufficient for companies that operate in countries that require companies to have two complete ledgers, one for statutory reporting and another for corporate accounting.

By itself, this adjustments only secondary ledger does not represent the complete accounting picture; it only holds the adjustments for the transactions contained in its associated primary ledger. Use a ledger set to combine the adjustments only secondary ledger with the primary ledger to obtain a complete secondary accounting representation that includes both the transactional data and the adjustments. Then report on the ledger set using General Ledger's Financial Statement Generator (FSG), which automatically summarizes data across ledgers in a ledger set.

Note: Ledger Sets enable you to group multiple ledgers together (that share the same chart of accounts and accounting calendar/period type combination) to obtain processing efficiencies, such as opening and closing periods and reporting across multiple ledgers simultaneously.

Note: Ledger Sets

Note: Adjustments only secondary ledgers must share the same chart of accounts, accounting calendar/period type combination, and currency as the associated primary ledger.

Using Secondary Ledgers for Consolidated Reporting

Use secondary ledgers for consolidated reporting to prevent the need to perform balance transfer consolidations, and to obtain a cross-company view of your enterprise. For example, assume the two accounting setups described in the following graphic and table are defined for the company's legal entities.

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Legal Entity: France (Parent Entity), US (Subsidiary)
Legal Entity France (Parent Entity) US (Subsidiary)
Primary Ledger
  • Description

  • Chart of Accounts

  • Accounting Calendar

  • Currency

France Operations Corporation
  • For Corporate Accounting

  • Corporate

  • Monthly

  • EUR

US Operations
  • For US Accounting

  • Corporate

  • Monthly

  • USD

Secondary Ledger
  • Description

  • Chart of Accounts

  • Accounting Calendar

  • Currency

France Statutory (Subledger Level)
  • For Statutory Reporting

  • Statutory

  • Fiscal

  • EUR

 

The France legal entity uses a primary ledger for corporate accounting purposes and a secondary ledger for statutory reporting purposes. Both ledgers use different charts of accounts and accounting calendars.

The US subsidiary uses its own chart of accounts and currency to account for its transactions in its main record-keeping ledger, the primary ledger.

For ease of consolidation, the US subsidiary can assign a secondary ledger to its primary ledger. The secondary ledger should use the same chart of accounts, accounting calendar, and currency as the parent entity, France. Then, by using a ledger set to group the secondary ledger of the US subsidiary with the primary ledger of the parent entity, consolidated results can be obtained by simply running an FSG report using the ledger set. This prevents the need to perform balance transfer consolidations every period.

The following graphic and table describe an example of the ledger configuration when a secondary ledger is added to the US subsidiary. The Consolidation Ledger Set is comprised of the primary Ledger for France and the secondary ledger for the US.

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Legal Entity: France (Parent Entity), US (Subsidiary)
Legal Entity France (Parent Entity US (Subsidiary)
Primary Ledger
  • Description

  • Chart of Accounts

  • Accounting Calendar

  • Currency

France Operations Corporation
  • For Corporate Accounting

  • Corporate

  • Monthly

  • EUR

US Operations
  • For US Accounting

  • Corporate

  • Monthly

  • USD

Secondary Ledger
  • Description

  • Chart of Accounts

  • Accounting Calendar

  • Currency

France Statutory (Subledger Level)
  • For Statutory Reporting

  • Statutory

  • Fiscal

  • EUR

US Operations Consolidation
  • For Consolidation Purposes

  • Corporate

  • Monthly

  • EUR

Note: If the parent entity, France, needs to enter consolidation adjustments, such as intercompany eliminations, they can enter those adjustments in their primary ledger using a balancing segment value that is reserved for manual adjustments.

Using Ledgers for Consolidation

A ledger in an accounting setup with no entity assigned can be used as the parent consolidation ledger when performing fairly simple consolidations across multiple legal entities in different accounting setups. This allows users to keep consolidation adjustments completely separate from the ledgers that are used to maintain the day-to-day transactions for multiple legal entities.

For example, assume the legal entities and ledgers in three different accounting setups as described in the following figure and tables.

