18 Overview to Advanced Chart of Accounts

This chapter contains these topics:

• Section 18.1, "Objectives"

• Section 18.2, "About the Advanced Chart of Accounts"

18.1 Objectives

• To set up a flexible format for account numbers

• To define the segments of the flexible format

• To update the flexible account numbers

• To set up the length of the object account in the standard chart of accounts

18.2 About the Advanced Chart of Accounts

You can create your own flexible format for your chart of accounts if you do not want to use the standard JD Edwards World format (business unit of 12 characters, object of 4, 5, or 6 characters, and subsidiary of 8 characters). You might use the flexible format to comply with a chart of accounts for a regulatory agency or parent company.

In the flexible format:

• Account numbers appear in different lengths and in a different order than the account numbers in the standard business unit.object.subsidiary format.

• You control the nature, meaning, and validation of each account number segment.

  Caution:

  After you create a flexible format, you should not change it. Changing it can produce unexpected results.

Creating a flexible format for your chart of accounts consists of:

• Understanding the flexible format

• Creating a flexible format

18.2.1 What Should You Consider Before Creating a Flexible Format?

Before you create a flexible format, consider the following:

Consideration	Explanation
Consistent account structure	You must use the same account structure for all companies and all business units in your organization. This is necessary for multi-company consolidations and automated intercompany settlements.
Specific AAI instructions	You must be specific in the following automatic accounting instructions (AAIs): The annual close procedure currently uses the AAI item GLG4 to find the retained earnings account. If you use a flexible format, you must define a GLG4 for each company using the complete account number for each company. Verify any AAIs that specify account ranges (such as GLG7, GLG9, GLG12, GLRC, GLPR, and PX). In general, express the subsidiary on the ending range (usually as all nines). For example, AAI GLG7 is 5999 (Object), 99999999 (Subsidiary). If you use alphabetic characters in any of the segments of your flexible format, you must be careful in setting up account ranges. For example, the system reads alpha characters (account AAAA) as the first account and numeric characters (account 9999) as the last account in a range.
Tax rate and tax areas	The system derives tax accounts in certain situations by using the tax rate and area code as the subsidiary account. This means you must set up tax rate/area codes that conform to your flexible format.
Specific segment meaning	The flexible format restricts you to a specific meaning and order for each segment. You can still change your chart of accounts as long as you stay within the defined segments that you set up. Although you cannot change between flexible and standard formats, you can change account numbers within one format or the other.
Format of invalid accounts	You cannot enter invalid accounts (with the # prefix) in a flexible format.