oracle finance
TRANSCRIPT
Multi Org:
Multi Org. is the feature used to store the data of multiple organizations in a single instance or database by partitioning the data of Human Resources, Finance, Sales, Purchases, Inventory etc.,
Multi Org.
Business Group
A Business Group is highest level in the
Organization structure. At this level we secure Work Structures and
Remuneration Policies.
Jobs
Positions
Grades
Cost Allocations
Pay Roll
Ledger
Ledgers are used to secure Journals and ledger balances of a
company. A ledger is a collection of Currency,
Calendar, COA, Conventions of A/C
Currency
Calendar
COA (Charts of Accounts)
Conventions of Accounting
Legal Entity
Legal Entity is a legal business or a registered firm. This is liable to submit all the financial statements to the income tax authorities. (Legal Entity is for only Tax reports)
Operating Unit
It is Strategic Business unit. At this level we Secure Sales & Purchases transactions Data
Inventory Org.
Storage
Manufacturing Plant
Distribution
Calendars:
In GL Calendars are of 2 types. Accounting calendar and transaction calendar.
Accounting Calendar: Is used to determine accounting periods. Which are used to control and maintain journals & Balances.
Transaction Calendar: is used to determine the list of holidays which is used to maintain average balances. This is generally used in banking sectors.
Accounting Calendars
1) Period Type: Is used to determine the number of periods required for a financial year.Name: TATA PTNo. Of Periods for Year: 12Year Type: Fiscal\CalendarYear Type is used to determine the suffix for the period name If the year type is “Fiscal” the name of the period is suffixed with last 2 digits of the “year” If the year type is “Calendar” the name of the period is suffixed with last 2 digit of the “from
date”
Validations for Creating Calendar:
1) The Date range of one period should not overlap with the date range of another period.2) There should not be any date gaps between the periods3) Calendar should be sequential order by date4) Period numbers and quarter numbers must be in sequential5) Financial year must be divided into 4 Quarters6) Maximum period number of calendar should not be greater than period type
The Date range of Adjusting period can overlap with the date range of accounting period
We can have one or more adjusting periods in a calendar. Adjustment periods are used to secure adjustment entries.
Navigation to Define Period Type:
Set up Financials Calendars Types
Navigation to Define Accounting Calendar:
Set up Financials Calendars Accounting
Prefix Period Year Qtr Period From Date To Date Name
Apr TATA PT 2011 1 1 01-Apr-2011 30-Apr-2011 Apr-11
May TATA PT 2011 1 2 01-May-2011 31-May-2011 May-11
Jun TATA PT 2011 1 3 01-June-2011 30-June-2011 Jun-11
Jul TATA PT 2011 2 4 01-July-2011 31-July-2011 Jul-11
Aug TATA PT 2011 2 5 01-Aug-2011 31-Aug-2011 Aug-11
Sep TATA PT 2011 2 6 01-Sep-2011 30-Sep-2011 Sep-11
Oct TATA PT 2011 3 7 01-Oct-2011 31-Oct-2011 Oct-11
Nov TATA PT 2011 3 8 01-Nov-2011 30-Nov-2011 Nov-11
Dec TATA PT 2011 3 9 01-Dec-2011 31-Dec-2011 Dec-11
Jan TATA PT 2011 4 10 01-Jan-2012 31-Jan-2012 Jan-12
Feb TATA PT 2011 4 11 01-Feb-2012 29-Feb-2012 Feb-12
Mar TATA PT 2011 4 12 01-Mar-2012 31-Mar-2012 Mar-12
Flex Fields:
Flex fields are flexible fields used to organize the business information of an organization.
Flex fields are 2 types:
Key Flex fields: These are used to capture mandatory or Key business information of the organization.
Descriptive Flex fields: These are used to capture additional or extra business information of the organization.
Key Flex fields: There are almost 41 key flex fields which are going to come with the package. Which are used in different functional areas.
Accounting flex fields are used to capture accounting business information.