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Legal Entity: France (Parent Entity)
Primary Ledger Secondary Ledger
Name: France Operations
Chart of Accounts: Corporate
Calendar: Monthly
Currency: EUR
Name: France Statutory
Chart of Accounts: Statutory
Calendar: Fiscal
Currency: EUR
Legal Entity: US (Subsidiary)
Primary Ledger
Name: US Operations
Chart of Accounts: Corporate
Calendar: Monthly
Currency: USD
Legal Entity: U.K. (Subsidiary)
Primary Ledger
Name: U.K. Operations
Chart of Accounts: Corporate
Calendar: Monthly
Currency: GBP

Instead of assigning secondary ledgers to the US and U.K. operations to perform consolidation, the parent entity can define another accounting setup with no legal entity assigned to perform balance transfer consolidations from all three legal entities.

The primary ledger should share the same ledger attributes as the primary ledger of the parent entity, such as the same chart of accounts, accounting calendar, and currency.

The tables below describe an example of all of the accounting setups with the additional accounting setup added for consolidation purposes.

Legal Entity: France (Parent Entity)
Primary Ledger Secondary Ledger
Name: France Operations
Chart of Accounts: Corp.
Calendar: Monthly
Currency: EUR
Name: France Statutory
Chart of Accounts: Statutory
Calendar: Fiscal
Currency: EUR
Legal Entity: US (Subsidiary)
Primary Ledger
Name: US Operations
Chart of Accounts: Corporate
Calendar: Monthly
Currency: USD
Legal Entity: U.K. (Subsidiary)
Primary Ledger
Name: U.K. Operations
Chart of Accounts: Corp.
Calendar: Monthly
Currency: GBP
Legal Entity: None
Primary Ledger
Name: Consolidation
Chart of Accounts: Corp.
Calendar: Monthly
Currency: EUR

With this configuration, perform balance transfer consolidations as follows:

Note: Using ledgers in an accounting setup with no legal entity assigned for consolidation purposes is not recommended if you have complex consolidation requirements. For example, if your organization performs frequent acquisitions, disposals, and reorganizations or has many partially owned subsidiaries, you should use Oracle Financial Consolidation Hub for your consolidation needs.

For more information on Oracle Financial Consolidation Hub, see the Oracle Financial Consolidation Hub User’s Guide.

Completing Accounting Setup

If you assigned secondary ledgers when you created an accounting setup structure, complete the secondary ledger steps described in the table below in the Accounting Options page.

Secondary Ledger Steps in the Accounting Options Page
Step Description
Ledger Options Defines and updates the journal and transaction processing options for the ledger

Note: The Ledger Options for the primary ledger must be completed before completing the Ledger Options for the secondary ledger.

Note: Completing Ledger Options

Primary to Secondary Ledger Mapping To specify conversion options to transfer data from the primary ledger to the secondary ledger.

Note: Primary to Secondary Ledger Mapping

Note: To Complete Reporting Currencies

Adding, Deleting, and Disabling Secondary Ledgers

Adding Secondary Ledgers

Add secondary ledgers to accounting setups at any time in the Accounting Options page.

If you add a balance level secondary ledger that uses a different currency from the primary ledger, a balance level reporting currency is generated for the primary ledger unless one already exists. This balance level reporting currency maintains the primary ledger's translated balances and is the source representation for the secondary ledger. In other words, when using GL Consolidation to transfer balances to the secondary ledger, transfer the balances from the source representation, the balance level reporting currency.

Note: The source representation is displayed on the Primary to Secondary Ledger Mapping page.

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Prerequisite

To add secondary ledgers

  1. Navigate to the Accounting Options page.

  2. Click Add Secondary Ledger.

    This button will only appear after the ledger options for the primary ledger have a complete status.

  3. Enter all relevant fields.

    The table below describes selected fields in the Add Secondary Ledger page.

    Field Description
    Accounting Calendar General Ledger uses the calendar periods that have the period type specified for journal entry, budgeting, and reporting with this ledger.

    Note: 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.

    Subledger Accounting Method 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.

    Note: 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.

    Note: Subledger Accounting Methods, Oracle Subledger Accounting Implementation Guide

    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.

    Note: The data conversion level cannot be changed.

Note: After adding a secondary ledger, complete the Ledger Options step and the Primary to Secondary Ledger Mapping step to enable the secondary ledger for data entry.

Deleting Secondary Ledgers

You can only delete secondary ledgers before the accounting setup is complete. After the accounting setup is complete, you can disable the conversion of secondary ledgers. This prevents any journals that are entered in the primary ledger or source representation from being transferred to the secondary ledger.

Deleting a secondary ledger removes the ledger and all of its setup steps.

