The following chapter describes the accounting setup done in Oracle Subledger Architecture.
This chapter covers the following topics:
Accounting for all transactions uses Oracle Subledger Accounting (SLA). SLA delivers many benefits, and lets you customize the way accounting is performed for a specific event. You can use accounts derived from custom business logic based on data provided by the application (accounting sources).
SLA is a common rule-based accounting engine used by Oracle products that posts accounting entries into Oracle General Ledger. Rules are user-defined and reside in a common repository for all subledger applications such as OPM Cost Management. The SLA accounting engine is a common engine for all subledger applications and provides you with a single common paradigm for defining your accounting behaviors.
The engine supports multiple currencies, as well as audit tools such as the XML Publisher based Journal Entries report. This report also displays the balance of an Inventory Valuation account within the specified date range. Refer to Journal Entries Report, Oracle Subledger Accounting Implementation Guide.
The subledger accounting engine lets the accounting department maintain sophisticated control over accounting and charts of accounts. Accounting rules can be defined against most attributes. For example, you can use an attribute of an item to redirect accounting to the proper category of Cost of Goods Sold within the Chart of Accounts. You can also control and avoid user errors from being entered into the application. Incorrect entries can be redirected to proper accounts.
Refer to the Oracle Subledger Accounting Implementation Guide for details on setting up and using Subledger Accounting.
Accounting Methods Builder is a set of programs and utilities with SLA that lets you create the event model. Account Derivation Rule builder is part of the Account Methods Builder that lets you create a rule-based account construction. Transaction Account Builder provides a subset of Accounting Methods Builder features. Journal Line Types are defined in Accounting Methods Builder and include options to convert transaction data into Subledger journal entry. Journal Line Types help to determine whether a Subledger journal entry line is a debit or credit, whether it should be transferred to the GL in summary or detail mode, whether matching lines must be merged and its balance type (actual, encumbrance, or budget). Journal Line Types are defined for an event class and are assigned to Event Class and Event Types. The Journal Line Types to use for an event is defined using Source's. Journal Line Definition associate Journal Line Types and Account Definition Rules. This determines what Account Derivation Rules to use for Journal Line Types.
For example, for Production Batches, OPM maps INV, RCA, RUV, WIP Journal Line Types and assigns them to the appropriate event class and event type. You must create an Account Derivation Rule to use the AAP account during goods receipt. GL Accounts are retrieved using Account Derivation Rules.
Accounting template is setup using Application Accounting Definition. Application Accounting Definition determines how the accounting for events are processed by accounting program. You can setup accounting templates in addition to what is provided as seed data.
Application Accounting Definition ties all the these together. Events, Journal Line Types, Account Definition Rules, and Analytical Criteria collectively define Application Accounting Definition. Account Definition Rules and Analytical Criteria are assigned to Journal Line Types, which are then assigned to Events and these Events are assigned to Application Accounting Definition. You can create multiple Application Accounting Definition for each transaction model. All the Application Accounting Definitions are grouped to form Subledger Accounting Method. To complete the setup, the Subledger Accounting Method is assigned to a Ledger. Refer the Oracle Subledger Accounting Implementation Guide for more details. For example, in the case of Application Accounting Definition for Production Batch contains Event Classes (Release, Completion, and Closure), Journal Line Types (INV, WIP, RCA, RUV), Account Definition Rules (user-defined), and journal line descriptions.
You can use the Valuation Cost Method option on the Subledger Applications window to generate accounting for transactions using multiple cost methods for simulations. SLA supports different accounting for each valuation method. At anytime there can be more than one representation. You must setup secondary ledgers and assign a valuation method to it. Refer to "Assigning Ledgers" topic for more details.
To create multiple accounting representations:
Create secondary ledgers and other required setup.
Select Subject to Valuation Method option in the Subledger Applications window of Oracle Subledger Accounting application available from the OPM Financials responsibility.
Set up Fiscal Policy for the operating unit in OPM Financials.
Select Valuation Method Assignment window from the Fiscal Policy window Actions menu to assign valuation methods ledgers.
Assign Valuation Method to each ledger to see the accounting representations.
