Inflation is a general rise in the price of goods and services in an area over a certain time period. Rapid inflation can distort the amounts maintained in accounting records. In some countries, companies must prepare their financial reports to stockholders and government authorities in constant units of money, amounts that are not affected by inflation. The balances that have been distorted must be adjusted by applying indexes that measure the pace of inflation. The Consumer Price Index (CPI) is the most common approximate measure of inflation that compares the average price for different goods and services and the price increases for these goods and services over time.
Account balances that consist only of original journal entry line amounts and that have not been adjusted for inflation are called historical balances. Balances that have been adjusted for inflation and that consist of both original and inflation adjustment journal entry line amounts are called inflation-adjusted balances.
In some countries, such as Argentina, companies are legally required to report both historical balances and inflation-adjusted balances for non-monetary accounts, such as fixed assets and most expense and revenue accounts. In other countries, such as Chile, companies are only required to report inflation-adjusted balances for non-monetary accounts.
The inflation adjustment feature in General Ledger provides two different options to meet the inflation adjustment reporting requirements in Latin America:
Historical/adjusted option – lets you maintain and report on both historical balances and inflation-adjusted balances by using two different ledgers. For more information, see Maintaining Both Historical and Inflation-Adjusted Balances.
Adjusted-only option – lets you maintain and report on simply the inflation-adjusted balances by using one main ledger. For more information, see Maintaining Only Inflation-Adjusted Balances.
When you set up inflation adjustment, choose the option that satisfies your country's requirements. For more information, see your country-specific chapter.
Note: If you use the Multiple Reporting Currencies (MRC) feature, you should choose the historical/adjusted option in General Ledger and use the historical ledger as your MRC primary ledger. You must use a historical ledger as your MRC primary ledger to avoid including inflation adjustment amounts when MRC converts your transactions into another currency.
Oracle General Ledger for Latin America provides you with features to satisfy these basic business needs. You can:
Adjust your non-monetary account balances to reflect inflation during a specific time period.
Define different price indexes by entering price index values and the periods that these values apply to.
Choose which accounts to adjust by entering the accounting flexfield ranges that contain these accounts.
Choose which Result of Exposure to Inflation (R.E.I.) accounts, also referred to as inflation adjustment gain/loss accounts, to charge with the adjustment amount for each inflation adjustment.
Assign transactions to a date, called the inflation adjustment date, that is prior to the recording date.
Create an inflation adjustment journal entry that reflects gain or loss due to inflation for each corrected account.
Issue standard and Financial Statement Generator (FSG) reports for historical and adjusted balances.
If you need to maintain both historical and inflation-adjusted balances, choose the historical/adjusted option in General Ledger. With the historical/adjusted option, you use two different ledgers to keep the historical balances separate from the inflation-adjusted balances.
To adjust General Ledger accounts for inflation with the historical/adjusted option:
Enter, generate, or import unposted journal entries in the historical ledger. You can run inquiries or standard reports to check the journal entries.
Post the journal entries in the historical ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
You can run inquiries or standard reports to check that the journal entries are correctly posted or to check what the account balances are.
Submit the Latin American General Ledger Journal Copy process from the historical ledger to copy the posted journal entries for the period to the adjusted ledger and import the copied journal entries into the adjusted ledger.
You can run inquiries or standard reports to check the journal entries.
Post the imported journal entries in the adjusted ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
You can run inquiries or standard reports to check that the journal entries are correctly posted or to check that the account balances are correctly imported.
Run the inflation adjustment process.
Run the Journal Import process, either automatically or manually, to import the inflation adjustment journals into the adjusted ledger. You can run inquiries or standard reports to check that the journal entries are correctly imported.
Post the imported journals in the adjusted ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
You can run inquiries or standard reports to check that the journal entries are correctly posted or to check how the account balances are adjusted.
Run standard or Financial Statement Generator (FSG) reports that list balances from your historical and adjusted ledger.
Related Topics
Entering Journals, Oracle General Ledger User Guide
Importing Journals, Oracle General Ledger User Guide
Posting Journal Batches, Oracle General Ledger User Guide
Overview of the Financial Statement Generator, Oracle General Ledger User Guide
If you do not need to maintain historical balances, choose the adjusted-only option in General Ledger. With the adjusted-only option, you keep the inflation-adjusted balances in one main ledger.
To adjust General Ledger accounts for inflation with the adjusted-only option:
Enter, generate, or import unposted journals in your main ledger. You can run inquiries or standard reports to check the journal entries.
Post the journals in the main ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
You can run inquiries or standard reports to check that the journal entries are correctly posted or to check what the account balances are.
Run the inflation adjustment process.
Run the Journal Import process, either automatically or manually, to import the inflation adjustment journals into the main ledger. You can run inquiries or standard reports to check that the journal entries are correctly imported.
Post the imported journals in the main ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
You can run inquiries or standard reports to check that the journal entries are correctly posted or to check how the account balances are adjusted.
Create Financial Statement Generator (FSG) reports that list balances from your main ledger.
Related Topics
Entering Journals, Oracle General Ledger User Guide
Importing Journals, Oracle General Ledger User Guide
Posting Journal Batches, Oracle General Ledger User Guide
Overview of the Financial Statement Generator, Oracle General Ledger User Guide
Before you can adjust your accounts for inflation, you must perform these prerequisite steps to prepare your ledger in Oracle General Ledger. Some prerequisite steps are required for both the adjusted-only option and the historical/adjusted option. Other prerequisite steps are only required for the historical/adjusted option. Use the table below to determine which steps you must perform for your option.
| Prerequisite Steps | Adjusted-only | Historical/adjusted |
|---|---|---|
| Define the main ledger | Required | Required |
| Define the adjusted ledger | Required | |
| Enter transactions in the main ledger | Required | Required |
| Post journal entries in the main ledger | Required | Required |
| Run the Latin American General Ledger Journal Copy process | Required | |
| Post journal entries in the adjusted set of books | Required |
You must define a main ledger to record your transactions in. If you use the adjusted-only option, you record your transactions in the same ledger where you will run the inflation adjustment process.
Note: If you use the Inflation Adjustment Date feature with the adjusted-only option, define your main ledger as an MRC primary ledger. To use the Inflation Adjustment Date feature, you must define the ledger where you will run the inflation adjustment process as an MRC primary ledger, even if you do not use the MRC feature in Oracle General Ledger. You can classify a ledger as primary in the Reporting Currency Options tabbed region in the Ledger window. For more information, see Using the Inflation Adjustment Date.
If you use the historical/adjusted option, record your day-to-day business transactions in the historical ledger. Do not adjust for inflation in this ledger. Instead, copy these transactions to the adjusted ledger to adjust the balances for inflation.
Related Topics
Defining Ledgers, Oracle General Ledger Implementation Guide
If you use the historical/adjusted option, you must define a separate, adjusted ledger to maintain inflation-adjusted balances for your non-monetary accounts. The adjusted ledger must have the same calendar, chart of accounts, and currency as the historical ledger. Copy your transactions from the historical ledger to the adjusted ledger, and perform inflation adjustment only in the adjusted ledger.
Note: If you use the Inflation Adjustment Date feature with the historical/adjusted option, define your adjusted ledger as an MRC primary ledger. To use the Inflation Adjustment Date feature, you must define the ledger where you will run the inflation adjustment process as an MRC primary ledger, even if you do not use the MRC feature in Oracle General Ledger. You can classify a ledger as primary in the Reporting Currency Options tabbed region in the Ledger window. For more information, see Using the Inflation Adjustment Date.
Related Topics
Defining Ledgers, Oracle General Ledger Implementation Guide
You must enter your daily transactions in your main ledger. If you use the adjusted-only option, enter your transactions in the same ledger that you will run the inflation adjustment process in.
If you use the historical/adjusted option, enter your transactions in the historical ledger. This ledger mirrors the historical operation of your business. All the reports and processes that you run against the historical ledger show your balances without the effect of inflation because you keep historical balances separate from the balances that are adjusted for inflation.
Related Topics
Defining Ledgers, Oracle General Ledger Implementation Guide
You must post journal entries in your main ledger. The posting process updates the account balances in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
If you use the adjusted-only option, you must post your journal entries in the main ledger before adjusting your accounts for inflation so that the inflation adjustment process can calculate the adjustment amounts based on up-to-date account balances. The inflation adjustment process selects only journal entries with a Posted status to find the account balances.
If you use the historical/adjusted option, you must post your journal entries in the main ledger before you run the Latin American General Ledger Journal Copy process so that the Latin American General Ledger Journal Copy process can copy the entries to the adjusted ledger. The Latin American General Ledger Journal Copy process selects only journal entries with a Posted status.
Related Topics
Defining Ledgers, Oracle General Ledger Implementation Guide
If you use the historical/adjusted option, you must run the Latin American General Ledger Journal Copy process to copy your journal entries from the historical ledger to the adjusted ledger. You must submit the Latin American General Ledger Journal Copy process from the historical ledger where you entered your transactions.
The Latin American General Ledger Journal Copy process selects only certain journal entries for copying to the adjusted ledger. Check that the journal entries that you want to copy have the following:
A status of Posted. Unposted journal entries are not copied.
A balance type of Actual. Budget and encumbrance journal entries are not copied.
A source other than Assets or Revaluation. The Latin American General Ledger Journal Copy process does not copy journal entries that originate in Oracle Assets. Instead, you should perform inflation adjustment for Oracle Assets journal entries within the Assets subledger and transfer all your Assets journal entries directly from your adjusted depreciation book to your adjusted General Ledger ledger. For more information, see Inflation Adjustment Overview.
All journal entries that meet these three requirements are copied to the adjusted ledger. The journal entries are copied in both the transaction currency and the ledger currency, if the transaction currency is not the same as the ledger currency.
When you run the Latin American General Ledger Journal Copy process, you can enter the period that you want to copy journal entries for. You must run the Latin American General Ledger Journal Copy process at least once for each period. If you run the Latin American General Ledger Journal Copy process again for the same period, the process selects only posted transactions that were not previously copied.
The Latin American General Ledger Journal Copy process creates journal entries in the Oracle General Ledger interface table. As soon as General Ledger finishes copying journal entries, the Journal Import process runs automatically. When the Journal Import process is complete, you can see the journal entries in the adjusted ledger.
Note: If the date of a journal entry belongs to more than one period, the Journal Import process assigns the journal entry to the earliest period that includes the date. For example, assume that the date December 31 belongs both to the December period (period number 12) and the Adjusting period (period number 13). In this case, the Journal Import process assigns all journal entries dated December 31 to the December period. You can change the journal entry period when you review the journal entries before you run the posting process.
Oracle General Ledger for Latin America copies the journal entries with references to subledger information, such as invoice number for journal entries from Oracle Payables. The references let you drill down from a copied journal entry to the subledger where the journal entry was created, just as you can from the original journal entry.
Use the Standard Request Submission windows to submit the Latin American General Ledger Journal Copy process.
Enter the adjusted ledger that you want to copy the journal entries to. You can only choose a ledger that has the same calendar, chart of accounts, and currency as the historical ledger from which you are submitting the Latin American General Ledger Journal Copy Process.
Enter the period that you want to copy journal entries for.
Related Topics
Importing Journals, Oracle General Ledger User Guide
Using Standard Request Submission , Oracle Applications User Guide
If you use the historical/adjusted option, you must post the imported journal entries in the adjusted ledger. The posting process updates the account balances in the ledger currency.
You must post the journal entries in the adjusted ledger before adjusting your accounts for inflation so that the inflation adjustment process can calculate the adjustment amounts based on up-to-date account balances. The inflation adjustment process selects only journal entries with a Posted status to find the account balances.
Related Topics
Posting Journal Batches, Oracle General Ledger User Guide
This section describes how to set up Oracle General Ledger for the inflation adjustment process. Use this checklist to help you complete the appropriate steps in the correct order:
In some countries, companies are legally required to calculate inflation rates with a certain precision. For example, in Chile, the inflation rate must be calculated with a precision of three decimal positions.
You can use the JL: Inflation Ratio Precision profile option to define the number of decimal positions for the precision of the inflation rate calculation. Oracle General Ledger rounds the rate to the number of decimal positions you choose. Use the System Profile Values window in the System Administrator responsibility to assign a value to the JL: Inflation Ratio Precision profile option.
You should only define a value for the inflation ratio precision if you are legally required to do so. If your country does not require a certain precision, do not enter a value for the JL: Inflation Ratio Precision profile option. Instead, leave this profile option blank to calculate the inflation rate with the greatest possible precision.
Related Topics
Overview of User Profiles, Oracle Applications User Guide
Define your accounting models in the Accounting Models window. An accounting model lets you select individual General Ledger accounts as well as account ranges, group those accounts into a set, and give a name to that set.
You can later use the sets that you define as accounting models to choose the accounts that you want to adjust when you run the inflation adjustment process. Defining appropriate accounting models saves you time in the future, because once an accounting model is defined for a particular group of accounts, you can reuse that accounting model whenever you want to work on that group of accounts.
For example, if you have 20 accounts numbered 1-20 and you want to adjust accounts 5-7, 9, and 12-14, you could group those accounts together as an accounting model. You can now work on these accounts with the new name that you gave this group in the accounting model, rather than working with each account individually.
Note: Although there are no rules for grouping accounts, you may want to define different accounting models for different kinds of accounts. For example, you can define one accounting model for all of your asset accounts and another accounting model for all of your liability accounts.
To define an inflation adjustment accounting model:
Navigate to the Accounting Models window.
Enter the accounting model name in the Name field.
Enter the accounting model description in the Description field.
In the Account Low field, enter the low segment values for the range of accounts that you want to assign to this accounting model.
In the Account High field, enter the high segment values for the range of accounts that you want to assign to this accounting model.
Note: When you enter low and high segment values, you define the range you want for each segment separately from the other segments. The accounting model includes only those accounting flexfields whose segment values each fall within the range for that segment.
For example, suppose you enter the low segment values 91-000-4000 and the high segment values 92-000-5000. In this case, the accounting model includes only the accounting flexfields from 91-000-4000 through 91-000-5000 and from 92-000-4000 through 92-000-5000.
Repeat steps 4 and 5 for each range of accounts that you want to assign to this accounting model.
Define the price indexes that you want to use to adjust accounts for inflation in the Price Indexes window. A price index is a measure of the overall cost of goods and services bought by various entities. The base value of the index represents the cost level in a certain base period. The index value for each subsequent period represents the cost level for that period as a proportion of the base value. The difference between the base value and the index value for a certain period represents the inflation rate between the base period and that period.
The index that you use depends on your company's business. Many organizations use either the Consumer Price Index (CPI) or the Producer Price Index (PPI).
When the government publishes the inflation measure, the measure is expressed as a price index value. For this reason, you must enter the measure for each month as an index value in the Value % field. Do not enter the inflation measure as a percentage. You must enter a new value each month when the government publishes the price index value for the month.
The Inflation Adjustment process uses the price index to select the appropriate index value for the period that you are adjusting.
To define a price index:
Navigate to the Price Indexes window.
Enter the index name that you want to define in the Index field.
Enter the price index value from the government in the Value % field.
In the From Date and To Date fields, enter the dates that this index value is effective for. If you leave the To Date field blank, the index value is effective indefinitely.
Related Topics
Defining Price Indexes, Oracle Assets User Guide
Price Index Listing, Oracle Assets User Guide
After you set up Oracle General Ledger for inflation adjustment, and you enter and post all the journal entries that you want to adjust for inflation, you can adjust your accounts for inflation. Oracle General Ledger provides three methods for you to adjust your accounts for inflation: adjusting balances based on a price index, revaluing balances based on a direct foreign exchange rate, and revaluing balances based on a foreign exchange rate using a stable currency.
Each of these three methods satisfies a different set of business requirements. For example, the two methods for revaluing balances based on a foreign exchange rate satisfy the requirements for certain industries in Chile. When you adjust your accounts for inflation, choose the method that meets your business requirements.
For more information about adjusting balances based on a price index, see Submitting the Inflation Adjustment Process. For more information about revaluing balances based on a direct foreign exchange rate and revaluing balances based on a foreign exchange rate using a stable currency, see the Oracle Financials for Chile User Guide.
Use the Inflation Adjustment window to submit the inflation adjustment process. The Inflation Adjustment window lets you choose the accounts that you want to adjust. You can adjust any accounting model that you previously defined and specify the gain/loss account that you want to post the unrealized inflation adjustments to.
From the Inflation Adjustment window, Oracle General Ledger for Latin America initiates a concurrent process that calculates the inflation adjustments and creates an inflation adjustment journal entry for each balancing segment value in the account ranges that you specify.
You must enter the account ranges to adjust, the periods that you want to run the process for, the index name that you want to use, and the Result of Exposure to Inflation (R.E.I.) account. The Inflation Adjustment verification report is printed automatically as part of the inflation adjustment process. You can generate the report for all accounts or only those accounts that are adjusted for inflation. In addition, you can also choose to automatically import the adjustments to General Ledger with Run Journal Import.
To submit the inflation adjustment process:
Navigate to the Inflation Adjustment window.
Enter an R.E.I. account (inflation adjustment gain/loss account) in the R.E.I. Account field.
In the From and To fields in the Accounting Periods region, select the accounting periods that you want from the lists of values. The lists include only periods that are available for inflation adjustment.
In the Index Name field, select the index name that you want from the list of values.
Enter the accounting flexfield ranges that you want to adjust. You can enter an existing accounting model, enter an existing accounting model and modify it, enter new ranges, or create a new accounting model. This table shows the steps that you follow to complete these tasks.
| For this task… | Follow these steps… |
|---|---|
| Enter an existing accounting model | Select an accounting model name from the list of values in the Accounting Model field. The list of values displays the accounting model names that you defined in the Accounting Models window. The ranges for that model are automatically displayed in the Account Low and Account High fields. |
| Modify an existing accounting model | 1. Enter an accounting model name in the Accounting Model field. 2. To modify an existing accounting flexfield range, select the Account Low or the Account High field for the range and make your changes. You can modify any segment of the range. 3. To add new accounting flexfield ranges to the model, enter the new ranges in the Account Low and Account High fields. 4. Select Modify in the Accounting Model region to save the modifications. |
| Enter new accounting ranges | 1. In the Account Low field, enter the low value for the range of accounts that you want to adjust. 2. In the Account High field, enter the high value for the range of accounts that you want to adjust. 3. Repeat steps 1 and 2 for each range of accounts that you want to adjust. Note: If you want to enter all new ranges, leave the Accounting Model field blank. |
| Create a new accounting model | 1. To include accounting flexfield ranges from an existing accounting model in your new model, enter the existing model name in the Accounting Model field. If you want to enter all new ranges for your new model, leave the Accounting Model field blank. 2. Enter the new accounting flexfield ranges for the model in the Account Low and Account High fields. 3. To save the new model, select Create in the Accounting Model region and enter a new name for the model. |
Note: When you enter low and high segment values in the Account Low and Account High fields, you define the range you want for each segment separately from the other segments. The accounting flexfield range includes only those accounting flexfields whose segment values each fall within the range for that segment.
For example, suppose you enter the low segment values 91-000-4000 and the high segment values 92-000-5000. In this case, the accounting model includes only the accounting flexfields from 91-000-4000 through 91-000-5000 and from 92-000-4000 through 92-000-5000.
In the Accounts to Report region, select Adjusted Only to report only on adjusted accounts. Select All to report on all accounts in General Ledger. The option you select in this region only controls which accounts appear in the Latin American General Ledger Inflation Adjustment report; it does not affect which accounts are adjusted. Journal entries are created only for the accounts that you selected for adjustment.
Check the Run Journal Import check box if you want to automatically run the Journal Import process as soon as the inflation adjustment process is complete.
Press the Adjust button to submit the inflation adjustment process with the parameters you entered.
When you submit the inflation adjustment process, General Ledger performs these steps:
Selects all of the accounts that fall within the account ranges that you specified.
Calculates the inflation rate based on the price index values that you entered in the Price Indexes window.
Applies the rate to the actual balance of the accounts to calculate the adjustment for each account.
Creates journal entries with adjustment amounts that show the effect of inflation on your General Ledger accounts. The effective date of the journal entries is the last day of the last period adjusted, regardless of the number of periods adjusted. For example, if you have a monthly calendar and you adjust from January to March, only one journal entry, effective on March 31, is created.
Generates the Inflation Adjustment verification report. You can review the results of the calculation with this report. See: Latin American General Ledger Inflation Adjustment Report
This table provides an example of journal entries that General Ledger creates:
| Accounts | Debit | Credit |
|---|---|---|
| Asset Account 1 (01.000.1000.000) | 10 | |
| Asset Account 2 (01.000.1100.000) | 20 | |
| Equity Account 3 (01.000.2300.000) | 15 | |
| R.E.I. Account (01.000.7100.000) | 15 |
The Result of Exposure to Inflation (R.E.I.) account is the accounting flexfield where General Ledger registers net gain or loss due to inflation. You must enter this account in the Inflation Adjustment window when you submit the inflation adjustment process for the first time. For subsequent submissions of the inflation adjustment process, the R.E.I. account defaults from your previous inflation adjustment request.
The inflation adjustment process automatically creates one journal entry for each balancing segment value that is adjusted. If your company segment is a balancing segment, one journal entry is created for each company processed.
General Ledger uses the R.E.I. account that you enter in the Inflation Adjustment window as a template. General Ledger derives the correct R.E.I. account for each journal entry by replacing the balancing segment with each balancing segment value in the account ranges that you specify.
Assume that the balancing segment is the first segment of your accounting flexfield, and that you defined three valid values for the balancing segment (01, 02, 03). When you adjust the account ranges, 01.000.1000.000/ 03.000.1000.000 and 01.000.2000.000/03.000.2000.000 for inflation, you get the journal entries shown in these tables:
| Accounts | Debit | Credit |
|---|---|---|
| Asset Account (01.000.1000.000) | 10 | |
| Equity Account (01.000.2000.000) | 3 | |
| R.E.I. Account (01.000.7000.000) | 7 |
| Accounts | Debit | Credit |
|---|---|---|
| Asset Account (02.000.1000.000) | 25 | |
| Equity Account (02.000.2000.000) | 13 | |
| R.E.I. Account (02.000.7000.000) | 12 |
| Accounts | Debit | Credit |
|---|---|---|
| Asset Account 03.000.1000.000) | 19 | |
| Equity Account (03.000.2000.000) | 8 | |
| R.E.I. Account (03.000.7000.000) | 11 |
Related Topics
Importing Journals, Oracle General Ledger User Guide
The Inflation Adjustment Date (Fecha Valor) feature lets you adjust a journal entry for a period that is before the effective date. For example, you can enter a journal entry for June and adjust the journal entry for a period that starts in January.
Note: If you enter an inflation adjustment date that is after the journal entry effective date, Oracle General Ledger does not use that inflation adjustment date. Instead, the inflation adjustment is calculated based on the journal entry effective date.
To use the Inflation Adjustment Date feature, you must define the ledger where you will run the inflation adjustment process as an MRC primary ledger, even if you do not use the MRC feature in Oracle General Ledger books. You can classify a ledger as primary in the Reporting Currency Options tabbed region in the Ledger window.
Use the Change Currency window to enter the inflation adjustment date. You can navigate to the Change Currency window by pressing the Change Currency button in the Journals window. Enter the inflation adjustment date in the To Date field.
