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R12 Financials Overview

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R12 Financials Overview

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Author: Helene Abrams

www.eprentise.com

R12 Financials Overview

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There are many differences not only in the way that R12 handles your business, but also in the underlying

structures of the Financials. Essentially, R12 was designed to accommodate global companies with

different accounting requirements who need to allow their data to be shared among different entities. The

most significant of these changes is that in R12, there is no concept of Sets of Books. Ledger and Ledger

Sets together replace Sets of Books. The data of a Set of Books is contained in a ledger. The management

of the set of books (open and closing, reporting, allocating, etc.) is now at the Ledger Set level A ledger

and is defined by the 4 Cs: Calendar, Currency, Chart of Accounts (these should be familiar as the

definition of a set of books), and Convention.

Convention refers to the Accounting Method (e.g. GAAP, IAS) used. From a single transaction ledger, you

can generate rules that will populate different subledgers. For example, if you have different tax

jurisdictions, you would have a ledger that would track the accounting and reporting necessary for each of

the jurisdictions. You would only enter the transaction one time, and then populate that transaction to

different ledgers depending on the rules that you create. Detailed transaction information is captured in

the subledgers and periodically posted (in summary or detail form) to the ledger. Within the ledgers, you

define accounting rules to comply with Sarbanes Oxley, providing an audit trail and easier reconciliation.

You can balance at the subledger level.

Subledger Accounting allows you to define centralized rules and provides multiple accounting

representations of a single transaction in multiple currencies. One of the main advantages is to be able to

create a single payment transaction for different legal entities or different operating units and create a

rule that allows that transaction to be credited and debited correctly without creating overrides and

adjusting entries. A ledger owner might be a legal entity or a group of companies in a common legal

environment, or a foreign branch. Ledgers are also used to consolidate financial transactions. Accounting

entries can account for themselves in ledgers that are prepared under different conventions with different

charts of accounts, and value transactions in different currencies. One of the ledgers is the primary ledger.

A ledger set is a collection of ledgers that you wish to manage as though they were one ledger.

Many functions are available across ledgers:

Open/Close Periods

Create Journals

Translate and Revalue Balances

View Information

Submit Standard Reports

Submit Financial Statements

Another major change is the Multi-Org Access Control (MOAC). MOAC allows you to perform functions

across operating units without changing responsibilities. A responsibility is no-longer tied to a single

operating unit. Instead, from within HR, you can assign a list of operating units to a responsibility and

assign security to that operating unit through a security profile. By setting the operating unit to null, you

can import all transactions for all operating units through the open interface programs at the same time.

You can also create and report on transactions that cross operating units or operate a shared services

center with centralized processing.

In R12, the concept of legal entity has been enhanced. A legal entity exists in the outside world and may

be regulated by different governing bodies (i.e. country, state, tax authority). A legal entity pays taxes, has

R12 Financials Overview

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bank accounts, and complies with different regulatory agencies. Transactions that occur between and

across legal entities are intercompany transactions. Bank accounts are now associated with legal entities

rather than with operating units, allowing for a single bank account to serve multiple operating units.

Income statements and balance sheets are generated along with tax forms for every legal entity. In HR,

there is the Government Reporting Legal Entity (GRLE) which represents the registered legal entity who is

the employer in HR.

Curious?

For more information, please call eprentise at 1.888.943.5363 or visit www.eprentise.com.

About eprentise

eprentise provides transformation software products that allow growing companies to make their Oracle® E-Business

Suite (EBS) systems agile enough to support changing business requirements, avoid a reimplementation and lower the

total cost of ownership of enterprise resource planning (ERP). While enabling real-time access to complete, consistent

and correct data across the enterprise, eprentise software is able to consolidate multiple production instances, change

existing configurations such as charts of accounts and calendars, and merge, split or move sets of books, operating

units, legal entities, business groups and inventory organizations.