A flex field is a collection of structures
A Structure is a collection of segments
Each Segment is associated with value set
Value set is a collection of values
The structure define using accounting flex field is called chart of accounts.
Tata Chart of AccountsCompany Division Location Department Account
Value Set1 Value Set2 Value Set3 Value Set4 Value Set5
01-TM 00-No Division 00-No Location 00-No Depart 0001-Retained Earnings02-TCS 01-Cars 01-Hyderabad 01-Sales 1001-Cars03-Tata Steel 02-Trucks 02-Bangalore 02-Finance 2000-Rent
10-Dev 03-Pune 03-Distribution 3000-Payables11-Consultency12-Training
Each unique combination of segment of a particular COA is used as a separate ledger account at my ledger.
Qualifiers:-
Qualifiers are properties which are used to determine the behavior of segments and their values.
Qualifiers are 2 types. 1) Flex field Qualifiers 2) Segment Qualifiers
Flex field Qualifiers are used to set the properties to segment columns
Segment Qualifiers are used to set the properties to values of the segments.
Segment qualifiers are dependent on flex field qualifiers
Balancing Segment Qualifier:
Balancing Segment Qualifier is unique and mandatory. To which segment we enable this property application balances the journals on that segment.
It is also used to account for Retained Earnings, Un-realized Gain or Loss and cumulative Translation account
Secondary Segment Tracking:
It is unique and optional. To which segment you enable this property application accounts for retained earnings, Un-realized gain or Loss and Cumulative translation Adj. Account. And we can also call as Secondary Balancing Segment.
Flex field Qualifiers
Balancing Segment Value Secondary Segment Natural Account Segment Intra Company Segment Cost Center Segment Management Segment
Natural Account Segment:
Natural account segment is unique and mandatory. To which segment we enable this property application enables a segment qualifier as account type.
Account type is used to determine the nature of the account.
Global is a hidden flex field qualifier. Global has 2 Segments.
1) Allow Budgeting 2) Allow Posting
Allow Budgeting: Is used to determine budgetary controls. All the segments in COA should be enabled as “Yes” allows budgeting.
Allow Posting: Allow Posting is used to Record Transactions.
Navigation to define Segments:
Set up Financials Flex Fields Key Segments
Navigation to define values:
Setup Financials Flex Fields Key Values
Accounting Set up
Accounting setups are the common setups required to process transactions across the all the financial modules.
1) Create Legal Entities Legal Entity information Address General Information
2) Define Ledgers Chart of Accounts Calendar Currency
3) Define Accounting optionsThese are divided into 3 sections
I. Legal Entity Add legal Entity/ Assign Balancing value segmentII. Primary Ledger
o First Ever open period Apro No. of future periods 1o Year End Processing Retained Earnings
III. Secondary Ledger
Navigation to create Accounting setupsSetup Financials Accounting set up Manager Accounting set ups
System Administrator
Define Responsibility:Responsibility is a role authorized to access specific forms & Programs of particular module.
o Responsibility is a collection of menu, Request Group and Data Groupo Menu is a collection of formso Request group is a collection of processes and reportso Data Group is a collection of modules for integrations
File Switch ResponsibilityIn Responsibility window select “System Administrator”Security Responsibility Define
Profile Options:Profile options are used to determine the behavior of oracle application forms and programs. There are almost 7000+ profile options are going to come with package. Each profile option can be set at 4 levels. That is SITE, APPLICATION, RESPONSIBILITY, and USER.
1) Site Level: When we set the profile options at site level this is going to affect all the forms and programs of all the modules.
2) Application Level: Application level affect all the forms and programs which are registered with a particular module.
3) Responsibility Level: Will affect all the forms and programs of all the responsibilities associated with a particular Responsibility.
4) User Level: Will affect all the forms and programs of all the responsibilities associated with a particular user.
When we set the profile options at all the 4 levels user level profile options will over write responsibility level.