Oracle General Ledger only adjusts the lines with accounting flexfield combinations that fall within the account ranges you specified when you submitted the inflation adjustment process.
For examples of how to use the inflation adjustment date in your country, see your country-specific chapter.
Related Topics
Entering Entered Currency Journals, Oracle General Ledger User Guide
Use the Latin American General Ledger Inflation Adjustment report to review the inflation adjustments for the accounting flexfields that you specified in the Inflation Adjustment window. This report also creates the adjusted journal entries that are imported to Oracle General Ledger.
The Latin American General Ledger Inflation Adjustment report is automatically submitted when you press the Adjust button in the Inflation Adjustment window.
| In this heading… | General Ledger prints… |
|---|---|
| Company Name | The ledger name |
| Currency | The currency |
| Period | The period range covered by the adjustment |
| Report Date | The date that you submit the report |
| Page | The page number |
| Index | The price index that is used for the adjustment, such as the CPI |
| R.E.I. Account | The inflation adjustment gain/loss account |
| Group ID | The group ID that identifies the imported inflation adjustment journal entry in the General Ledger interface table |
| In this column… | General Ledger prints… |
|---|---|
| Accounting Flexfield | The accounting flexfield that is adjusted for inflation. |
| <Start Period> Beginning Balance | The beginning balance in the first period of the period range of the adjustment. |
| <Start Period> To <End Period> Activity | The balance of existing transactions for the accounting flexfield during the period range of the adjustment. |
| Inflation Adjustment | The adjusted amount from the Inflation Adjustment process. |
| Adjusted Balance | The ending balance of the accounting flexfield after the adjustment. This is the sum of the values in the Beginning Balance, Activity, and Inflation Adjustment columns. Oracle General Ledger prints two asterisks (**) next to the adjusted balance if at least one journal entry contributing to the balance carries an Inflation Adjustment Date different from the journal entry effective date. |
| Natural Account Totals | The inflation adjustment and adjusted balance totals for the natural account. |
| Balancing Segment Totals | The inflation adjustment and adjusted balance totals for the balancing segment. |
If you print invoices on pre-numbered forms, you must maintain a clear audit trail so that the transaction number for the invoice stored in Oracle Receivables always matches the pre-printed number on the invoice.
Sometimes incidents such as printing errors cause a mismatch between the invoice transaction number and the number on the pre-numbered form. For example, you might print three invoices numbered 1003, 1004, and 1005 on forms with matching pre-printed numbers, but then discover that these pre-numbered forms are damaged and not usable. You will need to reprint these invoices using the next available pre-numbered forms, numbered 1006, 1007, and 1008. After you reprint the invoices, however, the invoice transaction numbers stored in Oracle Receivables and the numbers on the pre-numbered forms no longer match.
To keep accurate audit information and to ensure that the transaction number stored for an invoice in Oracle Receivables matches the number on your pre-printed form, you can use the Regional Receivables Copy and Void Invoices process in Oracle Receivables. Regional Receivables Copy and Void Invoices lets you copy invoice information from the original invoice to a new invoice without manually recreating the invoice. In addition, Oracle Receivables voids the original transaction to ensure that the customer's Receivables balance and General Ledger information are accurate. To maintain a complete audit trail, you must save the original voided invoice forms and record the reason for voiding the original invoices as well as the new transaction number.
An invoice is eligible for copying and voiding if the invoice meets these conditions:
The transaction class for the invoice is Invoice.
The invoice does not have any activity against it, such as receipts or credit memos applied to the invoice.
The invoice status is Complete.
The invoice was not already transferred to General Ledger.
You have entered warehouse information in the Warehouse Name field in the Transactions window, if you selected Latin Tax Handling as your tax method in the System Options window and the invoice line is an item line. Otherwise, Receivables calculates taxes based on the master inventory organization that you defined in the Order Management Parameters window.
To copy and void one or more invoices:
Perform all required setup steps, including:
Defining the void transaction type
Enabling automatic transaction numbering for your transaction batch sources
Defining void reasons
Optionally run the Regional Receivables Copy and Void Invoices Preview report if you want to preview the expected results of the Regional Receivables Copy and Void Invoices process.
Run the Regional Receivables Copy and Void Invoices process.
Use the Regional Receivables Copy and Void Invoices report to review the results of the Regional Receivables Copy and Void Invoices process.
Before you run the Regional Receivables Copy and Void Invoices process, you must complete these setup steps. Use this checklist to help you complete the appropriate steps in the correct order.
You must define the transaction type that you want to use for invoices voided by the Regional Receivables Copy and Void Invoices process. Use the globalization flexfield in the Transaction Types window to define your void transaction type. You must define only one transaction type as your void transaction type.
To ensure that transactions with this transaction type do not update your customer balances, you should disable the Open Receivables option for the void transaction type. To ensure that transactions with this transaction type are not posted to General Ledger, you should also disable the Post to GL option.
To define a void transaction type:
Navigate to the Transaction Types window.
Enter information to define the transaction type.
Select Invoice from the list of values in the Class field.
Ensure that the Open Receivables check box and the Post To GL check box are not checked.
Navigate to the globalization flexfield.
Enter Yes in the Void Original Transaction field.
Note: Your country's Oracle Receivables might include other fields in the globalization flexfield for features specific to your country.
Related Topics
Transaction Types, Oracle Receivables Implementation Guide
Enable automatic transaction numbering for the transaction batch sources that you use for invoices printed on pre-numbered forms. To enable automatic transaction numbering, check the Automatic Transaction Numbering check box when you define the transaction batch source in the Transaction Sources window.
Related Topics
Transaction Batch Sources, Oracle Receivables Implementation Guide
Define the void reasons that you will use to explain why you voided an invoice. For example, you might need void reasons for incidents such as a printer jam or other printer problems.
Define void reasons with the lookup type code JLZZ_VOID_REASON. Use the Lookups window in the Application Developer responsibility to define your void reasons.
You can optionally use the Regional Receivables Copy and Void Invoices Preview report to preview the outcome of the Regional Receivables Copy and Void Invoices process before you run the Regional Receivables Copy and Void Invoices process. This report shows a preview of the expected results of the Regional Receivables Copy and Void Invoices process. Use the Regional Receivables Copy and Void Invoices Preview report to help you correct any errors the process might encounter at system or individual transaction level. Running the Regional Receivables Copy and Void Invoices Preview report does not copy and void invoices.
You can specify which invoices you want to include in the preview by entering a transaction batch source, transaction type, and invoice number range. Identify the number range with either document sequence numbers or transaction numbers.
Note: You can only specify a number range with document sequence numbers if you use sequential numbering for your transactions.
The Regional Receivables Copy and Void Invoices Preview report shows two types of information:
Oracle Receivables system setup errors – If the setup is incorrect, the report displays instructions on how to correct the setup.
Errors for individual invoices – If an invoice has an error that will prevent the Regional Receivables Copy and Void Invoices process from copying the invoice, the report displays the cause of the error.
After you correct any errors, run the Copy and Void Invoice process. For more information, see Running the Regional Receivables Copy and Void Invoices Process.
Use the Standard Request Submission windows to submit the Regional Receivables Copy and Void Invoices Preview report.
Enter the transaction batch source for the invoices that you want to include. You should only choose a transaction batch source for which you enabled automatic transaction numbering.
Enter the transaction type for the invoices that you want to include. You can only choose transaction types with a class of Invoice.
Enter the number type if you want to specify an invoice number range. You can choose one of these number types:
Document Sequence – Select invoices for inclusion using a range of document sequence numbers. You can only choose Document Sequence if you use sequential numbering for your transactions.
Transaction – Select invoices for inclusion using a range of transaction numbers.
Enter the first number for the range of invoices that you want to include. If you choose the Document Sequence number type, you must enter document sequence numbers. If you choose the Transaction number type, you must enter transaction numbers.
Enter the last number for the range of invoices that you want to include. If you choose the Document Sequence number type, you must enter document sequence numbers. If you choose the Transaction number type, you must enter transaction numbers.
| In this heading... | Oracle Receivables prints... |
|---|---|
| Company Name | Your company name |
| Title | Copy and Void Invoices Preview Report |
| Report Date | The date you ran the report |
| Page | The page number |
| Transaction Batch Source | The transaction batch source |
| Number Type | The number type |
| Numbers Low/High | The invoice number range |
| In this column… | Oracle Receivables prints… |
|---|---|
| Transaction Number | The transaction number |
| Document Seq Number | The document sequence number if you use document sequence numbering |
| Activity | X if the invoice has activity against it |
| Posted to GL | X if the transaction was already transferred to General Ledger |
| Incomplete | X if the invoice status is not Complete |
| Class Other Than Invoice | X if the transaction class is not Invoice |
| Status | The copy status of the invoice. Possible statuses include:
|
Related Topics
Using Standard Request Submission, Oracle Applications User Guide
Implementing Document Sequences , Oracle Receivables User Guide
Use the Regional Receivables Copy and Void Invoices process to copy invoice information from original invoices to new invoices and void the original transactions.
If you want to preview the results of the Regional Receivables Copy and Void Invoices process before you run the process, run the Regional Receivables Copy and Void Invoices Preview report. For more information, see Regional Receivables Copy and Void Invoices Preview Report.
When you run the Regional Receivables Copy and Void Invoices process, you can specify which invoices you want to copy and void by entering a transaction batch source, transaction type, and invoice number range. You can identify the number range with either document sequence numbers or transaction numbers.
Note: You can only specify a number range with document sequence numbers if you use sequential numbering for your transactions.
An invoice is only eligible for copying and voiding if the invoice meets these conditions:
The transaction class for the invoice is Invoice.
The invoice does not have any activity against it, such as receipts or credit memos applied to the invoice.
The invoice status is Complete.
The invoice was not already transferred to General Ledger.
If you selected Latin Tax Handling as your tax method in the System Options window, you have entered warehouse information in the Warehouse Name field in the Transactions window if the invoice line is an item line. Otherwise, Receivables calculates taxes based on the master inventory organization that you defined in the Order Management Parameters window.
After copying the invoices you specify to new invoices, Oracle Receivables assigns your void transaction type to the original invoices and updates the Comments field of the voided invoices with the void reason you select.
When the Regional Receivables Copy and Void Invoices process finishes, Oracle Receivables automatically generates the Regional Receivables Copy and Void Invoices report. For more information, see Regional Receivables Copy and Void Invoices Report.
Note: As part of the Regional Receivables Copy and Void Invoices process, Oracle Receivables runs the Recurring Invoice program during the time between the end of the copy process and the beginning of the void process. If the Recurring Invoices program is not finished at the end of the time limit you define in the JL: Copy and Void Invoices Program Timeout profile option, the Regional Receivables Copy and Void Invoices process stops and Oracle Receivables assigns a copy status of Warning to all the invoices selected for the process. For more information, see Reviewing an Invoice Copy Status.
Use the Standard Request Submission windows to submit the Regional Receivables Copy and Void Invoices process.
Enter the transaction batch source for the invoices that you want to include. You should only choose a transaction batch source for which you enabled automatic transaction numbering.
Enter the transaction type for the invoices that you want to include. You can only choose transaction types with a class of Invoice.
Enter the number type if you want to specify an invoice number range. You can choose one of these number types:
Document Sequence – Select invoices for inclusion using a range of document sequence numbers. You can only select Document Sequence if you set up document sequence numbering for your transactions.
Transaction – Select invoices for inclusion using a range of transaction numbers.
Enter the first number for the range of invoices that you want to include. If you choose the Document Sequence number type, you must enter document sequence numbers. If you choose the Transaction number type, you must enter transaction numbers.
Enter the last number for the range of invoices that you want to include. If you choose the Document Sequence number type, you must enter document sequence numbers. If you choose the Transaction number type, you must enter transaction numbers.
Enter the void reason to explain why the invoices were voided.
Related Topics
Using Standard Request Submission, Oracle Applications User Guide
Implementing Document Sequences, Oracle Receivables User Guide
Use the Regional Receivables Copy and Void Invoices report to review original invoice information after the Regional Receivables Copy and Void Invoices process is finished. The Regional Receivables Copy and Void Invoices report shows invoices that were successfully copied and voided, as well as invoices that were not successfully copied.
The Regional Receivables Copy and Void Invoices report shows two types of information:
Oracle Receivables system setup errors – If the setup is incorrect, the Regional Receivables Copy and Void Invoices process stops and the report displays instructions on how to correct the setup.
Errors for individual invoices – If an invoice was not successfully copied, the report displays the cause of the error.
Use the Regional Receivables Copy and Void Invoices report to help you correct any errors at system or individual transaction level. You can then resubmit the Regional Receivables Copy and Void Invoices process, if necessary.
Oracle Receivables generates the Regional Receivables Copy and Void Invoices report automatically when you run the Regional Receivables Copy and Void Invoices process. For more information, see Running the Regional Receivables Copy and Void Invoices Process.
| In this heading... | Oracle Receivables prints... |
|---|---|
| Company Name | Your company name |
| Title | Copy and Void Invoices |
| Report Date | The date you ran the report |
| Page | The page number |
| Transaction Batch Source | The transaction batch source |
| Number Type | The number type |
| Numbers Low/High | The invoice number range |
| In this column… | Oracle Receivables prints… |
|---|---|
| Transaction Number | The transaction number |
| Document Seq Number | The document sequence number if you use document sequence numbering |
| Activity | X if the invoice has activity against it |
| Posted to GL | X if the transaction was already transferred to General Ledger |
| Incomplete | X if the invoice status is not Complete |
| Class Other Than Invoice | X if the transaction class is not Invoice |
| Status | The copy status of the invoice. Possible statuses include:
|
After you run the Regional Receivables Copy and Void Invoices process, you can use the globalization flexfield in the Transactions window to review the copy status of an individual invoice and update the status, if necessary. Possible copy statuses include:
Processed – The original invoice was successfully copied and voided. You cannot manually update this status.
Error – The invoice did not meet one or more of the conditions to be eligible for the Regional Receivables Copy and Void Invoices process. If you resubmit the Regional Receivables Copy and Void Invoices process, Oracle Receivables will attempt to copy and void the invoice again. If the errors were corrected and the invoice is successfully copied, Oracle Receivables updates the copy status to Processed.
Warning – A timeout error occurred before Oracle Receivables completed the Recurring Invoice program. Your system administrator should determine whether the invoice was successfully copied before the timeout error occurred.
If the invoice was successfully copied, you should manually change the original invoice copy status to Ignore and the transaction type to Void. Update the Comments field with the new invoice transaction number and void reason.
If the invoice was not successfully copied, you should manually change the status to Reprocess.
Ignore – The copy status was manually changed from Warning to Ignore. The Regional Receivables Copy and Void Invoices process will not select this invoice for copying.
Reprocess – The copy status was manually changed from Warning to Reprocess. If you resubmit the Regional Receivables Copy and Void Invoices process, the Recurring Invoice Program will select the invoice for copying.
To review the copy status for an invoice:
Query the invoice that you want to review.
Review the copy status of the invoice in the Copy Status field.
If necessary, change the copy status from Warning to Ignore or Reprocess.
Choose OK.
Save your work.
To determine whether an invoice with a Warning copy status was successfully copied, your system administrator should:
Review the log file of the Regional Receivables Copy and Void Invoices program to find the request number for the Recurring Invoice program.
Review the log file of the Recurring Invoice program. The log file of the Recurring Invoices program lists the original invoices that were copied and the new invoices that were created.
If the original invoice appears on the Recurring Invoices log file, then the invoice was successfully copied. Change the copy status of the invoice to Ignore.
If the original invoice does not appear on the Recurring Invoices log file, then the invoice was not successfully copied. Change the copy status of the invoice to Reprocess.
The Oracle Receivables Latin Tax Engine provides a convenient solution to your tax requirements. The Latin Tax Engine:
Calculates multiple taxes on an invoice line
Calculates different tax rates based on characteristics of the company issuing the invoice, the ship to customer, and the transaction (item or memo line)
Provides easy transaction entry for users with little or no knowledge of taxes and tax requirements
Oracle Receivables uses the Latin Tax Engine to calculate taxes according to this model:
Transaction WorkBench – lets you enter transaction information, including customer address, transaction type, and invoice line information (tax group code, warehouse name, and invoice line-level global descriptive field information). When you save your work or press the Tax button, the Global Tax Engine is called to calculate the tax.
Global Tax Engine – retrieves the invoice and invoice line information and proceeds to calculate the tax for each invoice line. If you set the Tax Method to Latin, the Latin Tax Engine is called to calculate the tax for each applicable tax category of the tax group entered in the Tax Code field of the Tax window. This process is repeated for each transaction line.
Latin Tax Engine – uses the information provided by the Global Tax Engine to calculate the tax for each tax category and pass the tax calculations to the Global Tax Engine.
Global Tax Engine – passes the Latin Tax Engine's tax calculations back to the Transaction Workbench.
Transaction WorkBench – displays the calculated taxes and writes back the tax and accounting information to the database.
To calculate the taxes that apply on each invoice line, the Latin Tax Engine uses this information:
Taxes and tax rates
Tax conditions and tax condition values for your organization, your customers, and items and memo lines
Tax group associated with the invoice line
Tax rules for determining the tax rate and base rate
You must define each tax that your company is authorized to levy as a Latin tax category. Define a separate tax category for each tax that is calculated separately, accounted separately, or reported separately.
For example, if the government has multiple reporting requirements for a certain tax that depends on the customer's situation or the nature of the transaction, you must create the corresponding number of tax categories for this one tax to report each tax separately.
Tax rates are the actual rates used to calculate individual taxes. Each tax rate is associated with a distinct tax code. Each tax code must be associated with a tax category. You can associate one tax category with multiple tax codes.
You must define, for each tax category, characteristics that describe the:
Inventory organization's authority or ability to levy this tax
Ship to customer's eligibility in relation to this tax
Taxability of each transaction for this tax
These characteristics are called tax conditions and tax condition values. You must separately define organization tax conditions and values, contributor tax conditions and values, and transaction tax conditions and values.
The tax condition defines the meaning of the characteristic. The tax condition values define all of the possible relationships to this characteristic. For example, if the calculation of a specific tax depends on whether or not the inventory organization is registered with the government, you can name the tax condition Registration Status, and the possible tax condition values Registered and Not Registered.
Once you define the tax conditions and tax condition values for all tax categories, you assign them to:
Inventory organization
Ship to address of each of your customers
Items and memo lines
You assign tax conditions and tax condition values to an organization by grouping the values for each tax category and tax condition into an organization tax condition class. The organization tax condition class contains all tax conditions of all tax categories, and a specific tax condition value for each tax condition that applies to the inventory organization.
You assign tax conditions and tax condition values to a customer site by grouping the values for each tax category and tax condition into a contributor tax condition class. The contributor tax condition class contains all tax conditions of all tax categories, and a specific tax condition value for each tax condition that applies to the customer site.
Note: You assign contributor characteristics at the ship to address level, because each customer, and even individual sites for a given customer, can have a different tax eligibility. For example, local taxes may apply to one customer site only, and not to other ship to locations for the same customer.
You assign tax conditions and tax condition values to an item or memo line by grouping the values for each tax category and tax condition into a transaction tax condition class. The transaction tax condition class contains all tax conditions for all tax categories, and a specific tax condition value for each tax condition that applies to transactions.
Note: When you calculate taxes, Oracle Receivables defaults the transaction tax condition class for the item or memo line to the transaction line. You can enter a different transaction condition class for an individual transaction line.
When you enter transactions on an invoice, Oracle Receivables associates a tax group with each transaction line. The Latin Tax Engine uses the tax group to determine which taxes to generate for a specific transaction line.
The tax group contains one entry for every combination of tax category, organization characteristic, ship to customer characteristic, and transaction characteristic needed to generate the tax. A tax category can appear in the tax group more than once to satisfy the multiple combinations of characteristics that can generate a tax.
Tax rules define, for each tax, the hierarchy of choices for the Latin Tax Engine to use to find the actual tax rate or base rate modifier to calculate a tax.
You define tax rules, with a hierarchy of choices, for each combination of:
Ship to customer characteristic
Transaction type
Tax category
You can also define defaults for ship to customer characteristic and transaction type. There are currently sixteen different choices for finding the tax rate and seven choices for finding the base rate modifier.
When you enter a transaction, the Latin Tax Engine first determines the taxes to calculate on an invoice line based on the tax group. The Latin Tax Engine looks to the tax rules to determine the appropriate tax code and associated rate and/or base rate modifier for each tax.
When you enter a transaction line and save your work, the Latin Tax Engine calculates the tax for each tax category that applies in the tax group that you entered on the transaction line. For each tax category, the Latin Tax Engine searches the tax rules for a rule to use to find the tax code. If no more rules exist to search, the Latin Tax Engine searches for a default tax rule to find the tax code. If the Latin Tax Engine cannot find any method to obtain the tax code, the Latin Tax Engine stops with an error.
The Latin Tax Engine uses a similar process to find the base rate modifier for each tax. The difference is that the Latin Tax Engine does not stop with an error if the Latin Tax Engine does not find a base rate modifier.
For each combination, you can define one or more rules for where the Latin Tax Engine should look to find the tax rate or base rate modifier. The Latin Tax Engine will examine each rule, in the order that you defined them, until it finds one that matches the characteristics of the current transaction line. See How the Latin Tax Engine Calculates Taxes for an example of how the Latin Tax Engine uses tax rules to calculate tax.
Once the Latin Tax Engine has found the tax rate and base rate modifier, it calculates the tax as follows:
Tax amount = Taxable base x base rate modifier x tax rate
To calculate taxes on an invoice, Oracle Receivables uses the tax group that you enter on each invoice line. The tax group is a collection of tax categories for applicable combinations of organization, contributor, and transaction condition values. Optionally, each combination can have a tax code associated with it.
Depending on your country and business requirements, you can set up one tax group for all your tax calculations, or different tax groups for different combinations of organization/contributor/transaction values.
When you set up tax groups and the Latin Tax Engine, you assign the tax groups to transaction types. Oracle Receivables defaults the tax group to the invoice line from the transaction type associated with a transaction. See Setting Up the Latin Tax Engine for more information about defining tax groups.
The Latin Tax Engine calculates taxes for each transaction line by using this processing:
Determine the tax categories
Determine the tax codes
Determine the base rates
Calculate the tax
After the Latin Tax Engine calculates the taxes, the Transaction WorkBench displays one or more tax lines for each invoice line.
The sections that follow describe the Latin Tax Engine tax calculation processes in more detail.
The Latin Tax Engine uses the tax group and the organization, contributor site, and transaction conditions and values to determine which tax categories apply to an invoice line.
The tax group contains combinations of tax categories and condition values for organization, contributor, and transaction. In your setup, you can assign a tax category to more than one organization/contributor/transaction combination in the tax group to account for all the circumstances under which a tax category applies to a transaction.
Your setup definitions for your organization, each contributor site, and each transaction indicates the conditions under which a particular tax category is applicable and not applicable. The Latin Tax Engine determines the tax categories that apply, by selecting the organization/contributor/transaction combinations in the tax group that match the organization, contributor site, and transaction definitions.
The Latin Tax Engine determines the tax codes and tax rates to apply to a transaction line for each tax category or categories derived from the tax group using the tax rule or rules for each tax category with a rule type of Rate.
