Journal Reversals

Reversal Settings on Journals

You can enter and view a journal's reversal settings in the Reversal tab on the Create and Edit Journal pages:

Reversal Period: Accounting period for the resulting reversal journal. Required for reversal.
Reversal Date: Applicable only to average daily balance ledgers. Accounting date to be applied to the reversed journal, since that's needed for calculating average balances. For ledgers that aren't average daily balance ledgers, default logic is applied to determine the accounting date for the generated reversal.
Reversal Method: Method for reversing amounts in the reversal journal. Select from Change Sign or Switch Debit or Credit. The default setting is Switch Debit or Credit. The Change Sign setting means that the reversal puts the original journal amount in the same Debit or Credit column, but with the opposite (negative or positive) sign. The Switch Debit or Credit setting means that the amount is moved to the other column. Required for reversal.
Reversal Status: View-only state of the journal reversal. For example, Not reversed or Reversed.

You can enter a reversal period and method at any time, even after the journal is posted. If applicable, the following values also display in the Reversal tab:

Reversal Journal: If you're reviewing a journal that was reversed, this setting displays the name and link to the reversal journal.
Originating Journal: If you're reviewing a reversal journal, this setting displays the name and link for the journal that was reversed.

Manual Journal Reversal

You can manually reverse posted journals that are eligible for reversal on both the Manage Journals and Edit Journal pages. Both pages provide an action to reverse a journal and an action to reverse a batch.

On the Edit Journal page, you can select Reverse from the Batch Actions menu to reverse a journal batch, or you can select Reverse from the Journal Actions menu to reverse a specific journal. On the Manage Journals page, you can select rows in the Search Results section and then select the Reverse Batch or Reverse Journal buttons. To select multiple rows at once, use the Shift or Control key. You can reverse multiple journals of the same batch, or of different batches, or reverse entire journal batches that are eligible for reversal, based on the rows you selected.

Each reversal journal is created in its own reversal batch and the batch name starts with the word Reverses. When you reverse a batch, a single reversal request is submitted. However, the reversal journal for each journal in the reversed batch is still generated in its own journal batch. Reversal journals for journal-level reporting currencies are grouped into the same reversal batch as the corresponding reversal journal of their associated primary or secondary ledger. Reversal journals for subledger-level reporting currencies are grouped into the same reversal batch as their corresponding primary ledger.

Here are some examples of when you might want to use batch reversal.

Scenario	How It Works
You want to reverse all of the journals in a batch that aren't yet reversed, using the same reversal settings. For example, using the same reversal period for ledgers that aren't enabled for average balances, or the same reversal period and date for ledgers that are enabled for average balances. Or, you want to use the same reversal method.	When you select the reverse batch action, the Reverse Journal Batch window opens. You provide the reversal period, date, or method. The information you enter overrides any reversal settings at the journal level of journals that aren't yet reversed. All journals eligible for reversal are reversed according to what you specified on the Reverse Journal Batch window.
You specified reversal settings for every journal that's not yet reversed in a batch, and you want to process reversals more efficiently using batch reversal.	Leave the fields blank on the Reverse Journal Batch window. Each of these journals is reversed according to the journal's reversal settings.
You specified reversal settings for some, but not all, of the journals that aren't yet reversed in a batch, and you want to process reversals more efficiently using batch reversal.	Use the Manage Journals page to reverse the batch. Leave the fields blank on the Reverse Journal Batch window. Each of these journals is reversed according to the journal's reversal settings.
You want to reverse multiple journals from different batches using the reversal settings specified on each journal in these batches.	Use the Manage Journals page to select the rows for the batches and then select the reverse batch action. Each journal that's eligible for reversal in these batches is reversed according to the journal's reversal settings.

Journal Reversal Criteria Sets

To provide default reversal settings to a newly-created journal based on the journal's category, or to also proceed with automatically reversing a posted journal, create a journal reversal criteria set and assign it to a ledger. A journal reversal criteria set contains all journal categories with their corresponding reversal settings and can be shared with any number of ledgers.

Here's how to navigate to the journal reversal criteria set page from the Setup and Maintenance work area:

Offering: Financials
Functional Area: General Ledger
Task: Manage Journal Reversal Criteria Sets

The Create Journal Reversal Criteria Set page lists all of the journal categories with default reversal settings. Find the journal categories that you want to specify reversal criteria for and set the values accordingly. This table describes each reversal setting.

Setting	Values	Description
Reversal Period	No Default, Same Period, Next Period, Next Nonadjusting Period, Next Day, Same Day	Accounting period for the resulting reversal journal. The following values apply only to average balance ledgers: Next Day, Same Day. Selecting those values for a ledger that isn't an average balance ledger is the same as selecting the value No Default.
Reversal Date	First Day, Next Day, Last Day	Day of the accounting period when the journal is to be reversed. A reversal date only applies to average balance ledgers. You must specify a reversal date if you select the following values for the reversal period: Next Nonadjusting Period, Next Period, Same Period.
Reversal Method	Change Sign, Switch Debit or Credit	Method for reversing amounts in the reversal journal.
Automatic Reversal Option	None, Reverse Automatically, Reverse and Post Automatically	Setting that determines whether a journal is selected for automatic reversal, and whether the reversal journal is posted after it's reversed. Unlike the previous settings in this table, which are propagated directly as attributes in the journal, this setting is used to determine the reversal action that's applied when the automatic reversal process is run.

After you create the journal reversal criteria set, assign it to one or more of your ledgers. Here's how to navigate to the ledger page in the Setup and Maintenance work area where you can assign the journal reversal criteria set:

Offering: Financials
Functional Area: General Ledger
Task: Specify Ledger Options, with the ledger scope set

When you create a journal for a ledger with an assigned criteria set, the journal's reversal period and method are populated according to the criteria setting for that journal's category. This applies to journals entered through the user interface and the Create Journal spreadsheet. You can accept the defaulted reversal values or change them at any time, even after the journal is posted.

