5. Setting up the Chart of Accounts

This chapter contains the following sections:

5.1 Chart of Accounts

This section contains the following topics:

5.1.1 Maintaining Chart of Accounts

Oracle FLEXCUBE supports a multilevel structure for your bank’s Chart of Accounts. You can create broad groups of accounts in the categories of assets, liabilities, income, expenses, etc., and further divide these groups into several levels. The groups at each of these levels are referred to as GLs. However, there is no limit to the number of levels that can be maintained in the hierarchical structure of GLs. In Oracle FLEXCUBE, you may create a GL structure as follows:

5.1.2 Invoking the Chart of Accounts Maintenance Screen

You can maintain a multilevel GL structure using the ‘Chart of Accounts Maintenance’ screen.

You can invoke this screen by typing ‘EGDCHACT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

To define the details of a new GL, click new icon on the toolbar.

GL Code

In Oracle FLEXCUBE, a GL is identified by a code. Enter a unique code to identify the GL that you are creating. The length and composition of the code depends upon the GL Mask defined in the ‘Bank-wide Parameters’ Screen. The code that you enter can have a maximum of nine alphanumeric characters.

Description

You can enter a brief description of the GL in this field. You can use this description for the internal reference of your bank.

Level

Oracle FLEXCUBE GL can be created in two levels:

A Node GL is one that reports to another GL and has other GLs reporting to it. In the reporting relationship, if a GL reports to another GL, but no GLs report to it, then it is a Leaf GL. A Head GL is a Node that does not report to another GL.

The ‘Chart of Accounts Maintenance’ screen is designed with four tabs.

5.1.3 General Ledger Details Tab

To define details for a GL, click the tab ‘General Ledger Details’ tab on the ‘Chart of Accounts Maintenance’ screen. The details that you can specify for a GL depend on the type of GL that you create. If a particular field is disabled, it means that the field is not relevant to the type of GL that you are creating.

You can capture the following details pertaining to the GL:

Category

GL category can be specified only for a GL head. A Head GL can be assigned any of the following categories:

Two Head GLs can have the same category. All GLs that fall under a Head GL will essentially belong to the category defined for the Head. Each category can have any number of GLs under it. But, the category allocated to a GL should be assigned at the head of any GL stream; all nodes and leaves by default take the category of the Head GL to which they report.

General Ledger Type

Based on the way they are used in accounting, FGLs are classified into different types. Choose one of the following from the option list:

Parent GL and Description

Specify the parent GL to which the current GL is associated. Select the appropriate one from the option list. Based on the parent GL selected, the system displays the description.

Specifying Position Accounting Details

Positioning Required

If you check this option, the system will pass position entries for the specific general ledger. If you uncheck it, system will not pass any position entries.

Display on Report With

You may opt to report the currency position under any of the following heads:

Here, ‘Separate’ an independent head, other than Asset or Liability, for reporting currency positions.

Specifying the Restriction Details

You may impose certain restrictions on the usage of the general ledger. Oracle FLEXCUBE allows you to set the restrictions in the following fields:

Currencies

You may create a GL that takes entries in terms of:

Select the appropriate option from the dropdown menu. If you choose to impose restriction on a single currency, you have to specify the restricted currency.

Restricted Currency

If you have chosen to impose restriction on a single currency, specify that currency here. The option list displays all valid currencies maintained in the system. Select the appropriate one.

Branch Restriction

You can restrict access to the GL for:

Choose the appropriate option as applicable.

Blocked

You may opt to restrict the entries from being posted to a GL by checking this option. You can aptly use this option to stop entries to a GL temporarily. No entries can be posted into a GL while it is blocked. You can open a GL marked with blocked status by unchecking the blocked status box.

This feature is useful as you need not close the GL. Blocking is temporary whereas closure is permanent.

Back Period Entry Allowed

Using this option, you can regulate the posting of entries into past periods. Check this box to allow the system to post entries into back periods.

Specifying Revaluation Details

You need to set your preferences as to revaluation for all leaf GLs.

Revaluation

Check this option to enable revaluation of foreign currency balances. You can revalue the balances of asset, liability, contingent asset, and contingent liability GLs. You can also revalue the balances in Income / Expense GLs. If you indicate that revaluation is applicable, Oracle FLEXCUBE will revalue the GL during End of Day (EOD) processes.