Note: If the taxable base is the line amount, the Latin Tax Engine only needs to find the tax code to calculate the tax. If the taxable base is a calculated base amount, the Latin Tax Engine also needs to find a base rate for the applicable tax categories to calculate the tax. See Determining Base Rates for more information about how the Latin Tax Engine determines the base rate modifier.
The Latin Tax Engine uses Latin tax rules with a rule type of Rate for the applicable tax categories to find a tax code. The Latin Tax Engine derives the tax code in this sequence:
The Latin Tax Engine sets the current tax category based on the tax group associated with the transaction line.
The Latin Tax Engine looks for a rule with the first priority number.
The rule's contributor determining factor tax condition value must match the current contributor value, and the rule's transaction type must match the transaction type for the current transaction.
If the Latin Tax Engine does not find a rule with matching parameters, the Latin Tax Engine searches for a rule with default parameters.
The Latin Tax Engine looks for a default rule with these values:
Contributor determining-factor tax condition is Default
Transaction type is the default transaction type entered in the System Options window
If the Latin Tax Engine does not find a rule with matching parameters or a default rule, processing stops with an error.
If the Latin Tax Engine finds a rule, the Latin Tax Engine attempts to retrieve the tax code by accessing the rule data with the relevant parameters.
For example, if the rule retrieved is Ship from/Ship to Site, the Latin Tax Engine attempts to retrieve the tax code by accessing a record in the Latin Locations window with the parameters:
Tax Category
Ship from State for the organization's current location
Ship to State (the ship to or bill to state for the customer)
If the Latin Tax Engine finds a tax code using the rule, the Latin Tax Engine stores the information for calculating the tax amount.
If the Latin Tax Engine does not find a tax code using the rule, it repeats steps 2 to 6 for each tax rule for the applicable tax category until it finds a tax code.
If there are more tax categories to process, the Latin Tax Engine repeats steps 1 to 8.
If there are no more tax categories to process, tax code processing is complete.
The Latin Tax Engine determines the base rate modifier to apply to a transaction line for each tax category or categories derived from the tax group using the tax rule or rules for each tax category with a rule type of Base.
The Latin Tax Engine calculates tax after using the base rate modifier to derive the taxable base amount. See Calculating the Tax for more information about how the Latin Tax Engine determines the taxable base amount.
The Latin Tax Engine uses Latin tax rules with a rule type of Base for the applicable tax categories to find a base rate modifier. The Latin Tax Engine derives the base rate modifier using this sequence:
The Latin Tax Engine sets the current tax category based on the tax group associated with the transaction line.
The Latin Tax Engine looks for a rule with the first priority number.
The rule's contributor determining factor tax condition must match the current contributor value, and the rule's transaction type must match the transaction type of the current transaction.
If the Latin Tax Engine does not find a rule with matching parameters, the Latin Tax Engine searches for a rule with default parameters.
The Latin Tax Engine looks for a default rule with these values:
Contributor determining-factor tax condition is Default
Transaction type is the default transaction type entered in the System Options window
If the Latin Tax Engine does not find a rule with matching parameters or a default rule, it calculates a base rate modifier of 1.
If the Latin Tax Engine finds a rule, the Latin Tax Engine attempts to retrieve the base rate modifier by accessing the rule data with the relevant parameters.
For example, if the rule retrieved is Fiscal Classification Code, the Latin Tax Engine attempts to retrieve the base rate by accessing a record in the Latin Fiscal Classification window with the parameters:
Tax Category
Fiscal Classification Code on the invoice line
If the Latin Tax Engine finds a base rate modifier using the rule, the Latin Tax Engine stores the information for calculating the taxable base amount.
If the Latin Tax Engine does not find a base rate modifier using the rule, it repeats steps 2 to 6 for each tax rule for the applicable tax category until it finds a base rate modifier or until no more rules exist.
If there are more tax categories to process, the Latin Tax Engine repeats steps 1 to 8.
If there are no more tax categories to process, base rate processing is complete.
The Latin Tax Engine calculates the tax on an invoice line based on:
Receivables System Option window settings
Tax codes derived from the tax categories and Rate tax rules
Base rate modifier, if applicable, derived from the tax categories and Base tax rules
Since certain transactions vary by invoice line, you must set up the Receivables System Options window to calculate tax on each invoice line. In particular, you must enter Line in the Calculation Level field. See Step 1. Define System Options for more information about setting System Options.
In some Latin American countries, the taxable base for certain taxes is different from the line amount because of one or more of these reasons:
Base rate modifier is applied to the line amount
Compounding tax amount is applied to the line amount
Sum of line amounts for the transaction do not meet the threshold
Sum of line amounts from current and prior related transactions, (such as credit memos or debit memos) do not meet the threshold.
Note: Current and prior related transactions are also known as Whole Operation. See Step 5. Define Tax Categories for more information.
Sum of line amounts for the transaction, grouped by transaction condition value do not meet the threshold
Sum of line amounts from prior related transactions, such as credit memos or debit memos grouped by transaction condition value do not meet the threshold.
Note: You associate related transactions in the Reference field in the Transactions window.
In these cases the Latin Tax Engine first calculates the taxable base amount and then calculates the tax. The Latin Tax Engine derives the taxable base amount and calculates the tax using this sequence:
Calculate the line base amount by:
Modifying the line amount by the base rate, if necessary
Compounding the line amount with another tax amount, if necessary
Determine the applicable prior base by keeping a running total of line base amounts. This table describes line base amounts.
| Threshold Check Level | Grouping Condition Type | Grouping Condition | Description |
|---|---|---|---|
| Line | Line | Line | Current line base amount |
| Document | Document | Document | Sum of line base amounts of transaction lines of the current transaction |
| Operation | Document | Document | Sum of line base amounts of all current and prior related transactions |
| Document | Transaction Condition | Any transaction condition (for example, Income Concept) | Sum of line base amounts of all transaction lines of the current transaction that have the same tax condition value |
| Operation | Transaction Condition | Any transaction condition (for example, Income Concept) | Sum of line base amounts of all current and prior related transactions that have the same tax condition value |
Minimum taxable base threshold checking
Compare the applicable prior base with the minimum threshold. If the applicable prior base is:
Greater than the minimum threshold, set taxable base = line base amount
Less than or equal to the minimum threshold, set taxable base = line base amount + applicable prior base
If necessary, set taxable base for thresholds = line base amount + applicable prior base
Calculating the tax amount
Compare the taxable base for thresholds with the minimum threshold. If the taxable base for thresholds is:
Greater than the minimum threshold, set tax amount = taxable base x tax rate
Less than or equal to the minimum threshold, set tax amount = 0
Taxable amount threshold checking
Compare the tax amount with the minimum tax amount. If the tax amount is less than or equal to the minimum tax amount, set tax amount = 0.
Tributary substitution
For tax categories with tributary substitution, reduce the tax amount by the compounded tax.
This section provides an overview of all of the tasks and windows used to set up the Latin Tax Engine.
A certain number of tasks are mandatory for all countries, while some tasks apply to certain countries only. The Setup Checklist indicates the mandatory and optional tasks.
In many cases, your Oracle Receivables installation includes a certain amount of pre-defined data. You only need to perform the tasks related to this data if you need to add or modify information.
Note: The task titles in this section refer only to setup for the Latin Tax Engine. Certain tasks, such as Define Customers and Define Items for example, require many other steps for a complete Oracle Receivables setup.
You should use this section in conjunction with your country-specific chapter. Along with a description of the specific tasks and windows that you need to set up the Latin Tax Engine in your country, your country-specific chapter contains this information:
Description of country-specific tax requirements
Description of country-specific globalization flexfields
Prerequisite steps for setting up the Latin Tax Engine in your country
Description of data already included in your Oracle Receivables installation
This table shows the setup steps for the Latin Tax Engine and denotes whether a step is mandatory or optional.
The windows and procedures that comprise the Receivables setup are designed to provide the Latin Tax Engine with information about taxes and rates, and about the requirements and dependencies of your company, your customers, and your transactions. The Latin Tax Engine uses this information to automatically calculate all the applicable taxes on each invoice line.
For the Latin Tax Engine to perform all the necessary processes correctly, it is important to enter complete and accurate setup information. The setup procedures can be organized into these general categories:
Tax information, including tax categories and tax rates
Tax conditions and values
Information about organizations (your company), contributors (customers and customer sites), and transactions
Tax exceptions
Tax groups
Tax rules
Receivables settings: system options, legal messages, transaction types
A tax category contains information about each separate tax levied in your country. The tax category identifies the type of tax and minimum taxable base, minimum amount, and minimum percentage, if applicable.
Oracle Receivables holds tax rate information in tax codes. A tax code identifies one rate for a particular tax category. A tax category can have several tax rates. When you define a tax code, you must assign it a tax category.
A tax condition describes the general relationship of an organization, contributor, or transaction to a specific tax. In this context, organization, contributor, and transaction are called condition types.
For example, you can name an organization tax condition for a VAT tax category as VAT Status or Registered Status. You define one or more tax conditions for organization, contributor, and transaction for each tax category.
Each tax condition has one or more tax condition values. The tax condition values describe the various relationships that an organization, contributor, and transaction can have to a tax condition. For example, the organization tax condition VAT Status could have the two tax condition values of Registered and Not Registered. A contributor or transaction tax condition could have more tax condition values, for example, Registered, Not Registered, Exempt, and Excluded for contributor; or Goods, Services, Professional Fees, and Legal Fees for transactions.
When you assign tax conditions to tax categories, you designate one tax condition for each condition type for each tax category as the determining factor tax condition. The Latin Tax Engine uses the determining factor tax condition as the primary condition for determining whether the tax applies to a transaction.
The number and kind of tax conditions and tax condition values that you must define depends upon the prevailing tax requirements in your country, city, and province.
You organize tax conditions and tax condition values into tax condition classes. You define separate tax condition classes for organizations, contributors, and transactions. A tax condition class contains a list of tax categories and related tax conditions and values. You assign the appropriate tax condition class to your organization, and to each of your customers and transactions (items and memo lines). The transaction tax condition class for an item or memo line is used as the default class for a transaction line. If necessary, you can change the default class for a specific transaction line.
The Latin Tax Engine uses tax condition classes (organization/contributor/transaction) to determine the taxes to calculate on a specific transaction line. For example, if VAT is one of your taxes and the tax conditions for your customer indicate that the customer is exempt from VAT, you can set up the Latin Tax Engine such that VAT is not calculated for this transaction line.
The information you enter for your organization, your customers, and items and memo lines provides the Latin Tax Engine with the background information for determining each applicable tax.
Enter the organization information for the location attached to the inventory organization. Assign a tax condition class to each ship to customer address, item, and memo line.
You can define tax exceptions to a tax for particular classifications related to your customers or transactions. The types of tax exception are:
Customer Site
Transaction Condition Value
Fiscal Classification
Item
You can define tax exceptions for each of these classifications for each applicable tax category. For each tax exception/tax category combination, you assign the tax code to use in place of the standard tax code.
The Latin Tax Engine uses the tax code associated with the tax exception, when the tax rule is identified as a tax exception.
A tax group contains tax categories and, for each tax category, a combination of tax condition values for the organization, contributor, and transaction determining factor tax conditions. The Latin Tax Engine uses the tax group to determine the tax categories that apply to an invoice.
A tax group can contain the same tax category more than once, if the tax category applies to more than one combination of organization tax condition value, contributor tax condition value, and transaction tax condition value. The tax group must contain all determining factor tax conditions.
After you define a tax group, you assign the tax group to Receivables transaction types.
When you enter a transaction, the tax group associated with the transaction type is defaulted to the document. When the transaction is saved or the Tax button is pressed, the Latin Tax Engine uses the tax group to:
Determine the tax categories that apply to each transaction line
Look for the rules that apply to each transaction line
Determine the taxes and rates, and calculate the tax
Tax rules are the guidelines that the Latin Tax Engine uses to determine the tax code to apply to a transaction line. A tax rule is a combination of tax category, contributor condition value, and transaction type. For each combination, the name of the rule identifies where the Latin Tax Engine should look to find the tax code.
If there is more than one tax rule for the same combination of tax category, contributor condition value, and transaction type, each combination is assigned a different priority number. The Latin Tax Engine looks for the tax code according to the priority sequence.
If the Latin Tax Engine cannot find the tax code in the place identified by the first rule, the Latin Tax Engine tries the second rule, and so on, until it finds a tax code for the transaction line.
Enter the appropriate settings in Oracle Receivables to allow the Latin Tax Engine to calculate taxes on each transaction line.
The setup procedures in this user guide and in your country-specific user guide describe the required settings.
Use the Create Application Tax Options page in Oracle E-Business Tax and Oracle Receivables System Options window to set system options to allow the Latin Tax Engine to calculate tax. Use the globalization flexfield in the Oracle Receivables System Options window to enter country-specific settings to calculate tax.
You can enter a default transaction type to use to calculate taxes. The Latin Tax Engine uses the default transaction type when it cannot find a tax rule for a transaction line.
You can enter a rule set to define the set of seeded data that you can see and use. Once you choose a rule set, you should not change it. If you change the rule set, you will not be able to see or use data that you created using the previous rule set. You will also not be allowed to change the rule set once you have entered transactions in the system.
Using E-Business Tax, enter these system options settings for all countries:
Enter Latin Tax Handling as the tax method.
Check the Inclusive Tax Used check box.
Enter Line as the calculation level.
If you define the tax rule System Options Tax Code for a tax category, then enter a tax code.
Additionally, enter applicable values for the following tax system options/rounding options:
Reporting Currency
Precision
Min Accountable Unit
Allow Override
Rounding Rule
Use these guidelines for the globalization flexfield in the Receivables System Options window:
In the Location Flexfield Classification field, enter the location flexfield classification that corresponds to your location flexfield structure.
Note: The use of the Location Flexfield Classification field can vary depending on your country.
Enter Yes or No in the Use Legal Messages field to indicate whether you will use legal messages.
In the Transaction Type field, enter the transaction type that the Latin Tax Engine will use for the default tax rule. See Step 32. Define Latin Tax Rules for more information.
Enter the name of your country in the Tax Rule Set field.
Related Topics
Using Application Tax Options, Oracle E-Business Tax User Guide
Defining Receivables System Options, Oracle Receivables User Guide
Use the Lookups window to define lookup codes for tax conditions. The Latin Tax Engine uses tax conditions to determine the taxes to calculate on a specific transaction.
You define tax conditions for each tax category at the organization level for your company, at the contributor level for your customers, and at the transaction level for items and memo lines. Use the designated lookup types for your country for organization, contributor, and transaction to define the tax condition lookup codes.
The Latin Tax Engine uses tax conditions as deciding factors in determining the tax code and rate for each tax category and condition type. You must define at least one tax condition for each tax category/condition type (organization, contributor, transaction) combination.
If you define more than one tax condition for a tax category/condition type combination, you must designate one of these combinations as the determining factor tax condition. You designate the determining factor tax condition in the Associate Tax Categories and Tax Conditions window. See Step 10. Associate Tax Categories with Tax Conditions and Values for more information.
One tax condition can apply to more than one combination. For example, a tax condition defined for the combination Organization-1/TaxCategory-XYZ can apply to the Organization-1/TaxCategory-ABC and/or Organization-2/TaxCategory-XYZ combinations. You would only need to define this tax condition once.
After you define tax conditions, define tax condition values for each tax condition. See Step 3. Define Tax Condition Values for more information.
Use these guidelines for defining tax condition lookup codes:
Use the lookup type ORGANIZATION_ATTRIBUTE for organization tax conditions.
Use the lookup type CONTRIBUTOR_ATTRIBUTE for contributor tax conditions.
Use the lookup type TRANSACTION_ATTRIBUTE for transaction tax conditions.
Enter the tax condition code in the Code field.
Enter the meaning or use of the tax condition code in the Meaning field, and a description of the code in the Description field.
Use the Lookups window to create lookup codes for tax condition values.
Tax condition values identify the possible values of each tax condition for organization, contributor, and transaction. You define each tax condition value only once, and you can associate it with any tax condition.
The number and kind of tax condition values depends upon the tax requirements of your country, your city, or your province. Examples of tax condition values are Registered and Not Registered for organizations; Exempt, Taxable, and Non-Taxable for contributors; and Goods, Services, Tobacco, and Alcohol for transactions.
After you define tax condition values for each tax condition, you can associate both the tax condition and tax condition values with tax categories. See Step 10. Associate Tax Categories with Tax Conditions and Values for more information.
Use these guidelines for defining tax condition value lookup codes:
Use the lookup type JLZZ_AR_TX_ATTR_VALUE for all lookup codes.
Enter the tax condition value code in the Code field.
Enter the meaning or use of the tax condition value code in the Meaning field, and a description of the code in the Description field.
Use the Lookups window to define lookup codes for legal message exceptions. You can select lookup codes from lists of values after you define them.
Legal message exception codes are used to define the type of exception that you can associate with a legal message. See Step 34. Associate Legal Messages and Tax Rules for more information.
This table shows the legal message exception codes that are already included in your installation:
| Lookup Code | Meaning |
|---|---|
| BASE_AMOUNT_REDUCTION | Tax Base Amount Reduction |
| EXEMPTION | Tax Exemption |
| EXPORTS | Exports |
| IMMUNITY | Tax Immunity |
| NON_INCIDENCE | Non-Incidence |
You can add as many legal message exception codes as you require. Use the lookup type JLZZ_AR_TX_LEGAL_MESSAGE to define a new legal message exception code.
Related Topics
Lookups, Oracle Payables User Guide
Use the Latin Tax Categories window to define information about each tax levied in your country, and in your city or province if applicable. You should create a different tax category in each of these cases:
Tax is accounted separately
Tax has different computation requirements
Tax has different applicability requirements
You cannot delete a tax category once you enter and commit. To render a tax category inactive, use the Effective From and Effective To fields to set effective dates.
Enter all the tax rates that apply to this tax category. You must define a separate tax code in the Tax Codes and Rates window for each tax rate that you enter for a tax category. You can also enter a default tax code for a tax category. See Step 6. Define Tax Codes and Rates for more information.
You can enter:
Minimum taxable base if the tax is only levied when the tax basis is over a specified amount
Minimum tax amount if the tax is only levied when the calculated tax amount is over a specified amount
If you enter a minimum taxable base or a minimum tax amount, you can also choose whether the threshold checking for the tax base or tax amount is performed by transaction line, invoice, or operation. If you have different values for minimum taxable base or minimum tax amount for different effective periods, you can enter these details in the Latin Tax Category Details window. See Step 8. Define Latin Tax Category Details for more information.
If another tax is included in the base amount for the tax calculation, you can choose another tax category to be compounded with a tax category.
Note: You must define tax categories before you can associate them with other tax categories.
If applicable, you can use tributary substitution to calculate the tax amount for a tax category.
Use these guidelines for defining a tax category:
Select the applicable operating unit.
In the Category field, select a tax category from the list of values.
In the Effective From and Effective To fields, enter the effective dates for the tax category.
In the Threshold Check Level field, enter:
Line – Consider the current invoice line for threshold checking
Document – Consider the current invoice for threshold checking
Operation – Consider the current invoice and its related debit memos, credit memos, and/or related invoices for threshold checking
In the Grouping Condition Type field, enter:
Line – Use the current invoice line amount as the base amount for threshold checking.
Document – Use the sum of all amounts of relevant lines (see table below) as the base amount for threshold checking. For use with the values Document or Operation in the Threshold Check Level field.
Transaction Condition – Use the sum of all amounts of relevant lines (see table below) as the base amount for threshold checking. For use with the values Document or Operation in the Threshold Check Level field.
The value that you enter in the Threshold Check Level field determines the value you can enter in the Grouping Condition Type field, as shown in this table:
| If the Threshold Check Level is… | In the Grouping Condition Type field, you can enter… | Lines considered for threshold checking |
|---|---|---|
| Line | Line | Current line only |
| Document | Document | All lines in the current document |
| Document | Transaction Condition | All lines in the current document that have the same transaction condition value for the selected transaction condition |
| Operation | Document | All lines in the current and related documents |
| Operation | Transaction Condition | All lines in the current and related documents that have the same transaction condition value for the selected transaction condition |
In the Tax Code field, you can optionally enter a tax code to use with the tax category.
Note: You must define tax codes before you can enter a value in this field.
In the Tax Authority Code field, enter the code for the tax authority responsible for this tax as you want the code to appear in your reports.
Enter values in the Min Amount, Min Taxable Base, and Minimum % fields, if applicable.
Check the Tributary Substitution check box, if the tax category uses tributary substitution.
Check the Inclusive Tax check box, if you want tax included in the price at invoice line level. Leave the check box unchecked if you do not.
Note: You cannot change the Inclusive Tax setting after you associate the tax category with a tax code or a tax group.
Enter another tax category in the Tax Category To Compound Base field, if another tax is included in the base amount for the tax calculation.
Note: You must define the other tax category before you can enter it in this field.
Check the Mandatory in Class check box, if you want the tax category to appear in every tax condition class.
Check the Print check box, if you want the tax line printed. Leave the check box unchecked if you do not.
Use the Tax Codes and Rates window to define and maintain tax codes, their associated tax rates, and effective dates. Use the globalization flexfield in the Tax Codes and Rates window to assign tax codes to tax categories and to maintain country-specific information for each tax code.
Define as many tax codes as you need for each type of tax. You must define at least one tax code for each tax rate that exists for a tax category. For example, if a VAT tax category has one tax rate for Goods and a different tax rate for Services, you would define a separate tax code for each of the two rates and assign them both to the VAT tax category.
When you assign a tax category to a tax code, Oracle Receivables defaults the Tax Inclusive and Print on Invoice values from the tax category. You can change the Print on Invoice value in the field, but you cannot change the Tax Inclusive value.
When you define tax rules to find tax codes, you must:
Associate the tax code that you define here with the applicable source, such as tax categories or fiscal classifications
Define a tax rule that looks for the tax code in the applicable source
See Step 32. Define Latin Tax Rules for more information.
Use these guidelines for the globalization flexfield in the Tax Codes and Rates window:
In the Tax Category field, enter default tax category to associate the tax code with.
In the Print Tax Line field, enter Yes if you want the tax line printed. Enter No if you do not.
In the Legal Message Exception Code field, select an exception code from the list of values.
Use the Latin Tax Categories window, after you define tax categories and tax codes and rates, to assign a default tax code to each tax category that you previously defined.
The Latin Tax Engine uses the default tax code associated with a tax category to calculate tax when the Rate tax rule for the tax category is Tax Category.
If you want to derive a tax code and rate from a tax category, you must also define a tax category tax rule. See Step 32. Define Latin Tax Rules for more information.
Use the Latin Tax Category Details window to enter the minimum amount, minimum taxable base, and minimum percentage for a tax category for an effective period. You can also use this window to assign a tax code to the tax category.
You only use the Latin Tax Category Details window for tax categories that have different values for minimum taxable base or minimum tax amount for different effective periods.
Before you can use the Latin Tax Category Details window, you must define tax categories and tax codes and rates. See Step 5. Define Tax Categories and Step 6. Define Tax Codes and Rates for more information.
Use these guidelines for using the Tax Category Details window:
Select the applicable operating unit.
In the Tax Category field, query or enter the tax category that you want.
