Understanding Ledgers

Before you set up ledgers:

• Deselect the check boxes on the Installation Options - Products page for all products that you have not licensed.

  See Installation Options - Overall Page.

• Set up general ledger business units.

• Set up ChartField values.

• Set up accounting calendars.

PeopleSoft provides several ledger templates, each of which defines the physical attributes of a ledger. A ledger template is linked to multiple ledgers that you can then add to a ledger group. This template relationship ensures that all ledgers within a ledger group share the same physical layout. General Ledger uses these templates to identify all of the records and fields required to update and to report on their associated ledgers.

To store debit amounts separately from credit amounts in your ledgers, create the fields, modify the tables, and identify the fields in the ledger template according to the configuring instructions provided for the PeopleSoft Separate Debit/Credit feature.

Ledgers are stored in tables within a database. The key fields in a ledger table are Business Unit, Ledger, ChartFields, Fiscal Year, and Accounting Period; Net Period Activity is not a key field.

Before posting, General Ledger validates data posted to the ledger table against other tables in the system. You set up the tables used for validation to enable the system to post transactions to the ledger. Remember:

• When you post journal entries, the system stores net period activity (debits and credits combined) for each ChartField combination.

• The system does not store year-to-date balances, but calculates these balances for reports.

• The calendar for a ledger determines whether the amount of time in an accounting period is a week, a month, a quarter, or other period.

• You can store multiple ledgers (such as actuals, budgets, or statistics) with identical ChartFields on a single table.

• You can balance debits and credits for ledgers at the ledger level, business unit, or at the ChartField level.

A detail ledger is used to store a journal's accounting transaction details. After setting up ledger templates, define detail ledgers and associate them with a ledger group. They are termed detail ledgers to distinguish them from summary ledgers, which are used to record summarized activity.

You combine ledger templates and detail ledgers in an appropriate ledger group. A ledger group can have one primary ledger and zero to nine secondary ledgers. Each ledger within the ledger group shares a common physical structure based on the ledger template, and also has unique characteristics, such as its own base currency. General Ledger posts to the ledgers within the group according to the rules that you establish. The application can also manage multibook transactions that post to all ledgers within a group simultaneously.

The ledger group name can be descriptive of the purpose or ledgers it contains (such as, ACTUALS or BUDGETS). The name is unique across all ledger groups defined for a business unit and forms a unique key on the ledger table. Typically, the names of the individual ledgers within the group describe the type of currency or use of the ledger within the group, such as local, functional, and reporting. The name of the ledger group can also be the name of the primary ledger. For example, if you are not using the multibook feature, you might name your ledger ACTUALS and also name the ledger group ACTUALS.

Non commitment control ledger group types include Average Daily Balance, Standard, Budget, and Translation. Commitment control only uses the ledger group types Commitment Control Expense and Commitment Control Revenue.

Average Daily Balance, Budget, and Translation ledger groups have only one primary ledger and no secondary ledgers, while Standard ledger groups have one primary ledger and from zero to nine secondary ledgers.

The Commitment Control Expense ledger group type typically contains a budget, pre-encumbrance, encumbrance, and expense ledger. The Commitment Control Revenue ledger group type typically contains a budget, recognized revenue, and collected revenue ledger.

The Keep Ledgers in Sync check box in combination with the AutoGenerate Lines option determines how the system posts transactions. If you select the Keep Ledgers in Sync option or the Auto-Generate Lines option, the system posts transactions to every ledger in the group. When you select either option, the Journal Edit process generates additional journal lines for the other ledgers within the ledger group. For example, when you enter a two line journal entry for a ledger group that contains three ledgers, the system creates four additional lines, two lines for each additional ledger. If you do not select the Keep Ledgers in Sync or the Auto-Generate Lines options, the system posts transactions only to those ledgers with transaction entries, and does not generate secondary lines for other ledgers in the ledger group.

The Inherit Base Currency of Business Unit option determines if the ledgers in the group use the base currency of the business unit for conversions. This feature adds the flexibility for sharing ledger groups across business units with different base currencies. For example, a multinational organization based in Canada has five subsidiaries located in different countries around the world. If the subsidiaries select theInherit Base Currency of Business Unit, option, they can each have a ledger group with a secondary ledger that has a currency code of CAD (Canadian dollars) for the Reporting ledger. The primary ledger shares the base currency of the business unit and represents the functional currency of each country where the business unit is located. If the organization does not select the Inherit Base Currency of Business Unit option, it must define five different ledger groups, each with a primary ledger that has a base currency that matches the base currency of the business unit.

You can define a secondary ledger as a translation ledger by selecting the Translation check box for ledger groups. This option is applicable only when you select the Keep Ledgers in Sync option (KLS) for the ledger group. You cannot define a primary ledger as a Translation ledger. You often use Translation ledgers for multibook ledgers.

After you define your ledgers and calendars, specify in the Ledgers For A Unit component which detail ledgers, ledger groups, and calendars each general ledger business unit uses.

For each detail ledger to which a business unit posts, specify:

• Whether it is a balanced ledger.

• The periods that are currently open.

• The year and adjustment period for posting any adjustments.

• The rules for handling journal processing, currency, and approval options.