Reval Split Required

Check this option to indicate that you require trading split for the leaf GL.

Specifying Year End Profit and Loss Accounts

In case of income and expense GLs, the system will move the balances in the GLs to year end profit and loss accounts at the end of every financial cycle. You need to specify the accounts in the following fields:

Profit Account and Description

Specify the profit account to which you wish to move the GL balances at the end of the year. The option list displays all valid profit accounts maintained. Select the appropriate one. Based on the account selected, the system displays the description.

Loss Account and Description

Specify the loss account to which you wish to move the GL balances at the end of the year. The option list displays all valid loss accounts maintained. Select the appropriate one. Based on the account selected, the system displays the description.

Specifying Central Bank Reporting Lines

For Central Bank reporting purposes, you should associate a GL with a debit and credit reporting line.

Debit Line and Description

The Central Bank debit line indicates the line to which an account under a GL should report, if in debit.

Credit Line and Description

You can indicate the line to which an account under a GL should report, if in credit.

You can select the reporting lines from the option list. The option list displays all lines maintained in the ‘Reporting Line Maintenance’ screen. Based on the selection, the system displays a description of each reporting line. The debit and credit reporting lines you define for a leaf can be the same.

Specifying Head Office Reporting Lines

In order to include a GL under a Head Office reporting line, you should associate it with debit and credit reporting line.

Debit Line

The Head Office debit line indicates the line to which an account under a GL should report, if in debit.

Credit Line

You can indicate the line to which an account under a GL should report, if in credit.

You can select the reporting lines from the option list. The option list displays all lines maintained in the ‘Reporting Line Maintenance’ screen. The system displays the description of each reporting line based on the selection. The debit and credit reporting lines you define for a leaf can be the same.

Once you have made the required entries save the maintenance.

5.1.4 GAAP Linkages Tab

You may link a general ledger to one or more GAAP codes using ‘GAAP Linkage’ tab of ‘Chart of Accounts Maintenance’ screen.

You need to specify the following details under this tab:

GAAP Code

Specify the GAAP code that you wish to link to the selected GL. The option list displays all valid GAAP codes maintained in the system. Select the appropriate one.

GAAP Description

Based on the GAAP code selected, the system displays the description.

SDE Class

Select the SDE class to be linked to the GL for generating system accounts.

Class Description

The system displays the description of the selected SDE class.

You may add more rows to the list and link any number of GAAP codes to the GL. Once you have specified the above details, save the linkage maintenance. As a result, the system posts all entries to the GL in the books of linked GAAPs.

5.1.5 Position Details Tab

You can enter the details on position accounting under the Position Details tab. If you have checked the option ‘Position Accounting Required’ under the ‘General Ledger Details’ tab, you have to specify the details pertaining to the position accounting.

Here, you can capture the following details:

Currency Code

You may define the position GL and position equivalent GL for each currency. Select the code that identifies the currency for which you wish to specify the details.

Position GL

Specify the position GL to be used for the selected currency. The option list displays all valid GLs maintained in the system. You can choose the appropriate one.

Position Equivalent GL

Specify the position equivalent GL to be used for the selected currency. The option list displays all valid GLs maintained in the system. You can choose the appropriate one.

In case you do not provide the above details, the system takes the position GL and position equivalent GL information maintained at the Currency Definition level.

5.1.6 Hierarchy Details Tab

You can view the hierarchy of the general ledgers connected to the current GL under the ‘Hierarchy Details’ tab.

This tab displays all child GLs connected to the current GL. It also displays a list of GLs that are linked to the parent GL of the current GL.

5.2 Inter-branch Parameters Maintenance

This section contains the following topics:

5.2.1 Maintaining Inter-Branch Parameters

You can maintain inter-branch parameters for passing inter-branch entries.You need to set the inter-branch (IB) currency for each branch in the ‘Interbranch Parameters Maintenance’ screen.

Here, you need to capture the following details:

Branch 1 and Branch Name

Specify the code that identifies the first branch for passing interbranch entries. Based on the branch code specified, the system displays the branch name.

Branch 2 and Branch Name

Specify the code that identifies the second branch for passing interbranch entries. Based on the branch code specified, the system displays the branch name.