Navigate to the Tax Category Details region.
Enter values for the Start Date and End Date fields.
Note: The values that you enter must be within the dates that you defined for the tax category.
In the Min Amount field, enter the minimum tax amount for this tax category.
In the Min Taxable Basis field, enter the minimum taxable base for this tax category.
In the Minimum % field, enter the minimum tax percentage for this tax category.
In the Tax Code field, enter the tax code to associate with this tax category.
Use the Latin Tax Category Schedules window to assign schedules to applicable tax categories. A schedule describes the tax rates to apply to ranges of taxable amounts for a given tax category.
You only use the Latin Tax Category Schedules window for tax categories where the tax code changes because of:
Taxable base range
and/or
Different effective periods
This feature normally applies to situations where the tax rate varies based on the amount being taxed (for example, an Income Tax schedule).
Before you can use the Latin Tax Category Schedules window, you must define tax categories and tax codes and rates. See Step 5. Define Tax Categories and Step 6. Define Tax Codes and Rates for more information.
Use these guidelines for using the Tax Category Schedules window:
Select the applicable operating unit.
In the Tax Category field, query or enter the tax category that you want.
Navigate to the Tax Category Schedules region.
Enter values in the Start Date and End Date fields.
Note: The values that you enter must be within those of the tax category.
In the Min Taxable Basis field, enter the minimum taxable amount for this tax range.
In the Max Taxable Basis field, enter the maximum taxable amount for this tax range.
In the Effective From and Effective To fields, enter the applicable dates for this schedule.
In the Tax Code field, enter the tax code to use for this tax range.
Repeat steps 2 to 5 for each tax range and date range that belongs to this schedule.
Use the Associate Latin Tax Category with Conditions and Values window to associate tax categories with tax conditions and tax condition values. Define for each tax category the applicable tax condition for each condition type (organization, contributor, transaction). You define one tax condition for each tax category/condition type combination.
Every tax category/condition type combination must have one and only one determining factor tax condition. This condition is the deciding factor for the tax category/condition type combination that the Latin Tax Engine uses to determine the tax code to apply to a transaction. To define a tax condition as the determining factor tax condition, enter Yes in the Determining Factor field. If you enter Yes in the Determining Factor field, you must also enter Yes in the Mandatory in Class field.
Note: You can define more than one tax condition for a tax category/condition type combination for situations where the tax line must be generated with an exempt or reduced rate. You can define a tax rule to direct the Latin Tax Engine to retrieve the tax code for the additional transaction condition value. See Fixed Asset Transaction Condition below for an example of assigning this type of tax condition and tax category/condition type combination.
The combinations of tax categories and tax conditions that you define in the Associate Latin Tax Category with Conditions and Values window are used as a basis for defining tax condition classes for each condition type. If you define a tax condition that you associate with a tax category and condition type for every tax condition class, enter Yes in the Mandatory in Class field.
Use these guidelines for associating tax categories with conditions and values:
Select the applicable operating unit.
In the Tax Category field, enter the tax category.
In the Condition Type field, enter Organization Condition, Contributor Condition, or Transaction Condition.
Check the Mandatory in Class check box.
Check the Determining Factor check box.
Uncheck the Grouping Attribute check box.
In the Value fields, enter the tax condition values that apply to this combination of tax category and tax condition.
In this example, a buyer intends to use a certain quantity of a purchase item as a fixed asset rather than for resale. The fixed asset sale item therefore is to be taxed at a zero (exempt) rate for VAT Perception.
An electronics store purchases LaserJet printers both for resale and for use in the store (as a fixed asset), as described in this table:
| Item | Quantity | Intended Use | VAT Perception Rate |
|---|---|---|---|
| LaserJet printers | 100 | Resale | 5% |
| LaserJet printers | 10 | Fixed asset | Exempt (0%) |
This table shows the tax category setup:
Transaction Class: Printers-Resale
| Tax Category | Transaction Determining Condition | Tax Code | Tax Rate |
|---|---|---|---|
| VAT Perception | Applicable | VAT-P-5 | 5% |
This table shows the tax code setup:
| Tax Code | Tax Rate | Tax Category | Legal Message Exception Code |
|---|---|---|---|
| VAT-P-5 | 5% | VAT Perception | |
| VAT-P-Exempt | 0% | VAT Perception |
This table shows the transaction condition class setup for resale items:
Transaction Class: Printers-Resale
| Tax Category | Condition | Condition Value | Determining Factor? |
|---|---|---|---|
| VAT Perception | Applicable | Yes | Yes |
| VAT Perception | Fixed Assets | No | No |
This table shows the transaction condition class setup for fixed asset items:
Transaction Class: Printers-Fixed Asset
| Tax Category | Condition | Condition Value | Determining Factor? |
|---|---|---|---|
| VAT Perception | Applicable | Yes | Yes |
| VAT Perception | Fixed Assets | Yes | No |
This table shows the tax rule setup:
| Tax Category | Transaction Type | Contributor Condition Value | Base/ Rate | Priority | Rule |
|---|---|---|---|---|---|
| VAT Perception | Rate | Yes | Exception by Transaction Condition Value | ||
| VAT Perception | Rate | Yes | Tax Category |
This table shows the exception by transaction condition value setup:
| Tax Category | Condition Name | Priority Number | Condition Value | Tax Rate Code |
|---|---|---|---|---|
| VAT Perception | Fixed Assets | 1 | Yes | VAT-P-Exempt |
This table shows the invoice line entry:
| Invoice Line Number | Item | Quantity | Price | Transaction Class |
|---|---|---|---|---|
| 1 | LaserJet printers | 100 | 100 | Printers-Resale |
| 2 | LaserJet printers | 10 | 100 | Printers-Fixed Asset |
This generates the tax lines shown in this table:
| Invoice Line Number | Tax Line Number | Tax Code | Tax Rate | Tax Amount | Notes |
|---|---|---|---|---|---|
| 1 | 1 | VAT-P-5 | 5.00 | 500.00 | (1) |
| 2 | 1 | VAT-P-Exempt | 0.00 | 0.00 | (2) |
(1) The first rule considered was Exception by Transaction Condition Value. For the Transaction Class of Printers-Resale, for VAT Perception, there is no record for the Condition Fixed Assets with a value No—which is what the class (Printers-Resale) contains. The next rule is the Tax Category rule, which yields the tax rate code of VAT-P-5 and a rate of 5%.
(2) The first rule considered was Exception by Transaction Condition Value. For the Transaction Class of Printers-Fixed Asset, for VAT Perception, there is one record for the Condition Fixed Assets with a value Yes—which is what the class (Printers-Fixed Asset) contains. This yields the tax rate code of VAT-P-Exempt and a rate of 0%.
Use the Latin Tax Condition Classes window to define organization tax condition classes for each tax category. An organization tax condition class defines the tax condition values for each tax category for the organizations that you have defined in Oracle Applications. If you have defined only one organization, or all organizations have identical defaults, you only need to define one organization tax condition class.
Each organization tax condition class must contain every tax category and all determining factortax conditions defined for the tax category at the organization level. For each organization tax condition class, define only one tax condition value for each tax category/tax condition combination.
Each organization tax condition class must include every tax condition that was defined as Mandatory in Class and that was associated with the tax category at the organization level.
After you define organization tax condition classes, assign them to your organization. See Step 12. Assign Tax Condition Classes to Organizationsfor more information.
To define tax condition classes for organizations:
In the Class Type field, enter Organization Class.
Check the Only Mandatory Conditions check box.
In the Class Code field, enter the tax code to use with this tax condition class.
Select the operating unit for this tax condition class.
In the Tax Category fields, enter the tax categories that you want in this tax condition class.
In the Condition Code fields, enter the tax condition to associate with each tax category.
In the Value Code fields, enter the tax condition value to associate with each tax category/tax condition combination.
Check the Enabled check box for every tax category, tax condition, and tax condition value that you enter. If you want to omit one or more of these combinations from the tax condition class, uncheck the check box.
You can use the Enable All and Disable All buttons to enable or disable all check boxes at once. You can enable or disable check boxes individually, depending on your needs.
Use the globalization flexfield in the Location window to assign an organization tax condition class to each inventory organization defined in Oracle Applications.
The organization inherits the values for the determining factor tax conditions associated with each tax category contained in the organization tax condition class.
To assign tax condition classes to organizations:
In the Organization window, query the organization that you want.
Enter Inventory Organization in the Name field.
Check the Enabled check box.
Save your work.
In the Location window, query the inventory organization that you defined in the Organization window.
Navigate to the globalization flexfield.
In the Organization Class field in the globalization flexfield, enter the organization tax condition class.
Enter a tax code in the Tax Code field, if you define the tax rule Organization Tax Code for a tax category.
Press the OK button.
Save your work.
Use the Latin Tax Condition Classes window to define contributor (customer) tax condition classes for each tax category. A contributor tax condition class defines the tax condition values for each tax category for different customer types.
Each contributor tax condition class must contain every tax category and all determining factor tax conditions defined for the tax category at the contributor level. For each contributor tax condition class, define only one tax condition value for each tax category/tax condition combination.
Each contributor tax condition class must include every tax condition that was defined as Mandatory in Class and that was associated with the tax category at the contributor level.
Note: You must define a contributor tax condition class for every valid combination of tax category/tax condition values for which you have a customer that matches the combination of values. To determine the number of contributor tax condition classes that you need to define, first draw up a list all of the possible combinations of tax codes/determining factor tax conditions/tax condition values. Review the list carefully, and if you have a customer that matches any row in the list, create a separate contributor tax condition class for that row.
After you define contributor tax condition classes, assign them to your customers. See Step 14. Assign Tax Condition Classes to Contributors for more information.
To define tax condition classes for contributors:
In the Class Type field, enter Contributor Class.
Check the Only Mandatory Conditions check box.
In the Class Code field, enter the tax code to use with this tax condition class.
Select an operating unit for this tax condition class.
In the Tax Category fields, enter the tax categories that you want in this tax condition class.
In the Condition Code fields, enter the tax condition to associate with each tax category.
In the Value Code fields, enter the tax condition value to associate with each tax category/tax condition combination.
Check the Enabled check box for every tax category, tax condition, and tax condition value that you enter. If you want to omit one or more of these combinations from the tax condition class, uncheck the check box.
Use the globalization flexfield in the Customer Addresses window to assign a contributor tax condition class to each customer address for each customer defined in Oracle Applications.
The customer inherits the values for the determining factor tax conditions associated with each tax category contained in the contributor tax condition class.
To assign tax condition classes to contributors:
Query the first customer that you want in the Customers window.
Navigate to the Customer Addresses window for this customer.
Query the first address for this customer, then navigate to the globalization flexfield.
In the Contributor Class field, enter the contributor tax condition class.
Repeat steps 1 to 4 for each customer and customer address.
Use the Party Tax Profiles page in Oracle E-Business Tax to enter a tax code for a customer, if you define the tax rule Customer Tax Code for a tax category.
The tax code and rule apply to a specific customer.
Related Topics
Setting Up a Third Party Tax Profile, Oracle E-Business Tax User Guide
Use the Business Purpose Detail window to enter a tax code for a customer address, if you define the tax rule Bill To Site Tax Code or Ship To Site Tax Code for a tax category.
The tax code and rule apply to a specific customer bill to site or ship to site.
To enter a tax code for a customer bill to or ship to site:
Navigate to the Customers - Standard window.
Navigate to the Customer Addresses window for a customer address.
Navigate to the Business Purpose Detail window by pressing the Open button.
In the Usage field, enter Bill To or Ship To.
In the Tax Code field, enter the tax code to use for the tax rule for this address.
Complete the rest of the window.
Save your work.
Use the Latin Tax Customer Site Profile window to modify the tax condition values for a specific customer site.
In some cases, not all the tax categories or tax conditions and values in the contributor tax condition class that you assign to customer addresses apply to every customer site. The Latin Tax Customer Site Profile window lets you modify the tax categories, and conditions and values, for an individual customer site, without these changes affecting the other customer sites.
Use the Tax Class Details region of the Latin Tax Customer Site Profile window to make your changes to a customer site profile. You can change the tax condition values for one or more tax categories. You can also insert new tax categories and tax conditions, or delete existing tax conditions.
To modify the tax condition values for a customer site:
Select the applicable operating unit.
Query the customer name and site that you want.
Press the Find button to display the tax class details for this customer site.
In the Tax Category field, enter a new tax category to apply to this customer site.
In the Condition Code field, enter a new tax condition to apply to this customer site.
In the Value Code field, enter a new tax condition value to apply to a tax condition.
Uncheck the Enabled check box to render inactive a tax condition and value.
You can use the Enable All and Disable All buttons to enable or disable all check boxes at once. You can enable or disable check boxes individually, depending on your needs.
Use the Define Latin Locations window to enter a tax code for specific ship from/ship to combinations, if you define the tax rule Ship From / Ship To Site Tax Code for a tax category.
The tax code and rule apply to a specific ship from/ship to site combination.
To enter a tax code for a ship from/ship to combination:
Select the applicable operating unit.
In the Shipment Location From field, enter the ship from location.
In the Shipment Location To field, enter the ship to location.
In the Tax Category field, enter the tax category that applies to this ship from/ship to combination.
In the Base Rate field, enter the rate to apply to the taxable base.
You only enter a value in this field for taxable base modifications. The Latin Tax Engine uses this value if the Base rule is Ship From / Ship To Site Tax Code.
In the Tax Code field, enter the tax code to use for the tax rule for this ship from/ship to combination.
Save your work.
Use the Latin Tax Condition Classes window to define transaction tax condition classes for each tax category. A transaction tax condition class defines the tax condition values for each tax category for different items and memo lines.
Each transaction tax condition class must contain every tax category and all determining factor tax conditions defined for the tax category at the transaction level. For each transaction tax condition class, define only one tax condition value for each tax category/tax condition combination.
Each transaction tax condition class must include every tax condition that was defined as Mandatory in Class and that was associated with the tax category at the transaction level.
Note: You must define a transaction tax condition class for every valid combination of tax category/tax condition values for which you have an item or memo line that matches the combination of values. To determine the number of transaction tax condition classes that you need to define, first draw up a list all of the possible combinations of tax codes/determining factor tax conditions/tax condition values. Review the list carefully, and if you have a transaction that matches any row in the list, create a separate transaction tax condition class for that row.
After you define transaction tax condition classes, assign them to items and memo lines. See Step 22. Assign Tax Condition Classes and Fiscal Classifications to Items and Step 24. Assign Tax Condition Classes and Fiscal Classifications to Memo Lines for more information.
To define tax condition classes for transactions:
In the Class Type field, enter Transaction Class.
Check the Only Mandatory Conditions check box.
In the Class Code field, enter the tax code to use with this tax condition class.
Select the applicable operating unit.
In the Tax Category fields, enter the tax categories that you want in this tax condition class.
In the Condition Code fields, enter the tax condition to associate with each tax category.
In the Value Code fields, enter the tax condition value to associate with each tax category/tax condition combination.
Check the Enabled check box for every tax category, tax condition, and tax condition value that you enter. If you want to omit one or more of these combinations from the tax condition class, uncheck the check box.
Use the Latin Fiscal Classifications window to define fiscal classifications and associate them with tax categories. You define fiscal classifications for both items and memo lines. You can also define special fiscal classification codes within items and memo lines, for example, alcohol, tobacco, consultancy, and catering.
You can assign a tax code to each tax category that you associate with a fiscal classification code. The Latin Tax Engine uses the tax code associated with a fiscal classification code to calculate tax when the Rate tax rule for the tax category is Fiscal Classification Code.
If your country uses base rates to calculate tax, you can optionally enter a value for the base rate modifier. The Latin Tax Engine uses the base rate modifier associated with a fiscal classification code to calculate tax when the Base tax rule for the tax category is Fiscal Classification Code.
If you want to derive a tax code and rate, or a base rate modifier, from a fiscal classification code, you must also define fiscal classification code tax rules. See Step 32. Define Latin Tax Rules for more information.
To define fiscal classifications:
In the Fiscal Classification Code field, enter the fiscal classification code.
Check the Enabled check box to activate the code.
You can use the Enable All and Disable All buttons to enable or disable all check boxes at once. You can enable or disable codes individually, depending on your needs.
Select the applicable operating unit.
In the Tax Category fields, enter the tax categories that apply to this fiscal classification.
In the From Date and To Date fields, enter the effective dates for this fiscal classification.
In the Tax Code fields, enter the tax code to associate with this fiscal classification.
Use the Master Item window to enter a tax code for an item, if you define the tax rule Item Tax Code for a tax category.
The tax code and rule apply to a specific item.
To enter a tax code for an item:
Navigate to the Master Item window.
Navigate to the Invoicing tabbed region.
In the Tax Code field, enter the tax code to use for the tax rule for this item.
Save your work.
Use the globalization flexfield in the Master Item window to assign a primary inventory item application, fiscal classification code, and transaction tax condition class to each item defined in Oracle Applications.
Select the inventory item application that you want to associate the item with most often.
If you use the item only in Receivables/Order Entry, select AR. The lists of values in the Fiscal Classification Code field and the Transaction Condition Class field display only the values you defined for Receivables.
If you use the item only in Purchasing, select PO. The lists of values in the Fiscal Classification Code field and the Transaction Condition Class field display only the values you defined for Purchasing.
If you use the item in both Receivables and Purchasing, select INV. The lists of values in the Fiscal Classification Code field and the Transaction Condition Class field display both the values you defined for Receivables and the values you defined for Purchasing. Select Receivables values in these fields if you use the item primarily in Receivables. Select Purchasing values if you use the item primarily in Purchasing.
The item inherits the values for the determining factor tax conditions associated with each tax category contained in the transaction tax condition class. Depending on your country tax requirements, you can also assign a fiscal classification code to an item.
Use the Standard Memo Lines window to enter a tax code for a memo line, if you define the tax rule Memo Line Tax Code for a tax category.
The tax code and rule apply to a specific memo line.
To enter a tax code for a memo line:
In the Tax Product Category field, enter the tax code to use for the tax rule for this customer.
Use the Standard Memo Lines window to assign a fiscal classification code and transaction tax condition class to each memo line defined in Oracle Applications.
The memo line inherits the values for the determining factor tax conditions associated with each tax category contained in the transaction tax condition class. Depending on your country tax requirements, you can also assign a fiscal classification code to a memo line.
Use the Transaction Types window to define transaction types. Use the globalization flexfield in the Transaction Types window to enter country-specific options for your transaction types.
In order for the Latin Tax Engine to calculate taxes correctly, you must choose these settings in the Transaction Types window for your transaction types:
Check the Tax Calculation check box
Check the Allow Overapplication check box
By selecting the Tax Calculation check box, Receivables cannot complete an invoice until each invoice line has a tax line. If the Latin Tax Engine does not automatically generate a tax line, then save the invoice, review the tax setup and calculate the taxes again. Do not enter manual tax lines, as the Latin Tax Engine does not support entering tax lines manually.
You can enter a tax group or a tax code in the globalization flexfield in the Transaction Types window, if you want to default a tax group or tax code at the invoice line or sales order line whenever this transaction type is chosen.
Use the Latin Tax Groups window to define tax groups to use to calculate taxes on invoices.
A tax group contains related tax categories with combinations of organization tax conditions, contributor tax conditions, and transaction tax conditions for invoice lines. You can only include determining factor tax conditions in a tax group.
Depending on the tax requirements of your country, you can create one tax group only for all transactions, or more than one tax group for related transactions.
When you define a tax group, you must add a tax category for each combination of determining factor tax conditions and tax condition values. You may add the same tax category to a tax group more than once, if multiple tax conditions and values apply for the tax category.
Note: The Latin Tax Engine does not calculate the tax category more than once for an invoice line, because each invoice line only has one combination of tax condition values.
You can assign a default tax code to each tax category in the tax group. The Latin Tax Engine only uses the default tax code on an invoice line when the applicable tax rule is Tax Group.
You can also assign effective dates, minimum taxable amount, and minimum tax amount to each tax category in the tax group.
After you create tax groups, assign them to each transaction type. See Step 27. Assign Tax Group to Transaction Types for more information.
The tax group is the starting point for calculating taxes using the Latin Tax Engine. You enter a tax group in the Tax Code field in the Lines window of the Transactions Work Bench. The Latin Tax Engine determines the tax category or categories to use to calculate tax on a transaction line, based on the combination of values for the organization, contributor, and transaction determining factor tax conditions.
Oracle Receivables generates a tax line for every tax category that the Latin Tax Engine applies to a transaction. If necessary, you can override taxes that are defaulted from the tax category.
These exceptions apply to overriding default taxes:
You cannot override a tax category marked as Inclusive Tax.
If you are using tributary substitution, you must enter a tax category to compound the base.
To define a tax group:
Select the applicable operating unit.
The Contributor Condition, Organization Condition, and Transaction Condition fields display the determining factor tax conditions for each tax category.
Use the Contributor Value, Organization Value, and Transaction Value fields to modify the tax condition value for the tax condition.
Enter a tax code in the Tax Code field for a tax category, if you intend to define a rule to look for the tax code in the tax group.
Enter a value in the Base Rate field, if you want the Latin Tax Engine to modify the taxable base for a tax category.
Check the Tributary Substitution check box for tax categories that use tributary substitution.
Enter a tax category in the Tax Category to Compound Base field for a tax category, if you checked the Tributary Substitution check box or if you want the Latin Tax Engine to compound the line amount with another tax amount.
Enter values in the Minimum Amount, Minimum Taxable Base, and Minimum % fields, if applicable for the tax category.
Check the Inclusive Tax check box, if you want tax for a tax category included in the price at invoice line level. Leave the check box unchecked if you do not.
Use the globalization flexfield in the Transaction Types window to assign the tax group that you defined to each transaction type. Transactions created with transaction types inherit the tax group.
Check the Tax Calculation check box and the Allow Over Application check box for each transaction type. This lets the Latin Tax Engine calculate and account taxes.
To assign the tax group to transaction types:
In the Transaction Types window, query or enter a transaction type.
Navigate to the globalization flexfield.
Enter No in the Void Original Transaction field.
In the Tax Code field, enter the tax group.
Press the OK button.
Repeat steps 2 to 6 for each transaction type.
Save your work.
Use the Latin Tax Exceptions by Fiscal Classification window to define tax exceptions by fiscal classification code for combinations of ship from/ship to locations and tax categories. For each tax exception, you must enter a value for the base rate modifier, tax code, or both.
The Latin Tax Engine uses the tax code for a particular ship from/ship to location and tax category combination when the applicable Rate tax rule is defined as Ship From/Ship To Site Exception by Fiscal Classification Tax Code.
The Latin Tax Engine uses the base rate to modify the line amount for a particular ship from/ship to location and tax category combination when the applicable Base tax rule is defined as Ship From/Ship To Site Exception by Fiscal Classification Tax Code.
You must define a Latin tax rule for tax exceptions by fiscal classification. See Step 32. Define Latin Tax Rules for more information.
To define tax exceptions by fiscal classification:
Select the applicable operating unit.
In the From and To fields, enter the ship from and ship to locations.
In the Fiscal Classification Code field, enter the fiscal classification for this exception.
In the Tax Category field, enter the tax category for this exception.
In the Base Rate field, enter the rate to apply to the taxable base.
