Overview of Balancing Segments

Balancing segments ensure that all journals balance for each balancing segment value or combination of multiple balancing segment values. You can secure access to your primary balancing segment values only with data access sets.

The Oracle General Ledger application automatically calculates and creates balancing lines as required in journal entries.

The three balancing segment labels are:

• Primary

• Second

• Third

Note:

The primary balancing segment label is required.

By enabling multiple balancing segments for your chart of accounts, you can produce financial statements for each unique combination of segment values across one, two, or three qualified balancing segments. This ability provides you greater insights into your operations as it affords you visibility along the critical fiscal dimensions you use to plan, monitor, and measure your financial performance.

The following explains processes that use balancing segments.

• Intercompany balancing: Adds lines to unbalanced journals using intercompany rules.

• Opening first period of the accounting year: Calculates retained earnings amounts at the level of granularity that totals revenue and expense account balances for multiple balancing segment value combinations. This applies to standard and average balances.

• Importing journals: Adds lines using the suspense account on unbalanced journals.

• Posting journals: Adds additional lines to unbalanced journals for the following enabled account types:

  • Suspense

  • Rounding

  • Net income

  • Retained earnings

  • Cumulative translation adjustments from replication of revaluation journals to reporting currencies and for multiple reporting currency account type specific conversion

• Posting prior period journals: Calculates any income statement impact and posts to the appropriate retained earnings account.

• Translating balances: Supports multiple balancing segments for the following accounts:

  • Retained earnings: Calculated translated retained earnings are post to the retained earnings accounts by balancing segment. Retained earnings accounts represent the summing of the translated revenue and expense accounts across multiple balancing segment values.

  • Cumulative translation adjustment: Amounts posted by balancing segment to these accounts represents currency fluctuation differences between ranges of accounts which use different rate types. For example, period end rates are used for asset and liability accounts and historical rates for equity accounts.

• Revaluing Balances: Supports multiple balancing segments when calculating gain or loss accounts.

• Creating Opening Balances: Initializes reporting currency balances by converting from the total primary currency. Any difference in the reporting currency amounts is offset by populating retained earnings accounts.

• Closing year end: Supports multiple balancing segments when calculating the income statement offset and closing account in the closing journals.