Due to Branch 1

This is the general ledger in Branch 2, into which the system passes the credit accounting entries.

Due from Branch 1

This is the general ledger in Branch 2, into which the system passes the debit accounting entries.

IB Currency for Branch 1

Specify the interbranch currency to be used for branch 1. The dropdown menu displays the following options:

If you select ‘Account Currency’ as the IB Currency, the system will pass inter branch entries in the account currency. Otherwise, it passes the entries in the transaction currency.

Due to Branch 2

This is the general ledger in Branch 1, into which the system passes the credit accounting entries.

Due from Branch 2

This is the general ledger in Branch 1, into which the system passes the debit accounting entries.

IB Currency for Branch 2

Specify the interbranch currency to be used for branch 2. The dropdown menu displays the following options:

If you select ‘Account Currency’ as the IB Currency, the system will pass inter branch entries in the account currency. Otherwise, it passes the entries in the transaction currency.

Descriptions

The system displays the descriptions for each general ledger selected, in the respective fields.

5.3 Currency Positions

This section contains the following topics:

5.3.1 Maintaining Currency Positions Details

FGL provides you an option to maintain position general ledger and position equivalent general ledger for a currency.In case position information is not maintained in ‘Chart of Accounts Maintenance’ screen, system picks up the details of position and position equivalent GL from ‘Currency Position Details’ screen.

Enter the following details:

Currency Code and Name

You may define the position GL and position equivalent GL for each currency. Select the code that identifies the currency for which you wish to specify the details. The system displays the currency name accordingly.

Position GL and Description

Specify the position GL to be used for the selected currency. The option list displays all valid GLs maintained in the system. You can choose the appropriate one. Based on the GL selected, system updates the description.

Position Equivalent GL and Description

Specify the position equivalent GL to be used for the selected currency. The option list displays all valid GLs maintained in the system. You can choose the appropriate one. Based on the GL selected, system displays the description.

5.4 MIS Class Details

This section contains the following topics:

5.4.1 Maintaining MIS Class Details

In Oracle FLEXCUBE, you can maintain MIS classes using ‘MIS Class Maintenance’ screen. Each MIS class that you maintain may contain a number of MIS codes, based on the type of MIS that you choose.

Here, you need to specify the following details.

MIS Class

Enter a unique code to identify the MIS class that you are maintaining.

Description

Enter a brief description on the nature of the MIS class. You may use this description later to refer to the MIS class.

MIS Type

Specify the type of MIS class that you are maintaining. In Oracle FLEXCUBE, you may maintain the following types of MIS classes:

You may maintain a maximum of 20 Transaction MIS classes. Similarly, you can maintain a maximum of 10 Customer MIS classes in Oracle FLEXCUBE. Each such MIS class maintained may contain several MIS codes.

MIS Code

Specify the MIS code that you wish to add to the MIS class. You may add more rows to the list of MIS codes using add icon on the screen.

Code Description

Enter a brief description on the nature of the MIS code selected.

5.5 Accounting Periods

This section contains the following topics:

5.5.1 Invoking Period Code Maintenance Screen

Oracle FLEXCUBE allows you to maintain various period codes that correspond to a specific financial cycle for Oracle FLEXCUBE general ledger. You can use the ‘Period Code Maintenance’ screen to do the same.

You can invoke this screen by typing ‘STDPRCDE’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to capture the following details:

Specifying Financial Cycle Details

Cycle

Specify a unique name to identify the financial cycle corresponding to which, you wish to maintain the period codes.

Description

Enter a brief description of the financial cycle.

Start Date

Specify the date of beginning of the financial cycle.

End Date

Specify the day on which the financial cycle ends.

Adding Period Codes

The financial cycle defined above, can be divided into different accounting periods. To define individual accounting periods, click on the first row under period code. The system creates a period called ‘FIN’. This is an open ended period coinciding with the last day of the financial cycle.

You can maintain the following parameters for each accounting period within a financial cycle:

Period Code

Enter a code to identify the accounting period. For example, if your period length is a quarter you can enter - Q1 for the first period; Q2 for the second; Q3 for the third and so on. If your period length is a bimonthly you can enter BM1, BM2. If your period length coincides with a month, you can input M1, M2.

Start Date

This is the first day of the corresponding period.

End Date

This is the last date of the corresponding period. ‘End date’ of a period should always end on a month end.