Oracle Subledger Architecture Event model consists of Event Entity, Event Class, and Event Type. Events are seeded into SLA to process OPM transactions. SLA calls the extract program during accounting to extract amounts for these transactions that are posted to GL Accounts.
The following table displays the OPM entities:
| Entity Type | Entity Name |
|---|---|
| INVENTORY | Inventory Transaction |
| ORDER MANAGEMENT | Order Management |
| PRODUCTION | Process Execution |
| PURCHASING | Purchasing Transactions |
| REVALUATION | Inventory Revaluation |
The following table displays the OPM entities, event classes, and event type names:
| Entity Name | Event Class Name | Entity Type Code | Event Type Name |
|---|---|---|---|
| Inventory Revaluation | Actual Cost Adjustment | ACTCOSTADJ | Actual Cost Adjustment |
| Inventory Revaluation | Cost Revaluation | COSTREVAL | Cost Revaluation |
| Inventory Revaluation | Lot Cost Adjustment | LOTCOSTADJ | Lot Cost Adjustment |
| Inventory Transactions | Direct Interorg Receipt | DIR_INTERORG_RCPT_TP | Direct Interorg Receipt, Transfer Pricing |
| Inventory Transactions | Direct Interorg Receipt | DIR_INTERORG_RCPT | Direct Interorg Receipt, no Transfer Pricing |
| Inventory Transactions | Direct Interorg Shipment | DIR_INTERORG_SHIP_TP | Direct Interorg Shipment, Transfer Pricing |
| Inventory Transactions | Direct Interorg Shipment | DIR_INTERORG_SHIP | Direct Interorg Shipment, no Transfer Pricing |
| Inventory Transactions | Internal Order to Expense | INT_ORDER_ISSUE | Internal Order Issue to Expense |
| Inventory Transactions | Internal Order to Expense | EXP_REQ_RCPT | Internal Order Receipt to Expense |
| Inventory Transactions | Intransit Interorg Receipt for FOB Shipment | FOB_SHIP_RECIPIENT_RCPT | Intransit Interorg Receipt for FOB Shipment |
| Inventory Transactions | Intransit Interorg Shipment for FOB Receipt | FOB_RCPT_SENDER_SHIP | Intransit Interorg Shipment for FOB Receipt |
| Inventory Transactions | Logical Intercompany | LOG_IC_SHIPMENT_RCPT | Logical InterCompany Receipt |
| Inventory Transactions | Logical Intercompany | LOG_IC_RCPT_RETURN | Logical InterCompany Receipt Return |
| Inventory Transactions | Logical Intercompany | LOG_IC_SALES_RETURN | Logical InterCompany Sales Return |
| Inventory Transactions | Logical Intercompany | LOG_IC_SALES_ISSUE | Logical Intercompany Sales Issue |
| Inventory Transactions | Miscellaneous Transactions | ACCT_ALIAS_ISSUE | Account Alias Issue |
| Inventory Transactions | Miscellaneous Transactions | ACCT_ALIAS_RECEIPT | Account Alias Receipt |
| Inventory Transactions | Miscellaneous Transactions | ACCT_ISSUE | Account Issue |
| Inventory Transactions | Miscellaneous Transactions | ACCT_RECEIPT | Account Receipt |
| Order Management | RMA | LOG_RMA_RECEIPT | Logical RMA Receipt |
| Order Management | RMA | RMA_RECEIPT | RMA Receipt |
| Order Management | RMA | RMA_RETURN | RMA Return |
| Order Management | Shipments | COGS_RECOGNITION | COGS Recognition |
| Order Management | Shipments | COGS_RECOGNITION_ADJ | COGS Recognition Adjustment |
| Order Management | Shipments | LOG_SO_ISSUE | Logical Sales Order Issue |
| Order Management | Shipments | SO_ISSUE | Sales Order Issue |