Responsibility level will over write application level Application level will over write site level
Navigation to Define User
Security User Define
Open the periods in General LedgerNavigation to perform open/ closeSet up Open Close
Journal Entry Posting ReportsNever Opened X X XOpen Future X XClosed X X Permanently Closed X X
Cross Validation RulesCross Validation Rules are used to restrict the combinations between the segments of a particular Chart of accounts.Enable “Cross Validate Segments” option at out Chart of Accounts Navigation to Define Cross Validate SegmentsSet up Financials Flex fields Key Rules
Every cross validation rule must have Include rule. An Include rule is used to include all the values of segments in the cross validation rule. One include rule can have one or more exclude rules. An exclude rule is used to restrict the combinations from our include rule.
Data Access Sets
A Data access set is used to restrict Balancing Segment Values or Management Segment values with read or write privileges using GL data access set profile options.
When we define a ledger system internally generates a default data access set with the same name as our Ledger which is going to give full access to the ledger with read and write privileges.
When we associate ledger to the responsibility using GL ledger name profile option system internally associates the default data access set to the responsibility using GL data access set profile option.
We can also define additional data access sets based on our business requirement we can not modify default data access set.
Navigation to Define Data access set
Set up Financials Data Access Set
Management Segment Qualifier
Management Segment Qualifier is a new flex field qualifier in Release 12. It is used to determine the segment as strategic business unit. Management segment qualifier is unique and optional.Enable Management segment qualifier to a Segment.
Set up Financials Flex fields Key SegmentsBrowse your COA; Disable the freeze flex field qualifiers Assign Division as “Management flex field Qualifier”
We cannot perform Open\Close periods from a responsibility to which we have the restricted data access set.
We will be allowed perform Open\Close periods from only that responsibility to which we have full ledger access.
Ledger Set:A Ledger set is a collection of ledgers which are going to share the same COA and Calendar.Once we define a ledger set system internally generates data access set with the same name as ledger set with access set type as full ledger.
Navigation to define Ledger Set
Set up Financials Ledger Set
When we change the ledger system automatically resets default data access set.
Accessing multiple ledgers Restricting Balancing segment values
When we define reporting currency for our primary ledger system automatically includes this reporting currency in the default data access set
Security Rules
Security rules are used to restrict values of the segments of our Chart of Accounts to a particular responsibility.
Security Rules are of 2 types namely 1) Hierarchical Security 2) Non-Hierarchical Security
1) Hierarchical Security: When we secure a parent value it is going to secure all the child values associated with the parent.
2) Non-Hierarchical Security: If we secure a parent value only parent value is secured but not the child values associated with the parent.
We are not allowed to create transactions on parent values. Parent values are useful while generating the formulas and preparing FSG reports.
Enable “Security Enabled” option at the segments level in our “COA”Select the desired segment value set and change the security to “Hierarchical Security”Select the desired segment values set and change the security to “Non-Hierarchical Security”
Navigation to Define Security Rules:
Set up financials flex fields Key Security Define
Combinations
“Allow Dynamic Inserts” is a feature which is used to restrict the users to create combinations while recording the transactions. Once this property is disabled we are allowed to choose the combinations defined in combinations from.
To enter the code combinations in the combinations from we don’t have to enable “Allow Dynamic inserts”
Navigation:
Set up Financials flex fields Key SegmentsBrowse your COA and uncheck “Allow Dynamic Inserts” Set up Accounts Combinations
To see all possible combinations enter % for all segments in a new journal form
** The code combinations which have been already generated cannot be restricted using cross validation rules.
Journal Components:
1. Source: A source is used to determine origin of the journal entry.2. Category: Category is used to determine the purpose of the journal entry.
Journal Batches – Sources + Date & Time
Headers – Category + Currency
Lines – Debit & Credit
Journal Entries:
Journal Enter New Batch
Reversal of Journal Entry
To view Trial BalanceNavigation: View Request Submit a New Request Single Request
Summary of AccountsIt is a feature which is used to report the balances of accounts of the similar range of accounts.Step 1) Define Roll up groupsA Roll up group is used to group a set of parent valuesNavigation: Set up Financials Flex Fields Key Groups
Step 2) Define the Parent values at COA
Step 3) Associate the Group names to the parent valueNavigation: Set up Financials Flex fields Key Values
Step 4) Define Summary account TemplateNavigation: Set up Accounts Summary
Suspense JournalsSuspense account is used to balance the unbalance journal entries. Suspense account will be added automatically when you are going to initiate for posting.