You only enter a value in this field for taxable base modifications. The Latin Tax Engine uses this value if the Base rule is Tax Exceptions by Fiscal Classification.
In the Tax Code field, enter the tax code to use for this exception.
In the From Date and To Date fields, enter the effective dates for this exception.
Use the Latin Tax Exceptions by Items window to define tax exceptions by item for combinations of ship from/ship to locations and tax categories. For each tax exception, you must enter a value for the base rate modifier, tax code, or both.
The Latin Tax Engine uses the tax code for a particular ship from/ship to location and tax category combination when the applicable Rate tax rule is defined as Ship From/Ship To Site Exception by Item Tax Code.
The Latin Tax Engine uses the base rate to modify the line amount for a particular ship from/ship to location and tax category combination when the applicable Base tax rule is defined as Ship From/Ship To Site Exception by Item Tax Code. You must define a Latin tax rule for tax exceptions by items.
See Step 32. Define Latin Tax Rules for more information.
To define tax exceptions by items:
Select the applicable operating unit.
In the From and To fields, enter the ship from and ship to locations.
In the Warehouse field, select the warehouse that you want to associate with the item for this exception.
In the Item Code field, enter the item for this exception.
In the Tax Category field, enter the tax category for this exception.
In the Base Rate field, enter the rate to apply to the taxable base.
You only enter a value in this field for taxable base modifications. The Latin Tax Engine uses this value if the Base rule is Tax Exceptions by Items.
In the Tax Code field, enter the tax code to use for this exception.
In the From Date and To Date fields, enter the effective dates for this exception.
Use the Latin Tax Exceptions by Customer Sites window to define tax exceptions by customer site for combinations of customer site and tax categories.
You define tax exceptions by customer site when a customer is eligible for a tax deduction in a certain tax category and/or geographical location. For example, new customers that bring business into a country may receive tax deductions and are therefore classified as tax exceptions. Some tax exceptions apply to the customer, while other tax exceptions apply to certain customer sites only.
The Latin Tax Engine uses the tax code associated with a tax exception by customer site to calculate tax when the Rate tax rule for the tax category is Tax Exception by Customer Site. You must define a Latin tax rule for tax exceptions by customer site. See Step 32. Define Latin Tax Rules for more information.
To define tax exceptions by customer site:
Select the applicable operating unit.
Query the customer and customer site that you want.
Press the Find button to display the tax exceptions for this customer and customer site.
In the From and To fields, enter the effective dates for the tax exception.
In the Tax Code field, enter a tax code if you want the Latin Tax Engine to find a tax code using the rule Tax Exception by Customer Site.
In the Base Rate field, enter the rate to apply to the taxable base.
You only enter a value in this field for taxable base modifications. The Latin Tax Engine uses this value if the Base rule is Tax Exceptions by Customer Site.
Use the Latin Tax Exceptions by Transaction Condition Values window to define tax exceptions by transaction condition value for combinations of transaction condition values and tax categories.
Tax exceptions only apply to non-determining factor tax conditions. For example, if you have a tax condition for VAT on goods, you can define an exception for goods that are not normally subject to VAT.
You define tax exceptions for combinations of tax category and tax condition. You can designate one or more tax condition values belonging to the tax condition as tax exceptions, and assign a tax code to each tax condition value.
The Latin Tax Engine uses the tax code associated with a tax exception by transaction condition value to calculate tax when the Rate tax rule for the tax category is Tax Exception by Transaction Condition Value. You must define a Latin tax rule for tax exceptions by transaction condition value. See Step 32. Define Latin Tax Rules for more information.
To define tax exceptions by transaction condition value:
Select the applicable operating unit.
Use the Priority Number field when more than one transaction condition exception applies to a single tax category.
In the Tax Category field, enter the tax category that you want.
In the Tax Condition Name field, enter the transaction tax condition to use as the exception.
In the Tax Condition Value fields, enter the transaction tax condition values to use as exceptions.
If there is more than one transaction tax condition value exception, use the Priority Number field to number them.
In the Start Date Active and End Date Active fields, enter the effective dates for the tax exception.
In the Tax Code fields, enter the tax code to associate with the tax exception.
Use the Latin Tax Rules window to define one or more tax rules for each combination of tax category, contributor condition value, and transaction type. The Latin Tax Engine uses these rules to determine the tax rate or the base rate modifier to apply to a transaction.
The tax rules used to find the tax rate are:
Bill To Site
Customer Exception
Customer
Exception by Transaction Condition Value
Fiscal Classification
Item
Tax Group
Memo Line
Organization
Ship From/Ship To Site Exception by Item
Ship From/Ship To Site (Location)
Ship From/Ship To Site Exception by Fiscal Classification
System Options
Tax Category
Tax Schedule
Ship To Site
The tax rules used to find the base rate modifier are:
Customer Exception
Exception by Transaction Condition Value
Fiscal Classification
Tax Group
Ship From/Ship To Site Exception by Item
Ship From/Ship To Site
Ship From/Ship To Site Exception by Fiscal Classification
You can define rules to calculate the taxable base and to calculate the tax. Taxable base rules are labeled Base; tax calculation rules are labeled Rate. Define as many rules as require.
For every tax rule that you use, make sure that you have entered a tax code for the tax category in the applicable window. For example, if you use the tax rule Latin Tax Group, enter a tax code for the tax category in the Latin Tax Groups window.
To define a default tax rule, enter Default in the Value field and the default transaction type in the Transaction Type field. The default transaction type corresponds to the transaction type that you entered in the Receivables System Options window.
To define tax rules:
Select the applicable operating unit.
If you defined exceptions for one or more tax categories, define exceptions as your first tax rules for the applicable tax categories.
In the Value field, enter the tax condition value to use.
In the Transaction Type field, enter the type of transaction to which this rule applies.
In the Rule Level field, enter Rate to retrieve a tax code for the tax rate, or Base to retrieve a tax code for the base modifier.
In the Priority fields, enter two-digit values to indicate the hierarchy of tax rules, for example, 10, 20, 30, and so on.
Enter the tax rule in the Rule field. Enter rules in the order that you want the Latin Tax Engine to use them.
Use the Standard Messages window to enter your legal messages.
You enter a name for the legal message in the Name field, the type of message in the Type field, and the text of the message in the Message field.
After you define legal messages, you need to associate each message with a combination of tax rule, tax exception, and rule data.
See Step 34. Associate Legal Messages and Tax Rules for more information.
Related Topics
Standard Messages, Oracle Receivables User Guide
Use the Associate Latin Tax Legal Messages window or Legal Messages window to associate legal messages with Latin tax rules. You associate a legal message, which you created in the Standard Messages window, with a combination of tax rule, tax exception, and rule data.
Legal messages are fiscal messages on invoices that explain the reason why a lower tax rate is applied to an invoice line for various exceptions. For example, if a customer is exempt from a certain tax that normally applies to the transaction, the Brazilian tax authority requires a note printed on the invoice to explain the reason for the exception. Similarly, an item that belongs to a fiscal classification may be charged a lower rate, and this transaction would also require a printed explanation.
You apply legal message exception codes to invoice lines to describe the exception. See Step 4. Define Legal Message Exception Codes for more information. You can create as many legal messages as you want for each tax rule. You can create, however, only one legal message for each combination of tax rule, tax category, contributor type, transaction type, exception, and rule data.
The tax rule data that you associate with legal messages appears in the Legal Messages region of the Associate Latin Tax Legal Messages window or the Rule region of the Legal Messages window based on the tax rule that you enter.
Note: You can access the Legal Messages window using the Legal Messages button on these windows:
Latin Tax Groups
Latin Fiscal Classifications
Latin Locations
Latin Tax Exceptions by Customer Site
Latin Tax Exceptions by Transaction Condition Values
Latin Tax Exceptions by Item
Latin Tax Exceptions by Fiscal Classification
This table describes the tax rules used to associate legal messages for a given business situation and indicates which window to use to associate legal messages. Even though you can use either window for some tax rules, you should use the Legal Messages window whenever possible.
| Rate or Exemption For... | Use this Tax Rule... | Use this Window... |
|---|---|---|
| Customer | Customer Tax Code | Associate Latin Tax Legal Messages window |
| Customer Exception | Customer Exception Tax Code | Legal Messages window from the Latin Tax Exceptions by Customer Site window |
| Exception by Transaction Condition Value | Exception by Transaction condition value Tax Code | Legal Messages window from the Latin Tax Exceptions by Transaction Condition Values window |
| Fiscal Classification Code | Fiscal Classification Code | Legal Messages window from the Latin Fiscal Classifications window |
| Item | Item Tax Code | Associate Latin Tax Legal Messages window |
| Latin Tax Group | Latin Tax Group Tax Code | Legal Messages window from the Latin Tax Groups window |
| Memo Line | Memo Line Tax Code | Associate Latin Tax Legal Messages window |
| Organization | Organization Tax Code | Associate Latin Tax Legal Messages window |
| Ship From / Ship To Site | Ship From / Ship To Site Tax Code | Legal Messages window from the Latin Locations window |
| Ship From / Ship To Site Exception By Item | Ship From / Ship To Site Exception By Item Tax Code | Legal Messages window from the Latin Tax Exceptions by Item window |
| Ship From/To Site Exception by Fiscal Classification | Ship From/To Site Exception by Fiscal Classification Tax Code | Legal Messages window from the Latin Tax Exceptions by Fiscal Classification window |
Before you can use the Associate Latin Tax Legal Messages or Legal Messages window, you must:
Define tax codes.
Define tax rules.
Define legal message exception codes.
Record legal messages as standard statement messages in Oracle Receivables (150 character maximum).
To associate a legal message to a tax rule using the Associate Latin Tax Legal Messages window:
Navigate to the Associate Latin Tax Legal Messages window.
Select the applicable operating unit.
Query the tax rule that you want to associate legal messages with.
Navigate to the Legal Messages region.
In the Exception Name field, enter the tax exception that the legal message applies to.
Depending on the tax rule that you choose, Oracle Receivables displays the relevant rule data.
Customer Tax Code - In the Customer Name field, enter the customer that the legal message applies to.
Item Tax Code - In the Warehouse field, enter the warehouse that the item belongs to. In the Item field, enter the item that the legal message applies to.
The description of the item defaults in the Description field.
Memo Line Tax Code - In the Memo Line field, enter the memo line that the legal message applies to.
Organization Tax Code - In the Organization field, enter the organization that the legal message applies to.
Enter the legal message name in the Message Name field.
Repeat step 3 to 5 to associate other legal messages to this tax rule.
Repeat steps 2 to 6 for all legal messages and tax rules that you want to associate.
Save your work.
To associate a legal message to a tax rule using the Legal Messages window:
Navigate to the appropriate Latin Tax Engine window:
Latin Tax Groups
Latin Fiscal Classifications
Latin Locations
Latin Tax Exceptions by Customer Site
Latin Tax Exceptions by Transaction Condition Values
Latin Tax Exceptions by Item
Latin Tax Exceptions by Fiscal Classification
Query the entity that you want to associate a message for, such as a fiscal classification code or Latin tax group.
Select the detail line that you want and press the Legal Messages button.
The Legal Messages window appears.
The fields in the Rule region display different rule data depending on the tax rule. These fields default with information from the Latin Tax Engine window that you started with.
Navigate to the Legal Messages region.
In the Exception Name field, enter the tax exception that the legal message applies to.
Enter the legal message name in the Message Name field. The message text defaults in the Text field.
Repeat steps 4 to 6 to associate other legal messages to this tax rule.
Save your work.
This section provides an example of how the Latin Tax Engine uses setup information and tax rules to calculate taxes on an invoice. The example includes setup data and tax rules, and applies this information to an invoice.
This example uses seven tax categories:
Federal Tax 1
Federal Tax 2
Federal Tax 3
Provincial Tax 1
Provincial Tax 2
Provincial Tax 3
Provincial Tax 4
The following three tables describe—for each tax condition class—the tax conditions and tax condition values that apply to each tax category.
Note: The transaction tax condition class has two tax conditions and tax condition values for the tax category Federal Tax 1 in order to account for fixed asset transaction items.
This table describes the organization tax condition class:
| Tax Category | Tax Condition | Tax Condition Value |
|---|---|---|
| Federal Tax 1 | Federal Condition 1 | Applicable |
| Federal Tax 2 | Federal Condition 2 | Applicable |
| Federal Tax 3 | Federal Condition 3 | Not Applicable |
| Provincial Tax 1 | Provincial Condition 1 | Applicable |
| Provincial Tax 2 | Provincial Condition 2 | Not Applicable |
| Provincial Tax 3 | Provincial Condition 3 | Not Applicable |
| Provincial Tax 4 | Provincial Condition 4 | Not Applicable |
This table describes the customer tax condition class:
| Tax Category | Tax Condition | Tax Condition Value |
|---|---|---|
| Federal Tax 1 | Federal Customer Condition 1 | Applicable |
| Federal Tax 2 | Federal Customer Condition 2 | Applicable |
| Federal Tax 3 | Federal Customer Condition 3 | Not Applicable |
| Provincial Tax 1 | Provincial Customer Condition 1 | Applicable |
| Provincial Tax 2 | Provincial Customer Condition 2 | Not Applicable |
| Provincial Tax 3 | Provincial Customer Condition 3 | Not Applicable |
| Provincial Tax 4 | Provincial Customer Condition 4 | Not Applicable |
This table describes the transaction tax condition class:
| Tax Category | Tax Condition | Tax Condition Value |
|---|---|---|
| Federal Tax 1 | Item Type | Goods |
| Federal Tax 1 | Fixed Asset | Yes |
| Federal Tax 2 | Item Type | Goods |
| Federal Tax 3 | Item Type | Goods |
| Provincial Tax 1 | Taxable? | Taxable |
| Provincial Tax 2 | Taxable? | Taxable |
| Provincial Tax 3 | Taxable? | Taxable |
| Provincial Tax 4 | Taxable? | Taxable |
Note: The organization tax condition class is determined by the warehouse that you enter for transaction lines. You must enter a warehouse in the Warehouse Name field of the Lines window. If you do not enter a warehouse for invoices that were entered earlier, and modify or make these invoices incomplete, then you may get incorrect tax calculations.
This table shows the tax group for the seven tax categories in the example.
| Tax Category | Organization Tax Condition | Customer Tax Condition | Transaction Tax Condition | Rate (Code) |
|---|---|---|---|---|
| Federal Tax 1 | Applicable | Applicable | Goods | 21 |
| Federal Tax 1 | Applicable | Applicable | Services | 27 |
| Federal Tax 2 | Applicable | Applicable | Goods | 6 |
| Federal Tax 2 | Applicable | Applicable | Services | 8 |
| Federal Tax 3 | Applicable | Applicable | Goods | |
| Federal Tax 2 | Applicable | Applicable | Services | 13 |
| Provincial Tax 1 | Applicable | Applicable | Taxable | 9 |
| Provincial Tax 2 | Applicable | Applicable | Taxable | 4 |
| Provincial Tax 3 | Applicable | Applicable | Taxable | 5 |
| Provincial Tax 4 | Applicable | Applicable | Taxable | 3 |
This tax group defines all of the combinations of tax category, organization tax condition and value, customer tax condition and value, and transaction tax condition and value that require taxes calculated.
For example, the tax category Federal Tax 1 is calculated on all transactions where:
Organization tax condition of Federal Condition 1 has a value of Applicable
Customer tax condition Federal Customer Condition 1 has a value of Applicable
Transaction tax condition Item Type has a value of Goods (entry 1) or Services (entry 2)
This table shows the tax rules that are used to calculate taxes for the seven tax categories in the example:
| Tax Category | Customer Condition | Priority | Rule |
|---|---|---|---|
| Federal Tax 1 | Applicable | 10 | Fiscal Classification |
| Federal Tax 1 | Applicable | 20 | Transaction Nature Exception |
| Federal Tax 1 | Applicable | 30 | Tax Group |
| Federal Tax 2 | Applicable | 10 | Customer Site Exception |
| Federal Tax 2 | Applicable | 20 | Customer |
| Federal Tax 2 | Applicable | 30 | Tax Group |
| Federal Tax 3 | Applicable | 10 | Tax Group |
| Federal Tax 3 | Applicable | 20 | Tax Category |
| Provincial Tax 1 | Applicable | 10 | Fiscal Exception |
| Provincial Tax 1 | Applicable | 20 | Latin Location Exception |
| Provincial Tax 1 | Applicable | 30 | Item Exception |
| Provincial Tax 2 | Applicable | 10 | Tax Group |
| Provincial Tax 3 | Applicable | 10 | Tax Group |
| Provincial Tax 4 | Applicable | 10 | Tax Group |
The tax rules tell the Latin Tax Engine where to search for actual rates for each tax. In this example, for Federal Tax 1 the Latin Tax Engine first looks for a tax rate from the fiscal classification of the item, then from the transaction nature exception for the item, and finally from the tax group.
In this example, the Latin Tax Engine determines that there are four taxes to calculate by comparing the values of the organization tax condition class, customer tax condition class, and transaction tax condition class with the tax group. The four taxes to calculate are:
Federal Tax 1
Federal Tax 2
Federal Tax 3
Provincial Tax 1
Provincial Tax 2, Provincial Tax 3, and Provincial Tax 4 are not calculated because the organization and customer tax condition values are Not Applicable.
The Latin Tax Engine turns to the tax rules to determine how to calculate each tax. For each tax category, the Latin Tax Engine will use the hierarchy of rules defined for that tax category to look for a tax rate that applies to the taxable item.
The invoice for this example is from customer XYZ Corporation, with ship-from location Province 1, ship-to location Province 3, and taxable item Item 432. This table shows the invoice line information:
| Item | Fiscal Class | Amount |
|---|---|---|
| Item 432 | Hardware | 100,000 |
For Federal Tax 1, the Latin Tax Engine goes to the first tax rule, Fiscal Classification, and looks for a tax rate in the fiscal classification. The fiscal classification for Item 432 is Hardware. The Latin Tax Engine finds that there are Federal Tax 1 tax rates for the fiscal classifications Software, Services, and Food, but not the fiscal classification Hardware.
The Latin Tax Engine goes to the next tax rule, Transaction Nature Exception, and looks for a tax rate in the transaction nature exception. The Latin Tax Engine finds that there is a Federal Tax 1 tax rate for fixed assets. Federal Tax 1 was defined with a transaction tax condition Fixed Asset and tax condition value Yes. Therefore, the Latin Tax Engine uses the transaction nature exception rule for the tax rate.
Note: The condition Fixed Asset is not a determining factor tax condition.
Once the tax rate is found, the Latin Tax Engine calculates the tax for this invoice line. The tax rate was zero, so the calculation (100,000 * 0) is zero. This table shows the updated invoice line information:
| Item | Fiscal Class | Amount |
|---|---|---|
| Item 432 | Hardware | 100,000 |
| Federal Tax 1 | 0 |
For Federal Tax 2, the Latin Tax Engine goes to the first tax rule, Customer Site Exception, and looks for a tax rate in customer site exceptions. The Latin Tax Engine finds that there are customer site exceptions for customer ABC Corporation, but not for XYZ Corporation.
The Latin Tax Engine goes to the next tax rule, Customer, and looks for a tax rate for the customer. The Latin Tax Engine finds that there is separate tax group with its own set of conditions and values for customer XYZ Corporation. The Latin Tax Engine looks at the tax group attached to XYZ Corporation and finds the appropriate tax rate for tax category Federal Tax 2.
Once the tax rate is found, the Latin Tax Engine calculates the tax for this invoice line. The tax rate found is 6%, so the calculation is 6,000 (100,000 * 6%). This table shows the updated invoice line information:
| Item | Fiscal Class | Amount |
|---|---|---|
| Item 432 | Hardware | 100,000 |
| Federal Tax 1 | 0 | |
| Federal Tax 2 | 6,0000 |
For Federal Tax 3, the Latin Tax Engine goes to the first tax rule, Tax Group, and looks for a tax rate in the tax group. There is no tax rate in the original tax group entry for Federal Tax 3.
The Latin Tax Engine goes to the next tax rule, Tax Category, and looks for a tax rate in the tax category. The Latin Tax Engine finds the tax rate for Federal Tax 3 in the tax category.
Once the tax rate is found, the Latin Tax Engine calculates the tax for this invoice line. The tax rate found is 10%, so the tax calculated is 10,000 (100,000 * 10%). This table shows the updated invoice line information:
| Item | Fiscal Class | Amount |
|---|---|---|
| Item 432 | Hardware | 100,000 |
| Federal Tax 1 | 0 | |
| Federal Tax 2 | 6,0000 | |
| Federal Tax 3 | 10,000 |
For Provincial Tax 1, the Latin Tax Engine goes to the first tax rule, Fiscal Classification Exception, and looks for a tax rate in fiscal classification exceptions. The fiscal classification for Item 432 is Hardware. The Latin Tax Engine finds that there is a Provincial Tax 1 tax rate from Province 1 to Province 3 for the fiscal classification Software, but not the fiscal classification Hardware
The Latin Tax Engine goes to the next tax rule, Latin Location Exception, and looks for a tax rate in Latin location exceptions. There is no tax rate for Provincial Tax 1 from Province 1 to Province 3.
The Latin Tax Engine goes to the next tax rule, Item Exception, and looks for a tax rate in the item exceptions. The Latin Tax Engine finds a tax rate for Provincial Tax 1 from Province 1 to Province 3.
Once the tax rate is found, the Latin Tax Engine calculates the tax for the invoice line. The tax rate found is 9%, so the tax calculated is 9,000 (100,000 * 9%). This table shows the updated invoice line information:
| Item | Fiscal Class | Amount |
|---|---|---|
| Item 432 | Hardware | 100,000 |
| Federal Tax 1 | 0 | |
| Federal Tax 2 | 6,0000 | |
| Federal Tax 3 | 10,000 | |
| Provincial Tax 1 | 9,0000 |
The total of the invoice including tax is 125,000.
Use the Customer Interface program to import and validate customer information from other systems. Country-specific globalization flexfield content is imported and validated during this process.
You use SQL*Loader, or other import program, to load customer information into the interface tables. When you import customer information, the Customer Interface program validates the global attribute columns in the interface tables and transfers those values into the customer tables.
Before the Customer Interface program can properly validate your data file, you must:
Assign the appropriate context code for your country to the appropriate global attribute category column.
Map your global attribute columns from the interface tables to the corresponding global flexfield segment columns in the customer tables.
This table shows how the global attribute columns in the interface tables map to the global flexfield segment columns in the corresponding customer tables:
| Interface Table.Global Attribute Column | Customer Table.Global Attribute Column |
|---|---|
| RA_CUSTOMERS_INTERFACE_ALL. GLOBAL_ATTRIBUTE1-20 | HZ_CUST_ACCOUNTS. GLOBAL_ATTRIBUTE1-20 |
| RA_CUSTOMERS_INTERFACE_ALL. GDF_ADDRESS_ATTRIBUTE1-20 | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE1-20 |
| RA_CUSTOMERS_INTERFACE_ALL. GDF_SITE_USE_ATTRIBUTE1-20 | HZ_CUST_SITE_USES_ALL. GLOBAL_ATTRIBUTE1-20 |
| RA_CUSTOMER_PROFILES_INT_ALL. GDF_CUST_PROF_ATTRIBUTE1-20 | HZ_CUSTOMER_PROFILES. GLOBAL_ATTRIBUTE1-20 |
After you map your global attribute columns, run the Customer Interface program. The Customer Interface program will:
Validate taxpayer ID information based on the content of the GLOBAL_ATTRIBUTE_CATEGORY column in the RA_CUSTOMERS_INTERFACE_ALL table, and populate taxpayer ID information into the GLOBAL_ATTRIBUTE<nn> columns in the HZ_CUST_ACCOUNTS table. For more information about using Taxpayer ID Validation, see Taxpayer ID Validations as well as your country-specific user guide (for Argentine, Chile, and Colombia only).
