oracle e-business suite r12.1 general ledger overview...
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Oracle E-Business Suite R12.1 General Ledger Overview Training Courseware
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R12.1: Oracle Financials
Module: Oracle General Ledger
Oracle General Ledger Process
Accounting Setup Manager
Ledger
Basic Journal Entries
Accounting Setups
Summary Accounts
Bootcamp Objectives
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Advanced Journal Entries
Advanced Security
Financial Budgeting
Multi-Currency
Consolidations
Period Close
Financial Reporting
Section Objectives
Multi-Currency concepts
Use Currency Rate Manager
Perform Foreign currency journals Entry
Perform Revaluation of foreign currency balances
Translate functional balances into foreign currency
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Overview of Secondary Tracking Segment
Use Foreign Currency Reports
What is Multi–Currency?
• Capability to handle transactions in any
number of currencies.
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• Helps to develop and maintain
productive relationships with
international customers and vendors.
Multi Currency Concepts
Three key Multi currency concepts:
• Conversion:
– Conversion refers to foreign currency transactions that are immediately
converted at the time of entry to the functional currency of the ledger in
which the transaction takes place.
• Revaluation:
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• Revaluation:
– Revaluation adjusts asset or liability accounts that may be materially
understated or overstated at the end of a period due to a significant
fluctuation in the exchange rate between the time the transaction was
entered and the end of the period.
• Translation:
– Translation restates an entire ledger or balances for a company from the
functional currency to a foreign currency.
Setup: Defining Foreign Currencies
• Enable multiple currencies as the first step to use the multi-currency
features.
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Setup: Conversion Rate Types
• Conversion rate is used to convert foreign currency journal amounts
to functional currency equivalents.
• Conversion rate types:– Spot
– Corporate
– User
– EMU Fixed
– User Defined
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– User Defined
Setup: Rates
• Rates are shared across ledgers
• Subledgers share the same General Ledger rate definition
• Loading rates automatically
• Maintain daily and historical rates
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Setup: Rates Manager
• A new user-friendly tool to manage daily and historical rates
• Cross Rate rules can be applied to maintain consistency
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Foreign Currency Journals from Subledger
• Many foreign-denominated transactions are originally entered and
then settled in subledgers such as Payables and Receivables.
Foreign currency obligation is entered in Oracle
Payables journal entry is recorded in General Ledger
Foreign currency is revalued and the unrealized gain or
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entered in Oracle Payables
General Ledger unrealized gain or lost is recorded
Payables journal entry is recorded in General Ledger
Realized foreign currency gain or loss is calculated
Foreign currency obligation is paid in Oracle Payables
Concepts: Conversion
• Based on the foreign currency, conversion rate type and conversion
rate, General Ledger converts foreign currency journal amounts to
functional currency equivalents.
DR. Rent…………………..………………….2,500 Euro
CR. Cash…..…………………………………………2,500 Euro
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Functional currency
CONVERT 1 Euro = .9 US Dollars
DR. Rent…………………..………………….… 2,250 US$
CR. Cash…..……………………………………….….. 2,250 US$
Foreign currency
Concepts: Revaluation
• Revalue account balances to reflect the change in the exchange rate
between the transaction entry date and the reporting date.
• Upon revaluation, the change will be applicable only on the functional
currency.
Foreign currencies
Foreign currencies
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Functional currency Functional currency
Conversion at the time of the foreign currency transaction
Revaluation at the end of the accounting period
currencies currencies
Concepts: Revaluation Example
Entered Journal Entry Lines
DR. Rent…………………………………….10,000 Euro
CR. Cash….…………………………………………10,000 Euro
Convert 1 Euro = .8 US Dollars
DR. Rent…………………………………….… 8,000 US$
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REVALUE 1 Euro = .81 US Dollars
CR. Unrealized Gain…………………………………….. 100 US$
DR. Rent…………………………………….… 8,000 US$
CR. Cash….……………………………………….….. 8,000 US$
DR. Rent…………………...………………….… 100 US$
Concepts: Translation
• Foreign currency translation is a process that lets you restate your
functional currency account balances into a reporting currency.
Functional Balance Sheet
Assets Liabilities100,000 60,000 Period end
Rate = 0.75
Functional currency
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Foreign currency
ForeignBalance Sheet
Assets Liabilities
Period endRate = 0.75
HistoricalRate = 0.70
75,000 45,000
Owner's Equity
Owner's Equity
40,000
28,000
Concepts: Translation
• General Ledger selects translation rates based on the GL Account
Type and Translation Rate Type:
GL Account Type Translation Rate Type
Monetary Assets, Liabilities Period-End
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Non-Monetary Assets, Liabilities Historical
Revenue, Expense Period-Average
Equity Historical
Translation: Balances & Rates Used
Account Type
Assets
Liabilities
Balance and Rate Used in Translation
Cumulative balance and period-end rate
Cumulative balance and period-end rate
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Revenue
Expense
Equity
Periodic balances and period average rates
Periodic balances and period average rates
Cumulative balance and period-end rate unless historical rates are defined for these accounts
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Foreign Currency Reports
• Daily Conversion Rates Listing
• Historical Rates Listing
• Period Rates Listing
• Foreign Currency General Ledger Report
• Foreign Currency Journals Report
• Foreign Currency Detail Trial Balance Report
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• Foreign Currency Summary 1 Trial Balance
• Translation Trial Balance
• Foreign Account Analysis Report
• Foreign Account Analysis Report with Payables Detail
Multi–Currency Profile Options
•GL: Income Statement Accounts Revaluation Rule
•GL: Revaluation: Autoquery Last Run Ranges
•GL: Owners Equity Translation Rule
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• Journals: Allow Multiple Exchange Rates
• Journals: Display Inverse Rate