Automatic Journal Reversal

The automatic reversal process only selects reversible journals whose categories are enabled for automatic reversal in the journal reversal criteria set that's assigned to the ledger. The automatic reversal option for those categories must be set to either Reverse Automatically or Reverse and Post Automatically.

Here's how you can run the automatic reversal process:

Select the Run AutoReverse task from the tasks pane in the Journals work area. The task opens the Scheduled Process page for the AutoReverse Journals process. You might want to run automatic reversals this way for one-time accruals entered in the current period, but tagged to reverse in a later period.
Submit or schedule the AutoReverse Journals process on the Scheduled Processes page.
Enable the ledger option Run AutoReverse After Open Period on the Specify Ledger Options page. When enabled, the automatic reversal process is submitted with the reversal period choice of All.

Note: If you usually reverse journals on the last day of every month, don't enable this option. Instead, schedule the automatic reversal process to run on the last day of the month. The accounting period parameter automatically increments for each subsequent run.

The automatic journal reversal process creates one journal batch for each journal that's reversed. The names for the reversal batch and reversal journal begin with the word Reverses. The process also produces the AutoReverse Execution report, which prints the name of the journal batch that was submitted for reversal, along with the journal batch accounting period. If the automatic reversal option is set to Reverse and Post Automatically, then the report also provides information about the reversal batch.

Note: The AutoPost Journals process that's automatically submitted by the reversal process posts only the reversal journals that it generated, not other journals that are pending posting.

If reversal synchronization is enabled (refer to the next section for details), the process generates a journal reversal in the corresponding secondary ledger and the AutoReverse Execution report includes information about the journal reversal batch that's generated in the secondary ledger.

After the process completes, you can review the reports for any problems and verify that all journals were processed properly.

Here are some points to consider if you decide to run the automatic reversal process:

If the automatic reversal option on the applicable journal reversal criteria set is set to:
- Reverse and Post Automatically and journal approval is enabled, journals posted by the process bypass approval.
- Reverse Automatically, you must post the reversal journals manually or let the automatic posting process pick them up for posting based on the AutoPost criteria set. Additionally for posting, these reversal journals are considered to be automatically approved if journal approval is enabled.
If you have an average balance ledger, the automatic reversal process doesn't check that the reversal date is a valid business day. However, the journal validation in the journal pages and the import process perform this check and, if necessary, roll the date to the next business day.

Reversal Synchronization Between a Primary Ledger and Its Secondary Ledgers

If you have secondary ledgers, it's recommended that you enable the primary ledger option Synchronize Reversals Between Primary and Secondary Ledgers. Reversal synchronization helps to ensure that the secondary ledger remains as an accurate alternate representation of its corresponding primary ledger. If you enable this option, a journal reversal (manual or automatic) in the primary ledger triggers the reversal of the corresponding journal in the associated secondary ledger. If you didn't enable this option, you would have to actively manage the reversal of journals in the secondary ledger, whether they were replicated from its primary ledger or created directly in the secondary ledger. To set this option for a primary ledger, use the same navigation as you did for assigning the journal reversal criteria set to the ledger.

Note: Reversal synchronization is relevant only for secondary ledgers with a data conversion level of Journal or Subledger because primary ledger journal replication is applicable only to secondary ledgers at those conversion levels. Reversals for reporting currencies at a Journal level of conversion for a primary or secondary ledger, and also at a Subledger level for a primary ledger, are automatically synced with their source ledger, regardless of the synchronization option setting.

Here's how reversal synchronization works with journal approval when you have this setup:

You enabled journal approval in both the primary and secondary ledger.
You enabled reversal synchronization between the two ledgers.

The reversal journal generated in the secondary ledger (for the primary ledger reversal) won't require a separate approval.

This table shows how journals are reversed in a secondary ledger when synchronization is enabled. Journal reversal depends on how the journals were created in the secondary ledger and on whether a reversal criteria set is assigned to the secondary ledger.

How was the journal that's going to be reversed created in the secondary ledger?	Did you assign a journal reversal criteria set to the secondary ledger?	How is the journal reversed in the secondary ledger?
The journal was replicated from the primary ledger.	Yes	The journal is reversed automatically when the journal in the primary ledger is reversed. The reversal settings in the primary ledger source journal override any reversal settings on the journal in the secondary ledger that's being reversed. Note: Because the journal was replicated from the primary ledger, the journal reversal criteria set has no impact on the reversal.
The journal was created directly in the secondary ledger.	Yes	If the journal category is set for automatic reversal in the secondary ledger's assigned criteria set, you can run the automatic reversal process in the secondary ledger. Otherwise, you must reverse the journal manually.
The journal was replicated from the primary ledger.	No	The journal is reversed automatically when the journal in the primary ledger is reversed.
The journal was created directly in the secondary ledger.	No	You must specify reversal information in the journal and manually reverse the journal in the secondary ledger.

Once set, the primary ledger option Synchronize Reversals Between Primary and Secondary Ledgers applies to any secondary ledger of the primary ledger. The option Post Journals Automatically from Source Ledger is set by the individual secondary ledgers of the primary ledger and controls automatic posting of secondary ledger journals (reversals and otherwise), when the corresponding primary ledger journal is posted. To set this option, use this navigation in the Setup and Maintenance work area:

Offering: Financials
Functional Area: General Ledger
Task: Complete Primary to Secondary Ledger Mapping, with the primary ledger and secondary ledger scope set