Validate contributor class information in the GDF_ADDRESS_ATTRIBUTE8 column in the RA_CUSTOMERS_INTERFACE_ALL table, and populate that information into the HZ_CUST_ACCT_SITES_ALL table (for Argentina, Brazil, and Colombia only). This value is mandatory if the Tax Method is Latin Tax Handling.
Validate inscription and remittance information in the GDF_ADDRESS_ATTRIBUTE<nn> and GDF_CUST_PROF_ATTRIBUTE<nn> columns in the RA_CUSTOMERS_INTERFACE_ALL and RA_CUSTOMER_PROFILES_INT_ALL tables, and populate that information into the HZ_CUST_ACCT_SITES_ALL and HZ_CUSTOMER_PROFILES tables (for Brazil only).
Validate a customer's public sector company reporting designation in the GLOBAL_ATTRIBUTE1 column in the RA_CUSTOMERS_INTERFACE_ALL table and populate that information into the GLOBAL_ATTRIBUTE1 column in the HZ_CUST_ACCOUNTS table (for Greece only).
Validate a customer site's receipt acknowledgment designation in the GDF_SITE_USE_ATTRIBUTE1 column in the RA_CUSTOMERS_INTERFACE_ALL table and populate that information into the GLOBAL_ATTRIBUTE1 column in the HZ_CUST_SITE_USES_ALL table (for Greece and Portugal only).
Validate whether a customer drawee is responsible for bearing charges that are associated with bills receivable in the GDF_SITE_USE_ATTRIBUTE1 column in the RA_CUSTOMERS_INTERFACE_ALL table and populate that information into the GLOBAL_ATTRIBUTE1 column in the HZ_CUST_SITE_USES_ALL table (for Spain only).
The following sections describe in detail how to import country-specific attributes into the customer tables in Receivables using the Customer Interface program.
Related Topics
Customer Interface, Oracle Receivables User Guide
To use the Customer Interface program to import and validate globalization flexfield content, you must first assign the appropriate global flexfield context code for your country to one of the global attribute category columns in the RA_CUSTOMERS_INTERFACE_ALL table.
For a given context code, the Customer Interface program confirms that the values of the global attribute columns in the interface table match the value sets that are defined for the globalization flexfield segments in the corresponding customer table. In other words, if the global attribute category has a context code, the required global attribute columns for that country must have the correct data.
For example, if your country is Argentina and you want to import information for the JG_HZ_CUST_ACCOUNTS globalization flexfield from the interface tables to standard Receivables customer tables, then you must enter the JL.AR.ARXCUDCI.CUSTOMER context code in the GLOBAL_ATTRIBUTE_CATEGORY column and enter either Yes or No in the GLOBAL_ATTRIBUTE1 column.
This table shows you how to map these global flexfield context codes for your country to the GLOBAL_ATTRIBUTE_CATEGORY column in the RA_CUSTOMERS_INTERFACE_ALL table.
| For this country… | For this flexfield... | Map this global flexfield context code… |
|---|---|---|
| Argentina | JG_HZ_CUST_ACCOUNTS | JL.AR.ARXCUDCI.CUSTOMERS |
| Argentina | JG_HZ_CUST_ACCT_SITES | JL.AR.ARXCUDCI.Additional |
| Brazil | JG_HZ_CUST_ACCT_SITES | JL.BR.ARXCUDCI.Additional |
| Brazil | JG_HZ_CUSTOMER_PROFILES | JL.BR.ARXCUDCI.Additional Info |
| Chile | JG_HZ_CUST_ACCOUNTS | JL.CL.ARXCUDCI.CUSTOMERS |
| Colombia | JG_HZ_CUST_ACCOUNTS | JL.CO.ARXCUDCI.CUSTOMERS |
| Colombia | JG_HZ_CUST_ACCT_SITES | JL.CO.ARXCUDCI.Additional |
Map these global attribute columns in the interface tables to the corresponding global flexfield segments. For each context code that you assign to a global attribute category column, confirm that the values of the matching global attribute columns are compatible with the designated value sets.
This table shows the valid values with descriptions for the JL.AR.ARXCUDCI. CUSTOMERS Argentine context.
Context Code: JL.AR.ARXCUDCI.CUSTOMERS
| In this column... | Oracle Receivables stores... | For this location... |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE9 | Origin. This value is mandatory. Valid values are DOMESTIC_ORIGIN or FOREIGN_ORIGIN. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE9 |
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE10 | Primary ID Type. This value is mandatory. Valid values are 80, 82, 96, or any user-defined value in the JLAR_TAXID_TYPE value set. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE10 |
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE12 | Primary ID Validation Digit. This field is required only when GLOBAL_ ATTRIBUTE10 is LEGAL_ENTITY. Valid values are any single digit number between 0 and 9. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE12 |
This table shows the valid values with descriptions for the JL.AR.ARXCUDCI. Additional Argentine context.
Context Code: JL.AR.ARXCUDCI.Additional
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE8 | Contributor class. This value is mandatory if the tax method is Latin Tax Handling. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view where TAX_ATTR_CLASS_TYPE = "CONTRIBUTOR_CLASS". | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE8 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE9 | Customer site profile usage. This value is mandatory and must be N. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE9 |
This table shows the valid values with descriptions for the JL.BR.ARXCUDCI. Additional Brazilian context.
Context Code: JL.BR.ARXCUDCI.Additional
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE2 | Inscription type (CPF, CNPJ, other). This value is mandatory. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE2 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE3 | Inscription number. This value is mandatory if the inscription type is CNPJ or CPF. The inscription number and inscription subsidiary are validated against the inscription digit with a standard algorithm. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE3 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE4 | Inscription subsidiary. This value is mandatory if the inscription type is CNPJ or CPF. The inscription number and inscription subsidiary are validated against the inscription digit with a standard algorithm. If the inscription type is CPF, the inscription subsidiary must be 0000. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE4 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE5 | Inscription digit. This value is mandatory if the inscription type is CNPJ or CPF. The inscription number and inscription subsidiary are validated against the inscription digit with a standard algorithm. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE5 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE6 | State inscription. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE6 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE7 | Municipal inscription. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE7 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE8 | Contributor class. This value is mandatory if the tax method is Latin Tax Handling. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view where TAX_ATTR_CLASS_TYPE = "CONTRIBUTOR_CLASS". | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE8 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE9 | Customer site profile usage. This value is mandatory and must be N. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE9 |
This table shows the valid values with descriptions for the JL.BR.ARXCUDCI. Additional Info Brazilian context.
Context Code: JL.BR.ARXCUDCI.Additional Info
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_CUSTOMER_PROFILES_INT_ALL.GDF_CUST_PROF_ATTRIBUTE1 | Remittance Protest Instructions. The value can be Yes or No. This value is mandatory. | HZ_CUSTOMER_PROFILES.GLOBAL_ATTRIBUTE1 |
| RA_CUSTOMER_PROFILES_INT_ALL.GDF_CUST_PROF_ATTRIBUTE2 | Remittance Interest Instructions. The value can be Yes or No. This value is mandatory. | HZ_CUSTOMER_PROFILES.GLOBAL_ATTRIBUTE2 |
This table shows the valid values with descriptions for the JL.CL.ARXCUDCI. CUSTOMERS Chilean context.
Context Code: JL.CL.ARXCUDCI.CUSTOMERS
| In this column... | Oracle Receivables stores... | For this location... |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE10 | Primary ID Type. This value is mandatory. Valid values are DOMESTIC_ORIGIN or FOREIGN_ORIGIN. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE10 |
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE12 | Primary ID Validation Digit. This field is required only when GLOBAL_ ATTRIBUTE10 is DOMESTIC_ORIGIN. Valid values are any single digit number between 0 and 9 or the character K. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE12 |
This table shows the valid values with descriptions for the JL.CO.ARXCUDCI. CUSTOMERS Colombian context.
Context Code: JL.CO.ARXCUDCI.CUSTOMERS
| In this column... | Oracle Receivables stores... | For this location... |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE10 | Primary ID Type. This value is mandatory. Valid values are LEGAL_ENTITY, INDIVIDUAL, or FOREIGN_ ENTITY | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE10 |
| RA_CUSTOMERS_INTERFACE_ALL.GLOBAL_ATTRIBUTE12 | Primary ID Validation Digit. This field is required only when GLOBAL_ ATTRIBUTE10 is LEGAL_ENTITY. Valid values are any single digit number between 0 and 9. | HZ_CUST_ACCOUNTS.GLOBAL_ ATTRIBUTE12 |
This table shows the valid values with descriptions for the JL.CO.ARXCUDCI. Additional Colombian context.
Context Code: JL.CO.ARXCUDCI.Additional
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE8 | Contributor class. This value is mandatory if the tax method is Latin Tax Handling. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view where TAX_ATTR_CLASS_TYPE = "CONTRIBUTOR_CLASS". | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE8 |
| RA_CUSTOMERS_INTERFACE_ALL.GDF_ADDRESS_ATTRIBUTE9 | Customer site profile usage. This value is mandatory and must be N. | HZ_CUST_ACCT_SITES_ALL. GLOBAL_ATTRIBUTE9 |
Each time you run Customer Interface program, Receivables generates the Customer Interface Transfer report. If any validation fails, the Customer Interface program populates the INTERFACE_STATUS column in the interface tables with the concatenated error codes for the Customer Interface Transfer report. This report shows the rows with problems and related error descriptions.
For taxpayer ID validation, customer records are not imported unless the JL: Tax ID Validation Failure profile option is set to Warning. If you set this profile option to Error, you must correct the errors in either your feeder program or within Receivables before the Customer Interface program can successfully import any records. See Taxpayer ID Validations for more information.
Related Topics
Customer Interface Transfer Report, Oracle Receivables User Guide
The Customer Interface program validates the global attribute columns for taxpayer ID validation (for Argentina, Chile, Brazil, and Colombia only). Taxpayer ID validations are completed only if the GLOBAL_ATTRIBUTE_CATEGORY column has the correct context code and the taxpayer ID is entered in the JGZZ_FISCAL_CODE column in the RA_CUSTOMERS_INTERFACE_ALL table.
Note: Oracle Receivables derives the country context code from the operating unit or legal entity. If both operating unit and legal entity are not available for suppliers, customers, or any other third parties, then you must choose the country context when entering such entities.
If the JL: Tax ID Validation Failure profile option is set to Warning for cross validation and algorithm failures, customer information is processed with warning messages, which are printed in the Customer Interface Transfer report.
Note: The Customer Interface program uses the WARNING_TEXT field in the RA_CUSTOMERS_INTERFACE_ALL table to populate warning messages for taxpayer ID validation failures.
Chile and Colombia use the JL: Copy Tax Identifier Number profile option at the Responsibility level to copy the taxpayer ID concatenated with the validation digit into the Customer Number field. The Automatic Customer Numbering check box in the System Options window must also be unchecked. See the country-specific descriptions for more information about taxpayer ID validations.
Related Topics
Transactions and Customers System Options, Oracle Receivables User Guide
Overview of Setting User Profiles, Oracle Applications System Administrator's Guide
The RA_INTERFACE_LINES_ALL interface table stores invoice information. You use SQL*Loader to load invoice information into the interface table for each invoice that you create.
When you initiate importing invoices, the AutoInvoice open interface validates global attribute columns in the RA_INTERFACE_LINES_ALL table according to country-specific requirements. AutoInvoice then transfers global attribute columns from the RA_INTERFACE_LINES_ALL table to the RA_CUSTOMER_TRX_ALL table and the RA_CUSTOMER_TRX_LINES_ALL table.
Before the AutoInvoice program can properly validate your data file and create invoice and invoice lines in Oracle Receivables, you must:
Assign the appropriate context code for your country to the appropriate global attribute category column
Map your global attribute columns from the interface table to the corresponding global flexfield segment columns in the transaction tables
This table shows how the global attribute columns in the interface table maps to the global flexfield segment columns in the corresponding transaction tables:
| Interface Table.Global Attribute Column | Transaction Table.Global Attribute Column |
|---|---|
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE1-30 | RA_CUSTOMER_TRX_ALL. GLOBAL_ATTRIBUTE1-30 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE1-20 | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE1-20 |
Related Topics
Importing Invoice Information Using AutoInvoice, Oracle Receivables User Guide
To use the AutoInvoice program to import and validate globalization flexfield content, you must first assign the appropriate global flexfield context code for your country to one of the global attribute category columns in the RA_INTERFACE_LINES_ALL table.
For a given context code, the AutoInvoice program confirms that the values of the global attribute columns in the interface table match the value sets that are defined for the globalization flexfield segments in the corresponding transaction tables. In other words, if the global attribute category has a context code, the required global attribute columns for that country must have the correct data.
This table shows you how to map this global flexfield context code for your country to the HEADER_GDF_ATTR_CATEGORY column in the RA_INTERFACE_LINES_ALL table.
| For this country… | For this flexfield... | Map this global flexfield context code… |
|---|---|---|
| Brazil | JG_RA_CUSTOMER_TRX | JL.BR.ARXTWMAI.Additional Info |
This table shows you how to map these global flexfield context codes for your country to the LINE_GDF_ATTR_CATEGORY column in the RA_INTERFACE_LINES_ALL table.
| For this country… | For this flexfield... | Map this global flexfield context code… |
|---|---|---|
| Argentina | JG_RA_CUSTOMER_TRX_LINES | JL.AR.ARXTWMAI.Lines |
| Brazil | JG_RA_CUSTOMER_TRX_LINES | JL.BR.ARXTWMAI.Additional Info |
| Colombia | JG_RA_CUSTOMER_TRX_LINES | JL.CO.ARXTWMAI.Lines |
Map these global attribute columns in the interface table to the corresponding global flexfield segments. For each context code that you assign to a global attribute category column, confirm that the values of the matching global attribute columns are compatible with the designated value sets.
This table shows the valid values with descriptions for the JL.AR.ARXTWMAI. Lines Argentine context.
Context Code: JL.AR.ARXTWMAI.Lines
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE2 | Fiscal Classification Code. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. The value must exist in the FND_LOOKUPS and JL_ZZ_AR_TX_FSC_CLS tables with LOOKUP_TYPE = "JLZZ_AR_TX_FISCAL_CLASS_CODE." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE2 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE3 | Transaction Condition Class. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view and LOOKUP_TYPE = "TRANSACTION_CLASS." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE3 |
This table shows the valid values with descriptions for the JL.BR.ARXTWMAI. Additional Info Brazilian context.
Context Code: JL.BR.ARXTWMAI.Additional Info
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE1 | Interest type (rate or amount). If this value is not null, this value must exist in the FND_LOOKUP_VALUES.LOOKUP_CODE table and LOOKUP_TYPE = "JLBR_INTEREST_PENALTY_TYPE." The current date is the active date. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE1 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE2 | Interest rate or amount. If the interest type is R (rate), this value must be between 0 and 100. If the interest type is A (amount), this value must be greater than zero. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE2 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE3 | Interest period days. If the interest type is not null, this value must be greater than zero. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE3 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE4 | Interest formula (simple, compound). If this value is not null, this value must exist in the FND_LOOKUP_VALUES.LOOKUP_CODE table and LOOKUP_TYPE = "JLBR_INTEREST_FORMULA." The system date is the active date. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE4 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE5 | Grace days. This value must be greater than zero. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE5 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE6 | Penalty type (rate or amount). If this value is not null, this value must exist in the FND_LOOKUP_VALUES.LOOKUP_CODE table and LOOKUP_TYPE = "JLBR_INTEREST_PENALTY_TYPE." The system date is the active date. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE6 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE7 | Penalty rate or amount. If the penalty type is R (rate), this value must be between 0 and 100. If the penalty type is A (amount), this value must be greater than 0. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE7 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE9 | Freight accessory expense. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE9 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE10 | Insurance accessory expense. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE10 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE11 | Other accessory expense. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE11 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE12 | License plate. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE12 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE13 | Volume quantity. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE13 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE14 | Volume type. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE14 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE15 | Volume number. This value is alphanumeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE15 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE16 | Total gross weight. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE16 |
| RA_INTERFACE_LINES_ALL. HEADER_GDF_ATTRIBUTE17 | Total net weight. This value is numeric and is not mandatory. | RA_CUSTOMER_TRX_ALL.GLOBAL_ATTRIBUTE17 |
This table shows the valid values with descriptions for the JL.BR.ARXTWMAI. Additional Info Brazilian context.
Context Code: JL.BR.ARXTWMAI.Additional Info
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE1 | Operation Fiscal Code (CFO). This value is mandatory. The value must exist in the JL_BR_AP_OPERATIONS.CFO_CODE table. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE1 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE2 | Fiscal Classification Code. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. The value must exist in the FND_LOOKUPS and JL_ZZ_AR_TX_FSC_CLS tables with LOOKUP_TYPE = "JLZZ_AR_TX_FISCAL_CLASS_CODE." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE2 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE3 | Transaction Condition Class. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view and LOOKUP_TYPE = "TRANSACTION_CLASS." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE3 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE4 | Item origin. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the FND_LOOKUPS table and LOOKUP_TYPE = "JLBR_ITEM_ORIGIN." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE4 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE5 | Item fiscal type. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the FND_LOOKUPS table and LOOKUP_TYPE = "JLBR_ITEM_FISCAL_TYPE." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE5 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE6 | Federal tributary situation. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the FND_LOOKUPS table and LOOKUP_TYPE = "JLBR_ITEM_FEDERAL_SITUATION." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE6 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE7 | State tributary situation. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the FND_LOOKUPS table and LOOKUP_TYPE = "JLBR_ITEM_STATE_SITUATION." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE7 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE8 | Legal Message 1. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE8 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE9 | Legal Message 2. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE9 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE10 | Legal Message 3. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE10 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE11 | The tax base amount (numeric 38,2). | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE11 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE12 | The tax base rate (numeric 5,2). | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE12 |
This table shows the valid values with descriptions for the JL.CO.ARXTWMAI. Lines Colombian context.
Context Code: JL.CO.ARXTWMAI.Lines
| In this column… | Oracle Receivables stores… | For this location… |
|---|---|---|
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE2 | Fiscal Classification Code. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. The value must exist in the FND_LOOKUPS and JL_ZZ_AR_TX_FSC_CLS tables with LOOKUP_TYPE = "JLZZ_AR_TX_FISCAL_CLASS_CODE." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE2 |
| RA_INTERFACE_LINES_ALL. LINE_GDF_ATTRIBUTE3 | Transaction Condition Class. Validation occurs only if the tax method is set to Latin Tax Handling. This value is mandatory if RA_INTERFACE_LINES_ALL.INVENTORY_ITEM_ID or RA_INTERFACE_LINES_ALL.MEMO_LINE_ID is not null. This value must exist in the JL_ZZ_AR_TX_ATTCLS_VAL_V view and LOOKUP_TYPE = "TRANSACTION_CLASS." The current date is the active date. | RA_CUSTOMER_TRX_LINES_ALL. GLOBAL_ATTRIBUTE3 |
Inflation is a general rise in the price of goods and services in an area over a certain time period. Rapid inflation can distort the amounts maintained in accounting records. In some countries, companies must prepare their financial reports to stockholders and government authorities in constant units of money, amounts that are not affected by inflation. The amounts that have been distorted must be adjusted by applying indexes that measure the pace of inflation.
Amounts that have not been adjusted for inflation are called historical amounts. Amounts that have been revalued to adjust for inflation are called inflation-adjusted amounts.
To adjust fixed assets for inflation, you must revalue these amounts:
Cost
Accumulated depreciation, also called depreciation reserve
Year-to-date depreciation expense
Note: In Colombia, you only revalue cost and accumulated depreciation. According to Colombian legal requirements, you do not need to adjust year-to-date depreciation expense for inflation.
You can use the Mass Revaluation feature in Oracle Assets to adjust these components of your assets for inflation. The Mass Revaluation process calculates the amount needed to bring each asset component up to its new, adjusted value. The adjustment amount becomes part of the total balance of the component.
For example, the adjusted cost of an asset consists of its historical cost plus the cost adjustment amount. The adjusted accumulated depreciation consists of the historical accumulated depreciation plus the accumulated depreciation adjustment amount. The net book value of the asset, which equals recoverable cost minus accumulated depreciation, changes as well. The adjusted net book value equals the adjusted recoverable cost minus the adjusted accumulated depreciation.
Since cost adjustment amounts become part of the total cost of the asset, the adjustment amounts are depreciated over the life of the asset along with the historical cost.
Inflation adjustments in Oracle Assets for Latin America are recorded in General Ledger by a journal entry showing the adjustment amount for each adjusted account. A gain and loss account, called the Result of Exposure to Inflation (R.E.I.) account, offsets the adjustments.
In some countries, such as Argentina, Colombia, and Mexico, companies must separately maintain both historical and inflation-adjusted amounts for their fixed assets. In other countries, such as Chile, companies only need to maintain inflation-adjusted amounts. The inflation adjustment feature in Oracle Assets for Latin America provides two different options to meet the inflation adjustment requirements in these countries:
Historical/adjusted option – lets you maintain and report both historical amounts and inflation-adjusted amounts by using two separate depreciation books. For more information, see Maintaining Both Historical and Inflation-Adjusted Amounts.
Adjusted-only option – lets you maintain and report simply the inflation-adjusted amounts by using one main depreciation book. For more information, see Maintaining Only Inflation-Adjusted Amounts.
Note: If you want to use the Multiple Reporting Currencies (MRC) feature in Oracle Assets, you should choose the historical/adjusted option, even if you are not legally required to report historical amounts. You need to use a historical depreciation book as your primary MRC book to avoid including inflation adjustment amounts when MRC converts your transactions to another currency.
When you set up inflation adjustment, choose the option that satisfies your country's legal requirements and your own business needs. For more information, see your country-specific user guide.
Oracle Assets for Latin America provides you with features to satisfy these basic business needs. You can:
Set up different price indexes.
Assign a price index to each asset category.
Indicate whether or not to allow inflation adjustment in each depreciation book.
Indicate whether or not to allow inflation adjustment for each asset category.
Indicate whether or not to adjust each asset for inflation.
Specify the inflation start date for an asset
Preview the results of the inflation adjustment process more than once for the same depreciation book and period, and check your results using different index values.
Run the inflation adjustment process for any corporate or tax book.
Ensure that new additions are not adjusted for inflation in the period they are entered.
Transfer historical and adjusted journal entries to General Ledger.
Capitalize the inflation adjustment cost of Construction in Process (CIP) assets.
Depreciate the inflation adjustment to the cost of the assets.
Print reports showing the results of the inflation adjustment process.
Prepare tax reports.
You can set up several price indexes and associate them with the asset categories that you want to adjust. You adjust assets in a category with the index values from the price index assigned to that category.