| Process Execution | Batch Close Variances | CLOS | Batch Close |
| Process Execution | Batch Material Transactions | CERT | Batch Completion |
| Process Execution | Batch Material Transactions | RELE | Batch Release |
| Process Execution | Batch Resource Transactions | STEP | Step Completion |
| Purchasing Transactions | Deliver to or Return from Inventory | INT_REQ_RECEIPT_ADJ | Internal Requisition Receipt Adjustment |
| Purchasing Transactions | Deliver to or Return from Inventory | LOG_PO_RECEIPT | Logical PO Receipt |
| Purchasing Transactions | Deliver to or Return from Inventory | LOG_PO_RCV_ADJ Logical | Logical PO Receipt Adjustment |
| Purchasing Transactions | Deliver to or Return from Inventory | LOG_RET_TO_RECEIVING | Logical Return to Receiving |
| Purchasing Transactions | Deliver to or Return from Inventory | PO_RECEIPT PO | PO Receipt |
| Purchasing Transactions | Deliver to or Return from Inventory | PO_RECEIPT_ADJ | PO Receipt Adjustment |
| Purchasing Transactions | Deliver to or Return from Inventory | RETRO_PRICE_UPD | Retroactive Price Update |
| Purchasing Transactions | Deliver to or Return from Inventory | RET_TO_RECEIVING | Return to Receiving from Inventory |
| Purchasing Transactions | Deliver to or Return from Inventory | XFER_TO_CONSIGNED | Transfer to Consigned |
| Purchasing Transactions | Deliver to or Return from Inventory | XFER_TO_REGULAR | Transfer to Regular |
| Purchasing Transactions | Receiving | DELIVER_EXPENSE | Deliver to Expense |
| Purchasing Transactions | Receiving | EXP_RET_TO_RECEIVING | Expense Return to Receiving |
| Purchasing Transactions | Receiving | LOG_RECEIVE | Logical Receiving |
| Purchasing Transactions | Receiving | LOG_RET_TO_VENDOR | Logical Return to Vendor |
| Purchasing Transactions | Receiving | RECEIVE | Receive to Inspection |
| Purchasing Transactions | Landed Cost Adjustment | LC_ADJUST_DELIVER | Landed Cost Adjustment- Deliver |
| Purchasing Transactions | Landed Cost Adjustment | LC_ADJUST_EXP_DELIVER | Landed Cost Adjustment- Expense Deliver |
| Purchasing Transactions | Landed Cost Adjustment | LC_ADJUST_ RECEIVE | Landed Cost Adjustment- Receive |
| Purchasing Transactions | Landed Cost Adjustment | LC_ADJUST_VALUATION | Landed Cost Adjustment- Valuation |
Account definitions are created in Accounting Methods Builder (AMB) determine the journal line types, descriptions, General Ledger accounts and other elements of subledger journal entries. Each of the components is explained.
Journal Line Types (JLTs) determine basic information about a subledger journal entry line. This information includes whether the line is a debit or credit, whether it must be transferred to the General Ledger in summary or detail mode, whether matching lines should be merged, and its balance type (actual, encumbrance, or budget).
Journal Line Definition associate Journal Line Types and Account Derivation Rules. This determines which account derivation rules to use for journal line types. GL Accounts are retrieved using account derivation rules.
Note: The Journal Line Types are specific to Event Classes. In some cases, the Journal Line Type could be repeated under more than one event class.
