10Period Close

This chapter contains the following:

Overview

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's 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 can't 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's 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.

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 can't locate rates for one or more currencies, balances aren't 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 don't 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

    None

    Account

    Natural Account Segment

    Subaccount

    None

    Division

    None

    Product

    None

    Project

    None

    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

    None

    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 Euro = 1.642883 Australian dollars. 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

Not applicable

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 Euro = 1.155463 US dollars. 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

Not applicable

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 Euro = 1.57286 Australian dollars.

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

Not applicable

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 Australian dollar = 0.728134 US dollars. 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

Not applicable

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 Euro = 1.145253 US dollars.

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

Not applicable

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 Euro = 1.642883 Australian dollars. 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

Not applicable

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 Euro = 1.155463 US dollars. 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

Not applicable

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 Euro = 1.57286 Australian dollars.

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

Not applicable

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 Euro = 1.145253 US dollars.

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

Not applicable

0.00

0.00

22.47

22.47

Translation

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.

Note: Translation of average balances isn't supported.

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.

FAQs for Period Close

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