You can enable or disable inflation adjustment at the depreciation book, asset category, and individual asset levels. This feature allows you to keep different kinds of assets in the same depreciation book.
You can enter a date to specify when inflation begins to impact an asset. The asset is adjusted for inflation from this date onward.
You can perform a what-if analysis with the Mass Revaluation Preview report to see what the results of the inflation adjustment would be using different index values.
You can adjust any corporate or tax book that you define in Oracle Assets.
Except in Colombia, the Oracle Assets standard Create Journal Entries process creates the inflation adjustment journal entries, as well as the standard transaction journal entries such as additions, depreciation, and retirements. The Create Journal Entries process transfers the journal entries to the ledger that is associated with the Oracle Assets depreciation book being adjusted.
When a CIP asset is capitalized, the cost of the new asset consists of the cost amounts added to the asset through invoice lines and the inflation adjustment amounts. It is important to note, however, that the invoice lines themselves are not changed by the inflation adjustment.
If you maintain both historical and inflation-adjusted amounts for your assets, you can use the Regional Fixed Assets Inflation Adjusted Asset Summary report to compare the historical and inflation-adjusted amounts for cost, accumulated depreciation, and year-to-date depreciation expense.
In some countries, certain taxes are calculated based on inflation-adjusted amounts. These taxes include the Tax on Income in Argentina and the ISR and IMPAC taxes in Mexico. You can run the Exhibit of Fixed Assets report, the ISR report, and the IMPAC report to calculate and print the required information. Since you can run these reports for any corporate or tax book, you can calculate the tax amounts based on either your corporate asset values or your special tax asset values.
Related Topics
Asset Accounting, Oracle Assets User Guide
If you need to maintain both historical and inflation-adjusted amounts for your assets, or if you want to use the Multiple Reporting Currencies (MRC) feature in Oracle Assets, choose the historical/adjusted option in Oracle Assets. With the historical/adjusted option, you use two separate depreciation books to record the historical and inflation-adjusted amounts. Keep the historical amounts in a corporate book and the adjusted amounts in a tax book.
You can implement MRC while using the historical/adjusted option in Oracle Assets by using the historical depreciation book as your MRC primary book. You must not use the adjusted depreciation book as your MRC primary book because the inflation adjustment transactions must not be included when MRC converts your transactions to another currency. Using the historical book as your MRC primary book ensures that you maintain only the correct transactions in your MRC reporting book.
Before you set up your depreciation books in Oracle Assets, you must set up your ledgers in General Ledger. You can use the historical/adjusted option in Oracle Assets with either the historical/adjusted option or the adjusted-only option in General Ledger.
If you use the historical/adjusted option in both Oracle Assets and General Ledger, transfer the journal entries from the historical depreciation book to the historical ledger, and transfer the journal entries from the adjusted depreciation book to the adjusted ledger.
If you use the historical/adjusted option in Oracle Assets and the adjusted-only option in General Ledger, transfer the journal entries from the adjusted depreciation book to your main ledger.
If you do not need to maintain historical amounts, and you do not use MRC in Oracle Assets, choose the adjusted-only option in Oracle Assets. With the adjusted-only option, you perform inflation adjustment in your corporate depreciation book. You should only choose this option if you do not expect to implement MRC at any time, because once your corporate book contains inflation adjustment transactions, you cannot use it as the MRC primary book.
Before you set up your depreciation books in Oracle Assets, you must set up your ledgers in General Ledger. If you use the adjusted-only option in Oracle Assets, you should also use the adjusted-only option in General Ledger.
If you use the adjusted-only option in both Oracle Assets and General Ledger, transfer the journal entries from the adjusted corporate depreciation book to your adjusted ledger.
Before you can adjust your assets for inflation, you must perform these prerequisite steps:
Set up your ledgers in General Ledger.
Enter all the transactions for the current period in your corporate book.
If you are using both a corporate depreciation book and a tax depreciation book, run Mass Copy at the end of the period to copy the transactions for your capitalized assets from the corporate book to the tax book.
See also: Tax Book Maintenance, Oracle Assets User Guide
Run depreciation in your adjusted depreciation book for the depreciation period in which you add an asset. You cannot adjust an asset for inflation in the period in which you enter the asset. The amount of the depreciation in the first period can be zero.
After the first period, in a depreciation book that has inflation adjustment enabled, you cannot run depreciation for an asset without first adjusting the asset for inflation in the current period. For more information, see Running Depreciation.
In some countries, assets must not be adjusted for inflation in their retirement period. In those countries, you should retire assets before you begin the inflation adjustment process.
If your country requires assets to be adjusted for inflation in their retirement period, you should run the Mass Revaluation process to adjust your assets for inflation before you retire assets. For more information, see Retiring Assets.
If you are using both a corporate depreciation book and a tax depreciation book, synchronize the open periods in the corporate and tax books. When you enter information for a CIP asset in the corporate book, Oracle Assets copies the information to the tax book immediately, unlike information for capitalized assets which is not copied until you run the Mass Copy process. To copy the CIP information to the correct period in the tax book, you must ensure that the open period in the tax book corresponds to the open period in the corporate book.
To help you ensure that your depreciation books are synchronized, Oracle Assets requires you to run depreciation in the tax book for the latest closed period in the corporate book before you can run depreciation again in the corporate book.
Related Topics
Construction-In-Process (CIP) Assets, Oracle Assets User Guide
This topic describes how to set up Oracle Assets for Latin America for the inflation adjustment process. Use this checklist to help you complete the appropriate steps.
Oracle Assets uses the standard Mass Revaluation process to adjust your assets for inflation. Instead of using a revaluation rate that you enter in the Mass Revaluations window, however, Oracle Assets calculates the revaluation rate automatically from the price indexes that you define.
You must enable the automatic revaluation rate calculation process by setting the JL: Perform Inflation Adjustment profile option to Yes for your Oracle Assets responsibility. Use the System Profile Values window in the System Administrator responsibility to define the JL: Perform Inflation Adjustment profile option.
Note: If you do not enable automatic revaluation rate calculation, you can still use the Mass Revaluation process to adjust your assets for inflation. In this case, however, you must enter the revaluation rate and other asset information manually in the Mass Revaluations window.
Related Topics
Overview of User Profiles, Oracle Applications User Guide
In some countries, companies are legally required to calculate inflation rates with a certain precision. For example, in Mexico, the inflation rate must be calculated with a precision of four decimal positions for tax purposes.
You can use the JL: Inflation Ratio Precision profile option to define the number of decimal positions for the precision of the inflation rate calculation. Oracle Assets truncates the rate at the number of decimal positions you choose. Use the System Profile Values window in the System Administrator responsibility to assign a value to the JL: Inflation Ratio Precision profile option.
You should only define a value for the inflation ratio precision if you are legally required to do so. If your country does not require a certain precision, do not enter a value for the JL: Inflation Ratio Precision profile option. Instead, leave this profile option blank to calculate the inflation rate with the greatest possible precision.
Related Topics
Overview of User Profiles, Oracle Applications User Guide
Define the price indexes that you want to use to adjust your assets for inflation in the Price Indexes window. A price index is a measure of the overall cost of goods and services bought by various entities. The base value of the index represents the cost level in a certain base period. The index value for each subsequent period represents the cost level for that period as a proportion of the base value. The difference between the base value and the index value for a certain period represents the inflation rate between the base period and that period.
(CPI) or the Producer Price IndexThe index that you use depends on your company's business. Many organizations use either the Consumer Price Index (PPI).
When the government publishes the measure of inflation, the measure is expressed as a price index value. For this reason, you must enter the measure for each month as an index value in the Value % field. Do not enter the inflation measure as a percentage. You must enter a new value each month when the government publishes the price index value for the month.
The Mass Revaluation process uses the price index values to calculate the revaluation rate for the period that you are adjusting.
If the base value of a price index changes, the entire index must be re-expressed according to the new base, including previous periods.
To define a price index:
Navigate to the Price Indexes window.
Enter the index name that you want to define in the Index field.
Enter the price index value for the inflation measure from the government in the Value % field.
Note: You must enter the inflation measure for each period as an index value in the Value % field. Do not enter the inflation measure as a percentage.
In the From Date and To Date fields, enter the dates that this index value is effective for. If you leave the To Date field blank, the index value is effective indefinitely.
Related Topics
Defining Price Indexes, Oracle Assets User Guide
Price Index Listing, Oracle Assets User Guide
Use the Book Controls window and the globalization flexfield to set up your depreciation books for inflation adjustment. You can enable or disable inflation adjustment at depreciation book level. If you enable inflation adjustment for a depreciation book, you can choose to enable or disable inflation adjustment for individual asset categories and assets when you define them. If you disable inflation adjustment for a depreciation book, none of the assets in that book can be adjusted.
Use the Asset Categories window with the globalization flexfield and the Default Depreciation Rules window to set up your asset categories for inflation adjustment. In the Asset Categories window, you can specify the revaluation reserve account that you want to use to offset the inflation adjustments for assets in a category in a particular depreciation book.
In the globalization flexfield, you can enable or disable inflation adjustment for the asset category in a particular depreciation book. If you enable inflation adjustment for an asset category in a book, you can choose to enable or disable inflation adjustment for individual assets when you define them. If you disable inflation adjustment for an asset category in a book, none of the assets in that category can be adjusted in that book.
In this way, you can choose to adjust an asset category in one depreciation book while preventing the same asset category from being adjusted in another book. You can also choose to adjust some asset categories in a depreciation book for inflation while preventing other categories in the same book from being adjusted.
If inflation adjustment is disabled for an entire depreciation book, however, none of the asset categories in that book can be adjusted.
In the Default Depreciation Rules window, you can assign a price index to the asset category. The price index is used to calculate the inflation rate for all the assets in this asset category.
For more instructions on setting up asset categories in your country, see your country-specific user guide.
The inflation start date for an asset specifies when inflation begins to impact an asset. The asset is adjusted for inflation from this date onward.
The inflation start date is generally the same date as the date placed in service. You can, however, define an inflation start date that is different than the date placed in service. For example, if you enter an asset that is already in service and that has already been adjusted for inflation, you can set the inflation start date to an appropriate date to begin calculating new inflation adjustments in Oracle Assets.
The inflation start date for an asset can be earlier than the period when you add the asset. The first time you adjust that asset for inflation, Oracle Assets calculates the inflation adjustment for the entire time from the inflation start date through the current period. After the first inflation adjustment, Oracle Assets calculates the adjustment amount for each period from the previous period to the current period.
Note: You can define an inflation start date that is in a previous fiscal year. All inflation adjustments are recorded in the current fiscal year, however, even if the adjustments apply to a previous fiscal year.
If you define an inflation start date that is later than the period when you add the asset, however, Oracle Assets does not use the inflation start date when you adjust the asset for inflation for the first time, in the period following the addition period. Instead, Oracle Assets calculates the first inflation adjustment only for the time from the addition period to the following period.
Oracle Assets only uses the inflation start date the first time you adjust an asset for inflation. If you change the inflation start date after you adjust the asset for the first time, you must enter a manual cost adjustment in your adjusted depreciation book to correct the inflation adjustment for the asset according to the new date.
Use the globalization flexfield to define the inflation start date for each of your assets. You can navigate to the globalization flexfield while using any of these windows:
QuickAdditions
Asset Details
Mass Additions
The inflation start date is defined at asset level. This date remains the same for the asset in every depreciation book.
To define the inflation start date for an asset:
Navigate to the QuickAdditions window, the Asset Details window, or the Mass Additions window.
Enter information for the asset you want to add.
Navigate to the globalization flexfield.
Enter the inflation start date for the asset in the Inflation Start Date field.
Press the OK button.
Related Topics
Asset Setup Processes (Additions), Oracle Assets User Guide
Use the globalization flexfield on the Books window off the Asset Workbench to enable or disable inflation adjustment for individual assets. You enable or disable inflation adjustment for an asset in a particular depreciation book.
In this way, you can choose to adjust an asset in one depreciation book while preventing the same asset from being adjusted in another book. You can also choose to adjust some assets in a certain category in a depreciation book for inflation while preventing other assets in the same category and book from being adjusted.
If inflation adjustment is disabled for an entire depreciation book or an entire category in a book, however, none of the assets in that book or category can be adjusted.
Complete these steps to adjust your assets for inflation. You should adjust your assets for inflation regularly once each period. You can perform the Mass Revaluation process to create the inflation adjustments either at the beginning or at the end of the period.
To adjust assets for inflation:
Run the Calculate Gains and Losses program to ensure that accumulated depreciation for reinstated assets is correct.
Note: Oracle Assets also runs the Calculate Gains and Losses program automatically as part of the depreciation process to close a period. If you run the Mass Revaluation process to adjust your assets at the beginning of the period, just after running depreciation, you do not need to run the Calculate Gains and Losses program again separately.
Run the Mass Revaluation process to revalue the cost, accumulated depreciation, and depreciation expense for your assets.
Perform standard Oracle Assets procedures, such as capitalizing CIP assets, at the end of the period. If your country requires assets to be adjusted for inflation in their retirement period, you should also retire assets at this point, after you run the Mass Revaluation process, but before you run depreciation.
Run depreciation in your adjusted book.
Run the standard Create Journal Entries process to transfer the journal entries created by Oracle Assets transactions to General Ledger.
Run the Latin American Fixed Assets Inflation Adjustment of Retired Assets program to adjust the depreciation expense amounts for assets that were retired during the current fiscal year.
Run the Journal Import process to import the inflation adjustment journal entries for retired assets' depreciation expense into General Ledger.
If you use the historical/adjusted option, run the Regional Fixed Assets Inflation Adjusted Asset Summary report to compare the historical and inflation-adjusted amounts for cost, accumulated depreciation, and year-to-date depreciation expense.
Note: In Colombia, some of the steps for adjusting your assets for inflation are different from the steps listed here. The differences are due to Colombian legal requirements.
For example, since the Colombian government abolished inflation adjustment for gain/loss accounts, you must not use the Latin American Fixed Assets Inflation Adjustment of Retired Assets program in Colombia.
Before you run Mass Revaluation to adjust your assets for inflation, run the standard Calculate Gains and Losses program to correct the accumulated depreciation for reinstated assets. You can submit the Calculate Gains and Losses program from the Calculate Gains and Losses window.
Related Topics
Calculating Gains and Losses for Retirements, Oracle Assets User Guide
Run the standard Oracle Assets Mass Revaluation process to revalue the cost, accumulated depreciation, and depreciation expense for your assets. You can run the Mass Revaluation process from the Mass Revaluations window.
The JL: Perform Inflation Adjustment profile option for your Oracle Assets responsibility must be set to Yes in order for Oracle Assets to calculate the revaluation rate automatically. For more information, see Enable Automatic Revaluation Rate Calculation.
If you set the JL: Perform Inflation Adjustment profile option to Yes, you do not need to enter a revaluation percentage rate in the Rate % field to adjust your assets for inflation. If you do enter a value in the Rate % field, the value is deleted when you run the Mass Revaluation process. Instead, Oracle Assets automatically calculates the revaluation rate for each asset using the index values from the price index assigned to the asset category.
You can use the JL: Inflation Ratio Precision profile option to define the number of decimal positions for the precision of the inflation rate calculation. Oracle Assets truncates the rate at the number of decimal positions you choose. For more information, see Define Inflation Ratio Precision.
Different countries use different formulas to calculate the inflation rate from the index values. Oracle Assets selects the formula for the inflation rate calculation according to the country that you defined in the JG: Country Code profile option. For more information, see the Oracle Financials Country-Specific Installation Supplement.
Note: If you disable automatic revaluation rate calculation by setting the JL: Perform Inflation Adjustment profile option to No, you can still use the Mass Revaluation process to adjust your assets for inflation. In this case, however, you must enter the revaluation rate and other asset information manually in the Mass Revaluations window.
You can use the globalization flexfield in the Book Controls window to check whether the Mass Revaluation process has been run for the latest period. After you perform inflation adjustment for a book, the period name for the most recent time you ran the Mass Revaluation process appears in the Last Inflation Adjustment Period field, and the revaluation ID for the most recent time you ran the Mass Revaluation process appears in the Last Inflation Adjustment field. For more information, see your country-specific user guide.
The inflation start date for an asset specifies when inflation begins to impact an asset. You can define an inflation start date for an asset that is earlier than the period when you add the asset.
The first time you adjust that asset for inflation, Oracle Assets calculates the inflation adjustment for the entire time from the inflation start date through the current period. After the first inflation adjustment, Oracle Assets calculates the adjustment amount for each period from the previous period to the current period.
If you define an inflation start date that is later than the period when you add the asset, however, Oracle Assets does not use the inflation start date when you adjust the asset for inflation for the first time, in the period following the addition period. Instead, Oracle Assets calculates the first inflation adjustment only for the time from the addition period to the following period.
If you make an improvement to an asset that you enabled inflation adjustment for, you can create a child asset with the original asset as its parent and enter the cost adjustment for the improvement as the cost of the child asset. Enter the date of the improvement as the date placed in service and as the inflation start date, and enable inflation adjustment for the child asset.
If you are using both a historical and an adjusted depreciation book, create the child asset in the historical book. The Mass Copy process does not copy changes to asset cost if the cost in the corporate book is different from the cost in the tax book, but entering the cost adjustment amount as a child asset lets you use the Mass Copy process to copy the child asset from the historical book to the adjusted book. You can then adjust the child asset for inflation as usual in the adjusted book.
Oracle Assets also lets you change the cost of your assets directly if you need to make a correction other than a cost adjustment for an improvement.
If you are using both a historical and an adjusted depreciation book, you should correct the cost separately in each book. The Mass Copy process does not copy changes to asset cost if the cost in the corporate book is different from the cost in the tax book. Since the historical cost is usually different from the adjusted cost, Mass Copy does not copy cost corrections from the historical book to the adjusted book. Instead, you should make separate corrections in each depreciation book.
When you make a correction to the cost of an asset in a book where you enabled inflation adjustment for the asset, you must also include the effect of inflation on the amount of the correction. Calculate the inflation adjustment amount for the correction during the time from the date when the correction takes effect to the current period. Then add the inflation adjustment amount to the original correction amount to find the entire amount by which the asset cost must be changed.
If you make the correction after you perform inflation adjustment for the current period, you must calculate the inflation adjustment for the time from the date the correction takes effect up to and including the current period. If you make the correction before you perform inflation adjustment for the current period, you must calculate the inflation adjustment for the time from the date the correction takes effect up to but not including the current period.
Note: In Colombia, you must record historical cost amounts and inflation adjustment cost amounts in separate accounts for your assets. After you enter the entire amount of the change in the asset cost, create a manual journal entry to assign the original correction amount and the inflation adjustment amount to the appropriate accounts.
If you reinstate a fully retired asset that you enabled inflation adjustment for, Oracle Assets reverses all the inflation adjustment transactions created for that asset by the Latin American Fixed Assets Inflation Adjustment of Retired Assets program. Then, the first time you adjust the asset for inflation after the reinstatement, Oracle Assets calculates the inflation adjustment amounts for the entire time from the retirement date through the current period.
Before you can perform the mass revaluation, you must run the Mass Revaluation Preview report to preview the effects of the revaluation. You can run the Mass Revaluation Preview report by pressing the Preview button in the Mass Revaluations window after you enter all the information for the Mass Revaluation process.
Since you can run the Mass Revaluation Preview report several times for the same depreciation book and period, you can do a what-if analysis with the report to check the impact that performing the mass revaluation with different index values has on your assets. You can enter new information in the Mass Revaluations window and rerun the Mass Revaluation Preview report as many times as you want.
When you are satisfied with the results of the Mass Revaluation Preview report, perform the revaluation by pressing the Run button in the Mass Revaluations window. You should only run the Mass Revaluation process once in each period for a depreciation book.
Note: If you submit the Mass Revaluation process again for the same period, Oracle Assets displays a message informing you that Mass Revaluation has already been run for that period. You can then decide whether or not to continue. If you run Mass Revaluation a second time for the same period, however, the adjustment is duplicated.
Depending on your country's requirements, you should perform standard Oracle Assets procedures, such as capitalizing CIP assets and retiring assets, after you run Mass Revaluation to adjust your assets for inflation.
You should perform capitalization for any CIP assets that are ready to be placed in service after you adjust these assets for inflation in the current period. Oracle Assets does not adjust a newly capitalized asset in the period in which the asset is capitalized. When you capitalize a CIP asset, you cannot adjust the asset for inflation until you run depreciation once for the asset.
To ensure that an asset is adjusted for inflation in all appropriate periods, you must not capitalize the asset until after you adjust the asset in the current period. The cost of the new asset should consist of all the inflation adjustment amounts in addition to the cost added to the asset through invoice lines.
Related Topics
Placing Construction-In-Process (CIP) Assets in Service, Oracle Assets User Guide
In some countries, assets must be adjusted for inflation in their retirement period. In those countries, you should retire assets at this point, after you run Mass Revaluation to adjust for inflation, but before you run depreciation.
Related Topics
Retiring Assets, Oracle Assets User Guide
You should run the depreciation process for your assets after you adjust the assets for inflation, capitalize any CIP assets for the current period, and retire any assets for the current period. The depreciation amounts for a period should be calculated from the inflation-adjusted cost amounts rather than the original cost amounts. For this reason, if you enable inflation adjustment for a depreciation book, you must run Mass Revaluation to adjust the assets in that book for the current period before you can run depreciation for that book in that period in the Run Depreciation window.
Note: If you are using both a corporate depreciation book and a tax depreciation book, you must synchronize the open periods in the corporate and tax books to ensure that CIP information from the corporate book is copied to the correct period in the tax book. To help you ensure that your depreciation books are synchronized, Oracle Assets requires you to run depreciation in the tax book for the latest closed period in the corporate book before you can run depreciation again in the corporate book.
Related Topics
Running Depreciation, Oracle Assets User Guide
Construction-In-Process (CIP) Assets, Oracle Assets User Guide
After you run Mass Revaluation and complete other Oracle Assets procedures, run the standard Create Journal Entries process to create journal entries for Oracle Assets transactions and transfer the journal entries to General Ledger.
If you choose the historical/adjusted option in both Oracle Assets and General Ledger, you should transfer the journal entries from your historical depreciation book to your historical ledger and the journal entries from your adjusted depreciation book to your adjusted ledger. If you choose the historical/adjusted option in Oracle Assets and the adjusted-only option in General Ledger, you should transfer the journal entries from your adjusted depreciation book to your main ledger. For more information, see Maintaining Both Historical and Inflation-Adjusted Amounts and Maintaining Only Inflation-Adjusted Amounts.
Note: In Colombia, you should not run the standard Create Journal Entries process from your adjusted depreciation book. Instead, you should use the Colombian General Ledger Transfer process for the inflation adjustment journal entries from the adjusted depreciation book. For more information about adjusting your assets for inflation in Colombia, see your Colombian user guide.
After you retire an asset, the depreciation expense amounts for that asset remain in the depreciation expense account until the end of the fiscal year. These depreciation expense amounts must be adjusted for inflation from the time the asset is retired through the end of the fiscal year.
Run the Latin American Fixed Assets Inflation Adjustment of Retired Assets program to adjust the depreciation expense amounts for assets that were retired during the current fiscal year. To submit the Latin American Fixed Assets Inflation Adjustment of Retired Assets program, choose Adjust Retirements from the <Country> Localization menu.