To delete secondary ledgers:

  1. Navigate to the Accounting Options page.

  2. Find the secondary ledger to delete and click the Remove Secondary Ledger icon.

Disabling the Conversion of Secondary Ledgers

Once you disable the conversion of secondary ledgers, it immediately prevents the propagation of journals from the primary ledger to the secondary ledger.

The disabled secondary ledger is still available for historical reporting and manual journal entries

Note: Balance level secondary ledgers cannot be disabled. To stop transferring balances from the source representation (primary ledger or balance level reporting currency) to the balances level secondary ledger, stop running consolidations.

Note: Adjustments only secondary ledgers cannot be disabled because journals are not automatically transferred to this secondary ledger.

To disable the conversion of secondary ledgers:

  1. Navigate to the Accounting Options page.

  2. In the Secondary Ledgers region, select the Disable Conversion icon for the secondary ledger to be disabled.

    Note: Once the conversion of a secondary ledger is disabled, the status of the secondary ledger is changed to Disabled.

Primary to Secondary Ledger Mapping

The Primary to Secondary Mapping step specifies the conversion options to convert data from the primary ledger to the secondary ledger that may use a different chart of accounts, currency, and calendar from the primary ledger.

Note: If using an adjustments only secondary ledger, the Primary to Secondary Ledger Mapping step is not displayed. No conversion rules are required because the adjustments only secondary ledger must share the same chart of accounts, accounting calendar, and currency as the primary ledger.

Primary to Secondary Ledger Mapping Conversion Options

This section describes the following conversion options:

Chart of Accounts Conversion

In order to convert data between the charts of accounts of the primary and secondary ledgers, assign a chart of accounts mapping. A chart of accounts mapping is a set of instructions for mapping accounts or entire account segments from your primary ledger’s chart of accounts to your secondary ledger’s chart of accounts. This is particularly important if the primary and secondary ledgers use different charts of accounts.

Note: If a chart of accounts mapping is not assigned when the primary and secondary ledgers use different charts of accounts, errors are caused with Subledger Accounting and General Ledger posting.

If the primary and secondary ledgers use the same chart of accounts, the chart of accounts mapping is not required but can be assigned to the journal level and balance level secondary ledgers. This allows more flexibility to utilize different rollup rules when transferring journals or balances from the primary ledger to the secondary ledger. For example, you can maintain more detailed information in the primary ledger but maintain more summarized information in the secondary ledger, depending on the rollup rules defined for the chart of accounts mapping.

Note: You cannot change the chart of accounts mapping that is assigned to the secondary ledger once the accounting setup is complete.

Note: Mapping Charts of Accounts, Oracle General Ledger User Guide

Calendar Conversion

If the primary and secondary ledgers use different accounting calendars, the journal effective date is used to determine the corresponding non-adjusting period in the secondary ledger. If the secondary ledger does not share the same calendar as the primary ledger, each primary ledger journal is transferred to the secondary ledger’s non-adjusting period that includes the journal's effective date.

Journal Conversion

In order to transfer journals to the secondary ledger, specify journal conversion rules. Choose the journals to transfer to the secondary ledger by specifying journal source and category combinations. The General Ledger Posting program uses these journal conversion rules to determine which journals it should automatically transfer to the secondary ledger during posting.

Note: Journal conversion rules are only applicable if the data conversion level of the secondary ledger is subledger or journal.

Journal sources identify the origin of journal entry transactions, such as Purchasing or Payables. Journal categories describe the purpose of journal entries, such as purchase requisitions or purchase orders.

Specifying a journal source and category combination and selecting Yes to Transfer Journals to this Secondary Ledger, instructs the General Ledger Posting program to automatically transfer those journals to this secondary ledger when they are posted in the source representation.

The journal source and category Other represents all other journal sources and categories other than those explicitly defined.

This means that if you revalue balances in the source representation, such as the primary ledger, the resulting journals are not transferred to the secondary ledger. The same is true if you use MassMaintenance to move or merge balances between accounts in the source representation.

For example, if moving or merging account balances in the primary ledger, the resulting journal entries that use the source Move/Merge are not automatically converted to the secondary ledger. The same rule applies if reversing the Move/Merge journal entry. You must perform the Move/Merge operation and Move/Merge reversal in the secondary ledger separately.

Run Revaluation separately in the secondary ledger. General Ledger does not automatically convert the primary ledger's revaluation journal to the secondary ledger.