The following table displays the OPM Costing - SLA Journal Line Types:
| Journal Line Type Code | Journal Line Type | Journal Line Code |
|---|---|---|
| AAP | Accrued Accounts Payable | Accrued Accounts Payable |
| ALC | Allocation | Allocation |
| ALV | Allocation Variance | Allocation Variance |
| CLEARING | Clearing | Clearing |
| CLEARING | Clearing Account | Clearing |
| CLS | Batch Close Variance | Batch Close Variance |
| COGS | Cost of Goods Sold | Cost of Goods Sold |
| DCOGS | Deferred Cost of Goods Sold | Deferred Cost of Goods Sold |
| EXP | Expense | Expense |
| EXP_SUB_FROM | Expense - Transfer From | Inventory - Transfers |
| EXP_SUB_TO | Expense - Transfer To | Inventory - Transfers |
| FRT | Freight Expense | Freight Expense |
| ICACC | Intercompany Accrual | Intercompany Accrual |
| ICCOGS | Intercompany COGS | Intercompany Cost of Goods Sold |
| ICEXP | Intercompany Expense | Intercompany Expense |
| INV | Inventory Valuation | Inventory Valuation |
| INV_SUB_FROM | Inventory - Transfer From | Inventory - Transfers |
| INV_SUB_TO | Inventory - Transfer To | Inventory - Transfers |
| IOP | Inter-Org Payables | Inter-Org Payables |
| IOPR | Inter-Org Profit | Inter-Org Profit |
| IOR | Inter-Org Receivables | Inter-Org Receivables |
| IRV | Inventory Revaluation Variance | Inventory Revaluation Variance |
| ISP | Receiving Inspection | Receiving Inspection |
| ITR | Intransit Inventory | Intransit Valuation |
| IVA | Inventory Adjustments Expense | Inventory Adjustments Expense |
| OHV | Overhead Variance | Overhead Variance |
| OVH | Overhead Absorption | Overhead Absorption |
| PIN | Profit In Inventory | Profit in Inventory |
| PPV | Purchase Price Variance | Purchase Price Variance |
| RCA | Resource Control Account | Resource Control Account |
| RMV | Resource Manning Variance | Resource Manning Variance |
| RPADJ | Retroactive Price Adjustment | Retroactive Price Adjustment |
| RSV | Resource Substitution Variance | Resource Substitution/Method Variance |
| RUV | Resource Usage Variance | Resource Usage/Efficiency Variance |
| SUB | Substitution Variance | Substitution Variance |
| USG | Usage Variance | Usage Variance |
| WIP | Work in Process Valuation | Work In Process Valuation |
| XTC | Interorg Transfer Credit | Inter-Org Transfer Credit |
| YLD | Yield Variance | Yield Variance |
| LCA | Landed Cost Absorption | Landed Cost Absorption |
| LCV | Landed Cost Variance | Landed Cost Variance |
The following table displays the OPM Costing - SLA Account Derivation Rules:
| Segment Rule Code | Segment Rule Type |
|---|---|
| AAP | Accrued Accounts Payable |
| ALC | Allocation |
| ALV | Allocation Variance |
| CLEARING | Clearing Account |
| CLS | Batch Close Variance |
| COGS | Cost of Goods Sold |
| DCOGS | Deferred Cost of Goods Sold |
| EXP | Expense |
| FRT | Freight Expense |
| ICACC | Intercompany Accrual |
| ICCOGS | Intercompany COGS |
| ICEXP | Intercompany Expense |
| INV | Inventory Valuation |
| INV_SUB_FROM | Inventory - Transfer From |
| INV_SUB_TO | Inventory - Transfer To |
| IOP | Inter-Org Payables |
| IOPR | Inter-Org Profit |
| IOR | Inter-Org Receivables |
| IRV | Inventory Revaluation Variance |
| ISP | Receiving Inspection |
| ITR | Intransit Inventory |
| IVA | Inventory Adjustments Expense |
| OHV | Overhead Variance |
| OVH | Overhead Absorption |
| PIN | Profit In Inventory |
| PPV | Purchase Price Variance |
| RCA | Resource Control Account |
| RMV | Resource Manning Variance |