By associating calendars to ledgers, to business units, and by sharing calendars and ledgers across business units, you can efficiently and effectively capture accounting data.

When you define a ledger in the Ledgers For A Unit component, you determine how to process a journal entry entered with errors for that ledger. In General Ledger, you can specify these error processing options in the following locations:

• For the business unit level, access the General Ledger Definition - Journal Options page.

• For the ledger and ledger group level, access the Ledgers For A Unit - Journal Edit Options page.

• For the source level, access the Journal Source Journal Options page.

Settings generally override, from the source to the ledger group and then to the business unit level. Conversely, the default is from the business unit to the ledger and then to the source level. For example, a ledger setting overrides a business unit setting, but a source setting overrides both a setting at the ledger level and at the business unit level for the same option.

When you enter and edit a journal entry, the system identifies any errors.

General Ledger cannot post a journal if one or more of the following error conditions exist:

The PeopleSoft Multibook feature enables you to maintain multiple ledgers, sharing the same physical structure, in different base currencies, resulting in a real-time balance in multiple currencies. This functionality is also called dual-book due to the requirement for a company to carry one set of books in its local currency (functional currency) and another set of books in the currency of its parent company (reporting currency).

Multibook supports multiple base currencies, each in the form of a ledger, defined for a business unit. Optionally, you can post a single transaction to all base currencies (all ledgers) or to only one of those base currencies (an individual ledger). With multibook, the system automatically converts transactions to the applicable base currency and then posts to the corresponding ledger. This gives you full drill-down support and cross-currency comparisons at both the summary and the transaction levels.

You can use a secondary multibook ledger within a ledger group as a currency translation ledger. This ledger can function as your reporting ledger because it maintains real-time balances for all accounts in the specified currency during the accounting period. At the end of the accounting period, you can run the Translate Within Ledger process to generate a translation gain or loss adjustment within the multibook translation ledger for any selected account.

PeopleSoft maintains translation ledgers differently from other secondary ledgers within a multibook ledger group. Typically, when the system posts a transaction to a multibook ledger group, it uses the transaction currency amount of the primary ledger as the transaction amount of the secondary ledger. However, translation ledgers use the base currency amount of the primary ledger as the transaction amount. For multibook translation ledgers, the system generates lines with the transaction currency and foreign amount equal to that of the base currency and base amount of the primary ledger.

Within a ledger group, an in-sync accounting entry is a group of accounting entries for one transaction that the system distributes to different ledgers. These accounting entries have the same ChartFields, transaction currency, and foreign amounts. PeopleSoft applications support multibook and generate in-sync accounting entries to most ledgers within a ledger group. For the currency translation ledger, the Journal Edit process adds the in-sync entries before posting and creates completely in-sync journals. The Journal Generator recognizes these lines as in-sync accounting entries and generates the in-sync journal entries in General Ledger. You can specify the field order on the Journal Generator Accounting Entry Definition page. When generating the journal entry, the Journal Generator process uses these fields to determine how to group accounting entries for one transaction and generates an in-sync journal.

Summary ledgers store combined account balances from detail ledgers. You use summary ledgers primarily in PS/nVision reporting. Summary ledgers increase reporting speed and efficiency by eliminating the need to summarize detail ledger balances each time that you request a report. Instead, General Ledger summarizes detail ledger balances in a background process according to the criteria that you select and stores them in summary ledgers.

You can incrementally update summary ledgers with changes made since the summary ledgers were last created or updated in one of two ways:

• Update the summary ledgers at the same time that you post changes to the detail ledgers as part of the Journal Post process.

  This updates only preexisting summary ledgers, which include business unit, summary ledger name, fiscal, and accounting period information.

• Start the Build Summary Ledger process using PeopleSoft Process Scheduler with an increment option to update summary ledgers.

TimeSpans enable you to select and retrieve ledger balances for use in allocations, inquiries, and PS/nVision reporting. TimeSpans control the number of periods that you can extract and summarize data from the ledger table. Typical TimeSpans in General Ledger include activity for the current period, year-to-date amounts for the selected items, and balance forward amounts for balance sheet accounts.

You can express many TimeSpans relative to the current period, so that they automatically adapt the content of a report to the as of date that you specify when you execute the report. You can define other TimeSpans for specific periods.

General Ledger uses the calendar to validate absolute periods and years that you enter for a TimeSpan. These periods and years must exist on the calendar that you specify. Use TimeSpans to retrieve balance forward amounts and adjustments that the system stores in special calendar periods.

General Ledger includes many commonly used TimeSpans; however, you can define as many additional TimeSpans as necessary. Generate the FIN0003 report to list and display information about these TimeSpans.

You can import and export flat file ledgers to and from third-party reporting software. A process in General Ledger enables you to import a flat file from another product or external system that contains rows of ledger data. This functionality is often used to combine distributed ledger data from different General Ledger systems to perform consolidation, summarization and corporate reporting.

You can also select or add a flat file format and create flat file ledgers using a general ledger process that exports them to third-party reporting software systems. This functionality is often used in those countries requiring delivery of ledger data in a particular format for use in producing statutory reports in a required format.

You can also exchange ledger data between distributed General Ledger systems using the Ledger Publish Enterprise Integration Point (IP) and Ledger Load processing. This functionality is designed to work together with Consolidation.