Steps
1) Define Suspense Account at your COANavigation: Set up Financials Flex fields Key Values
2) Map the suspense account code combination at ledgerNavigation: Set up Financials Accounting Setup Manager Accounting Set ups
If we want to define suspense account for a specific source and category then navigate to Set up Accounts Suspense
Recurring Journals
The journals which are repeated in one or more periods. In applications recurring journals are classified into 3 types.
1) Standard 2) Skeleton 3) Formula
In Standard Recurring journal accounts affected are same and the amounts are fixed.Eg: Rent, any fixed maintenance, EMI’s Etc.,
In Skeleton Recurring journals accounts affected are same and the amounts are going to vary from one period to another period.Eg: Salaries, Utilities etc.,
In Formula recurring journal accounts affected are same and the amounts have to be calculated using formula. In this method we define the formula for 1 line and make the other line as offset line.
Offset line should be last line of your journal. The number is 9999.
Navigation to Define:Journals Define Recurring
Navigation to GenerateJournals Generate Recurring
Standard Recurring Journals:
If we want to run recurring batch from multiple ledgers from a responsibility that responsibility should have access to multiple ledger set.Skeleton Recurring Journals
Formula Recurring Journal
Mass AllocationsMass Allocations journals are used to generate the formulas to allocate revenues or expenditures to be various cost centers depending upon their usage factors.The formula for mass allocation is = A * B
CWhere A is a Total cost amount
B is a Usage FactorC is a Total Usage Factor
Journal for Rent
Debit Credit01.00.00.00.2000
1,00,000
1,00,000
01.00.00.00.3000
01.00.00.01.2000
Rent*2500/10000
01.00.00.02.2000
Rent*3500/10000
01.00.00.03.2000
Rent*4000/10000
01.00.00.00.2000
1,00,000
Define usage factor as accounts in our COA with any account type but while entering the amounts into these accounts we must use statistical currency. It is a non-monitory currency. The amounts entered using this currency will not affect any financial statement.We don’t have to balance the journals created using statistical currency.
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In General ledger we have 2 flex fields to maintain the COA. 1) Accounting Flex field2) GL Ledger Flex field
We always define COA using accounting flex field once we compile the COA system automatically creates a replica of this COA in GL ledger flex field by adding one more segment as “Ledger” with ledger segment flex field qualifier.This segment is going to list out all the ledgers which are going to share the same COAThe Tables affected to capture the accounting information is common for both the flex fields.The structures of GL ledger flex field is used while defining mass allocation formulas and generating FSG Reports.
Inter Company & Intra Company
Inter Company transactions are the transactions between the balancing segments across the legal entities
Intra Company transactions are the transactions between the balancing segments of the same legal entity or the ledger.
Set up’s required for Inter CompanyEnable Intercompany flex field qualifier to “Company” segmentDefine Inter Company Payable & Inter Company Receivables at our COAEnable “Balance Intra Company Journals” option at our ledger
Navigation:Setup Financials Accounting Set up Manager Accounting Set ups
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Revaluation Process:Revaluation process is the process of converting foreign to functional currency.Revaluation process is available in 2 modules. 1) General Ledger 2) Fixed Assets
In GL revaluation process is used to update current assets and current Liabilities.Current Assets are going to come from account receivablesCurrent Liabilities are going to come from account payables
In Fixed Assets Revaluation process is used to revalue the asset by giving the latest market price.
Reporting Currency Ledger (RCL)
RCL is used to report functional currency balances into one or more foreign currencies.
