5Accounting Period Close

This chapter contains the following:

Overview

For all ledgers, primary, secondary, and journal and subledger level reporting currencies, open the first period of the ledger when you are ready to transact in that period.

  1. To open the first period of your ledgers, navigate to the Open First Period task in the primary ledger task list.

  2. Click the Go to Task icon.

  3. On the submission page, select the ledger and the period to open.

  4. Click the Submit button to submit the open period process.

You can use other ways to open the first period or subsequent periods without going into the Setup and Maintenance work area. You can maintain the ledgers' period statuses from the:

  • Close Status region in the General Accounting Dashboard. The Close Status region provides real-time visibility into the period close process from your subledgers to your General Ledger across the entire enterprise.

  • Manage Accounting Periods task in the Period Close work area.

  • Process Monitoring work area, which provides a framework for submitting, monitoring and maintaining processes across Oracle Fusion Financials.

The Close Monitor:

  • Provides information about the period close status for a given accounting period across multiple products for related ledgers in a hierarchical ledger set based display.

  • Uses the hierarchical ledger set to mirror the consolidation relationships and roll ups of entities across the enterprise.

  • Summarizes period close status information for each ledger across multiple applications and for each consolidation node across multiple ledgers.

  • Provides the contact information of the manager for a given node on the ledger set hierarchy.

  • Summarizes high-level income statement results for each entity and aggregates this financial information at each consolidation node.

  • Displays each of these elements of information, period status, manager information, and financial data, in separate tags that are navigated to for each node of the interactive hierarchical display.

  • Provides views for a given ledger set, for a particular accounting period, and currency.

The period status information that is displayed is broken down by application module including General Ledger, Payables, Receivables, Asset, Projects, and Costing. Some modules track their entity at a more granular level, such as:

  • Business units for Payables, Receivables, and Projects

  • Asset Books for Assets

  • Cost Organization Books for Costing

The Close Monitor indicates the number of the subunits by module for the ledgers. It also displays the fractional indicator, where applicable, of how many of the subunits are at the closed status.

Secondary ledgers, journal level, or transaction level reporting currencies cannot be associated with subledger business units for Payables, Receivables, and Projects. As such, if the ledger set displayed in the hierarchy includes members that are secondary ledgers, journal, or subledger level reporting currencies, the period status indicated in the Close Monitor for such subledger modules is based on its related primary ledger. Asset books and cost organization books can be associated with all types of ledgers. Therefore in the case of the Assets and Costing modules, their period status for secondary ledger or reporting currencies is shown accordingly for the books directly associated with them. Otherwise, their period statuses are derived from the books associated with their primary ledgers.

Setting Up the Close Monitor

The Close Monitor setup consists of a ledger set hierarchy definition whereby a predefined ledger set is addressed, with each ledger and ledger set assigned a manager who is responsible for its financial close, and a logo to represent the entity in the display.

Note: The list of managers available for assignment contains the persons defined in the Human Capital Management (HCM) module of Oracle Fusion Applications. The attributes defined in HCM, such as the picture of the person and contact details, are shown in the Close Monitor.

The ledger set serves as the foundation of this setup.

  • The members of the Close Monitor hierarchy must share a common chart of accounts and calendar. In addition, the ledgers assigned to the ledger set must share a common currency, or the common currency representation must be available from an associated balance level reporting currency for the ledger.

  • The financial data displayed in the Close Monitor is derived from the account group assigned to the ledger set, therefore, an assignment is required. The account group:

    • Must include two line items whose account designations respectively query the total revenues and total expenses of the organization.

    • Reflects a summarized income statement in the financial data tab of the Close Monitor.

    The Rapid Implementation process automatically generates an account group called Close Monitor Summary Income Statement, which you can display in the Close Monitor using the Manage Close Monitor Setup task. You can also submit the Generate Financial Reports and Account Groups process to automatically create the Close Monitor Summary Income Statement account group.

  • All ledgers in the ledger set share a common chart of accounts and the selection of accounts are equally applicable throughout the nodes in the ledger set hierarchy.

  • When working with ledger sets that include members that are also ledger sets, you can choose any of the ledger sets in the selector to indicate the starting ledger set to display in the Close Monitor.

  • If different account groups are assigned to each ledger set member in such a ledger set, the account group used to display the financial data is the one assigned to the ledger set specified in the selector in the Close Monitor.

  • To have meaningful comparison and summation along the ledger set hierarchy:

    • Assign ledgers to the ledger set that have a relevant currency representation that matches the intended group currency that the Close Monitor displays the financial data in.

    • Select the appropriate primary, secondary, or reporting currency ledger for assignment to the ledger set.

    • Alternately, use translated balances (balance level reporting currency) in the ledger set selection to satisfy the common group currency requirement if needed.

Viewing the Close Monitor

Navigate to the Close Monitor by clicking the Open Subledgers infolet on the General Accounting Infolets page, or by selecting the Close Monitor task from the Period Close work area. You choose a ledger set, accounting period, and currency as the view criteria for the Close Monitor display. You can alter this selection at any time.

For example, change the currency displayed by:

  • Working with a global ledger set.

  • Shifting the focus to a lower-level ledger set that aggregates at the continental level, such as North America, that uses a different group currency.

  • Including the ledger with the relevant currency representation that matches the selected group currency that the Close Monitor financial data is displayed in.

The Close Monitor supports different zoom levels to enable you to:

  • Accommodate viewing a larger ledger set hierarchy in its entirety, given the limited display area of the user interface.

  • Show detail information for each node, which can vary, decreasing and simplifying in content as you zoom out further to accommodate showing more nodes in a single view.

  • Hover over the more summarized node to view the complete set of information for that node at the 100% zoom level.

  • Leave the zoom level at 100% and move around the display to other ledger sets or ledgers currently not in view.

Note: The Close Monitor has a control panel that you can use to:
  • Adjust the zoom level.

  • Flip all of the nodes to the same display of Close Monitor, Manager, or Profit and Loss.

  • Change the displayed layout of the hierarchy.

While implementing your accounting configuration, optionally define and maintain period close components, including allocations and periodic entries, revaluations, and historical rates.

In the Setup and Maintenance work area, use the following:

  • Offering: Financials

  • Functional Area: General Ledger

  • Tasks:

    • Manage Allocations and Periodic Entries

    • Manage Revaluations

    • Manage Historical Rates

Manage Allocations and Periodic Entries

The Manage Allocations and Periodic Entries task opens the Enterprise Performance Management workspace. From there you can navigate to Calculation Manager to create allocations and other formula journal templates for generating periodic journal entries automatically. Calculation Manager is a framework for defining allocation rules and formulas using a graphical interface and intuitive step-by-step wizards. You can base formulas on multiple criteria.

You can also open Calculation Manager from within the Journals work area by clicking the Create Allocations Rules task from the Tasks pane.

Manage Revaluations

Revaluation is done to adjust foreign entered amounts due to currency fluctuations. Use the Manage Revaluations task to define currency revaluation options, such as the range of accounts to revalue and the gain or loss accounts. On the Manage Revaluations page, define and generate your revaluation definitions.

Manage Historical Rates

Historical rates are the weighted average rate for transactions that occur at different points in time. The application uses historical rates to calculate the conversion rate on equity account balances during foreign currency translation of the balance sheet.

On the Currency Rates Manager page, define and maintain your historical rates. You can define historical rates using a Desktop Integrated Excel workbook.

To create historical rates, specify the required ledger and other optional fields, as needed. Click the Create in Spreadsheet button to open the spreadsheet for uploading. To update existing historical rates for your ledgers, click the Edit in Spreadsheet button. The spreadsheet is prepopulated with the existing historical rates.

Note: Before using the historical rates spreadsheet, install the ADF Desktop Integration Add-In for Excel.

Currency Rates

You are required to enter the daily rates for currency conversion from Great Britain pounds sterling (GBP) to United States dollars (USD) for 5 days.

To load rates using the Create Daily Rates Spreadsheet, you must first install Oracle ADF Desktop Integration client software. Oracle ADF Desktop Integration is an Excel add-in that enables desktop integration with Microsoft Excel workbooks. You can download the installation files from the Tools work area by selecting Download Desktop Integration Installer.

Entering Daily Rates

  1. From the General Accounting work area, select the Period Close link.

  2. From the Tasks panel, click the Manage Currency Rates link.

    Use the Currency Rates Manager page to create, edit, and review currency rate types, daily rates, and historical rates.

  3. Click the Daily Rates tab.

    Use the Daily Rates tab to review and enter currency rates.

  4. Click the Create in Spreadsheet button.

    Use the Create Daily Rates spreadsheet to enter daily rates in a template that you can save and reuse.

  5. Click in the From Currency field. Select the GBP - Pound Sterling list item.

  6. Click in the To Currency field. Select the USD - US Dollar list item.

  7. Click in the Conversion Rate field. Select the Spot list item.

  8. Click in the From Conversion field. Enter a valid value: 10/2/2017.

  9. Click in the To Conversion Date field. Enter a valid value: 10/6/2017.

  10. Click in the Conversion Rate field. Enter a valid value: 1.6.

  11. Click Submit and click OK twice.

  12. Review the Record Status column to verify that all rows were inserted successfully.

  13. Save the template to use to enter daily rates frequently. You can save the spreadsheet to a local drive or a shared network drive.

  14. Optionally, edit the rates from the Daily Rates user interface or resubmit the spreadsheet.

You're required to change today's daily rates that were already entered. The rates you're changing are for currency conversion from Great Britain pounds sterling (GBP) to United States dollars (USD) for your company InFusion America.

Currency conversion rates were entered by an automatic load to the Daily Rates table. They can also be entered through a spreadsheet.

Updating Currency Rates

  1. Navigate to the Period Close work area.

    Use the Period Close work area to link to close processes and currency process.

  2. Click the Manage Currency Rates link.

    Use the Currency Rates Manager page to create, edit, and review currency rate types, daily rates, and historical rates.

  3. Click the Daily Rates tab.

    Use the Daily Rates tab to review and enter currency rates.

  4. Click the From Currency list. Select the GBP - Pound Sterling list item.

  5. Click the To Currency list. Select the USD - US Dollar list item.

  6. Enter the dates for the daily rates that you are changing. Enter today's date.

  7. Click the Rate Type list. Select the Spot list item.

  8. Click the Search button.

  9. Click in the Rate field. Enter the new rate of 1.7 in the Rate field.

  10. Click in the Inverse Rate field. Enter the new inverse rate of 0.58822 in the Inverse Rate field.

  11. Click the Save button.

Revaluation

The revaluation process is used to adjust account balances denominated in a foreign currency. Revaluation adjustments represent the difference in account balances due to changes in conversion rates between the date of the original journal and the revaluation date. These adjustments are posted through journal entries to the underlying account with the offset posted to an unrealized gain or loss account. All debit adjustments are offset against the unrealized gain account and all credit adjustments are offset against the unrealized loss account. If the same account is specified in the Unrealized Gain Account and Unrealized Loss Account fields, the net of the adjustments is derived and posted.

For balance sheet accounts, the revaluation journal entries are reversed in the next period. AutoReverse can be used to automate the reversals. For income statement accounts that use the PTD method of revaluation, the revaluation journals aren't reversed since each period's revaluation adjustment is for that period.

In Oracle Fusion General Ledger, the revaluation functionality provides the following advantages:

  • Full multicurrency functionality to eliminate currency barriers across a global business.

  • Predefined revaluation rules to ensure consistency in generation of revaluation entries each period.

  • Usage of prevailing currency normalization accounting standards including:

    • US Financial Accounting Standards Board, Financial Accounting Statement No. 52 (FAS 52), Foreign Currency Translation.

    • International Financial Reporting Standards, International Accounting Standard No. 21 (IAS 21), The Effects of Changes in Foreign Exchange Rates.

  • Support for multiple balancing segments to provide clarity in tracking the profitability and performance for more distinct segments of your enterprise in any currency

Definition

When defining your revaluations, perform the following:

  • Include accounts for tracking gains and losses, currency conversion rates, and the number of entered currencies to revalue.

  • Define separate revaluation definitions for each class of accounts, using a different rate type for each class.

  • Select various conversion types and methodologies for different account ranges, such as:

    • Current rates and year-to-date (YTD) method for balance sheet accounts.

    • Average rates and period-to-date (PTD) method for income statement accounts.

Note: Income statement accounts can also be revalued using the YTD method.

Hierarchies and flexible account selection criteria, such as usage of parent values from your account hierarchy, streamlines maintenance of revaluation definitions. The parent values can be selected for the primary balancing and the natural account segments using the operator Is a last descendant of. Leverage hierarchy versions to include organizational changes in your revaluation definitions. Adjust account selection criteria monthly to retrieve the accounts that must be revalued for the current accounting period.

Share revaluation definitions across ledgers that have the same chart of accounts to reduce maintenance.

Generation

Generating revaluations include:

  • Using defined revaluation criteria and automatically generating entries to shorten your close process.

  • Selecting automatic posting as part of the generate revaluation criteria to help you to achieve processing efficiency.

  • Scheduling revaluations to run during off peak hours to save your processing resources.

  • Using date effective account hierarchies to generate revaluations to keep results in line with your current organization hierarchies.

Always run revaluation to bring monetary balances to current rates before performing currency translation or remeasurement.

Note: When the revaluation process is scheduled to run automatically, the accounting period increments on each subsequent run.

Revaluation Execution Report

The Revalue Balances process automatically generates the Revaluation Execution report when you run revaluation. This report shows the details of your account balance revaluation and the journal batches created after running revaluation. The report includes:

  • Currencies and revaluation rates used to revalue your accounts.

  • Unrealized gain or loss account in which you recorded net gains and losses.

  • Range of accounts revalued.

  • Names of your batch and journals that the revaluation process created for each foreign currency.

  • Total debits and credits of the created entries.

If the Revaluation process cannot locate rates for one or more currencies, balances are not revalued for those currencies. In this case, the Revaluation process completes with a warning and the execution report lists which currencies are missing rates.

Revaluation launches a process that revalues the ledger currency equivalent balances for the accounts and currencies you select, using the appropriate current rate for each currency. Resulting unrealized gain or loss amounts are posted to the unrealized gain or loss accounts or to the cumulative translation adjustment account. The revaluation journal is created, balanced, and posted automatically by balancing segment values.

Revaluation journal entries are created to adjust the ledger currency balances for conversion rate fluctuations, in accordance with:

  • Statement of Financial Accounting Standards No. 52, Foreign Currency Translation

  • International Accounting Standard (IAS) 21, The Effects of Changes in Foreign Exchange Rates

The revaluation journal entries generated and posted in the primary ledger are automatically generated, converted, and posted to each of their reporting currencies. Define the cumulative translation adjustment account in the reporting currency prior to running revaluation.

Revaluation is the process which adjusts asset or liability accounts that may be materially understated or overstated. The fluctuation in the conversion rate occurs between the time the transaction was entered and the time revaluation takes place. You may want to revalue income statement accounts as well. The Income Statement Accounts Rule indicates whether period-to-date (PTD) or year-to-date (YTD) method is to be used when revaluing income statement accounts.

Click the Income Statement radio buttons on the Create Revaluation page to revalue income statement accounts using PTD or YTD balances.

If you select to revalue PTD balances for income statement accounts, the process continues to appropriately revalue YTD balances for balance sheet accounts. If the range of accounts consists of both income statement and balance sheet accounts and you select PTD as an option for income statement account revaluation rule, the revaluation:

  • Creates separate revaluation journal for the income statement accounts

  • Creates weighted average YTD balances using period rates from each corresponding period against the PTD account balance.

  • Is in compliance with the Statement of Financial Accounting Standards No. 52, Foreign Currency Translation.

When you run revaluation on your income statement accounts, the process produces two separate journal entries; one that revalues your balance sheet accounts and another for your income statement accounts. You do not reverse the PTD revaluation journal for your income statement accounts in the subsequent period. The revaluation only applies to last period's activity.

Note: This functionality only applies when the range of accounts in the revaluation definition consist of income statement and balance sheet accounts. Normally only balance sheets accounts are revalued.

This example demonstrates how to revalue foreign currency balances across multiple balancing segments. Your company, Vision Corporation, has three lines of business. You revalue foreign currency account balances for two divisions, Air Components and Repair Parts. The Installation Services line of business doesn't have foreign currency transactions. Your company is the primary balancing segment and your lines of business are represented in the secondary balancing segment.

Consider the following points when running the revaluation process:

  • The revaluation process posts the resulting gain or loss amounts against the unrealized gain or loss accounts, substituting the balancing segment values appropriately for all balancing segments.

  • Gain or loss accounts and revaluation account ranges aren't validated against your data access set security when the revaluation definition is created because the ledger context isn't known at the time of definition.

  • Data access set security is enforced when the Revalue Balances process is run. Limited write access to the gain or loss accounts due to inadequate access results in an error.

  • Segment value security rules are enforced when you enter account ranges and the unrealized gain and loss accounts. Only segment values that you have access to are available in the list of values.

  • Account ranges that you have read and write access to are revalued. Account combinations that you don't have access to are ignored.

  • The revaluation process expands the parent primary balancing segment to the child values. Data access set security applies to the child values only, not the parent value.

  • The posting process supports multiple balancing segments for calculating the entry to the Cumulative Translation Adjustment accounts when replicating revaluation journals to reporting currencies.

Defining Revaluations

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Financials

    • Functional Area: General Ledger

    • Task: Manage Revaluations

  2. On the Manage Revaluations page, click the Create icon.

  3. Complete the fields, as shown in this table.

    Field Value

    Name

    Vision Corporation Revaluation

    Description

    Revaluation for all foreign currency balances.

    Chart of Accounts

    Vision Corporation Chart of Accounts

    Currency

    Leave blank.

    Note: If blank, all currencies are revalued and after saving, the field automatically displays: All currencies.

    Conversion Rate Type

    Daily

    Days to Roll Forward

    5

    Unrealized Gain Account

    011-00-96600000-0000-000-000

    Unrealized Loss Account

    011-00-96700000-0000-000-000

    Income Statement Accounts Basis

    PTD

    Post Automatically

    Yes

  4. In the Revaluation Accounts section, click the Add Row icon.

  5. Click the Change filter conditions icon to enter the filter used to select the accounts to revalue.

  6. Click Add Fields and select Company.

  7. Accept the default operator of Equals and select 11 from the list of Company segment values.

  8. Click Add Fields and select Lines of Business.

  9. Change the operator to Between and select 30 for Air Components and 40 for Repair Parts.

  10. Click Add Fields and select Account from the list.

  11. Change the operator to Between and enter values 10000000 and 29999999.

  12. Click OK to accept the filters.

  13. Click Save and Close.

    Optionally, click Save and then click Generate to save and run the revaluation immediately.

Revaluation Tracking by Multiple Segments

The revaluation process adjusts account balances expressed in a foreign currency, based on conversion rate changes between a transaction's accounting and revaluation dates.

Here's more information about what the process does:

  • Posts revaluation amounts to the accounts with foreign currency balances that are eligible for revaluation.

  • Posts the offset to the unrealized gain or loss accounts from the revaluation template tracked by the balancing and revaluation tracking segments.

If you decide to set up segments for revaluation tracking, here's what you need to know:

  • You can track revaluation gains or losses by up to five distinct segments, including the segments you assigned balancing segment labels to. Let's say your chart of accounts has these segments and these segment label assignments.

    Segment Segment Label

    Company

    Primary Balancing Segment

    Department

    Account

    Natural Account Segment

    Subaccount

    Division

    Product

    Project

    Intercompany

    Intercompany Segment

    Because the revaluation process automatically balances gains or losses by balancing segments, you can track up to four additional segments. Here's the list of eligible segments:

    • Department

    • Subaccount

    • Division

    • Product

    • Project

  • Don't assign the revaluation tracking segment label to segments that you already assigned the Natural Account or Intercompany segment labels to.

  • Remember that tracking by multiple segments applies only to the revaluation process.

Set Up Revaluation Tracking by Multiple Segments

Before you can track revaluation by multiple segments, you have to do these steps:

  1. Opt in to the feature.

  2. Assign the revaluation tracking segment label to the segments in your chart of accounts that you want to track.

  3. Enable revaluation tracking for your ledgers.

Let's take a closer look at each step.

Opt In to the Feature

Use this navigation in the Setup and Maintenance work area to opt in to the Multiple Segment Tracking for Revaluation Gain/Loss feature:

  • Offering: Financials

  • Functional Area: General Ledger

  • Feature: Multiple Segment Tracking for Revaluation Gain/Loss

Assign the Revaluation Tracking Segment Label

Now follow this navigation:

  • Offering: Financials

  • Functional Area: Financial Reporting Structures

  • Task: Manage Chart of Accounts Structures

  1. Search for your Key Flexfield Structure and click Edit.

  2. Select the segment you want to track and click Edit.

  3. Select Revaluation Gain/Loss Tracking Segment from the list of segment labels and click the Move Selected Item icon.

  4. Save your changes.

  5. On the Manage Chart of Accounts Structure page, click Deploy Flexfield for the General Ledger Accounting Flexfield.

Enable Revaluation Tracking on the Ledger

Here's the last step:

In the Setup and Maintenance work area, go to:

  • Offering: Financials

  • Functional Area: General Ledger

  • Task: Specify Ledger Options, with the ledger scope set

  1. Select the option Track Revaluation Gain or Loss by Multiple Segments.

  2. Save the change.

Keep this setting the same throughout the life of the ledger. This helps ensure consistency in processing and accurate revaluation gain and loss account balances and reports.

Examples of Revaluation Journals When Tracking by Multiple Segments

Use these examples to understand how the application generates revaluation journals in primary ledgers and reporting currencies when you track revaluation by multiple segments. These examples assume the accounts being revalued at month end have only one foreign currency journal for the month.

Here's the important information from the primary ledger setup.

  • Ledger Currency: AUD

  • Chart of Accounts Segments and Segment Labels

    Segment Segment Label

    Company

    Primary Balancing Segment

    Department

    Revaluation Gain/Loss Tracking Segment

    Account

    Natural Account Segment

    Subaccount

    Division

    Revaluation Gain/Loss Tracking Segment

    Product

    Revaluation Gain/Loss Tracking Segment

    Project

    Revaluation Gain/Loss Tracking Segment

    Note: The primary balancing segment (Company) is also a revaluation gain or loss tracking segment.
  • Cumulative Translation Adjustment (CTA) Account: 01-000-3500-0000-000-0000-000

  • Revaluation Template:

    • Unrealized Gain Account: 01-000-7842-0000-000-0000-000

    • Unrealized Loss Account: 01-000-7844-0000-000-0000-000

    • Account Filter: Account = 1110, which is a cash account

And here's the important information from the reporting currency setup.

  • Currency: USD

  • Currency Conversion Level: Journal

  • Revaluation Basis: Entered Currency

Example 1: Revaluation Journal Source Enabled for Reporting Currency

In this example, you don't change the default journal conversion rules for the reporting currency, which means the Revaluation journal source is enabled. Here's how you define the revaluation template for the reporting currency:

  • Unrealized Gain Account: 01-000-3500-0000-000-0000-000

  • Unrealized Loss Account: 01-000-3500-0000-000-0000-000

    Note: Both accounts are the CTA account for the primary ledger.
  • Account Filter: Account = 1110, which is the same cash account that's in the primary ledger revaluation template

Here's a high-level view of the five journals that are going to be created in the primary ledger and reporting currency.

The first journal is the foreign currency journal
entered in the primary ledger. The second journal is the automatic
conversion of that journal in the reporting currency. The third journal
is the revaluation journal generated in the primary ledger. The fourth
journal is the automatic conversion of the revaluation journal in
the reporting currency. The fifth journal is the revaluation journal
that's generated in the reporting currency.

Now let's look at the details.

You create a foreign currency journal in the primary ledger with an accounting date of January 1, 2019. The conversion rate in effect for that date is 1 EUR = 1.642883 AUD. Here's the foreign currency journal in the primary ledger.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (AUD) Accounted Credit (AUD)

1

01-100-1110-1001-001-1001-101

1000.00

1642.88

2

01-200-1110-1002-002-1002-102

1200.00

1971.46

3

01-000-1210-0000-000-0000-000

2200.00

3614.34

Total

2200.00

2200.00

3614.34

3614.34

The foreign currency journal is automatically converted in the reporting currency. The conversion rate in effect for January 1, 2019 is 1 EUR = 1.155463 USD. Here's the converted journal in the reporting currency.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (USD) Accounted Credit (USD)

1

01-100-1110-1001-001-1001-101

1000.00

1155.46

2

01-200-1110-1002-002-1002-102

1200.00

1386.56

3

01-000-1210-0000-000-0000-000

2200.00

2542.02

Total

2200.00

2200.00

2542.02

2542.02

Now you run the Revalue Balances process for the primary ledger for January 31, 2019. The conversion rate in effect for that date is 1 EUR = 1.57286 AUD.

The process generates the unrealized loss accounts based on the account definition in the revaluation template and the balance sheet and revaluation tracking segments. In this example, the revaluation journal records the unrealized loss for the cash accounts tracked by the Company, Department, Division, Product, and Project segment values from the original foreign currency journal.

Here's the revaluation journal in the primary ledger.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (AUD) Accounted Credit (AUD)

1

01-100-1110-1001-001-1001-101

0.00

0.00

0.00

70.02

2

01-100-7844-0000-001-1001-101

0.00

0.00

70.02

0.00

3

01-200-1110-1002-002-1002-102

0.00

0.00

0.00

84.03

4

01-200-7844-0000-002-1002-102

0.00

0.00

84.03

0.00

Total

0.00

0.00

154.05

154.05

Remember that the Revaluation journal source is enabled for the reporting currency's journal conversion rules. As a result, the revaluation journal for the primary ledger is automatically converted in the reporting currency. The conversion rate in effect for January 31, 2019 is 1 AUD = 0.728134 USD. The offset is posted to the CTA account from the primary ledger because the reporting currency is a form of translation of the primary ledger. At this stage, this journal is just accomplishing part of the adjustments to CTA for the reporting currency.

Here's the converted journal in the reporting currency.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (USD) Accounted Credit (USD)

1

01-100-7844-0000-001-1001-101

0.00

0.00

50.98

0.00

2

01-200-7844-0000-002-1002-102

00.00

0.00

61.19

0.00

3

01-100-3500-0000-001-1001-101

0.00

0.00

0.00

50.98

4

01-200-3500-0000-002-1002-102

0.00

0.00

0.00

61.19

Total

0.00

0.00

112.17

112.17

Next, you run the Revalue Balances process in the reporting currency for January 31, 2019 to revalue the foreign currency journal that was converted from the primary ledger. The EUR to USD rates may have changed since January 1, 2019. The conversion rate in effect for January 31, 2019 is 1 EUR = 1.145253 USD.

The process records the revaluation adjustment to the CTA account (from the reporting currency revaluation template) and the balance sheet and revaluation tracking segments. The offset isn't considered a gain or loss for the reporting currency, which was already accounted for in the previous journal. Rather, the offset is adjusted against the CTA that was booked during the previous entry, to net to the final CTA amount that should be booked for the reporting currency.

Here's the revaluation journal in the reporting currency.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (USD) Accounted Credit (USD)

1

01-100-1110-1001-001-1001-101

0.00

0.00

0.00

10.21

2

01-100-3500-0000-001-1001-101

0.00

0.00

10.21

0.00

3

01-200-1110-1002-002-1002-102

0.00

0.00

0.00

12.26

4

01-200-3500-0000-002-1002-102

0.00

0.00

12.26

0.00

Total

0.00

0.00

22.47

22.47

Example 2: Revaluation Journal Source Not Enabled for Reporting Currency

In this example, you disable the Revaluation journal source in the reporting currency's journal conversion rules. You set up the revaluation template for the reporting currency with these accounts:

  • Unrealized Gain Account: 01-000-7842-0000-000-0000-000

  • Unrealized Loss Account: 01-000-7844-0000-000-0000-000

  • Account Filter: Account = 1110, which is the same cash account that's in the primary ledger revaluation template.

Here's a high-level view of the four journals that are going to be created in the primary ledger and reporting currency.

The first journal is the foreign currency journal
entered in the primary ledger. The second journal is the automatic
conversion of that journal in the reporting currency. The third journal
is the revaluation journal generated in the primary ledger. The fourth
journal is the revaluation journal that's generated in the reporting
currency.

Now let's look at the details.

Just like example 1, you create a foreign currency journal in the primary ledger with an accounting date of January 1, 2019. The conversion rate in effect for that date is 1 EUR = 1.642883 AUD. Here's the foreign currency in the primary ledger. It's the same as the first example.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (AUD) Accounted Credit (AUD)

1

01-100-1110-1001-001-1001-101

1000.00

1642.88

2

01-200-1110-1002-002-1002-102

1200.00

1971.46

3

01-000-1210-0000-000-0000-000

2200.00

3614.34

Total

2200.00

2200.00

3614.34

3614.34

Just like example 1, the foreign currency journal is automatically converted in the reporting currency. The conversion rate in effect for January 1, 2019 is 1 EUR = 1.155463 USD. Here's the converted journal in the reporting currency. It's the same as the first example.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (USD) Accounted Credit (USD)

1

01-100-1110-1001-001-1001-101

1000.00

1155.46

2

01-200-1110-1002-002-1002-102

1200.00

1386.56

3

01-000-1210-0000-000-0000-000

2200.00

2542.02

Total

2200.00

2200.00

2542.02

2542.02

Again, just like the first example, you run the Revalue Balances process in the primary ledger for January 31, 2019. The conversion rate in effect for that date is 1 EUR = 1.57286 AUD.

The process generates the unrealized losses accounts based on the account definition in the revaluation template and the balance sheet and revaluation tracking segments. In this example, the revaluation journal records the unrealized loss for the cash accounts tracked by the Company, Department, Division, Product, and Project segment values from the original foreign currency journal.

Here's the revaluation journal in the primary ledger. It's the same as the first example.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (AUD) Accounted Credit (AUD)

1

01-100-1110-1001-001-1001-101

0.00

0.00

0.00

70.02

2

01-100-7844-0000-001-1001-101

0.00

0.00

70.02

0.00

3

01-200-1110-1002-002-1002-102

0.00

0.00

0.00

84.03

4

01-200-7844-0000-002-1002-102

0.00

0.00

84.03

0.00

Total

0.00

0.00

154.05

154.05

Now you run the Revalue Balances process in the reporting currency for January 31, 2019 to revalue the foreign currency journal that was converted from the primary ledger. The conversion rate for January 31, 2019 is 1 EUR = 1.145253 USD.

The process generates the revaluation journal using the accounts from the revaluation template in the reporting currency and the balance sheet and revaluation tracking segments. In this example, the revaluation journal records the unrealized loss for the cash accounts tracked by the Company, Department, Division, Product, and Project segment values from the original foreign currency journal.

Line Account Entered Debit (EUR) Entered Credit (EUR) Accounted Debit (USD) Accounted Credit (USD)

1

01-100-1110-1001-001-1001-101

0.00

0.00

0.00

10.21

2

01-100-7844-0000-001-1001-101

0.00

0.00

10.21

0.00

3

01-200-1110-1002-002-1002-102

0.00

0.00

0.00

12.26

4

01-200-7844-0000-002-1002-102

0.00

0.00

12.26

0.00

Total

0.00

0.00

22.47

22.47

Translation

Translation and Reporting Currencies

Reporting currencies are representations of a primary or secondary ledger in another currency. Reporting currencies share the same chart of accounts, accounting calendar, and accounting method as their related ledger. You can use reporting currencies for online inquires, reporting, and consolidation.

When you create a reporting currency, you select a currency conversion level (Balance, Journal, or Subledger), which determines the level of information that's copied from the ledger to the reporting currency. If you set the currency conversion level to Balance, the Translate General Ledger Account Balances process restates the actual account balances from the ledger currency to the reporting currency.

The setup for translation includes creating daily rates and optionally, historical rates or amounts. In addition, the translation process is affected by:

  • Reporting currency translation options

  • Ledger options

  • Accounting calendar setup

Reporting Currency Translation Options

When you create a reporting currency, you specify currency translation options. Currency translation options include translation rate types and translation rules.

Translation rate types identify the type of rate used to translate income statement and balance sheet accounts. You can set default values for these rate types on the Specify Ledger Options page to ensure new reporting currencies have the same default value.

  • Period Average Rate Type: Type of rate used for the Period to Date method of translation, typically with income statement and equity accounts.

  • Period End Rate Type: Type of rate used for the Year to Date method of translation, typically with asset and liability accounts.

Note: Historical rates and amounts that are assigned to a specific account combination override period average and period end rates.

Translation rules determine how period amounts are translated. Asset and Liability accounts are always translated using the Year to Date translation rule.

  • Revenue and Expense Translation Rule: The default setting is Period to Date, but you can change it to Year to Date before running translation for the first time.

  • Owner's Equity Translation Rule: The default setting is Period to Date, but you can change it to Year to Date before running translation for the first time.

Caution: Set translation rate types and translation rules carefully before running translation for the first time. If changes are required after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process.

Ledger Options

The translation process also uses the Retained Earnings Account and the Cumulative Translation Adjustment Account from the related ledger. You specify these accounts in the Period Close section on the Specify Ledger Options page.

Caution: Set these accounts carefully before running translation for the first time. If changes are required after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process.

Accounting Calendar Setup

When defining the start date for an accounting calendar, select a period before the first period in which you plan to load history or perform translations. You can't run translation in the first defined period of a ledger calendar.

Making Setup Changes After Running the Translation Process

You can rerun the translation process if you post additional journal entries or change rates. However, if the following setup requires changes after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process after changing the setup.

  • Translation rules

  • Translation rate types

  • Retained earnings account

  • Cumulative translation adjustment account

  • Initial translation period

  • Account type classification for natural account segment values

How General Ledger Account Balances Are Translated

The Translate General Ledger Account Balances process restates actual account balances from a ledger currency to a reporting currency. Submit the process after you have completed all journal activity for an accounting period and after finalizing translation rates. You can rerun the process if you post additional journal entries or change translation rates.

Settings That Affect The Translation Process

Caution: Carefully check the following settings before you run the translation process for the first time. If changes are required after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process.
  • Translation rules

  • Translation rate types

  • Retained earnings account

  • Cumulative Translation Adjustment (CTA) account

  • Account type classification for natural account segment values

When you submit the translation process, you specify values for the following parameters:

  • Data Access Set: Select the applicable data access set.

  • Ledger or Ledger Set: Select the ledger or ledger set for the balance-level reporting currency.

  • Target Currency: Select the reporting currency to translate.

  • Accounting Period: Select the accounting period to translate. The first accounting period translated becomes the initial translation period for the specified balancing segment values. The next time the process is submitted, translation is processed from the initial translation period up to the Accounting Period parameter that you specify.

    Caution: If you're submitting the translation process for the first time, select the Accounting Period carefully. After the initial translation period is set, you can't run the translation process for any earlier period.
  • Balancing Segment Value: Leave the parameter blank to translate all balancing segment values, or select a specific balancing segment value.

    If you leave this parameter blank and a new balancing segment value has been added since the last translation, the process doesn't automatically translate the new balancing segment value. You must run translation for the specific new balancing segment value to establish the intended initial translation period. The next time you run translation for all balancing segment values, the new balancing segment value is automatically included.

How Account Balances Are Translated

The translation process uses translation rate types and translation rules to restate actual balances from the ledger currency to the reporting currency for the specified balancing segment values. In addition, the translation process updates the balances cube.

Translated period amounts are calculated as follows:

  • For Period to Date translation rules, the translated period amount = Period Average Rate * Period to Date Ledger Currency Balance.

  • For Year to Date translation rules, the translated period amount = Period End Rate * Ledger Currency Balance - Beginning Translated Balance.

The daily rates that are defined for the last day of the period for the corresponding period average and period end rate types are used as the translation rates. If the rate for the last day of the period doesn't exist, the translation process searches back within the period until a rate is found. If no rate exists for the period, the translation process ends in error.

Note: Historical rates and amounts that are assigned to a specific account combination override period average and period end rates.

The translation process totals the translated debits and credits for all account combinations sharing the same primary, second, and third balancing segment values. The net difference is recorded to a corresponding CTA account.

An additional step is performed when the first period of a new accounting year is translated. The translation process first identifies the income statement account combinations that share the same primary, second, and third balancing segment values. The prior year translated balances for those account combinations are then closed out to a corresponding retained earnings account.

Example: Translation Using Period End and Historical Rates

In this example, a Canadian company has a Mexican subsidiary. The translation process is run on the subsidiary ledger to convert balances from the Mexican peso (MXP) to the Canadian dollar (CAD).

The following figure shows an example of translation. In this example:

  • The period end rate of 0.75 translates 100,000 MXP in assets to 75,000 CAD, and translates 60,000 MXP in liabilities to 45,000 CAD.

  • The historical rate of 0.70 translates 40,000 MXP in Owner's Equity to 28,000 CAD.

As a result, an offset of 2,000 CAD in the translation currency, created by the different rates, is recorded in the CTA account.

This figure shows an example of a balance sheet
in one currency translated to another currency.

How Translated Balances Are Deleted

You can rerun the translation process if you change rates or post additional journal entries. However, some accounting configuration changes require that you delete all previously translated balances, rebuild the balances cube, and rerun the translation process after making the accounting configuration change.

If the changes listed in the following table are required after already translating, you must run the Delete Translated Balances process. The following table lists the type of change and whether all translated periods, balancing segment values, and related balance level reporting currencies are affected.

Type of Change Affects All Translated Periods? Affects All Translated Balancing Segment Values? Affects All Related Balance Level Reporting Currencies of the Ledger?

Translation rules

Yes

Yes

No, can be specified for each balance level reporting currency.

Period End and Period Average translation rate types

Yes

Yes

No, can be specified for each balance level reporting currency.

Cumulative translation adjustment (CTA) account

Yes

Yes

Yes

Retained earnings account

Yes

Yes

Yes

Initial translation period

Yes

Yes

No, can be specified for each balance level reporting currency.

Account type classification for natural account segment values

Yes

Yes

Yes

When making any of these changes, consider whether other areas are impacted. For example:

  • Reports may have been based on translated balances.

  • Translated balances could have been used as a source in previous balance transfers.

  • A primary ledger may have journal or subledger level reporting currencies associated with it.

  • A related secondary ledger may have balance level reporting currencies.

How Translated Balances Are Deleted

When you submit the process from the Scheduled Processes page, you must provide values for the following parameters:

  • Ledger: Select the ledger for the reporting currency.

  • Target Currency: Select the currency.

  • From Accounting Period: Select the earliest period for which balances must be deleted

Note: The To Accounting Period parameter is display-only and represents the last translated period for the selected ledger and target currency.

The process deletes translated balances for all translated balancing segment values from the specified period to the last translated period. You can view the log file for the list of periods processed. After the process completes, you must run the Create General Ledger Balances Cube process to ensure that the balances cube maintains translated balances that are consistent with future translations.

Caution: Contact your Oracle Support team for assistance before initiating the Create General Ledger Balances Cube process.

Running the Delete Translated Balances process is only one aspect of making the changes listed in the previous table. The following table describes the required steps for each type of change.

Type of Change Steps

Translation rule

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. On the Edit Balance Level Reporting Currency page, select the correct translation rule.

  3. Rerun the translation process.

Translation rate type

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. On the Edit Balance Level Reporting Currency page, select the correct rate types.

  3. Rerun the translation process.

CTA account

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. On the Specify Ledger Options page, edit the Cumulative Translation Adjustment Account value.

  3. Rerun the translation process.

Retained earnings account

Before deleting translated balances, follow the steps documented in the FAQ on changing retained earnings accounts.

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. Rerun the translation process.

Initial translation period

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. Rerun the translation process using the new initial translation period.

Account type classification for natural account segment values

Before deleting translated balances, follow the steps documented in the topic Correcting Misclassified Accounts: Explained.

  1. Run the Delete Translated Balances process and after the process completes, rebuild the balances cube.

  2. Rerun the translation process.

General Accounting Infolets

Oracle Fusion General Ledger provides a General Accounting dashboard that highlights risks and helps to prioritize activities on the most important concerns. The dashboard pinpoints late period close activities, under performing lines of business, excessive expenses, unreconciled accounts, and unallocated balances. All infolets provide direct access to related pages and functions where you can address issues.

The General Accounting dashboard has these infolets:

  • Journals and Intercompany Transactions infolets: Evaluate the magnitude of outstanding journals and intercompany transactions.

  • Accounts Payable and Accounts Receivables Reconciliation infolets: Accelerate reconciliations by analyzing the differences between the ledger balance and subledger balances for payables or receivables accounts. Link to the reconciliation report for the transaction details to resolve outstanding items.

  • Intercompany Reconciliation infolet: Speeds up intercompany reconciliations by identifying variances between amounts due to providers and from receivers. Identifies the trading partners with the most significant differences, and links to the detail report to view unposted transactions and open items.

  • Revenues and Expenses infolets: Highlight the organizations with the highest and lowest revenue performance and highest expenditures, and compares actual amounts against target amounts

  • Unallocated Balances infolet: Displays residual amounts from allocation pools and provides insight into remaining account details, balances, and activities.

  • Open Subledgers infolet: Improves management of the close process by tracking which modules are still open. Drills to the Close Monitor for a comprehensive view of the overall close process across the organizational hierarchy.

  • Close Calendar infolet: Improves insight into the close process by counting down the number of days until period end.

  • Budgetary Control infolets are available for users with the Budget Manager role.

General Accounting Infolets

Infolets help you access many sources of information across your enterprise. Infolets are aimed at aggregating this information in an efficient, timely, and engaging manner.

Infolets:

  • Divide the information into consumable chunks with progressive elaboration and disclosure.

  • Replace traditional dashboards to provide a modern and flexible user interface.

  • Make it simpler for you to get the most important information you need quickly.

  • Enhance your experience by following a glance, scan, and save design strategy.

AP and AR Reconciliation Infolets

The AP and AR Reconciliation infolets provide a summary of the ending balances in the Oracle Fusion Payables and Oracle Fusion Receivables subledgers. The infolet appears on the General Accounting dashboard and shows:

  • The corresponding ending balances in the Oracle Fusion General Ledger from the perspective of both a specific primary ledger and an accounting period of interest.

    Note: The accounting period is usually the one that is currently active in the period close process.
  • The infolets show:

    • An absolute difference amount between these two balances.

    • The data represented by the latest run and extract of the following processes:

      • Prepare Payables to General Ledger Reconciliation

      • Prepare Receivables to General Ledger Reconciliation

Using the Infolets

The clickable data points within the default view take you to a page that depicts the key reconciliation points in a graphical format.

  • The clickable data points within the default view take you to a page that depicts the key reconciliation points in a graphical format.

  • Use the Run Extract action from the Action drop down menu to run the extract in the background. The process populates the infolets with the latest data points.

  • Rise and fall data points are displayed in between the two ending balances.

    • Rise in the color green: Indicates that the data point may be added to the previous adjusted subledger ending balance to arrive at the progressive ledger ending balance.

    • Fall in the color red: Indicates that the data point may be subtracted from the previous adjusted subledger end balance to arrive at the progressive ledger end balance.

  • Click View Report hyperlink in the infolet to navigate to a page that displays the subledgers to ledger reconciliation Oracle Transactional Business Intelligence (OTBI) reports. Closing the View Reports page returns you back to the previous view. The OTBI reports have full drill capability.

Journals Infolet

The Journals infolet on the General Accounting Infolets dashboard displays the total amount and batch count of all outstanding journals, including all journals that are unposted, incomplete, pending approval, or in error status. You can then decide on what actions to take to resolve issues.

Front View

The front, or default, view of the infolet displays the total amount and total batch count.

The following figure shows an example of the front view. Fourteen journals are outstanding with a total amount of 38,200 dollars.

This figure shows an example of the front view
of the Journals infolet.

Back View

On the back view, you can set thresholds to filter the data that's shown on the front view. You can set thresholds for the age of the journals and the amount of the journals. For example, you might want to see only outstanding journals where the amount exceeds 1,000 USD.

The following figure shows an example of the back view. The threshold amount is set to 1,000 and the threshold number of days is set to 5.

This figure shows an example of the back view of
the Journals infolet.
Note: The Journals infolet displays a check mark when there are no outstanding journals based on your defined thresholds.

Expanded View

From the back view of the infolet, you open the expanded view. The expanded view provides a graphical breakdown of the outstanding journals using the following categories: In Error, Pending Approval, Incomplete.

The following figure shows an example of the expanded view with the three categories and journal count for each category. Two journals have errors, three journals are pending approval, and nine journals are incomplete.

This figure shows an example of the expanded view
with the categories for errors, pending approvals, and incomplete
journals.

Focused View

When you click a category on the expanded view, a respective page opens with subcategories where you can view details and, in some cases, take action.

Here's the list of categories on the expanded view, their corresponding subcategories on the focused view, and the actions you can take from the focused view.

  • In Error category: Posting Errors and Import Errors subcategories.

  • Pending Approval category: My Approvals, Pending Approval from Others, and Rejected subcategories. You can approve or reject journals pending your approval and you can withdraw journals you previously submitted for approval.

  • Incomplete category: Incomplete and Unposted subcategories. You can post batches from the Unposted subcategory.

You can drill down to the Journals page from all of the subcategories, except for the Import Errors subcategory. From that subcategory, you can drill down to the journal corrections worksheet.

Security

The current General Accounting Management dashboard navigation is controlled by the Manage General Accounting Activities privilege and it is assigned to all GL job roles. The access to General Ledger infolets is secured by the same privilege. Each infolet is secured according to the privilege that governs the area for that infolet. For example, the Journals infolet is secured by the Review Journal privilege.

Account Groups

Account groups are easy-to-use reporting components that save queries on account balances that require regular monitoring. With account groups, you define tolerance rules to create self-monitoring accounts. Tolerance rules are set using criteria that compare two balances. The comparison looks for an increase or decrease that's above or below a percentage or constant amount threshold. When the criteria are met, the balance information for the specified account displays on the Account Monitor section of the General Accounting dashboard, General Accounting infolets, and the Financial Reporting Center. Use account groups to eliminate surprises of account anomalies during your close process.

With account groups you can:

  • Automatically monitor key accounts in real time on an exception or permanent basis.

  • Review both current and comparative balances, including comparisons with your budgets or the actual performance for the same period last year, and across different periods, such as PTD, QTD, YTD.

  • Analyze change percentages based on your defined rules and thresholds to assess whether your balance variances are favorable or unfavorable.

  • Arrange accounts to be monitored on a regular basis into different account groups to meet your business requirements.

  • Share account groups with other users or across ledgers.

  • View all account groups from the Account Monitor section on the General Accounting dashboard. Click View > Account Group > Manage.

Best practice is to have the same chart of accounts across ledgers. Then you can potentially use the same account group across your ledgers as account groups are chart of accounts driven. If you don't want to use an account for all ledgers, add the specific ledger to each account group row. If you enable the Dynamically derive ledger option when setting up the account group:

  • The ledger is derived based on your given data access set selection. If the data access set has multiple ledgers, the default ledger for that data access set is used as the default initially, but you can choose another ledger that's available for that data access set.

  • The ledger column in the account group row isn't displayed.

Viewing Account Groups in the General Accounting Infolets

With the General Accounting infolets you can display the account group results for revenue, expense, and allocation information. Before the account group-based infolets are set up, a link appears on the infolet that's used to open the setup page. For example, the link that appears on the Expenses infolet says: Set up Expense Accounts.

Account groups for the Revenues and Expenses infolets can be automatically generated by the Rapid Implementation process. You can also submit the Generate Financial Reports and Account Groups process to automatically create account groups for the Revenues and Expenses infolets.

The infolet names are derived from the account group names. You can override the name for your infolet by selecting Edit Title and Views on the Actions menu. You can give each account group row a short name that's displayed in infolet details.

The signage display options are applied to the Account Monitor display. You can define the signage options by clicking your user name, the Set Preferences link, and the General Ledger Preferences link. For infolets, the signage is already set to show:

  • Revenue amounts as a positive for credit balances.

  • Expense amounts as a positive for debit balances.

Close Calendar Infolet

The Close Calendar infolet shows how many days there are before or after the accounting period close date. A negative value represents the number of days remaining to the end of the accounting period. A positive value represents the number of days past the end of the accounting period. The ledger and accounting period for this infolet apply to all infolets on the General Accounting Infolets dashboard.

The default ledger is your primary ledger. The default accounting period is the current accounting period, unless the prior period is open. When the prior period is still open and the current system date falls within the first half of the current accounting period, the prior period displays in the infolet.

For example, you have the following setup:

  • Current system date is January 14, 2019.

  • Date range for the Jan-19 accounting period is January 1 to January 31.

  • Prior accounting period Dec-18 is open.

In this example, the default accounting period that displays in the infolet is Dec-18 and the number of days is + 14.

When the prior period is still open and the current system date falls within the last half of the current accounting period, the current period displays in the infolet. For example, you have the same setup, except the current system date is January 17, 2019. In this case, the default accounting period that displays in the infolet is Jan-19.

The following image shows an example of the Close Calendar infolet. The infolet displays the default primary ledger, current accounting period, current date, and a positive value, which indicates the number of days past the end of the previous accounting period.

This image shows an example of the Close Calendar
infolet.

You can change the ledger, or specify an override for the accounting period assigned by the application, from the Setting and Actions menu for your user name. Click the Set Preferences link and then click the General Ledger Preferences link.

Revenues Infolet

The default view for the Revenues infolet shows the top two and bottom two performing accounts. The performance is measured by the variance between the current period result, and a budgeted amount or a prior period result.

The following figure shows an example of the Revenues infolet with bottom and top performers along with their variance amounts from the target.

This figure shows an example of the Revenues infolet
with bottom and top performers.

You can expand the infolet to view more information. The expanded view:

  • Displays all the revenue accounts you're tracking.

  • Shows the performance against the target.

  • Allows drilling into the Account Monitor.

  • Allows viewing through the Sunburst visualization tool.

Note: You can sort the accounts by variance amount or variance percentage.

Expenses Infolet

The Expenses infolet shows the expense account with the most unfavorable variance against the target, as defined in the account group. The infolet displays the variance amount and percentage.

The components in the infolet represent:

  • The name of the expense account with the most unfavorable variance against the target.

  • The amount and percentage of the variance between the current balance of the account compared to its target. The target can be a budget or a prior period balance depending on the account group configuration.

The following figure shows an example of the Expenses infolet with an expense account name, variance amount, and variance percentage.

This figure shows an example of the Expenses infolet.

You can expand the infolet to view more information. The list can be sorted by either the variance amount or variance percentage column. The expanded view:

  • Provides list of all the expense accounts you're tracking.

  • Shows the performance against the target.

  • Allows drilling to the Account Monitor.

  • Allows viewing through the Sunburst visualization tool.

Note: You can sort the accounts by variance amount or variance percentage.

Allocations Infolet

The Allocations infolet identifies residual amounts from allocation pools and provides insight into remaining account details, balances, and activities.

The default view of the infolet displays the residual amounts in allocation pools and the count of allocation pool accounts with outstanding balances. The default view uses an X of Y format, where:

  • X represents the number of accounts with an outstanding (nonzero) balance.

  • Y represents the total number of account rows defined in the account group, which is all of the allocation pool accounts being tracked.

When defining an Allocations account group on the Create Account Group page, set the Change criteria on allocation pool accounts to Not Equal and the Threshold value to 0. This instructs the account group to only return allocation pool accounts that still have remaining balances, which are then tracked in the Allocations infolet.

The following figure shows an example of the Allocations infolet. The infolet displays the total balance that's not allocated, the number of accounts with a balance pending allocation, and the total number of rows in the account group, which is all of the allocation pool accounts being tracked.

This figure shows an example of the Allocations
infolet with residual amounts.

The expanded view of the infolet displays the list of the allocation pool accounts and their remaining balances.

Viewing Account Groups in the Financial Reporting Center

You can view account groups from within the Financial Reporting Center by searching on the name of the account group. When you select an account group, the default view is a table view. You can also view the account group with the Sunburst visualization tool.

With the Sunburst tool, you can:

  • Explore account group balances across three business dimensions.

  • View balances from different perspectives by changing values.

  • Drill into specific sections for a more detailed view.

For example, you can view quarterly regional sales from an account group. The Sunburst tool helps you identify sales trends that are visually represented by size and color. The visualization can indicate whether that region's sales increased or decreased over the quarter. Each Sunburst ring represents a different segment of the accounting flexfield. You can use the control panel to change which segments to display in a ring and the order in which the segments are displayed.

The following figure shows an example of an account group viewed through the Sunburst visualization tool.

This figure shows an account group viewed through
the Sunburst visualization tool.

Configuration of an account group enables you to create self-monitoring accounts that help you eliminate the surprise of account anomalies during your close process.

Scenario

You have been given the task to set up account groups. Follow these steps to define account groups that track key account balances by purpose, category, and comparison criteria.

  1. Navigate to the General Accounting Dashboard page.

  2. In the Account Monitor section, select View > Account Group > Create. Other Account Group options include:

    • Manage to create, edit, or delete account groups. You can also enable sharing of account groups with other users.

    • Edit to change an existing account group or to make a copy of an existing account group to which you have access, whether it's an account group that you own, that's shared with you, or that's public. You're marked as the owner of the copied account group, which is automatically set to private access, but can be changed to the access setting that you like.

  3. Enter the account group name and description. The name is used by default on the infolet that the account group displays in, but can be changed using the infolet Actions menu.

  4. Select a value for the Display In option to determine if the account group appears in one of the infolets (Allocations, Expenses, Revenues), the Account Monitor, or the Close Monitor. The display option that you select can affect the other account group settings. For example, account groups that display in the Close Monitor must have public access, and account groups that display in infolets must have the option to dynamically derive the ledger enabled.

    Note: Regardless of its display setting, any account group can be viewed from within the Account Monitor and Financial Reporting Center.
  5. For each infolet and Account Monitor display setting, you can specify a default account group by selecting the Set as default option. The default account group setting is user-specific, determining which account groups appear to you when you view the infolets and the Account Monitor.

    Note: The default setting doesn't affect account groups that are set to display in the Close Monitor. The account group that displays in the Close Monitor is determined by the ledger set definition.
  6. Select the Dynamically derive ledger option to apply the account group to any ledger in the same balances cube. The ledger derived is based on your given data access set selection. You must enable this option for account groups that display in the Revenues, Expenses, and Allocations infolets.

    Note: If you don't select this option, enter a ledger on each account row.
  7. Select a Time Option and Comparison Option as shown in the following table.

    Time Option Comparison Option

    Accounting Period

    • Budget PTD

    • Budget QTD

    • Budget YTD

    • Prior period PTD

    • Prior year PTD

    • Prior year QTD

    • Prior year YTD

    Quarter

    • Budget QTD

    • Budget YTD

    • Prior quarter QTD

    • Prior year QTD

    • Prior year YTD

    Year

    • Budget YTD

    • Prior year YTD

    Tip: If you're using a budget comparison option, select the budget name in the Scenario field.
  8. Set the access.

    Note: Regardless of the access setting, only the person who owns the account group can modify it. However, for account groups that you have access to, you can share with others even if you're not the owner.
    • Private: For your use only.

    • Public: For use by all users who have access to the same balance cube of that account group. Account groups that display in the Close Monitor must be set to Public.

    • Shared: For use by users you specify and who have access to the same balance cube of that account group.

      Note: To set shared access, navigate to the Manage Account Group page.
  9. In the Accounts section, enter the accounts to monitor. The accounts must be defined to be consistent with the particular infolets targeted to track revenues, expenses, or allocations pools.

    • Accounts included in an account group for display in the Expenses infolet must be of the account type Expense.

    • Accounts included in an account group for display in the Revenues infolet must be of the account type Revenue.

    • Close Monitor account groups must only have two account rows. The first row must represent total revenues and the second row must represent total expenses.

    1. Give each account a short name that's easily recognizable. The name displays in infolets and in the Name column of the Account Monitor. For account groups that display in infolets, you must provide a name for each account.

    2. If the Dynamically Derive Ledger option isn't enabled, you must enter a ledger.

    3. Enter either parent or child values for each segment of the account.

    4. Select when to display the account in the Change field.

      • Always Display

      • Decrease by Less than Amount

      • Decrease by Less than Percentage

      • Decrease by More than Amount

      • Increase by More than Amount

      • Increase by Less than Amount

      • Increase by Less than Percentage

      • Increase by More than Percentage

      • Decrease by More than Percentage

      • Not Equal

      • Equal

    5. Enter a value in the Threshold field, which is the criteria that's being measured against. The threshold is used in conjunction with the Change field selection.

  10. Click Save and Close or Save and Create Another.

View an Account Group from the Financial Reporting Center

This example shows how to view an account group from the Financial Reporting Center.

Viewing an Account Group

  1. Navigate to the Financial Reporting Center.

  2. Click the Sales Organization account group link.

  3. Change the period to 03-17. The balances are automatically updated.

  4. Click Show/Hide Segments.

  5. On the Account segment, select Value and Description.

  6. For the Product and Intercompany segments, clear Value.

  7. Click Done.

  8. Click View as Sunburst.

  9. Click Show Description.

  10. Select any cost center segment and click Move Ring Toward Center.

    Note: You can also use the Segments section to move the rings.

  11. Click Done.

Account Reconciliation

Account Reconciliation and Subledgers

You can reconcile account balances online or through reports using integrated inquiry, reporting, and analysis tools. Drill down from account balances to journals and underlying subledger transactions through a single drill path. Run the following types of predefined standard reports: subledger to general ledger reconciliation, intercompany reconciliation, trial balance, journals, and account analysis reports, to reconcile account balances.

Account reconciliation tools provide the following benefits:

  • Quicker period close to expedite managerial decision making.

  • Reliability of published financial results to support execution of informed and sound business strategies.

  • Automated reconciliation of key payables and receivables subledger balances to the general ledger.

  • Identification and tracing of reconciling items with insightful account analysis reports.

As a prerequisite to the reconciliation process, subledger transactions from Oracle Fusion Payables and Oracle Fusion Receivables are imported and accounted in Oracle Fusion General Ledger. The General Ledger journal entries are then posted, which updates the General Ledger balances. Reconciliation reports can then be run to start the account reconciliation process.

The following figure illustrates this flow from the subledger transactions to account reconciliation using reports.

This figure shows that subledger transactions are
accounted in General Ledger journal entries and then posted, which
updates General Ledger balances, after which accounts can be reconciled.

Reconcile Subledger Accounts

Payables and Receivables enable you to quickly reconcile these subledgers to your General Ledger. Compare the open payables and receivables balances in the subledger modules to their corresponding account balance in your general ledger for a given accounting period. If discrepancies exist, the process of matching each transaction to its respective accounting entry is automatically performed. The process finds all transactions and accounting entries that contributed to the out of balance situation.

Exceptions are automatically identified. For example:

  • Transactions that do not have complete accounting.

  • Amounts that do not tie to the accounting entry amount.

  • Manually entered journals that posted to the general ledger account.

  • Journals that did not come from the subledger modules.

Reconcile subledger and other balances with comprehensive Account Analysis reports and Payables and Receivables to Ledger Reconciliation reports to streamline reconciliation and increase productivity. These reports:

  • Automatically match payables and receivables transactions to subledger accounting entries.

  • Provide direct drill-down to supporting journals and transactions for increased visibility.

  • Identify reconciliation exceptions for the user to take action, increasing worker productivity.

  • Permit analysis of report output in a spreadsheet, with all the conveniences of spreadsheet functionality.

Account Analysis Report

Reconcile subledger and other balances with comprehensive Account Analysis reports that:

  • Include beginning and ending account balances along with all journal entries that constitute the account's activities.

  • Contain activity source, category, and references, which are fully documented to easily trace back to the origin of the balance.

  • Identify reconciling items with amount or origin mismatches.

Payables and Receivables to Ledger Reconciliation Reports

Leverage the Payables to Ledger Reconciliation and the Receivables to Ledger Reconciliation reports using the interactive Oracle Transactional Business Intelligence reporting technology to:

  • Expand account balance information from summarized to detail data for optimal reconciliations.

  • Facilitate manageability and clarity for the reconciliation process.

Note: To change the report format or output, create your own report using the underlying subject areas from Receivables, Payables, Subledger Accounting, and General Ledger.

Other Reports

Other reports aid in the reconciliation process:

  • Trial balance reports: Review summarized actual account balances and activity by ledger, balancing segment, and account segment value. Run this report for balances and activity imported from your subledgers or entered in your ledger currency, foreign currency, or statistical currency.

  • General ledger reports: Review beginning and ending account balances, and journal entry lines, including those from your subledgers, affecting account balance in your ledger currency and foreign currencies.

  • Journal reports: Review journal information in your ledger currency and foreign currencies, including posted, unposted and error journals. You can also review journal activity, including activity from your subledgers, for particular periods and balancing segments.

Best Practices

Account reconciliation best practices include the following:

  • Run the Payables and Receivables to Ledger Reconciliation reports only after the Receivables and Payables periods are closed to additional subledger transactions.

    • The summary level of the reconciliation reports contains data that is aggregated at the point in time the data extraction program is run.

    • The detail level of the reconciliation reports reflects real time data in the transaction and accounting applications. To minimize discrepancies between the summary and detail levels of the report, run the data extraction process after the periods are closed. Running the process after the periods are closed prevents additional activity.

    • If further activity happens after the data extraction process is run, the activity is included in the Detail of the report, but not the Summary.

  • Reconcile receivables or payables accounts in one of these ways:

    • For the entire ledger, by running the reports for your ledger.

    • For more control, by running the reports for your individual primary balancing segment values within the ledger. Your primary balance segments must be implicitly mapped to your payables and receivables business units in your enterprise.

  • Restrict receivables and payables accounts in your general ledger by designating a control account and not allowing other sources to post to them.

  • Review warnings raised in the general ledger close period request log files. Verify that exceptions such as unposted journals, are intended to be excluded for the period.

  • Run your reconciliation reports with general ledger, receivables, or payables access. The responsibility for reconciling your receivables or payables to your general ledger and running the reports is done by your accounting department.

Note: The Payables to Ledger Reconciliation report integrates with the AP Trial Balance report. Use the AP Trial Balance report to obtain the beginning and ending payables accounting balances and drill down to the details.

Clearing accounts reconciliation offers automatic and manual methods to group, match, and reconcile related in and out journal lines that no longer contribute to an account's ending balance. You can analyze those unreconciled journal lines that are both relevant and responsible for the buildup of the ending balance in a clearing account.

The following figure shows the process flow for clearing accounts reconciliation. Reconciliation can be automatic or manual. You can run reconciliations reports and also reverse reconciliations.

The process flow for reconciling clearing accounts
includes reconciling automatically and manually, marking lines as
reviewed, reversing reconciliations, and running reconciliation reports.

The recommended approach for reconciling clearing accounts is to run automatic reconciliation to process the majority of the journal lines, based on your setup. Then use manual reconciliation to resolve the journal lines that weren't reconciled automatically. You can also reverse incorrect reconciliations. Reports are available to help with this process.

Clearing accounts reconciliation offers automatic and manual methods to group, match, and reconcile related in and out journal lines that no longer contribute to an account ending balance.

Steps to Enable

To use clearing accounts reconciliation, perform these steps.

In the Setup and Maintenance work area:

  1. Go to the following:

    • Offering: Financials

    • Functional Area: General Ledger

    • Task: Specify Ledger Options, with the ledger scope set

  2. On the Specify Ledger Options page, Reconciliation section, enable primary and secondary ledgers for clearing accounts reconciliation as required, by selecting the Enable reconciliation option.

  3. Go to the following:

    • Offering: Financials

    • Functional Area: Financial Reporting Structures

    • Task: Manage Chart of Accounts Value Set Values

  4. On the Manage Values page, set the Reconcile attribute to Yes for each of the reconcilable clearing account values in the natural account segment.

In the Scheduled Processes work area:

  1. Run the Inherit Segment Value Attributes process to update existing account combinations with the subsequent changes to the segment value.

In the Setup and Maintenance work area:

  1. Go to the following:

    • Offering: Financials

    • Functional Area: General Ledger

    • Task: Manage Clearing Accounts Reconciliation

  2. On the Manage Clearing Accounts Reconciliation page, configure and maintain clearing account reconciliation types and the associated reconciliation rules.

Reconciliation types consist of one or more reconcilable clearing accounts and their associated reconciliation rules. Use the Manage Clearing Accounts Reconciliation task to configure and maintain them.

Chart of Accounts Level or Ledger Level

You can define reconciliation types at a chart of accounts level or at a ledger level. Chart of accounts level reconciliation types apply to all associated primary and secondary ledgers that are enabled for reconciliation. For ease of maintenance, define reconciliation types at the chart of accounts level.

If a ledger requires reconciliation rules that vary from the associated chart of accounts' rules, you can specify the ledger when creating the reconciliation type. You can select from among the primary and secondary ledgers enabled for clearing accounts reconciliation that use the chart of accounts you selected.

The Manage Clearing Accounts Reconciliation page automatically displays all reconciliation types, whether defined at a chart of accounts level or a ledger level.

Note: If you submit the automatic reconciliation process for all reconciliation types, the process reconciles ledger-specific reconciliation types first, followed by chart of accounts level types.

Reconciliation Type Names

Use unique names for reconciliation types. Maintaining a consistent naming convention is recommended. Consider appending the chart of accounts or ledger name as a suffix to distinguish between chart of accounts level and ledger level definitions. Following this convention helps you identify the appropriate definitions on the various reconciliation processing pages. This practice also helps to keep reconciliation type names unique within the application, and across ledgers and charts of accounts.

Account Matching Rules and Account Filters

When you create a reconciliation type, you must select an account matching rule. The account matching rule identifies the chart of account segments that are significant for finding matching journal lines during the reconciliation process. Conversely, the selection implies which segments are insignificant and irrelevant during the reconciliation process. Those irrelevant segments aren't considered when grouping and matching eligible journal lines that are reconciled together.

The account matching rules are:

  • By Primary Balancing Segment, Natural Account

  • By Primary Balancing Segment, Natural Account, Cost Center

  • By Account Combination

After you select the account matching rule, use the account filter to specify the segment values that belong to valid clearing account combinations. You would typically specify segment values only for those segments that are part of the account matching rule that you selected. At a minimum, you must specify a value for one of the segments. Most likely, you would provide a value for the natural account segment. If you don't specify values for a segment, the reconciliation process considers all of the underlying child values for that segment as valid values in a clearing account combination, when matching and grouping together related journal lines.

If you specify values for a segment that's not part of the account matching rule, journal lines across the specified values for that segment are reconciled together.

For example, a chart of accounts has the following segments and child values:

  • Company: Primary balancing segment values of 01, 02, 03

  • Cost Centers: 000, 100, 200

  • Natural Accounts: Range of 00000 - 99999

  • Products: 100, 200

The chart of accounts is used by the Vision Services (USA) ledger, which has been enabled for reconciliation. The reconciliation type has the following attributes:

  • Name: Approved Claims

  • Account Matching Rule: By Primary Balancing Segment, Natural Account

  • Account Filter:

    • Cost Center: 100 to 200

    • Natural Accounts: 22100 to 22101

This table shows how the process groups the journal lines together for matching and reconciliation, for the Vision Services (USA) ledger and the Approved Claims reconciliation type.

Set 1 Set 2 Set 3 Set 4 Set 5 Set 6

01-100-22100-100

01-100-22101-100

02-100-22100-100

02-100-22101-100

03-100-22100-100

03-100-22101-100

01-100-22100-200

01-100-22101-200

02-100-22100-200

02-100-22101-200

03-100-22100-200

03-100-22101-200

01-200-22100-100

01-200-22101-100

02-200-22100-100

02-200-22101-100

03-200-22100-100

03-200-22101-100

01-200-22100-200

01-200-22101-200

02-200-22100-200

02-200-22101-200

03-200-22100-200

03-200-22101-200

In this example, the journal lines are grouped together into six sets. Because the account matching rule is By Primary Balancing Segment, Natural Account, each primary balancing segment value (01, 02, 03) is combined with each natural account segment value that's in the account filter (22100, 22101), into its own set.

Since the product segment isn't part of the account matching rule or account filter, each set includes all of the product segment values (100, 200).

Lastly, the cost center segment isn't part of the account matching rule, but it's included in the account filter. The cost center segment values are 000, 100, and 200, but the account filter specifies only 100 and 200. This means that the journal lines eligible for reconciliation are limited to account combinations with cost centers 100 and 200. And, since the cost center isn't part of the account matching rule, each set includes journal lines containing both cost centers 100 and 200.

In summary, even though the following account combinations include primary balancing segment values 01, 02, and 03, and natural account segment values 22100 and 22101, they're excluded from the reconciliation because the cost center is 000.

  • 01-000-22100-100

  • 01-000-22100-200

  • 01-000-22101-100

  • 01-000-22101-200

  • 02-000-22100-100

  • 02-000-22100-200

  • 02-000-22101-100

  • 02-000-22101-200

  • 03-000-22100-100

  • 03-000-22100-200

  • 03-000-22101-100

  • 03-000-22101-200

Reconciliation Start Date and Last Automatic Reconciliation Run

Every reconciliation type has a reconciliation start date. The reconciliation start date, and the criteria you specify when reconciling automatically or manually, are used to retrieve the clearing account journal lines eligible for reconciliation. Only journal lines with an accounting date after the reconciliation start date are available for reconciliation.

The Manage Clearing Accounts Reconciliation page displays the date of the last successful automatic reconciliation run. You can use this date to track and monitor completed and pending reconciliations. Clearing accounts reconciliation, as an integral part of period close activities, can be planned accordingly.

Tolerances for Manual Reconciliation

You can set up amount and percentage tolerances for manual reconciliation. When the net accounted amount of the journal lines is within the tolerance, the lines can be reconciled together using manual reconciliation. If you:

  • Leave both the amount and percentage tolerance fields blank, then there is no tolerance.

  • Specify a value in one of the two tolerance fields, that amount or percentage becomes the applicable tolerance.

  • Specify both an amount and a percentage, the stricter of the two tolerances is applied.

The percentage tolerance is calculated on the higher of the grouped journal lines total debit or credit amounts. The amount tolerance is based on the absolute amount in the ledger currency.

Changes to Reconciliation Types

You can change the reconciliation type name, description, tolerance percentage or amount, reconciliation start date, and whether the reconciliation type is active. The edited reconciliation type becomes the applicable definition for any future reconciliation processes subsequent to the edit. Existing journal line groups that were already reconciled aren't affected by the changes. You can still reverse groups that were previously reconciled.

Inactive Reconciliation Types

Inactive reconciliation types are ineligible for automatic and manual clearing accounts reconciliation processing, starting from the moment they're inactivated. Also, the submission page for the Unreconciled Transactions report doesn't display inactive reconciliation types as a report parameter. You can however, use inactive reconciliation types when submitting the Reconciled Transactions report, as well as on the Reverse Reconciliation page.

When you define reconciliation types for clearing accounts reconciliation, you can specify an amount tolerance, a percentage tolerance, or both. These tolerances apply only to the manual reconciliation process. The percentage tolerance is calculated on the higher of the grouped journal lines total debit or credit amounts. The amount tolerance is based on the absolute amount in the ledger currency. If you specify both an amount tolerance and a percentage tolerance, the stricter of the two is applied.

How Tolerances Are Applied

As an example, a reconciliation type has the following definition:

  • Chart of accounts level

  • Account Matching Rule: By Account Combination

  • Account Filter: 01-000-22100

  • Tolerance percentage: 1

  • Tolerance amount: 5

This table shows the journal lines eligible for reconciliation that were retrieved on the Manual Reconciliation page.

Journal Line Account Combination Accounted Amount (Debit) Accounted Amount (Credit)

1

01-000-22100

100.00

2

01-000-22100

98.00

Total debits are 100.00 and total credits are 98.00. The higher of the two is 100.00. The percentage tolerance of 1 is applied against 100.00. One percent of 100.00 is 1. The amount tolerance is 5. The stricter of the two is applied, so in this example, the tolerance of 1 is applied. The difference between total debits of 100.00 and total credits of 98.00 is 2. This difference is higher than the applicable tolerance of 1, so the two journal lines remain unreconciled.

A reconciliation reference is an identifiable reference value that's entered or populated onto related clearing account journal lines. One example is an invoice number, which identifies an invoice accrual clearing journal line and the related offsetting journal line. The automatic clearing accounts reconciliation process uses reconciliation references, along with other factors, when determining which journal lines to group together.

Entering Reconciliation References

Here are some of the ways that reconciliation references can be entered or populated onto journal lines.

  • When you create a journal in General Ledger, you can specify reconciliation references in the Journal Lines section on the Create Journal page.

  • You can specify reconciliation references when creating journals using spreadsheet-based tools such as, file-based data import and Oracle ADF Desktop Integration.

    Caution: Both the ledger and the reconcilable natural account segment values must be enabled for reconciliation to import the reconciliation references into GL.
  • If you're using secondary ledgers, the journal posting process in the primary ledger automatically populates reconciliation references into the propagated journal in the secondary ledger. This happens regardless of whether the secondary ledger or the natural account segment value in that secondary ledger is enabled for reconciliation.

  • When reconciliation references are included in journal lines that are reversed (manually or automatically), the resulting reversal journal is populated with the same reconciliation references. This happens regardless of whether the contextual ledger (primary or secondary ledger), or the natural account segment value, is enabled for reconciliation.

    Note: Journals aren't reversible if any underlying journal lines have already been reconciled. You must perform a reverse reconciliation to unreconcile such journal lines first. The Reversible Detail column on the Manage Journals page indicates the reason why a journal line can't be reversed.
  • You can set up Subledger Accounting to automatically populate reconciliation references on journal lines. For information about accounting attributes and journal line rules, refer to the Oracle Financials Cloud Implementing Subledger Accounting Guide. The journal import process imports the references if both the ledger and the reconcilable natural account segment values are enabled for reconciliation.

You can search for journal lines using reconciliation references and other reconciliation attributes, such as reconciliation status on the Inquire on Journal Lines page.

Note: If you opt in to the Allocation Rule Name as Reconciliation Reference feature, the allocation rule name is available as the Reconciliation Reference attribute. You can then reconcile all journal lines generated from an allocation rule as a group.

Once you have posted all the clearing account journals in GL, you can automatically reconcile the journal lines. Select the Reconcile Clearing Accounts Automatically task from the Journals work area to submit the automatic reconciliation process.

Settings That Affect Automatic Reconciliation

Enable the following settings:

  • Enable reconciliation option on the Specify Ledger Options page.

  • Reconcile attribute on the Manage Values page for each of the natural account segment values used in the specific clearing account journals.

For successful automatic reconciliation, the applicable reconciliation types must be active. The reconciliation start dates must be equal to or earlier than the accounting date of the eligible clearing account journal lines. In addition, each eligible clearing account journal line must have a reconciliation reference, and journals must be posted.

When you submit the process, specify the:

  • Data access set

  • Ledger

  • Reconciliation type

    Note: If blank, the process evaluates all reconciliation types, starting with ledger-specific types followed by chart of account level definitions.
  • To Accounting Period: Period up until which the reconcilable clearing account journal lines are retrieved for automatic reconciliation. The process compares the accounting date and period for the related clearing account journal lines with this value. The default value is the latest open accounting period. If none is available, then the default value is the latest closed accounting period. You can change the period to any earlier accounting period.

How Clearing Account Journal Lines Are Reconciled

The automatic reconciliation process groups together and reconciles related clearing account journal lines. Both the reviewed and the unreconciled lines can be reconciled using automatic reconciliation. Related clearing account lines share the same ledger, reconciliation type, reconciliation reference, and clearing account combinations, as determined by the account matching rule and filter. In addition, the net difference of the total accounted debits and credits is zero.

Note: Tolerances apply only to manual reconciliations.

Once successfully reconciled, each of the underlying journal lines within each distinct set of journal lines are automatically marked with:

  • A reconciliation status of Reconciled

  • A reconciliation date

  • A unique identifier called a reconciliation group

Example

A chart of accounts has the following segments and child values:

  • Company: Primary balancing segment values of 01, 02, 03

  • Cost Centers: 000, 100, 200

  • Natural Accounts: Range of 00000 - 99999

  • Products: 100, 200

The chart of accounts is used by the Vision Services (USA) ledger, which has been enabled for reconciliation. The reconciliation type has the following attributes:

  • Name: Approved Claims

  • Account Matching Rule: By Primary Balancing Segment, Natural Account

  • Account Filter:

    • Cost Center: 100 to 200

    • Natural Accounts: 22100 to 22101

This table shows how the process groups the journal lines together for matching and reconciliation, for the Vision Services (USA) ledger and the Approved Claims reconciliation type.

Set 1 Set 2 Set 3 Set 4 Set 5 Set 6

01-100-22100-100

01-100-22101-100

02-100-22100-100

02-100-22101-100

03-100-22100-100

03-100-22101-100

01-100-22100-200

01-100-22101-200

02-100-22100-200

02-100-22101-200

03-100-22100-200

03-100-22101-200

01-200-22100-100

01-200-22101-100

02-200-22100-100

02-200-22101-100

03-200-22100-100

03-200-22101-100

01-200-22100-200

01-200-22101-200

02-200-22100-200

02-200-22101-200

03-200-22100-200

03-200-22101-200

In this example, the journal lines are grouped together into six sets. Because the account matching rule is By Primary Balancing Segment, Natural Account, each primary balancing segment value (01, 02, 03) is combined with each natural account segment value that's in the account filter (22100, 22101), into its own set.

Since the product segment isn't part of the account matching rule or account filter, each set includes all of the product segment values (100, 200).

Lastly, the segment for the cost center isn't part of the account matching rule, but it's included in the account filter. The cost center values are 000, 100, and 200, but the account filter specifies only 100 and 200. This means that the journal lines eligible for reconciliation are limited to account combinations with cost centers 100 and 200. And, since the cost center isn't part of the account matching rule, each set includes journal lines containing both cost centers 100 and 200.

In summary, even though the following account combinations include primary balancing segment values 01, 02, and 03, and natural account segment values 22100 and 22101, they're excluded from the reconciliation because the cost center is 000.

  • 01-000-22100-100

  • 01-000-22100-200

  • 01-000-22101-100

  • 01-000-22101-200

  • 02-000-22100-100

  • 02-000-22100-200

  • 02-000-22101-100

  • 02-000-22101-200

  • 03-000-22100-100

  • 03-000-22100-200

  • 03-000-22101-100

  • 03-000-22101-200

You can reconcile clearing accounts manually using the Manual Reconciliation page or the Reconcile Journal Lines spreadsheet. To get to the page and spreadsheet, select the Reconcile Clearing Accounts Manually task in the Journals work area.

Here's what else you can do from both the page and the spreadsheet.

  • Mark related journal lines as reviewed.

  • Update reconciliation reference values.

Let's take a closer look at how you reconcile lines and update reconciliation references, and what it means to review lines.

Reconcile Lines

  1. From the page or spreadsheet, search for the reconcilable clearing account journal lines. You can search by ledger, reconciliation type, group, date, status, accounting period range, and several other criteria.

    Tip: To find journal lines marked as reviewed, search using the reconciliation status.
  2. Select the lines that match the account matching rule and account filters to reconcile them together and click Reconcile. Reconciled lines are automatically removed from the page. You can reconcile lines together if the net difference of total accounted debits and credits is within defined tolerances.

    Note: When you reconcile manually, reconciliation reference values can be different. They're also not required.

Update Reconciliation References

  1. Search for the unreconciled or reviewed journal lines on the page or spreadsheet.

  2. Update the reconciliation reference information as needed.

  3. Save. You can then use the automatic reconciliation process to automatically reconcile the lines.

Review Lines

You can mark one or more related journal lines as reviewed from the page or spreadsheet. You might want to do this when you can't reconcile a set of journal lines right now, but you expect more offsetting lines coming through in a future accounting period. Unlike during the reconciliation process, the action of marking one or more journal lines as reviewed doesn't validate if the net difference of total accounted debits and credits is zero, or within a tolerance, or if the selected lines comply with the account matching rules.

Here are some characteristics of reviewed lines:

  • They're still unreconciled lines.

  • They appear on the Unreconciled Transactions report along with the other unreconciled lines.

  • You can track them separately from other unreconciled lines. They have a reconciliation status of Reviewed and a reconciliation group and reconciliation date, which is the date you marked them as reviewed.

  • You can reconcile them using either the automatic or manual reconciliation process.

You can manually reverse previously reconciled clearing account journal lines using the Reverse Reconciliation page or the Reverse Reconciled Journal Lines spreadsheet. You can get to the page and spreadsheet in two ways:

  • Select the Reverse Reconciliation task in the Journals work area.

  • Click the Reverse Reconciliation tab on the Manual Reconciliation page.

You can reverse reconciled lines that were reconciled manually or automatically. The reversed reconciled journal lines revert to the unreconciled pool of clearing account journals, becoming available for future reconciliation processes.

Tip: Run the Reconciled Transactions report to view reconciled lines and to provide the context for reversing reconciliations.

Here's how you do a reversal:

  1. Provide a data access set, ledger, reconciliation type, and accounting period range.

  2. You can enter more search criteria like reconciliation group and reconciliation reference, to retrieve the reconciled lines.

  3. Review the search results. Depending on the search you do, you can get an expanded view of every reconciliation group.

  4. Select the check box against one or more reconciliation groups to unreconcile the underlying reconciled clearing account journals. You can't select some lines for reverse reconciliation while leaving others in a reconciled state within a single reconciliation group. If you're using the spreadsheet, select at least one journal line to reverse the entire set of journal lines within a single reconciliation group. Reversals affect the entire reconciliation group.

  5. Click Reverse Reconciliation to complete the process. The reconciliation group and the underlying journal lines are removed from the page or spreadsheet.

Note: On both the Reverse Reconciliation page and Reverse Reconciled Journal Lines spreadsheet, you can't reverse a reconciliation group if you have partial access to the underlying journal lines. In addition, you can only view the journal lines that you have access to.

Commands on Reconciliation and Reverse Reconciliation Spreadsheets

You can use spreadsheets to manually reconcile clearing accounts and to reverse reconciliations.

Each spreadsheet has a ribbon tab with reconciliation-specific commands. The Reconcile Journal Lines spreadsheet has the Manual Reconciliation ribbon tab and the Reverse Reconciled Journal Lines spreadsheet has the Reverse Reconciliation ribbon tab.

Here are the commands that appear in both spreadsheets.

Command What It Does

Search

Opens a search window where you can enter multiple search criteria and then run an extensive search.

Note: You can also search on the various data fields within the worksheets using native Excel features.

Select All

Selects all of the displayed lines at one time for the subsequent action. If needed, you can manually deselect individual lines by clicking the specific lines in the Selection Status field.

Deselect All

Deselects all of the already selected lines at one time. If needed, you can manually select one or more lines manually by clicking the specific lines in the Selection Status field.

Here are the commands that appear only in the Reconcile Journal Lines spreadsheet.

Command What It Does

Reconcile

Reconciles a set of selected journal lines.

Mark as Reviewed

Sets the reconciliation status for one or more selected journal lines to Reviewed. Assigns a reconciliation group, representing the review group, and a reconciliation date, representing the review date. The action of marking one or more journal lines as reviewed doesn't validate if the net difference of total accounted debits and credits is zero, or within a tolerance, or if the selected lines comply with the account matching rules.

Note: Reviewed lines within a set share the same reconciliation group.

Save

Saves the changes you make to the Reconciliation Reference field.

Here's the command that appears only in the Reverse Reconciled Journal Lines spreadsheet.

Command What It Does

Reverse Reconciliation

Fully reverses the reconciliation of every journal line that has the same reconciliation group as the journal line that was selected.

This overview outlines the recommended overall approach to reconciling clearing accounts.

  1. Enter, transfer, upload, and post clearing account journal lines containing reconciliation references.

  2. Run the automatic reconciliation process. Many related clearing account journal lines may be marked as reconciled during this process. As a result, the number of remaining unreconciled journal lines is reduced. This step therefore, mitigates an otherwise adverse impact on the performance of reporting on unreconciled journal lines.

  3. Run the Unreconciled Transactions report to analyze why journal lines weren't reconciled during automatic reconciliation.

    Possible reasons are:

    • Anomalous reconciliation references, or no reconciliation references on related journal lines.

    • Total accounted debits and credits of related journal lines don't sum to zero.

    • Some transaction cycles might not have completed, so not all related in and out journal lines were recorded in the application.

  4. Based on your analysis, take appropriate action.

    Possible actions are:

    • Update reconciliation references on journal lines on the Manual Reconciliation page or Reconcile Journal Lines spreadsheet, then rerun automatic reconciliation.

    • Reconcile journal lines on the Manual Reconciliation page or Reconcile Journal Lines spreadsheet. Manual reconciliation ignores the constraints of reconciliation references. You can also provide tolerances, so many lines that were left unreconciled due to some rounding differences can be reconciled manually.

    • Complete transaction cycles to bring in related in and out journal lines, then perform automatic or manual reconciliation.

  5. Use the Reconciled Transactions report to analyze reconciled clearing account journal lines. Use the Reverse Reconciliation page or Reverse Reconciled Journal Lines spreadsheet to reverse a previous reconciliation.

  6. Use the Inquire on Journal lines page to inquire on reconciled, reviewed, and unreconciled clearing account journal lines. You can also further report on reconciled, reviewed, and unreconciled journals using Oracle Transactional Business Intelligence. The General Ledger - Journals Real Time and the Subledger Accounting - Journals Real Time subject areas include reconciliation attributes.

How Journal Lines Are Enabled for Clearing Accounts Reconciliation

The Enable Journal Lines for Clearing Accounts Reconciliation process prepares historical journal lines for reconciliation. You must run the process if:

  • You decide to reconcile existing clearing account journal lines that are already posted and that don't include reconciliation reference information.

  • You had not enabled clearing accounts reconciliation for the ledger and natural account segment values, at the time those journals were posted.

Prerequisite Steps

Before running the process, you must first set up clearing accounts reconciliation.

  1. Enable primary and secondary ledgers for clearing accounts reconciliation, as required. Select the Enable reconciliation option in the Reconciliation section on the Specify Ledger Options page.

  2. On the Manage Values page, set the Reconcile attribute to Yes for each of the reconcilable clearing account values in the natural account segment.

  3. Run the Inherit Segment Value Attributes process to update existing account combinations with the changes to the segment values.

Process Submission

Specify values for the following parameters and submit the process:

  • Data access set

  • Ledger: If blank, all ledgers you have access to that are enabled for reconciliation are processed.

  • From Accounting Date: The default start date is the earliest reconciliation start date of all of the reconciliation types defined for the selected ledgers. You can change it to a later date.

  • To Accounting Date: If blank, the process uses the current date.

The process produces a report with summary information about the ledgers, accounting periods, and number of journal lines enabled. After the process has successfully completed, you can enter reconciliation references in clearing account journal lines using the Manual Reconciliation page.

You can review reconciled and unreconciled journal lines using predefined reconciliation reports. You can also modify some existing reports to include reconciliation information and create analyses using reconciliation attributes.

Unreconciled Transactions Report

Use the predefined Unreconciled Transactions report to review all unreconciled clearing account journal lines, specifically the unreconciled lines that weren't subjected to reconciliation yet, those lines rejected by previous automatic or manual reconciliation processes, and those lines that were marked as reviewed.

This report can also help you identify reconciliation references that might need updating.

This screenshot shows an example page from the report. It has sections for clearing accounts, journal line details, and journal line amounts.

This screenshot shows the Unreconciled Transactions
Report.
Note: See the Reconcile Clearing Accounts topic for more information about running this report.

Reconciled Transactions Report

Use the predefined Reconciled Transactions report to review details for clearing account journal lines that were successfully reconciled, both automatically and manually. This report can also help provide you with context information for reversing a reconciliation.

This screenshot shows an example page from the report. It has sections for reconciliation details, journal details, and amounts.

This screenshot shows the Reconciled Transactions
Report.

Other Oracle Business Intelligence (BI) Publisher Reports

The data model for these BI Publisher reports includes attributes for reconciliation date, group, reference, and status. Use the status attribute to report on journal lines that were marked for review and not yet reconciled. You can make a copy of the report templates and modify them to include reconciliation information.

  • General Ledger Reports

    • Account Analysis for Contra Accounts Report

    • General Ledger Account Details

  • Subledger Accounting Reports

    • Account Analysis

    • Account Analysis by Legal Entity

    • General Ledger and Subledger Account Analysis

    • General Ledger and Subledger Accounting by Journal Lines

  • Global Reports

    • General Ledger Journal and Balance

  • Financials for EMEA Reports

    • Audit Report for France

      Note: Fields 14 and 15 of this report hold reconciliation group and reconciliation date, respectively, for each reconciled journal line. These fields don't show reconciliation group and reconciliation date of journal lines marked as reviewed, because reviewed lines aren't reconciled yet.

General Ledger Analytics

You can create an analysis that uses the reconciliation attributes in the General Ledger - Journals Real Time subject area. You can even section your report by grouping reconciled journal lines based on the reconciliation type that was used to reconcile those lines.

See the Creating Analytics and Reports for Financials Cloud guide for information about creating analyses.

Consolidation

Overview of Consolidation Methods

Select the best consolidation solution for your enterprise:

  • Reporting Only Consolidations: If your subsidiaries and corporate ledger share the same chart of accounts and calendar.

  • Balance Transfer Consolidations: If your subsidiaries and corporate ledger have either or both different charts of accounts and different calendars.

  • Financial Management Consolidations: If there are complex factors in your financial consolidation requirements such as:

    • Complex company structures such as joint ventures, minority interest holdings, partially or fully owned subsidiaries.

    • Multiple heterogeneous systems including data sources that are not general ledger that are required to support nonfinancial or industry-specific metrics, disclosures, and footnote schedules.

Example of Reporting Only Consolidation Method

Use the Reporting Only consolidation method and these reporting solutions: Financial Reporting, General Accounting Dashboard, Smart View, online inquiry, Oracle Business Intelligence (BI) Publisher, Oracle Transactional Business Intelligence.

The following figure illustrates this scenario.

  • The two subsidiaries and the corporate ledger share the same calendar.

  • The first subsidiary uses the corporate chart of accounts and a local currency. The reporting currency functionality is used to record balances in the corporate currency.

  • The second subsidiary uses a local chart of accounts and a local currency. A secondary ledger is used to record balances in the corporate chart of accounts and the corporate currency.

  • The reporting currency, secondary ledger, corporate ledger, and adjustment ledger, are grouped into the corporate ledger set for consolidation and reporting.

This figure shows the Corporate Ledger Set with
one corporate ledger, an adjustment ledger, and two subsidiary ledgers
that were translated into the corporate currency for consolidation.

With the Reporting Only consolidation method, perform the following tasks:

  • Group the ledgers in a ledger set. This assumes the ledgers share the same chart of accounts and calendar.

  • Translate balances to the corporate currency for ledgers not in the corporate currency.

  • Create eliminating entries.

  • Run reports using the ledger set and the corporate currency as reporting parameters to view the consolidated balances.

If each entity's ledger has a different chart of accounts or calendar from the corporate chart of accounts and calendar, a secondary ledger is used. The secondary ledger conforms the balances to the common chart of accounts and calendar and is included in the consolidation ledger set.

Example of Balance Transfer Consolidation Method:

If multiple subsidiaries and the corporate ledger don't share the same chart of accounts and calendar, use the Balance Transfer Consolidation method and these reporting solutions: Financial Reporting, General Accounting Dashboard, Smart View, online inquiry, Oracle Business Intelligence (BI) Publisher, and Oracle Transactional Business Intelligence (BI).

The following figure illustrates a scenario where two subsidiaries use their own local charts of accounts and currencies. The corporate ledger uses a corporate chart of accounts and corporate currency. The balance transfers convert the local balances to the corporate chart of accounts and currency.

This figure shows the two subsidiary ledgers and
the corporate ledger being consolidated into the consolidation ledger
for reporting.

With the Balances Transfer consolidation method, perform the following tasks:

  • Translate balances to the corporate currency for ledgers not in the corporate currency.

  • Create a chart of accounts mapping to map subsidiaries account values to the corporate chart of accounts.

  • Transfer balances from the subsidiaries to the corporate consolidation ledger using the Transfer Ledger Balances process, which transfers between any source and target ledger pair, or the Transfer Balances to Secondary Ledger process for balance level secondary ledgers. In the parameters, select:

    • Source and Target Ledgers

    • Chart of Accounts Mapping

    • Amount Type

    • Source Ledger and Target Ledger Periods

    • Run Journal Import

    • Create Summary Journals

    • Run Automatic Posting

    • Balancing Segment

  • Create eliminating entries using journal entries or the Calculation Manager in the corporate consolidation ledger.

  • Generate a report on the consolidated balances net of eliminations in the corporate consolidation ledger.

Overview of Balance Transfers

Two methods of balance transfers are supported in Oracle Fusion General Ledger. Balance data is transferred from:

  1. A primary ledger to a balance level secondary ledger assigned to it.

  2. From one ledger to another without a predefined relationship.

You can drill down from the target ledger balances to the source ledger balances. The drill down can originate from:

  • Financial reports.

  • Smart View spreadsheet.

  • Account Inspector queries.

  • Account Monitor analyses.

  • Journal lines in the target ledger.

When the Source and Target Ledger Currency Are the Same

You drill down on the entered amount from the Journal Lines page or the Journal page in target ledger which resulted from a balance transfer. The displayed page provides the source and target ledger details so you can analyze details. For example, analyze the accounting period and accounts used in the source ledger that transferred to the journal line amount in the target ledger.

Note: When there is a variance between the source and target ledger, there is a warning icon displayed next to the target amount and source amounts. The variance in this case could be due to journals that were posted to the source ledger after the balance transfer between source and target ledger.

When the Source and Target Ledgers Do Not Share the Same Ledger Currency

It is necessary to translate the source ledger to the target ledger's ledger currency before transferring balances. As such, balance transfers drill down also shows the reporting currency balances for the source ledger in the target ledger currency as part of the drill path.

Note: When there is a variance between the source (translated balance) and target ledger, there is a warning icon next to the target amount and source translated amounts.

The variance in this case can be due to:

  • Conversion rate changes after the balance transfer.

  • Journals that were posted to the source ledger after the balance transfer between source and target ledger.

Reporting Only or Balance Transfer Consolidation Methods

Here are pros and cons comparing the Reporting Only Consolidation method versus the Balance Transfer Consolidation method.

Reporting Only Consolidation Pros:

  • You are not required to run additional processes to consolidate unless ledgers have a different currency than the consolidation currency.

  • View the consolidated balances anytime. This cannot be done in the Balance Transfer Consolidation method because that method requires a balance transfer be done to achieve consolidation.

  • Faster close process.

Balance Transfer Consolidation Pros: Do not require a standardized chart of accounts and calendar.

Note: When reviewing balances that use either consolidation method, verify that the translation to the consolidation currency is current.

If there is a journal or subledger level reporting currency ledger, translated balances are automatically available from either Reporting Only or Balance Transfer Consolidations. Only a reporting level reporting currency ledger must have the translation process run when it has a different currency than the consolidation currency.

Balance Transfer Consolidation Cons:

  • May require an additional consolidation ledger to maintain balances or the current parent ledger can serve as the consolidation ledger. You can use your parent ledger and just transfer the subsidiary balances directly into that ledger.

  • Must run a balance translation process if the currency is different from the consolidation currency. Then run the transfer processes to view the consolidated balances.

  • Maintain charts of accounts mappings, which can be a labor intensive.

  • Outdated balance transfers have to be reversed and posted, and then a new balance transfer is run every time the source ledger's balance changes.

  • Requires translation to be run again if ledger currency is different than the consolidation currency.

Example of Multiple Levels of Reporting Consolidation

The consolidation for InFusion Corporation happens at two levels.

Level One

The InFusion North America elimination ledger records the elimination entries between InFusion USA and InFusion Canada. A ledger set has been created for the three ledgers to enable creation of consolidation reports in Financial Reporting.

The following figure shows the InFusion North America ledger set. The ledger set includes the InFusion North America elimination ledger, the InFusion USA ledger, and the InFusion Canada ledger.

This figure shows the North America ledger set, which
includes the elimination ledger, and the USA and Canada ledgers.

The InFusion EMEA elimination ledger records the elimination entries between InFusion UK and InFusion Germany. A ledger set has been created for the three ledgers to enable creation of consolidation reports in Financial Reporting.

The following figure shows the InFusion EMEA ledger set. The ledger set includes the InFusion EMEA elimination ledger, the InFusion UK ledger, and the InFusion Germany ledger.

The figure shows the EMEA ledger set, which includes
the elimination ledger, and the UK and Germany ledgers.

Level Two

The InFusion Corporate elimination ledger records the elimination entries among all four entities. A ledger set has been created for the five ledgers to enable creation of consolidation reports in Financial Reporting.

The following figure shows the InFusion Corporate ledger set. The ledger set includes the InFusion Corporate elimination ledger and the ledgers for InFusion USA, InFusion Canada, InFusion UK, and InFusion Germany.

This figure shows the Corporate ledger set, which includes
the elimination ledger and the USA, Canada, UK, and Germany ledgers.

Examples of Elimination Entries

The following examples show how to eliminate intercompany transactions recorded in the InFusion ledgers during consolidation. The following assumptions apply to all examples.

  • The balances that must be eliminated in the consolidation are between entities within a ledger set.

  • The eliminations are accomplished by creating allocation rules using Calculation Manager.

  • The elimination adjustments are recorded in an elimination ledger.

Level One Elimination Entries

The first level of elimination entries is created for transactions between two InFusion North America ledgers (InFusion USA and InFusion Canada), and between two InFusion EMEA ledgers (InFusion UK and InFusion Germany). The elimination entries are recorded during the consolidation with their respective parent ledgers.

The following figure shows the InFusion North America ledger set. This ledger set includes the InFusion North America elimination ledger, the InFusion USA ledger, and the InFusion Canada ledger.

This figure shows the ledgers included in the InFusion
North America ledger set.

The following figure shows the InFusion EMEA ledger set. This ledger set includes the InFusion EMEA elimination ledger, the InFusion UK ledger, and the InFusion Germany ledger.

The figure shows the ledgers included in the InFusion
EMEA ledger set.

The following table shows the debits and credits for the first transaction where InFusion USA pays InFusion Canada 10,000 USD for copper wiring.

Ledger Account Debit Credit

InFusion USA

Expense to InFusion Canada

10,000 USD

InFusion USA

Intercompany Payable to InFusion Canada

10,000 USD

InFusion Canada

Intercompany Receivable from InFusion USA

10,000 USD

InFusion Canada

Revenue from InFusion USA

10,000 USD

The following table shows the debits and credits for the elimination entry in the InFusion North America elimination ledger.

Account Debit Credit

InFusion USA Intercompany Payable

10,000 USD

InFusion USA Expense

10,000 USD

InFusion Canada Revenue

10,000 USD

InFusion Canada Intercompany Receivable

10,000 USD

The following table shows the debits and credits for the second transaction where InFusion UK pays InFusion Germany 5,000 EUR for manufactured technical components.

Ledger Account Debit Credit

InFusion UK

Expense to InFusion Germany

5,000 EUR

InFusion UK

Intercompany Payable to InFusion Germany

5,000 EUR

InFusion Germany

Intercompany Receivable from InFusion UK

5,000 EUR

InFusion Germany

Revenue from InFusion UK

5,000 EUR

The following table shows the debits and credits for the elimination entry in the InFusion EMEA elimination ledger.

Account Debit Credit

InFusion UK Intercompany Payable

5,000 EUR

InFusion UK Expense

5,000 EUR

InFusion Germany Revenue

5,000 EUR

InFusion Germany Intercompany Receivable

5,000 EUR

Level Two Elimination Entries

Two additional intercompany transactions have taken place and must be eliminated when the four entities are all consolidated into the InFusion Corporate elimination ledger.

The following table shows the debits and credits for the third transaction where InFusion Germany pays InFusion USA 20,000 USD for technical products.

Ledger Account Debit Credit

InFusion Germany

Expense to InFusion USA

20,000 USD

InFusion Germany

Intercompany Payable to InFusion USA

20,000 USD

InFusion USA

Intercompany Receivable from InFusion Germany

20,000 USD

InFusion USA

Revenue from InFusion Germany

20,000 USD

The following table shows the debits and credits for the fourth transaction where InFusion Canada pays InFusion UK 15,000 USD for copper rolls.

Ledger Account Debit Credit

InFusion Canada

Expense to InFusion UK

15,000 USD

InFusion Canada

Intercompany Payable to InFusion UK

15,000 USD

InFusion UK

Intercompany Receivable from InFusion Canada

15,000 USD

InFusion UK

Revenue from InFusion Canada

15,000 USD

Final Elimination Entry at Corporate Level

The following elimination entries are based on the previous cross-ledger transactions. At different levels of the consolidation, certain intercompany payables and receivables balances must be eliminated. Eliminations are only required in the context of a consolidation where the trading parties are both included in a given consolidation.

The following figure shows the InFusion Corporate ledger set. This ledger set includes the InFusion Corporate primary ledger, the elimination ledgers for InFusion EMEA and InFusion North America, and the ledgers for InFusion USA, InFusion Canada, InFusion UK, and InFusion Germany. The figure also shows that transactions occurred between the following ledgers:

  • InFusion USA and InFusion Canada

  • InFusion UK and InFusion Germany

  • InFusion Germany and InFusion USA

  • InFusion Canada and InFusion UK

This figure shows the ledgers in the InFusion Corporate
ledger set and identifies which ledgers transact with each other.

The following table shows the elimination entries for InFusion Corporation, where the conversation rate of EUR to USD is 1.577.

Account Debit Credit

InFusion USA Payable

10,000 USD

InFusion Canada Receivable

10,000 USD

InFusion Germany Payable

20,000 USD

InFusion USA Receivable

20,000 USD

InFusion Canada Payable

15,000 USD

InFusion UK Receivable

15,000 USD

InFusion UK Payable

7,885 USD

InFusion Germany Receivable

7,885 USD

The following figure shows the consolidated balance sheet in US dollars.

The report has these columns: USA, Canada, UK, Germany, Eliminations, Total. The report has these rows: Total Assets, Total Liabilities, Total Stockholder's Equity, Total Liabilities and Equity. For the Eliminations column, the Total Assets row displays a negative amount of 52,885, and the Total Liabilities row displays a positive amount of 52,885.

This figure shows a consolidated balance sheet with the
elimination entries from the example.

Ledger Close

Many organizations follow specific procedures to generate special journal entries to close and open fiscal years. Optionally run one or both of these closing processes to create one of two types of closing journals that move forward year-end and other closing period-end balances.

  • Create Income Statement Closing Journals: Posts all of the income statement account balances to one or more retained earnings accounts.

  • Create Balance Sheet Closing Journals: Posts all asset, liability, and equity balances to one or more closing accounts.

Note: Both processes automatically create a separate closing or retained earnings account for each balancing segment value, Primary, Second and Third Balancing segments:

The closing journals:

  • Address global audit and statutory reporting requirements for Greece, Italy, Portugal, Spain, Colombia, Mexico, and other countries.

  • Provide auditable journals for the United States and other countries.

Caution: If you use secondary ledgers or reporting currencies, you must define a conversion rule to prevent replication of your year-end closing journals from your primary ledger. Replication can cause unbalanced journal entries if different currencies and conversion rates are used in the ledgers. Instead, run your closing journal processes directly in your reporting or secondary ledgers to ensure that the balances are reduced to zero.

How Closing Journals for Balance Sheets Are Created

Use the Create Balance Sheet Closing Journals process to meet audit requirements. The process creates a journal entry that closes the balance sheet account balances to zero. The process:

  • Generates journals that reverse of the debits and credits of the ending year-to-date actual balances for the period or year that you have selected to close.

  • Transfers the balance, which is the net of the reversed asset, liability, and equity accounts, to the closing account that you specify.

  • Must run in an open period. The recommended period is the last period of the fiscal year being closed, which should be an adjusting period.

Tip: Adjusting periods are recommended to avoid large balance fluctuations in your standard accounting periods.

Before running the process:

  1. Set up the last day of your fiscal year as an adjusting period.

  2. Set up the first day of your next fiscal year as an adjusting period.

  3. Ensure that the adjusting period is open.

  4. Complete and post all adjustment entries related to the period or year you are closing.

  5. Print your general ledger trial balance and other end-of-month or end-of-year reports.

After running the Create Balance Sheet Closing Journal process in the last day of the fiscal year's adjusting period:

  • Open the next fiscal year by running the Open Period program.

  • Reverse and post the balance sheet closing journals to repopulate the balance sheet accounts.

Understanding the Balance Sheet Closing Journal attributes:

The journal that closes the balance sheet accounts has the following attributes:

  • Closes only actual balance types. Ignores budget and encumbrance balances.

  • Uses the last day of the period that you select in the Parameters window as the effective date of the closing entries.

  • Creates a separate closing account by Primary Balancing segment. If multiple balancing segments are used, it creates a closing account by the combination of Primary, Second, and Third Balancing segments.

  • Accept the application's default setting of the journal reversal in the period after the period in which the closing journal was generated. Optionally, manually change the reversal method.

  • Closes the total ledger currency balances of each balance sheet account, including the converted amounts to the ledger currency from foreign currency journals. The resulting balance sheet closing journal is only in the ledger currency of the ledger.

Caution: If you use secondary ledgers or reporting currencies, you must define a conversion rule to prevent replication of your year-end closing journals from your primary ledger. Replication can cause unbalanced journal entries if different currencies and conversion rates are used in the ledgers. Instead, run your closing journal processes directly in your reporting or secondary ledgers to ensure that the balances are reduced to zero.
Note: To make adjustments after posting the balance sheet closing journals:
  1. Reverse the original closing entries and post the reversal.

  2. Make your adjustments.

  3. Rerun the closing journal processes to capture the additional adjustments.

How Closing Journals for Income Statements Are Created

Use the Create Income Statement Closing Journals process to meet audit requirements. The process creates a journal entry that shows the revenue and expense account balances moved to the retained earnings account. The process:

  • Generates journals to close out the year-to-date (YTD) actual balances of all income and expense accounts.

  • Creates an audit trail showing how the retained earnings amount is calculated.

  • Can be run in any open period

  • Closes the YTD balances of the income statement accounts.

  • Optionally, uses an income offset account, which results in the individual income statement account balances remaining in their accounts. The process books the inverse balance of the retained earnings account to the offset account.

Tip: If you run the process for the first period of a fiscal year, it closes only that period's balance. The best practice is to run the process in the last period of the fiscal year to create an auditable journal entry.

Before running the program:

  1. Set up the last day of your fiscal year as an adjusting period.

  2. Set up the first day of your next fiscal year as an adjusting period.

  3. Ensure that the adjusting period is open.

  4. Complete and post all adjustments related to the period or year you're closing.

  5. Print your general ledger trial balance and other end-of-month or end-of-year reports.

After running the Create Income Statement Closing Journal process, you can open the next fiscal year by running the Open Period program. If you run the process:

  • At the end of the fiscal year, don't reverse the journal. The act of opening the fiscal year would have achieved the same effect as the journal entry by moving the income statement account balances to the retained earnings account.

  • In the middle of the fiscal year, reverse the journal after you run the reports that show the closed out income statement balances. The journal reversal reinstates your year-to-date income statement balances for the next period.

Note: The process closes only actual balances. You can't close budget or encumbrance balances.
Caution: If you use secondary ledgers or reporting currencies, you must define a conversion rule to prevent replication of your year-end closing journals from your primary ledger. Replication can cause unbalanced journal entries if different currencies and conversion rates are used in the ledgers. Instead, run your closing journal processes directly in your reporting or secondary ledgers to ensure that the balances are reduced to zero.

Run one of the two closing processes from the Period Close work area or the Scheduled Processes page to create journals that close out year-end or period-end balances.

Balance Sheet Closing Journals

Run the Create Balance Sheet Closing Journals process to post all asset and liability balances to a closing account.

The following figure shows the Period Close page with the Create Balance Sheet Closing Journals task selected. The Create Balance Sheet Closing Journals process requires values for the following parameters: Data Access Set, Ledger or Ledger Set, Accounting Period, Closing Account, and Category.

This figure shows the Create Balance Sheet Closing
Journals page, which was opened from the Period Close page by selecting
the Create Balance Sheet Closing Journals task.
  1. Navigate to the Period Close work area.

  2. Select the Create Balance Sheet Closing Journals task.

  3. Accept or change the defaults for the:

    • Data Access Set

    • Ledger or Ledger Set

    • Accounting Period

    • Category

  4. Enter the Closing Account.

  5. Click Submit.

Income Statement Closing Journal

Run the Create Income Statement Closing Journal process to post all of the income statement accounts to one or more retained earnings accounts.

The following figure shows the Period Close page with the Create Income Statement Closing Journals task selected. The Create Income Statement Closing Journals process requires values for the following parameters: Data Access Set, Ledger or Ledger Set, Accounting Period, Closing Account, and Category. The Income Offset Account parameter is optional.

This figure shows the Create Income Statement Closing
Journals page, which was opened from the Period Close page by selecting
the Create Income Statement Closing Journals task.
  1. Navigate to the Period Close work area.

  2. Select the Create Income Statement Closing Journals task.

  3. Accept or change the defaults for the:

    • Data Access Set

    • Ledger or Ledger Set

    • Accounting Period

    • Category

  4. Enter the Closing Account and an optional Income Offset Account.

    Note: To retain the income statement account balances, use an offset account instead of booking the reversal of the retained earning adjustment to the income statement accounts.
  5. Click Submit.

Closing Journals for Average Balance Ledgers

The Create Income Statement Closing Journals and Create Balance Sheet Closing Journals processes create journal entries for standard account balances for ledgers with average balancing enabled.

Create an accounting calendar with two adjusting periods at the end of the fiscal year that you want to close. These two adjusting periods represent the last day of the fiscal year and ensure that the average balance calculation is unaffected.

  • First adjusting period: Run the closing journal process in this period.

  • Second adjusting period: Reverse the closing journal in this period.

The effective date of the closing journal entries is the last day of the specified period. You can assign effective date rules for the journal source called Closing Journals on the Journal Sources page.

Note: When you post closing journals, standard and average balances are updated.
  • If you specify the closing account as an income statement account, then the revenue and expense account balances are transferred to this closing account. Average balances are not impacted.

  • If you specify the closing account as a balance sheet account and defined the period as the last period of the fiscal year, then the average balance of the closing account is updated. The average balance of the Net Income account and the net average of all income statement accounts are also updated.

Examples of Year-End Closing Journals

Oracle General Ledger provides processes for closing accounts by posting the reverse of the debits and credits in the accounts. For many European countries, the accounts must be closed by recording the net amount between the total debits and total credits.

The requirement is to always consider the resulting net amount between the credit and debit amounts for all year-end journals that are created for:

  • Profit and Loss (Income Statement) Accounts

  • Balance Sheet Accounts

  • Opening Journals for the Next Year for Balance Sheet Accounts

Profit and Loss Accounts

The year-end closing journals process zeros out the balances in the accounts using the reciprocal of the accounts' credits and debits when the last period of the year is closed.

The following table shows the entries for Travel Expense account 6100.

Description Debits Credits

Transaction 1

100,000

Transaction 2

40,000

Ending Balance in Travel Expense Account 6100

100,000

40,000

The following table shows the resulting closing journal, generated by General Ledger, and the entries that zero out the profit and loss accounts, with the offset booked to retained earnings account 3100.

Description Debits Credits

Travel Expense Account 6100

40,000

100,000

Retained Earning Account 3100

100,000

40,000

Net Ending Balances

Retained Earnings Account 3100 = 60,000

Travel Expense Account 6100 = 0

If the Create Income Statement Closing Journal process is run, the process creates a journal that also reverses the debits and credits of the respective profit and loss accounts to close out those account balances to retained earnings. The ending balance in the accounts is the same regardless of which method is used. The advantage of the closing journal process is that there is a journal to provide an audit trail of what balances were moved to retained earnings.

If the Net Closing Balance Journal ledger option is selected, the closing journals created by the Create Income Statement Closing Journal process use the net amount.

The following figure shows the Net Closing Balance Journal option in the Period Close section on the Specify Ledger Options page.

This figure shows the Period Close section on the
Specify Ledger Options page.

The following table shows the entry that's created.

Description Debits Credits

Travel Expense Account 6100

60,000

Retained Earnings Account 3100

60,000

Net Ending Balance

Retained Earnings Account 3100 = 60,000

Travel Expense Account 6100 = 0

Balance Sheet Accounts

The current year-end closing process leaves the balances in the balance sheet accounts and rolls them to the new year as beginning balances.

The following table shows the transactions and ending balance at the end of the year for Payables Account 2100.

Description Debits Credits

Transaction 1

170,00

Transaction 2

30,000

Net Ending Balance of Payables Account 2100

140,000

If the Create Balance Sheet Closing Journals process is used to meet audit requirements, the process creates a journal entry that closes the balance sheet account balances to zero. The process generates journals that reverse the debits and credits of the ending year-to-date actual balances for the period or year that you have selected to close.

The following table shows how the process transfers balances to the specified closing account.

Description Debits Credits

Payables Account 2100

30,000

170,000

Close Account 3200

170,000

30,000

Net Ending Balance

Closing Account 3200 = 140,000

Payables Account 2100 = 0

If the Net Closing Balance Journal ledger option is selected, the closing journals created by the Create Balance Sheet Closing Journals process use the net amount.

The following table shows the journal entry that's created.

Description Debits Credits

Payables Account 2100

140,000

Close Account 3100

140,000

At the beginning of the next year, the journal created by the Create Balance Sheet Closing Journals process is reversed and the balances become the beginning balances for the new year.

Overview of Common EMEA Year-End Close Business Reporting

Many countries follow specific procedures to generate journal entries to close and open fiscal years. These year-end entries apply to both the income statement and balance sheet accounts. Auditable closing procedures vary based on country's reporting requirements and an organization's business needs.

Oracle Fusion General Ledger provides two processes for the year-end closing journals. These processes close the accounts by putting the sum of the debits in the credit and conversely. For many European countries, including Italy, Spain, France, Belgium, Netherlands, and Luxembourg, the accounts must be closed by recording the difference between the total debits and total credits.

Poland is different and requires year-end income statement as a net closing journal and balance sheet closing journal to be in accumulated balances.

The closing journals processes meet the Italian and other European countries legal requirements.

Use Oracle Social Network

Before you can start using a social object, for example, accounting period, journal, or intercompany transaction in Oracle Social Network, configure the social object using the Manage Oracle Social Network Objects task on the Setup and Maintenance task list page.

The configuration consists of enabling the social object and its attributes for use on the Oracle Social Network. For example, for the accounting period social object, enable these attributes: Ledger, Period Name, Period Start Date, and Period End Date. You also configure the enablement method of the social object. The methods are: No, Manual, and Automatic.

The configuration applies to all instances of that social object in the application and to all ledgers. You can automatically create a conversation by setting the option in the Managing Oracle Social Network Objects user interface.

Note: Oracle Social Network is currently only available in Oracle Cloud implementations.

You can create conversations on general ledger journals in Oracle Social Network. For example, when the approver of a journal needs more details from the creator of the journal, the approver creates a journal conversation. This conversation allows communication between the creator and the approver, as well as others who have pertinent information and are added as members to the conversation.

Other points to consider in creating conversations on general ledger journals are:

  • Including other members or adding documents to the conversation.

  • Creating conversations manually or automatically.

  • Accessing journal conversations.

Note: The journal approval flow has an action Request Information which the approver can use to request the submitter of the batch to provide additional information. Using this action provides a record in the approval flow history.

Including Members and Documents

In Oracle Fusion Applications, you can add application users only, external users cannot join the conversation. When creating a conversation, optionally add the following:

  • Documents in the conversation

  • Additional members

  • Assignments of follow-ups to other members

  • Related conversations to the journal conversation

Note: You can make a conversation private, so that only selected members are involved in the conversation.

Creating Conversations Manually or Automatically

You can configure the journal conversations so the conversations are created manually or automatically.

  • Manually: A Share icon appears on the journal's Conversation List region after the journal is saved. Click the icon to create the conversation for that journal and add members or documents to the conversation.

  • Automatically: The conversation is automatically created for you once the new journal is saved. You can access the conversations of any journals where you are a member. To become a member of a conversation, simply select the Join icon from the Conversation List region.

Note: The Share and Join icons are only available from the Create Journal and Edit Journal pages. Selecting a conversation in the Conversation List opens the Oracle Social Network Social Conversation window in a standalone window, where the selected conversation is displayed.

Accessing Journal Conversations

There are several ways to access the journal conversations:

  • Create Journal and Edit Journal pages: Select the Social icon to open the Oracle Social Network Conversation List region to show the conversations of the selected journal and all its related conversations. The region shows all conversations you can access for other social objects.

  • Journal Overview: Select the Social icon to open the Oracle Social Network Conversation List region to show the conversations of all journals and all their related conversations. The region shows all the conversations you can access for other social objects.

  • Oracle Social Network: Select the Social icon from the global menu, to open the Oracle Social Network Conversation List region. This conversation list shows all conversations you can access, including the general ledger journal conversations and any other conversations.

Note: Oracle Social Network is only available in Oracle Cloud implementations.

You can create conversations on general ledger accounting periods in Oracle Social Network. For example, the finance team creates conversations on the closing tasks. These conversations allow the team members to collaborate on closing tasks to coordinate a smooth close process across all departments

Note: You can make a conversation private, so that only selected members are involved in the conversation.

Other points to consider in creating conversations on period close are:

  • Including other members or adding documents to the conversation.

  • Creating conversations manually or automatically.

  • Accessing accounting period conversations.

Including Other Features in the Conversation

When creating a conversation, optionally add the following:

  • Documents in the conversation

  • Additional members

  • Assignments of follow-ups to other members

  • Related conversations to the close period conversation

Creating Conversations Manually or Automatically

You can configure the period close conversations so the conversations are created manually or automatically.

  • Manually: A Share icon appears on the accounting period's Conversation List region after the accounting period is opened. Click the icon to create the conversation for the accounting period and add members or documents to the conversation.

  • Automatically: The conversation is automatically created for you once the new accounting period is opened. You can access the conversations of any accounting period where you're a member. To become a member of a conversation, simply select the Join icon from the Conversation List region.

Note: The Share and Join icons are only available from the Manage Accounting Periods, Edit Accounting Period Statuses, and Close Monitor pages. Selecting a conversation in the Conversation List opens the Oracle Social Network Social Conversation window in a standalone window, where the selected conversation is displayed.

Accessing Accounting Period Conversations

Period conversations are available on Oracle Fusion General Ledgers only. There are several ways to access the accounting period conversations:

  • Manage Accounting Periods and Edit Accounting Period Statuses pages: Select the Social icon to open the Oracle Social Network Conversation List region to show the conversations of the selected account periods and all its related conversations. The region shows all conversations you can access for other social objects.

    Note: In the Manage Accounting Periods page, the selected period is the Current Period of the ledger. If the period isn't selected, the Social icon is disabled.
  • General Accounting Dashboard: Select the Social icon to open the Oracle Social Network Conversation List region to show the conversations of all period statuses and all their related conversations. The region shows all the conversations you can access for other social objects.

  • Close Monitor: Select the Social icon on the node to open the Oracle Social Network Conversation List region to show the period status conversation for the selected ledger or ledger set and all their related conversations. This conversation list shows all conversations you can access.

  • Period Close Overviewpage: Select the Social icon on the overview page to open the Oracle Social Network Conversation List region to show the conversation of all period statuses and all their related conversations. This conversation list shows all conversations you can access.

  • Oracle Social Network: Select the Social icon from the global menu to open the Oracle Social Network Conversation List region. This conversation list shows all conversations, general ledger accounting period social objects, and any other social objects you can access.

Note: Oracle Social Network is only available in Oracle Cloud implementations.

FAQs for Accounting Period Close

When do I run the Closing Journals process for each ledger?

Run the process at period or year-end for a ledger and its associated reporting currencies simultaneously by grouping them into a ledger set. The result is a journal batch for each ledger, reporting currency, and entered currency. You can also run the process separately for each ledger and reporting currency.

Note: You must post your generated closing journals separately.

Use the Social link on the Period Close work area to collaborate with members of your team or others within your company to effectively close the period.

For example, as a controller, you keep Oracle Social Network open from the Period Close Overview page during the period close so you can be aware of any transactions that must be posted for the period.

On the All tab:

  • You see a conversation that needs your attention.

  • Your boss, the chief financial officer, started a private conversation with you to announce the close of a deal worth 15,000,000 USD and wants it booked for this period.

  • You download and listen to a voice message file that the chief financial officer posted sharing details about the delivery of the goods to help you confirm that the revenue can be posted to this period.

  • You create a new conversation and invite your accounting manager to join, marking it so she knows to reply quickly.

  • Your accounting manager added you to a conversation for the revenue adjustment journal.

  • Your accounting manager adds a post to the conversation confirming that the revenue is posted.

You navigate to the Close Monitor page to view the latest financial balances and confirm that the revenue is posted.

Depending on your job role and permissions, you can access social networking features for the following Oracle Fusion General Ledger business activities:

  • Period status

  • Journal

Manual reconciliation:

  • Uses the tolerances defined on the Create Reconciliation Type page. To reconcile, the net difference between total accounted debits and credits must be zero or within the specified tolerance level.

  • Doesn't require that journal lines have identical reconciliation reference values. Reconciliation references aren't even required.

Automatic reconciliation:

  • Doesn't use tolerances. To reconcile, the net difference between total accounted debits and credits must be zero.

  • Requires that journal lines have reconciliation reference values.

Use historical rates to:

  • Calculate balances for equity and investment in subsidiary accounts.

  • Stabilize translated balances for long-term accounts.

  • Remeasure specific historical account balances with highly inflationary currencies in accordance with United States FASB Financial Accounting Standard 8.

  • Provide a weighted average rate for transactions that occur at different times.

  • Report journal entry line amounts in the units of money that were current at the time the transactions took place.

Note: Define historical rates before running translation to avoid having to retranslate your balances.

How can I drill from transferred balances to the source ledger?

After transferring balances from one or more source ledgers to a target ledger, drill from the target ledger back to the source ledger balances. From there, drill to the underlying journals and subledger transactions.

When you drill from the entered amount, which resulted from a journal in the target ledger, the Transferred Balances page provides the source and target ledger details. The drill helps you analyze details such as accounting period or accounts that were used by the source ledger to transfer journal line amounts to the target ledger.

If the source and the target ledgers do not share a ledger currency, the source ledger must translate to the target ledger's ledger currency before balances are transferred. As such, the balance transfer drill shows the reporting currency balances for the source ledger in the target ledger currency as part of the drill path.

How can I secure balance transfer drill down?

The balance transfer drill-down feature is secured with the same privilege that controls the existing account balance inquiry features. A specific data access set is not required to drill down from the target ledger to the source ledger to view the balance transfer information. As long as you have read or write access to the target ledger you can drill down to the source ledger. However, you are limited to just that drill path and cannot see other journals for the target ledger.