| RPADJ | Retroactive Price Adjustment |
| RSV | Resource Substitution Variance |
| RUV | Resource Usage Variance |
| SUB | Substitution Variance |
| USG | Usage Variance |
| WIP | Work in Process Valuation |
| XTC | Interorg Transfer Credit |
| YLD | Yield Variance |
The following table displays the OPM Costing - SLA Journal Line Definitions:
| Journal Line Definition Code | Journal Line Definition Name |
|---|---|
| ACTCOSTADJ | Actual Cost Adjustments |
| BATCH_CLOSE | Batch Close |
| BATCH_COMPLETION | Batch Completion |
| BATCH_RELEASE | Batch Release |
| BATCH_STEP | Step Completion |
| COSTREVAL | Cost Revaluation |
| INT_REQ_RCPT_ADJ | Internal Requisition Receipt Adjustment |
| LOG_PO_RCV_ADJ | Logical PO Receipt Adjustment |
| LOGICAL_PO_RECEIPT | Logical PO Receipt |
| LOG_RET_TO_RECEIVING | Logical Return to Receiving |
| DELIVER | PO Receipt |
| PO_RECEIPT_ADJ PO | Receipt Adjustment |
| RETRO_PRICE_UPD | Retroactive Price Update |
| PO_RETURN | Return to Receiving |
| XFER_TO_CONSIGN | Transfer to Consigned |
| XFER_TO_REG | Transfer to Regular |
| DIRECT_XFER_RECV | Direct Inter-Org Receipt, no Transfer Pricing |
| DIRECT_XFER_RECV_TP | Direct Interorg Receipt, Transfer Pricing |
| DIRECT_XFER_SHIP | Direct Interorg Shipment, no Transfer Pricing |
| DIRECT_XFER_SHIP_TP | Direct Interorg Shipment, Transfer Pricing |
| FOB_RCPT_RECIPIENT_RCPT_NO_TP | Recipient-side Intransit Interorg Receipt for FOB Receipt, no Transfer Pricing |
| FOB_RCPT_RECIPIENT_RCPT_TP | Recipient-side Intransit Interorg Receipt for FOB Receipt, Transfer Pricing |
| FOB_RCPT_SENDER_RCPT_NO_TP | Sender-side Intransit Interorg Receipt for FOB Receipt, no transfer Pricing |
| FOB_RCPT_SENDER_RCPT_TP | Sender-side Intransit Interorg Receipt for FOB Receipt, Transfer Pricing |
| FOB_RCPT_SENDER_SHIP | Intransit Interorg Shipment for FOB Receipt |
| FOB_SHIP_RECIPIENT_RCPT | Intransit Interorg Receipt for FOB Shipment |
| FOB_SHIP_RECIPIENT_SHIP_NO_TP | Recipient-side Intransit Interorg Shipment for FOB Shipment, no Transfer Pricing |
| FOB_SHIP_RECIPIENT_SHIP_TP | Recipient-side Intransit Interorg Shipment for FOB Shipment, Transfer Pricing |
| FOB_SHIP_SENDER_SHIP_NO_TP | Sender-side Intransit Interorg Shipment for FOB Shipment, no Transfer Pricing |
| FOB_SHIP_SENDER_SHIP_TP | Sender-side Intransit Interorg Shipment for FOB Shipment, Transfer Pricing |
| EXP_REQ_RCPT | Internal Order Receipt to Expense |
| EXP_REQ_RCPT_TP | Internal Order Receipt into Expense, Transfer Pricing |
| INT_ORDER_ISSUE | Internal Order Issue to Expense |
| INT_ORDER_ISSUE_TP | Internal Order to Expense, Transfer Pricing |
| LOG_IC_RCPT_RETURN | Logical InterCompany Receipt Return |
| LOG_IC_SALES_ISSUE | Logical Intercompany Sales Issue |
| LOG_IC_SALES_RETURN | Logical InterCompany Sales Return |
| LOG_IC_SHIPMENT_RCPT | Logical InterCompany Receipt |
| LOTCOSTADJ | Lot Cost Adjustments |
| MISC_TXN | Miscellaneous Transactions |
| ADJUST_DELIVER | Adjust Deliver |
| ADJUST_RECEIVE | Adjust Receive |
| DELIVER_EXPENSE | Deliver to Expense |
| EXP_RET_TO_RECEIVING | Expense Return to Receiving |
| LOG_RECEIVE | Logical Receiving |
| LOG_RET_TO_VENDOR | Logical Return to Vendor |
| RECEIVE | Receive to Inspection |
| RETURN | Return to Vendor |
| RMA | RMA Receipt or Return |
| COGS_RECOGNITION | COGS Recognition |
| COGS_RECOGNITION_ADJ | COGS Recognition Adjustment |
| LOGICAL_SO_ISSUE | Logical Sales Order Issue |
| SO_ISSUE | Sales Order Issue |
| SUBINV_XFER | Sub-inventory Transfers |