5.6 Transaction Codes

This section contains the following topics:

5.6.1 Maintaining Transaction Codes

Transaction codes are attributes at accounting entry level that identify the nature of an entry. An attribute specific to an accounting entry can be a part of the transaction code.

You can maintain transaction codes using ‘Transaction Code Maintenance’ screen in Oracle FLEXCUBE.

On this screen, you need to capture the following details:

Transaction Code

Enter a unique code to identify the transaction.

Description

Enter a brief description on the nature of the accounting entry.

Once you have specified the above details, save it. Any attribute specific to the entry can form a part of the transaction code.

5.7 Identifying External Systems

This section contains the following topics:

5.7.1 Invoking the External Systems Screen

You need to maintain information on all external systems that post entries to a Oracle FLEXCUBE General Ledger. You can set your preferences specific to such external systems in the ‘External Systems’ screen.

You can invoke this screen by typing ‘EGDSORCE’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

On this screen, you need to capture the following details:

Source Code

Specify the source code of the external system. The preferences that you have set on this screen will be applied to this system.

Source Description

The system displays the description of the source code specified.

Generate Position Entries

If you wish Oracle FLEXCUBE to generate the position entries, check this option. If you uncheck it, the external system will handle the position entries.

Move Balances on SDE Change

There can be cases wherein, a change in the transaction attributes or MIS cause a change in the system accounts associated with an entry. Under such circumstances, if you have checked this option, the system will adjusts the accounting entries posted for that particular transaction.

Balancing Check

If you check this option, the system will check for debit / credit balancing of the batch of entries sent by the external system.

Value Date Balancing Check

If you check this option, the system will check for balances based on the value date. Batch of entries sent by the external system will balance for debit / credit by the value date. If there is a mismatch, the system will display an error message or a warning based on the configurations set.

Once you have set your preferences, save the settings.

5.8 GAAP Codes

This section contains the following topics:

5.8.1 Invoking the GAAP Maintenance Screen

FGL is a multi GAAP accounting system. You can maintain various GAAP codes that are applicable for the organization, using ‘GAAP Maintenance’ screen in Oracle FLEXCUBE.

You can invoke this screen by typing ‘EGDGPMST’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to specify the following details:

GAAP Code

Specify a code to identify the GAPP that you are maintaining. This code will be the unique identifier for the GAAP.

GAAP Description

Enter a brief description of the GAAP.

Once you have specified the above details, save the maintenance.

5.9 Branch to GAAP Codes Linkage

This section contains the following topics:

5.9.1 Invoking the Branch to GAAP Code Linkage Screen

You can link one or more GAAP codes to a specific branch using ‘Branch GAAP Linkage’ screen. Using this screen, you may even link each branch to all the GAAP codes maintained.

You can invoke this screen by typing ‘EGDBRNGP’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Here, you need to specify the following details:

Branch Code

Specify the code to identify the branch to which you wish to link the GAAPs. The option list displays all valid branch codes maintained in the system. Choose the appropriate one.

Branch Name

Based on the branch code specified, the system displays the name of the branch.

GAAP Code

Specify the GAAP code that you wish to link to the branch. The option list displays all valid GAAP codes maintained in the system. Choose the appropriate one.

Description

Based on the GAAP code selected, the system displays the description.

Once you have specified the above details, save the linkage maintenance. As a result, the system posts the entries in the books of GAAPs that are linked to the specific branches.

5.10 GL to the GAAP Codes Linkage

This section contains the following topics:

5.10.1 Linking GL to GAAP Codes

You may link a general ledger to one or more GAAP codes using ‘GAAP Linkage’ tab of ‘Chart of Accounts Maintenance’ screen.

 

You need to specify the following details on this screen:

GAAP Code

Specify the GAAP code that you wish to link to the selected GL. The option list displays all valid GAAP codes maintained in the system. Select the appropriate one.

GAAP Description

Based on the GAAP code selected, the system displays the description.

SDE Class

Specify the SDE class to be linked for generating system accounts.

Class Description

The system displays the description of the selected SDE class.

Similarly, you may add more rows to the list and link any number of GAAP codes to the GL. Once you have specified the above details, save the linkage maintenance. As a result, the system posts all entries to the GL in the books of linked GAAPs.