The different scenarios where we can use RCL When our Subsidiary and Parent ledgers are in different Currencies As a process of vendor evaluation & to participate the BID’s in global market When our company is listed in foreign stock markets
Reporting Currency Ledgers (RCL) are of 3 types
1.) Balance Method2.) Journal Method3.) Sub Ledger Method
RCL with Balance MethodThe process that is used to convert the net balances of the primary ledger into foreign currencies is “Translation”.
Once we run the translation process system internally generates reporting currency ledgers with balances in foreign currency.
RCL with balance method is used for Reporting and Consolidation purpose only. “Consolidation” is a process of transferring the data from one ledger to another ledger. We cannot create journal entries and access these ledgers from any responsibility.
We can also create RCL with balancing manually in our Primary ledger. But in order to convert the balances primary ledger to RCL we have to run “Translation”.
Translation can be done in 2 ways 1) PTD Rule2) YTD Rule
If the Translation rule is PTD application uses Period Average Rates to translate expenses and revenues. Period End Rates are used to translate assets and liabilities. And Historical rates are used to convert Retained Earnings.
If the Translation rule is YTD all the accounts are translated with period end rates.
The Profile option that is used to determine the translation is “GL Translation revenue expense translation rule”
RCL with Journal Method
In RCL we must always provide conversion rates entered currency to reporting currency.Whenever we define RCL with journal method system automatically includes RCL in default data access set.For RCL always COA and Calendar must be same as our primary ledger
Secondary LedgersSecondary Ledgers are additional accounting representations of the primary ledger which differ in one or more attributes like Currency, Calendar, COA and SLA methods and ledger options.
Secondary ledgers are optional. Second ledgers are of 4 types.
1. Balance Method2. Journal Method3. Adjustments only4. Sub Ledger
Consolidation is a process of transferring the data from one ledger to another ledger.
From which ledger we are going to get the data is called Subsidiary ledger
Into which ledger we are going to transfer the data is called parent
Mapping is used to determine the rules about which data has to be transferred from subsidiary to parent
Mapping can be defined in 2 ways
Segment Rules Account Rules
Using segment rules we define mapping based on the segments of source and target COA.Account rules are used to define mapping based on ledger accounts of source and target.We have to define the mapping based on Target Segments.Always account rules are going to overwrite segment rules.
Define Secondary Ledger with Balance method
Secondary Ledger with Journal Method
Differences between RCL and Secondary Ledgers
RCL (Balance Method) Secondary Ledger (Balance Method)In RCL always Calendar & COA Must be same
In Secondary Ledger COA & Calendar Can be differ
In RCL (BM) we use Translationprocess to get the data of Primary Ledger
In secondary ledger we use consolidation processto transfer the data from PL to SL
In RCL (BM) we cannot secure Journal entries
In SL(BM) we can define security and we can also secure journal entries
RCL (BM) is used for Reporting & Consolidation Purpose only
SL (BM) is used for Reporting, Consolidation & Closing activities
RCL (Journal Method) Secondary Ledger (Journal Method)
In RCL (JM) we can determine 1st future conversion period to convert historical data from PL to RCL
In SL (JM) we must use consolidation process to transfer historical transactions
In RCL (JM) we don’t need any mapping to transfer the data from PL to RCL
In SL Mapping is required when the COA of PL and SL are different
RCL (JM) will automatically included into the default data access set
We must define security to access secondary ledgers with journals
Consolidation Set:Consolidation Set is a Collection of consolidations which are going to share the same parent ledger.
Subsidiary Ledger - 1 Subsidiary Ledger - 2
Translation Translation
RCL INR RCL INR
Consolidation INR Consolidation INR
Parent ParentSubsidiary SubsidiaryMapping Mapping
Consolidation Set
Consolidation Data Set Transfer
GL Interface Table
Parent INR
Journal Import
Journal
Post
GL Balances
Elimination SetElimination Sets are used to restrict intercompany transactions while transferring the data from one ledger to another ledger.
Elimination set is going to create a journal entry which is going to nullify intercompany payables and intercompany receivables.
We need to generate elimination set for every period before running the consolidation process.
Budgets Budgets is used for better planning and control over expenditures. A Budget is a collection of periods, Accounts and Amounts.