By default, all other journal sources and categories are converted to the secondary ledger as indicated by the Other journal source and category.

Special Note for Subledger Level Secondary Ledgers

For subledger level secondary ledgers, the journal sources for transaction sources that use Subledger Accounting must be set to No in the Transfer Journals to this Secondary ledger field. Any journal source that uses Subledger Accounting to generate its accounting entries must not be converted to the secondary ledger using General Ledger Posting because Subledger Accounting automatically performs the conversion for these subledger journals.

Note: To find all transaction sources that integrate with Subledger Accounting, query them in the Subledger Application form that is accessed from the Subledger Accounting Setup menu.

Note: Subledger Accounting Options

Note: If integrating with transaction sources that do not use Subledger Accounting and you want General Ledger posting to maintain journals from these subledgers in the subledger level secondary ledger, do not use Oracle's seeded journal sources. For example, if you use a non-Oracle Receivables application, you can create your own journal source for that application instead of using the seeded source Receivables that is reserved for Oracle sources. If you use the seeded source to import data from third party systems, those journals will not be transferred to a subledger level secondary ledger when you post them in the primary ledger.

Currency Conversion

If the primary and secondary ledger use different ledger currencies, currency conversion rules are required to instruct the system on how to convert data from the currency of the primary ledger to the currency of the secondary ledger.

Note: If both the primary and secondary ledgers use the same currency, the currency conversion rules are not applicable.

For information on the Default Rate Type and Retain Transaction Rate Type options, see the Journal and Subledger Level Reporting Currencies table.

This section includes the following topics:

Primary Ledger as Source Representation

A secondary ledger receives its data from its source representation.

When the source representation is the primary ledger, it means that the primary ledger's data is transferred directly to the secondary ledger.

When the source representation is a reporting currency that is assigned to the primary ledger, then the data is transferred directly from the reporting currency to the secondary ledger.

By default, the primary ledger is the source representation for all secondary ledgers, except the balance level secondary ledger that uses a different currency from the primary ledger. In this case, the source representation will always be the balance level reporting currency of the primary ledger whose currency matches the balance level secondary ledger.

When the source representation is the primary ledger, this is referred to as a one-step conversion from the primary ledger.

Example

Assume you have a primary ledger and a journal level or subledger level secondary ledger. The primary ledger’s currency is CAD; the secondary ledger’s currency is GBP; and the Default Rate Type is Reporting.

An SGD foreign currency journal is entered in the primary ledger using the transaction rate type of Spot.

The journal is first converted to the currency of the primary ledger using the transaction rate type, Spot. When the journal is posted in the primary ledger, the Secondary Ledger’s Default Rate Type and Retain Transaction Rate Type settings determine how the SGD entered journal is converted.

This example is shown in the figure below.

One-Step Conversion from Primary Ledger to Secondary Ledger

the picture is described in the document text

Reporting Currency as Source Representation

For journal level secondary ledgers only, you can choose to make the source representation a journal level reporting currency that is assigned to the primary ledger. For example, the source representation for a journal level secondary ledger can be a journal level reporting currency.

Note: The currency of the journal level reporting currency must match the currency of the secondary ledger.

This is referred to as a two-step conversion from the primary ledger. When data is entered in the primary ledger, the data is first converted to the journal level reporting currency and then transferred to the journal level secondary ledger, as described in the figure below.

Two-Step Conversion from the Primary Ledger

the picture is described in the document text

This is useful if you are already using a journal level reporting currency for reporting purposes. By using a journal level reporting currency as the source representation, you can enter additional journal entries directly in the reporting currency to have them propagated to the secondary ledger.

Note: The two-step conversion method is most suitable for companies that require a reporting currency level of detail for the primary ledger.

When choosing a journal level reporting currency as the source representation, the Default Rate Type and Retain Transaction Rate Type settings for the reporting currency control the currency conversion of transactions to the secondary ledger. In other words, the secondary ledger inherits the same settings as the reporting currency.

Two-Step Currency Conversion from Primary to Secondary Ledger

the picture is described in the document text

Example

Assume you have a primary ledger, a journal level reporting currency that is assigned to the primary ledger, and a journal level secondary ledger. The primary ledger’s currency is CAD and the currency for both the secondary ledger and reporting currency is GBP. The source representation for the secondary ledger is the reporting currency.

An SGD foreign currency journal is entered in the primary ledger using the transaction rate type, Spot.

