Considerations for Multiple Balancing Segments

You can track financial results at a finer level of granularity than a single balancing segment.

In addition to the required primary balancing segment for the chart of accounts, which is typically associated with the company dimension of a business organization, two additional segments of the chart of accounts can be optionally qualified as the second and third balancing segments respectively. Possible chart of accounts segments that can be tagged as these additional balancing segments include cost center or department, additional aspects of a business commonly used in measuring financial results.

Several points must be consider when using multiple balancing segments:

• Journal entry processing

• Implementation timing

• Change options

• Migration adjustments

Journal Entry Processing

Multiple balancing segments ensure that account balances come from journal entries where the debits equal the credits. The financial reports are properly generated for each unique instance of account value combinations across the balancing segments. Consider this option carefully as it provides more granular reporting but requires more processing resources.

Implementation Timing

When using optional second and third balancing segments, remember that these chart of accounts segment labels are set from the beginning of time. Ensure that balances are immediately maintained in accordance with the necessary balancing actions to produce consistent financial reporting for the wanted business dimensions. Multiple balancing segment ledgers that aren't maintained from the beginning of time, require extensive manual balance adjustments to catch up and realign the balances.

Note: Don't set a segment already qualified as a natural account or intercompany segment as any of the three balancing segments. Validations aren't performed when segment labels are assigned, so verify that all are assigned correctly before using your chart of accounts.

Change Options

Once a segment has been enabled and designated as a balancing segment, you must not change the segment. Don't disable the segment or remove the segment labels. These settings must be consistently maintained throughout the life of the chart of accounts to control the accuracy and integrity of the financial data.

Migration Adjustments

For charts of accounts migrated from Oracle E-Business Suite to Oracle General Ledger that uses a second and third balance segments, steps must be taken to ensure the proper transition. The required adjustments are extensive.

For ledgers associated with a migrated chart of accounts, the balances must be adjusted manually. The manual adjustment is to ensure that the second and third balancing segments are consistent as though these segment labels have been in place since the beginning of entries for these ledgers. Recomputing and updating of the following processes is required to reflect the correct balancing for each account using the second and third balancing segments.

• Intercompany balancing

• Suspense posting

• Rounding imbalance adjustments on posting

• Entered currency balancing

• Revaluation gains or losses

• Retained earnings calculations at the opening of each new fiscal year

• Cumulative translation adjustments during translation

Note: All previously translated balances must also be purged. New translations must be run to properly account for translated retained earnings and cumulative translation adjustments with the correct level of balancing.