You should run the Latin American Fixed Assets Inflation Adjustment of Retired Assets program after you run depreciation. The process automatically selects the last closed period.
Note: Since the Colombian government abolished inflation adjustment for gain/loss accounts, you must not use the Latin American Fixed Assets Inflation Adjustment of Retired Assets program in Colombia.
Enter the depreciation book that you want to run the Latin American Fixed Assets Inflation Adjustment of Retired Assets program for.
The Latin American Fixed Assets Inflation Adjustment of Retired Assets program creates inflation adjustment journal entries in the Oracle General Ledger interface table. Before you can see the journal entries, you must import them to Oracle General Ledger by running the Journal Import process.
Related Topics
Importing Journals, Oracle General Ledger User Guide
If you use the historical/adjusted option, use the Regional Fixed Assets Inflation Adjusted Asset Summary report to compare the historical and inflation-adjusted amounts for your assets. The Regional Fixed Assets Inflation Adjusted Asset Summary report shows the inflation adjustment amounts that Oracle Assets calculated for the cost, accumulated depreciation, and depreciation expense of your assets in a given period. The report shows active capitalized and CIP assets for the period, as well as any assets that were retired during the fiscal year that the period belongs to.
The Regional Fixed Assets Inflation Adjusted Asset Summary report is sorted by asset category and asset number. Oracle Assets prints totals for each asset category.
Use the Standard Request Submission windows to submit the Regional Fixed Assets Inflation Adjusted Asset Summary report.
Enter the depreciation book that you want to report on. You can only choose a tax book for which you have enabled inflation adjustment.
Enter the currency to use for the report. The default value is the default currency of the primary ledger. If the primary and reporting ledgers both use the same default currency, choose either primary or reporting ledger from the list of values. You can also choose any other currency defined for the reporting ledger.
Enter the period that you want to report on.
Enter the asset category that you want to report on. Leave this parameter blank to report on all asset categories.
Enter the type of assets that you want to report on. Valid values are:
Capitalized – Capitalized assets only
CIP – CIP assets only
All – Both capitalized and CIP assets
| In this heading… | Oracle Assets prints… |
|---|---|
| <Organization Name> | The name of your organization |
| Book | The name of the tax depreciation book |
| <Report Title> | Regional Fixed Assets Inflation Adjusted Asset Summary |
| Period | The period name |
| Report Date | The date when you run the report |
| Page | The page number |
| In this column | Oracle Assets prints... |
|---|---|
| Asset Number - Description | The number and description of the asset |
| Cost - Historical | The historical cost of the asset |
| Cost - Period Inflation Adjustment | The inflation adjustment amount for cost in this period |
| Cost - Inflations Adjusted | The adjusted cost, including the historical cost and all adjustment amounts to date |
| Accumulated Depreciation - Historical | The accumulated depreciation corresponding to the asset's historical cost |
| Accumulated Depreciation - Period Inflation Adjustment | The inflation adjustment amount for accumulated depreciation in this period |
| YTD Depreciation - Period Inflation Adjustment | The inflation adjustment amount for year-to-date depreciation expense in this period |
| YTD Depreciation - Inflation Adjusted | The adjusted year-to-date depreciation expense, including the historical year-to-date depreciation expense and the year-to-date adjustment amounts |
| In this row... | Oracle Assets prints... |
|---|---|
| Category | The asset category name |
| Category <Name> Totals | The totals for the asset category |
| Report Totals | The totals for the report |
Related Topics
Using Standard Request Submission, Oracle Applications User Guide
The tax authorities of certain countries require summary and detailed reports on fixed asset costs and accumulated depreciation. Oracle Assets provides statutory reports that help you meet this requirement.
The three reports are designed to reconcile with one other to help you reconcile your fixed asset books with General Ledger account balances.
Statutory Asset Cost Detail Report – Provides information about changes in fixed asset costs, as well as beginning and ending balances, for a range of periods.
For example, the report is run for January to December, 2001 and shows an asset with beginning cost of 800 in January, addition of 200, and ending cost of 1000 in December.
Statutory Asset Ledger Report – Provides current cost, accumulated depreciation, and net book value information on all assets in a given period. You can optionally report on parent accounts.
For example, the report is run for December, 2001 and shows the same asset current cost of 1000 and accumulated depreciation of 400.
Statutory Asset Reserve Detail Report – Provides information about accumulated depreciation, beginning and ending balances of asset cost, and any changes on all assets in a period range. You can optionally report on parent accounts.
For example, the report is run for January to December, 2001 and shows a ending balance of 400.
In summary, the ending cost in the Statutory Asset Cost Detail report must match the current cost in the Statutory Asset Ledger report, and the accumulated depreciation in the Statutory Asset Ledger report must match the ending accumulated depreciation in the Statutory Asset Reserve Detail report.
To reconcile the three reports, the period that you enter in the Period parameter of the Statutory Asset Ledger report must match the period that you enter in the To Period parameter of the Statutory Asset Cost Detail and Statutory Asset Reserve Detail reports.
To use the Statutory Asset reports precision feature, you must have a fixed parent account structure. You can also run the reports without printing parent totals.
For example, if you have a three-level parent account structure with widths of two characters each (2 char/2 char/2 char), do not set up child values that are the same width as the parent. The reports summarize cost information for the fixed parent accounts that you define in Oracle General Ledger.
If you are required to print official versions of these reports for submission to tax authorities, use paper that has the required statutory headers.
Related Topics
Greek Statutory Headings Report, Oracle Financials for Europe User Guide
Use the Statutory Asset Ledger report to see summary asset information. The report provides summarized asset cost, accumulated depreciation, and net book value information for each asset, and optionally reports on all parent accounts.
Use the Standard Request Submission windows to submit the Statutory Asset Ledger report.
Enter Yes to print the report on Official Statutory Report headed paper. Enter No to use normal report headings.
Enter the Asset book that you want to use for this report.
Enter the balancing segment that you want to use for this report.
Enter the period that you want to use for this report.
Enter Yes to show parent account totals. Otherwise enter No.
If you entered Yes in the Parent Totals field, enter Class, Class and Sub-class, or Class, Sub-class, and Group to indicate the summary level to use for this report.
The Precision indicates the summary level that balances are reported on:
Class – First summary level
Class and Sub-class – First and second summary level
Class, Sub-Class, and Group – First, second, and third summary level
If you entered Yes in the Parent Totals field, enter the precision width that you want to report on the summary level you entered.
The precision width indicates the number of account value digits to include at each summary or precision level. The number of digits reported is a combination of the values that you enter in the Precision and Precision Width parameters, and operates as a multiplier from the lowest precision width of 1. For a precision width of 2, the number of digits reported for each precision is twice that of precision width of 1; for precision width of 3, the number of digits reported is three times that of precision width 1. The maximum precision width is 8, because the accounting flexfield column width is 25 characters.
This table shows the digits reported for each precision width.
| Precision Width | Class | Sub-Class | Group |
|---|---|---|---|
| 1 | 1 | 2 | 3 |
| 2 | 2 | 4 | 6 |
| 3 | 3 | 6 | 9 |
| 8 | 8 | 16 | 24 |
Enter your country code.
If your country uses global attributes for asset reporting, these two parameters contain a list of values for the country that you entered in the Country parameter. You enter global attributes for asset reporting in the globalization flexfield in the Asset Details window or the Quick Addition window.
Enter the first global attribute that you want to include in the report.
Enter the second global attribute that you want to include in the report.
| In this heading… | Oracle Assets prints… |
|---|---|
| Book | Depreciation book |
| Period | Periods included in this report |
| Ledger | Ledger associated with the depreciation book |
| Balancing Segment | Balancing segment |
| In this column… | Oracle Assets prints… |
|---|---|
| Asset Number | Asset number |
| Asset Description | Asset description |
| Asset Account | Natural account segment of the asset cost account associated with the asset category and book |
| Account Desc | Asset cost account description |
| Date Placed in Service | Date placed in service of the asset |
| Current Cost | Asset cost as of the end of the specified period |
| Accumulated Depr | Accumulated depreciation as of the end of the specified period |
| Net Book Value | Asset net book value as of the end of the specified period |
| <Global Attribute Name> | First asset key segment parameter value |
| <Global Attribute Name> | Second asset key segment parameter value |
Related Topics
Running Reports and Programs, Oracle Applications User Guide
Use the Statutory Asset Cost Detail report to see period changes in fixed asset costs. The report provides additions, revaluations, retirements, reclassifications, cost adjustments, and ending balances on all fixed assets.
Use the Standard Request Submission windows to submit the Statutory Asset Cost Detail report.
Enter Statutory Asset Cost Detail Report to run the Statutory Asset Cost Detail report.
Enter Yes to print the report on Official Statutory Report headed paper. Enter No to use normal report headings.
Enter the Asset book that you want to use for this report.
Enter the balancing segment that you want to use for this report.
Enter the first period range that you want to include in the report.
Enter the last period range that you want to include in the report.
Enter Yes to show parent account totals. Otherwise enter No.
If you entered Yes in the Parent Totals field, enter Class, Class and Sub-class, or Class, Sub-class, and Group to indicate the summary level to use for this report.
The Precision indicates the summary level that balances are reported on:
Class – First summary level
Class and Sub-class – First and second summary level
Class, Sub-Class, and Group – First, second, and third summary level
If you entered Yes in the Parent Totals field, enter the precision width to use to report on the summary level that you entered.
The precision width indicates the number of account value digits to include at each summary or precision level. The number of digits reported is a combination of the values that you enter in the Precision and Precision Width parameters, and operates as a multiplier from the lowest precision width of 1. For a precision width of 2, the number of digits reported for each precision is twice that of precision width of 1; for precision width of 3, the number of digits reported is three times that of precision width 1. The maximum precision width is 8, because the accounting flexfield column width is 25 characters.
This table shows the digits reported for each precision width.
| Precision Width | Class | Sub-Class | Group |
|---|---|---|---|
| 1 | 1 | 2 | 3 |
| 2 | 2 | 4 | 6 |
| 3 | 3 | 6 | 9 |
| 8 | 8 | 16 | 24 |
Enter Short to show one line per asset, or Long to show two lines per asset.
Note: If you enter Long, the report only prints the column headings Supplier Name, Invoice Number, Location, and Retirement Reason.
| In this heading… | Oracle Assets prints… |
|---|---|
| Book | Depreciation book |
| Period Range | Periods included in this report |
| Ledger | Ledger associated with the depreciation book |
| Balancing Segment | Balancing segment |
Note: The Statutory Asset Cost Detail report only prints the column headings Supplier Name, Invoice Number, Location, and Retirement Reason if you entered Long in the Asset Info parameter.
| In this column… | Oracle Assets prints… |
|---|---|
| Asset Number | Asset number |
| Asset Account | Natural account segment of the asset cost account |
| Account Desc | Description of the asset cost account |
| Date Placed in Service | Date placed in service of the asset |
| Rate in % | Asset depreciation rate |
| Retired | Retirement reason for the asset, if the asset was retired during the reported period |
| Supplier Name | Supplier for the asset associated with the Payables invoice |
| Invoice Number | Payables invoice numbers (if any) for the asset |
| Location | Active locations for the asset |
| Cost Beginning Balance | Asset cost at the start of the reported period |
| Additions | Addition cost of the asset |
| Revaluations | Changes in cost of the asset due to revaluations |
| Retirements | Total change in cost of the asset due to any full retirements, partial retirements, or reinstatements |
| Reclass. | Changes in cost of the asset due to reclassifications |
| Adjustments | Changes in cost of the asset due to adjustments |
| Cost Ending Balance | Asset cost at the end of the reported period |
Related Topics
Running Reports and Programs, Oracle Applications User Guide
Running Standard Reports and Listings, Oracle Assets User Guide
Use the Statutory Asset Reserve Detail report to see period changes in fixed asset accumulated depreciation between two periods. The report provides depreciation expenses, revaluations, retirements, reclassifications, reserve adjustments, and ending balances on all fixed assets.
Use the Standard Request Submission windows to submit the Statutory Asset Reserve Detail report.
Enter Statutory Asset Reserve Detail Report to run the Statutory Asset Reserve Detail report.
Enter Yes to print the report on Official Statutory Report headed paper. Enter No to use normal report headings.
Enter the Asset book that you want to use for this report.
Enter the balancing segment that you want to use for this report.
Enter the first period range that you want to include in the report.
Enter the last period range that you want to include in the report.
Enter Yes to show parent account totals. Otherwise enter No.
If you entered Yes in the Parent Totals field, enter Class, Class and Sub-class, or Class, Sub-class, and Group to indicate the summary level to use for this report.
The Precision indicates the summary level that balances are reported on:
Class – First summary level
Class and Sub-class – First and second summary level
Class, Sub-Class, and Group – First, second, and third summary level
If you entered Yes in the Parent Totals field, enter the precision width to use to report on the summary level that you entered.
The precision width indicates the number of account value digits to include at each summary or precision level. The number of digits reported is a combination of the values that you enter in the Precision and Precision Width parameters, and operates as a multiplier from the lowest precision width of 1. For a precision width of 2, the number of digits reported for each precision is twice that of precision width of 1; for precision width of 3, the number of digits reported is three times that of precision width 1. The maximum precision width is 8, because the accounting flexfield column width is 25 characters.
This table shows the digits reported for each precision width.
| Precision Width | Class | Sub-Class | Group |
|---|---|---|---|
| 1 | 1 | 2 | 3 |
| 2 | 2 | 4 | 6 |
| 3 | 3 | 6 | 9 |
| 8 | 8 | 16 | 24 |
Enter Short to show one line per asset, or Long to show two lines per asset.
Note: If you enter Long, the report only prints the column headings Supplier Name, Invoice Number, Location, and Retirement Reason.
| In this heading… | Oracle Assets prints… |
|---|---|
| Book | Depreciation book |
| Period Range | Periods included in this report |
| Ledger | Ledger associated with the depreciation book |
| Balancing Segment | Balancing segment |
Note: The Statutory Asset Reserve Detail report only prints the column headings Supplier Name, Invoice Number, Location, and Retirement Reason if you entered Long in the Asset Info parameter.
| In this column… | Oracle Assets prints… |
|---|---|
| Asset Number | Asset number |
| Asset Account | Natural account segment of the asset cost account |
| Reserve Account | Natural account segment of the reserve account |
| Account Desc | Description of the asset cost account |
| Date Placed in Service | Date placed in service of the asset |
| Rate in % | Asset depreciation rate |
| Retired | Retirement reason for the asset, if the asset was retired during the reported period |
| Supplier Name | Supplier for the asset associated with the Payables invoice |
| Invoice Number | Payables invoice numbers (if any) for the asset |
| Location | Active locations for the asset |
| Cost Beginning Balance | Original cost of the asset |
| Depr Rsv Beginning Balance | Asset depreciation reserve at the start of the reported period |
| Depreciation | Depreciation Expense of the asset |
| Revaluations | Changes in depreciation reserve of the asset due to revaluations |
| Retirements | Total change in depreciation reserve of the asset due to any full retirements, partial retirements, or reinstatements |
| Reclass. | Changes in depreciation reserve of the asset due to reclassifications |
| Adjustments | Changes in depreciation reserve of the asset due to adjustments |
| Depr Rsv Ending Balance | Asset depreciation reserve at the end of the reported period |
Related Topics
Running Reports and Programs, Oracle Applications User Guide
Running Standard Reports and Listings, Oracle Assets User Guide
Use the Fixed Assets Register report to report your fixed asset ledger status to your tax authorities. The report helps you reconcile your Fixed Asset books with your General Ledger account balances and to review asset details such as depreciation method, prorate convention, tag number, and statistical information.
The Fixed Assets Register report is an RXi report, divided into two sections. For the first section, Asset Details, the default attribute set displays detailed information for active assets within a particular period range. Active assets are assets that are not fully retired during previous fiscal years. This detail section includes account information as well as descriptive information about each asset. Financial information, such as initial values, increases, decreases, and final values, about asset cost, revaluations, ordinary depreciation, bonus depreciation reserve, and net book value is also printed. Information about asset transactions during the relevant fiscal year follows and is printed in chronological order. Possible transactions include:
Additions - The asset is entered.
Adjustment - The cost of the asset is either manually adjusted or adjusted by the addition of new invoices.
Reinstatement - The asset is reinstated.
Retirement - The asset is partially or fully retired.
Revaluation - The asset is revalued.
For the second section, Retirement, the default attribute set displays information about assets that were retired during the same period, including the retirement date, asset cost at the time of retirement, retired depreciation reserve amounts, and retired net book value.
If you are using Oracle Financials for Italy, select the Italy attribute set that is available for both Asset Details and Retirement sections.
You can copy the default or Italian attribute set and customize the layout to suit your reporting needs. Additional headings that you can add to your default attribute set are also available.
The report does not include expensed assets or CIP (construction in process) assets.
Choose the RXi: Fixed Assets Register Report in the Standard Request Submission windows to submit the Fixed Assets Register Report.
Enter the format that you want for the asset details section. You can choose the default format or any that you may have built by creating a new attribute set.
Enter the format that you want for the retirement section. You can choose the default format or any that you may have built by creating a new attribute set.
Enter the depreciation book that you want to run the report for. All active assets in the book are reported on.
Enter the earliest accounting period that you want to report from.
Enter the latest accounting period that you want to report to. You can enter periods that the depreciation process was run for.
Enter the major category segment value that you want to report on. If you leave this parameter blank, all major categories are reported on.
Enter the minor category segment value that you want to report on. You can enter a minor category even if you do not enter a major category. If you leave this parameter blank, all minor categories are reported on.
This table shows the column headings.
| In this column... | Oracle Assets prints... |
|---|---|
| Major Category | The value and description of the major category segment for assets listed on the current page. |
| Minor Category | The value and description of the minor category segment for assets listed on the current page. |
| Starting Depr Year | The fiscal year that the assets listed on the current page were first depreciated. |
| Asset Number | The asset number. |
| Description | The asset description. |
| Invoice Numbers | The invoice numbers associated with the original purchase of the asset. |
| Parent Asset Number | The parent asset number. |
| Original Cost | The original cost of the asset, including any cost adjustments or additional invoices applied before the first depreciation process. |
| Depr Rate | The depreciation rate. |
| Bonus Rate | The bonus depreciation rate. |
| Supplier Names | The supplier names associated with the original purchase of the asset. |
| Date Placed in Service | The date placed in service. The Fixed Assets Register report does not print this column by default; you can choose to print this column through RXi. |
| Cost Account | The asset cost account. |
| Depr Account | The depreciation expense account. |
| Reserve Account | The accumulated depreciation account. |
| Bonus Depr Account | The bonus depreciation expense account. |
| Bonus Reserve Account | The bonus accumulated depreciation account. |
| Initial Cost | The cost of the asset at the beginning of the period that you selected in the From Period parameter. |
| Cost Increase | The sum of any increases to the asset cost during the period range from any of these transactions:
|
| Cost Decrease | The sum of any reductions to the asset cost during the period range from any of these transactions:
The sum is printed as a positive number. |
| Final Cost | The cost of the asset at the end of the period that you selected in the To Period parameter. |
| Initial Revaluation | The total revaluation amount from the beginning of the asset life to the end of the previous period that you entered in the From Period parameter. |
| Revaluation Increase | The sum of changes to the asset cost due to any positive revaluations during the period range. |
| Revaluation Decrease | The sum of changes to the asset cost due to any negative revaluations during the period range. Retirements are not included. |
| Final Revaluation | The total revaluation amount from the beginning of the asset life to the end of the period that you entered in the To Period parameter. |
| Initial Depr Reserve | The life-to-date ordinary depreciation, excluding any bonus depreciation, at the beginning of the period that you entered in the From Period parameter. |
| Depr Reserve Increase | The sum of increases to ordinary accumulated depreciation during the period range due to any of these transactions:
|
| Depr Reserve Decrease | The sum of decreases to ordinary accumulated depreciation during the period range due to any of these transactions:
|
| Final Depr Reserve | The life-to-date ordinary depreciation, excluding any bonus depreciation, at the end of the period that you entered in the To Period parameter. |
| Initial Bonus Reserve | The life-to-date bonus depreciation at the beginning of the period that you entered in the From Period parameter. |
| Bonus Reserve Increase | The sum of increases to bonus depreciation reserve during the period range due to any of these transactions:
|
| Bonus Reserve Decrease | The sum of decreases to bonus depreciation reserve during the period range due to any of these transactions:
|
| Final Bonus Reserve | The life-to-date bonus depreciation at the end of the period that you entered in the To Period parameter. |
| Initial Net Book Value | The initial net book value at the beginning of the period that you entered in the From Period parameter. |
| Net Book Value Increase | The increase to net book value during the period range, calculated as: Net Book Value Increase = Cost Increase + Depr Reserve Decrease + Bonus Reserve Decrease |
| Net Book Value Decrease | The decrease to net book value during the period range, calculated as: Net Book Value Decrease = Cost Decrease + Depr Reserve Increase + Bonus Reserve Increase |
| Final Net Book Value | The final net book value at the end of the period that you entered in the To Period parameter, calculated as: Final Net Book Value = Final Cost - Final Depr Reserve - Final Bonus Reserve |
| Transaction Date | The transaction date depending on the type of asset transaction:
|
| Transaction Number | The transaction reference number for all four types of asset transactions. |
| Transaction Code | The transaction code depending on the type of asset transaction:
|
| Transaction Amount | The transaction amount depending on the type of asset transaction:
|
This table shows the column headings that are also available for use in your user-defined attribute set.
| In this column... | Oracle Assets prints... |
|---|---|
| Asset Key Flexfield | The concatenated segments of the asset key flexfield value that is assigned to the asset |
| Depreciation Method | The depreciation method code that is associated with this asset in the chosen book |
| Life in Months | The useful life of the asset, expressed in month, in the chosen book |
| Life in Years | The useful life of the asset, expressed in years, in the chosen book |
| Prorate Convention | The prorate convention code associated with this asset in the chosen book |
| Tag Number | The tag number for the asset |
| Serial Number | The serial number for the asset |
This table shows the column headings.
| In this column... | Oracle Assets prints... |
|---|---|
| Major Category | The value and description of the major category segment for assets listed on the current page. |
| Minor Category | The value and description of the minor category segment for assets listed on the current page. |
| Retirement Date | The retirement date. |
| Sales Invoice | The sales invoice number associated with the retirement. |
| Sales Amount | The proceeds of sale. |
| Asset Number | The asset number. |
| Description | The description of the asset. |
| Parent Asset Number | The parent asset number. |
| Asset Cost | The cost of the asset when at the time of retirement. If the asset was partially retired, the proportional retired cost is displayed. |
| Depr Reserve | The proportional amount of ordinary accumulated depreciation that was retired. |
| Bonus Reserve | The proportional amount of bonus depreciation reserve that was retired. |
| Net Book Value | The net book value that was retired. |
| Gain/Loss | The amount of realized gain or loss, including any reductions for removal cost. The gain/loss does not always equal the proceeds of sale minus retired net book value because removal cost is not shown in this report. |
Related Topics
Working with Attribute Sets, Oracle Financials RXi Reports Administration Tool User Guide
Using the RXi Reports Concurrent Program, Oracle Financials RXi Reports Administration Tool User Guide
Running Reports and Programs, Oracle Applications User Guide