The following table lists the conversion rates for different currencies used in this example.

From Currency To Currency Rate Type Rate
SGD CAD Spot 1.50
SGD CAD Reporting 1.65
SGD GBP Spot 1.70
SGD GBP Reporting 1.75

The journal is first converted to the currency of the primary ledger, CAD, using the transaction rate type, Spot, as described in the following table.

Primary Ledger Journal
Account Entered Debit (SGD) Entered Credit (SGD) Converted Debit (CAD) Converted Credit (CAD)
01.6110 1000.00   1500.00  
01.2110   1000.00   1500.00

Upon posting the journal described in the preceding table, the same journal is converted to the reporting currency based on the reporting currency's Default Rate Type and Retain Transaction Rate Type settings.

If Retain Transaction Rate Type is set to Yes, then the journal is converted from SGD to GBP using the transaction rate type, Spot.

The following table describes the journal entry that appears in both the reporting currency and the secondary ledger.

Journal for Reporting Currency and Secondary Ledger
Account Entered Debit (SGD) Entered Credit (SGD) Converted Debit (GBP) Converted Credit (GBP)
01.6110 1000.00   1700.00  
01.2110   1000.00   1700.00

If Retain Transaction Rate Type is set to No, then the journal is converted from SGD to GBP using the default rate type, Reporting.

The following table describes the journal entry that appears in both the reporting currency and the secondary ledger if the default rate type is used.

Journal for Reporting Currency and Secondary Ledger
Account Entered Debit (SGD) Entered Credit (SGD) Converted Debit (GBP) Converted Credit (GBP)
01.6110 1000.00   1750.00  
01.2110   1000.00   1750.00

Journals Entered Directly in the Reporting Currency

If entering a journal directly in the reporting currency, the same journal may or may not be copied exactly as is to the secondary ledger. It depends on the Default Rate Type and the Retain Transaction Rate Type settings for the secondary ledger.

Example

Assume you have a journal level reporting currency that is the source representation for a journal level secondary ledger. The default rate type assigned to the secondary ledger is Reporting. The currency for both the reporting currency and secondary ledger is GBP.

The following table lists the conversion rates for different currencies used in this example.

From Currency To Currency Rate Type Rate
SGD GBP Spot 1.70
SGD GBP Reporting 1.75

The SGD foreign currency journal described in the following table is entered in the reporting currency using the transaction rate type, Spot

Journal Entered in Reporting Currency
Account Entered Debit (SGD) Entered Credit (SGD) Converted Debit (GBP) Converted Credit (GBP)
01.6110 1000.00   1700.00  
01.2110   1000.00   1700.00

Upon posting the journal in the journal level reporting currency, the same journal is converted to the secondary ledger based on the secondary ledger’s Default Rate Type and Retain Transaction Rate Type settings.

The following table describes the journal entry that appears in the secondary ledger if Retain Transaction Rate Type is set to No.

Journal for Secondary Ledger
Account Entered Debit (SGD) Entered Credit (SGD) Converted Debit (GBP) Converted Credit (GBP)
01.6110 1000.00   1750.00  
01.2110   1000.00   1750.00

Using Reporting Currencies as Source Representations

To use a journal level reporting currency as the source representation for a journal level secondary ledger, perform the following tasks:

  1. Define a journal level reporting currency for the primary ledger.

    Note: A journal level secondary ledger can only have the primary ledger or a journal level reporting currency as its source representation.

  2. Choose the reporting currency to be the source representation in the Primary to Secondary Ledger Mapping page.

  3. Specify currency conversion rules.

  4. Specify journal conversion rules.

    The journal conversion rules specified for the secondary ledger should be the same as the journal level reporting currency, but you can change them for the secondary ledger in the Primary to Secondary Ledger Mapping page.

    You can choose to transfer selected journals that use different sources or categories from the reporting currency to the secondary ledger. For example, you can choose to transfer only a subset of journals from the reporting currency to the secondary ledger by making the journal conversion rules more restrictive for the secondary ledger.

Completing the Primary to Secondary Ledger Mapping

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Prerequisites

The following prerequisites are required to complete the primary to secondary ledger mapping step:

To complete the primary to secondary ledger mapping

Note: This step is required to complete the accounting setup.

  1. In the secondary ledger regions of the Accounting Options page, click the Update icon for the Primary to Secondary Ledger Mapping step.

  2. Specify the following: