2Create Accounting

This chapter contains the following:

How You Submit Accounting Process

The Create Accounting process is an Oracle Enterprise Scheduler process. It can be submitted as a request from the Scheduled Processes Monitor window to create journal entries for a batch of events. It has input parameters that determine the execution mode and the selection criteria for events.

This figure illustrates the submission of the Create Accounting process.

This figure illustrates the Create Accounting submission
process submitted in the Scheduled Process Monitor and the Create
Accounting Document Mode API.

This table contains the parameters for the Create Accounting process as submitted in the Scheduled Processes Monitor window.

Prompt Description

Subledger Application

Source system for which the Create Accounting process is being executed.

Ledger

Ledger name for which the Create Accounting process is being executed.

Process Category

Selecting a process category indicates that all associated accounting event classes and their accounting event types are selected for processing.

End Date

End date puts a filter on the selection of events. Only events having an event date on or before the end date are selected for accounting.

Default value is current system date. If the process is scheduled to execute periodically, after the initial process, the End Date for each subsequent scheduled process is incremental.

Accounting Mode

Accounting mode; Draft or Final

Default value is Final.

Process Events

Adds other filter criteria for the Create Accounting process to select events:

All: Process all events.

Errors: Process only those events that have previously been processed in error.

Invalid Accounts: Process only those events that have previously been processed in error. Replace any invalid accounts with the suspense account.

Default value is All.

Report Style

Users can select the type of details to display on the execution report. The report can be printed in Summary, Detail, or No report.

Default value is Summary.

Transfer to General Ledger

Indicates whether the Create Accounting process should submit the Transfer to GL process; Yes, No.

Default value is Yes.

Post in General Ledger

Indicates if users, who have been granted the posting privilege, want to submit General Ledger posting; Yes or No.

Default value is Yes.

Journal Batch

Batch name used by Transfer to GL to decide on the batch name for the batch created in Oracle Fusion General Ledger.

When a value for the batch name isn't provided, the journal import default is used.

Free text field.

Include User Transaction Identifiers

Default value is No.

Create Accounting Execution Report

When you submit the Create Accounting process, the Create Accounting Execution Report is submitted automatically if the Create Accounting process completes with a success or warning status. The Create Accounting process output contains a message with the Create Accounting Execution Report request identifier. Use this request identifier to retrieve the execution report output.

Create Accounting Execution Report

The Create Accounting Execution Report can be recreated.

This report can be recreated as needed using the following criteria:

  • Submit the Create Accounting process.

  • Use the same request identifier of the wanted Create Accounting process run previously by the same user, provided that no other Create Accounting process was run with the same criteria.

Examples of Accrual Reversal

The following examples describe how accrual reversals are scheduled and accounted.

Example 1

A company receives materials worth 100 (USD) on the 30th of the month but hasn't been invoiced. The following journal entry is created when the material is received to record the accrual.

This table contains a journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Accrual Expense

100.00

100.00

Accrual Liability

100.00

100.00

The accrual reversal accounting date is set to First Day of Next Accounting Period. The following journal entry is created to reverse the accrual.

This table contains the reversal journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Accrual Liability

100.00

100.00

Accrual Expense

100.00

100.00

Example 2

Future trading requires a margin account that's market-to-market on a daily basis. This means that the investor or ledger's gains or losses on the position are reflected on a daily basis. If the margin account is less than a specified amount (the maintenance of the margin), a margin call is issued. This requires the holder of the account to replenish the account to the initial margin level or close out the position.

The investor or ledger must mark the account to market each day. The entry booked from the day before must be reversed to reflect the new position.

Journal Entry Creation

  • The following journal entry creation date is June 1, 2006.

  • Accounting date: 01-Jun-2006

This table contains the journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Loss

100.00

100.00

Margin Liability

100.00

100.00

Reverse the Journal Entry

  • The accrual reversal accounting date is set to Next Day. The following journal entry is created to reverse the journal entry from June 1.

  • Accounting Date: 02-Jun-2006

This table contains the journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Margin Liability

100.00

100.00

Loss

100.00

100.00

Reflect the New Position

  • On June 2, a new journal entry is created to reflect the new position, which will be reversed on June 3.

  • Accounting Date: 02-Jun-2006

This table contains the journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Loss

105.00

105.00

Margin Liability

105.00

105.00

Reverse the Accrual

  • On June 3, the following journal entry is created to reverse the accrual from June 2.

  • Accounting Date: 03-Jun-2006

This table contains the journal entry.

Account Entered DR Entered CR Accounted DR (USD) Accounted CR (USD)

Margin Liability

105.00

105.00

Loss

105.00

105.00

How You Submit the Create Accrual Reversal Accounting Process

The Create Accrual Reversal Accounting process processes incomplete accrual reversal journal entries with accounting dates that fall on or before the End Date parameter specified. If the incomplete accrual reversal accounting entries are validated successfully, they're set to Final status and then posted to the general ledger, dependent on the parameters.

Report Parameters

This table contains the parameters for the Create Accrual Reversal Accounting process.

Prompt Description

Subledger Application

Source system for which the Create Accrual Reversal Accounting process is being executed.

Ledger

Ledger name for which the Create Accrual Reversal Accounting process is being executed.

Process Category

The process category indicates that all associated accounting event classes and their accounting event types are selected for processing.

End Date

End date puts a filter on the selection of journal entries. Only incomplete journal entries having an accounting date on or before the end date are selected for accounting.

Default value is current system date.

Process Events

Adds other filter criteria for the Create Accounting process to specific events:

  • All: Process all incomplete journal entries and meets the End Date selection criteria

  • Errors: Process only those entries that have previously been processed in error.

  • Invalid Accounts: Process only those events that have previously been processed in error. Replace any invalid accounts with the suspense account.

Default value is All.

Report

Identify the type of details to display on the execution report. The report can be printed in Summary, Detail, or No report.

Default value is Summary.

Transfer to General Ledger

Indicates whether the Create Accrual Reversal Accounting process should submit the Transfer to GL process; Yes, No.

Default value is Yes.

Post in General Ledger

Indicates whether to submit General Ledger posting after Transfer to GL process is complete.

Default value is Yes.

Journal Batch

Batch name for General Ledger journal entries.

Overview of Sequencing of Accounting Entries

The following sequences are attached to subledger journal entries or general ledger journal entries. These two sequences aren't mutually exclusive and can coexist in the same journal entry.

Accounting Sequence

The accounting sequence is assigned to subledger journal entries at the time that the journal entry is completed. The sequence is assigned in the completion date order using the accounting date as the date criterion for determining the sequence to be used.

Reporting Sequence

The reporting sequence is assigned to both subledger journal entries and general ledger journal entries when the accounting period is closed. This sequence is used by most of the legal reports required in some countries as the main sorting criterion to display the journal entries.

Note: In some related documents, this sequence is referred to as the chronological sequence.

Post Subledger Transactions to the General Ledger

Post subledger journals to the general ledger when you create accounting, or run the Post Subledger Journal Entries process to transfer and post at a later time.

To post to General Ledger:

  • Make sure that the Enable Posting from Subledger option is enabled so that you can automatically post subledger journals to GL.

    Note: If the Enable Posting from Subledger option is disabled, you can't post the subledger journal to GL but you can transfer the subledger journal to GL.
  • Alternatively, you must have the privilege to execute this task.

With the required privileges and settings, you can select the Account and Post to Ledger option to create and post journal entries to the general ledger, during the online Create Accounting process.

  • If you don't have the privilege to post, select Account in Final to create journal entries and transfer to General Ledger.

  • You can view the output of the Post Subledger Journal Entries process for the summary of the transfer process.

You can manually run the Create Accounting process to create accounting for a batch of transactions. Set the following parameters to create journal entries and post to the general ledger.

  • Accounting Mode is set to Final.

  • Transfer to General Ledger is set to Yes.

  • Post in General Ledger is set to Yes.

    • If you don't have the privilege to post or posting from the Enable Posting from Subledger option is disabled, the Post in General Ledger parameter isn't available.

Diagnose Subledger Accounting Event Data

The diagnostic framework stores data that is used in the creation of a journal entry so that the data can be reported to analyze accounting issues. The purpose of the process is to provide the transaction data that is referenced during accounting through accounting rules and ledger setup.

The diagnostic framework provides a tool that can be used to determine why the accounting was created in a particular way or why there are errors. Errors may occur because either the source system information or the accounting rules are not as expected.

The following examples describe typical uses of the diagnostic framework features.

  • In the implementation phase, you can launch the Accounting Event Diagnostic report to review the source values available in the transaction objects.

  • On a daily basis, you can use the Accounting Event Diagnostic report to troubleshoot exceptions.

Diagnostic Framework Features

The diagnostic framework features are as follows:

  • SLA: Diagnostic Enabled: This option controls whether diagnostic information is gathered by the Create Accounting process. Use with caution. Selecting this option can cause slow performance.

  • Diagnostic Framework Execution: When the SLA: Diagnostic Enabled option is set to Yes, the diagnostic framework is executed simultaneously with the Create Accounting process. The diagnostic framework data is stored in the diagnostic tables.

  • Accounting Event Diagnostic Report: To view the diagnostic framework report, users submit the Accounting Event Diagnostic process with the appropriate report parameters.

  • Purge Accounting Event Diagnostic Data: Purging is useful when accounting is successfully created so that the volume of information in the report does not increase to a point where it becomes unusable.

    Diagnostic framework data purged:

    • When the data collected can be purged by running the process.

    • When the administrator launches the Purge Accounting Event Diagnostic Data process.

Diagnostic Framework Business Process Flow

The following steps describe the diagnostic framework business process flow:

  1. The administrator sets the SLA: Diagnostics Enabled option to Yes for the user or responsibility.

  2. Users submit the Create Accounting process that automatically executes the diagnostic framework to populate the diagnostic tables. The diagnostic framework gathers source values and other information from the transaction objects.

  3. Users submit the Accounting Event Diagnostic process to view the diagnostic report. Based on the information in the diagnostic report, users may determine if additional or resubmission of information from source systems is required. They may also determine if any updates to the accounting rules is required.

  4. Users run the Create Accounting process again to generate subledger journal entries for events that had an error.

  5. The administrator submits the Purge Accounting Event Diagnostic Data process to purge the results of the diagnostic framework.