Professional Documents
Culture Documents
Overview
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Ownership
The Job Title [list@YourCompany.com?Subject=EDUxxxxx] is responsible for ensuring that this
document is necessary and that it reflects actual practice.
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Objectives
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Accounting Setups
Accounting Setups
An accounting setup defines the accounting context for one or more legal entities or a business
need if legal entities are not involved.
Defining an accounting setup is based on several factors, such as:
legal environment
number of legal entities maintained in the same primary ledger
business needs
transaction processing needs
Legal entities should be assigned to accounting setups to maintain a legal entity context for
transactions and use Oracle financial subledgers that require a legal entity context. No legal
entities should be assigned to accounting setups if there are business needs that do no require a
legal entity context.
If legal entities are involved, the general rule is to define a separate accounting setup for each
legal entity or group of legal entities that require their own primary ledger. In other words, if
legal entities require any one of the following attributes to be different from other legal entities,
a different primary ledger is required, and therefore a different accounting setup is required:
Copyright Oracle, 2007. All rights reserved.
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chart of accounts: One legal entity requires a six-segment chart of accounts and another
requires only a four-segment chart of accounts.
accounting calendar: One legal entity uses a 4-4-5 calendar and another uses a monthly
calendar; or one legal entity has a different fiscal year end than another.
primary currency: Legal entities operate in different countries requiring them to use their
own local currencies.
subledger accounting method: Legal entities operate in different countries or industries
that have different accounting standards.
ledger processing options: Legal entities operate in different industries, such as retail and
financial services, and require different ledger processing options, such as maintaining
average daily balances for legal entities in the financial services industry.
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Secondary Ledgers
Secondary Ledgers
Assign an unlimited number of secondary ledgers to each primary ledger of an accounting
setup. Each secondary ledger can be maintained at one of the following data conversion levels:
The subledger level secondary ledger maintains subledger journals, general ledger journal
entries, and balances in the additional accounting representation. This data conversion
level uses both Subledger Accounting and the General Ledger Posting program to create
the necessary journals in both the primary and secondary ledgers simultaneously.
Subledger Accounting creates the journal entries from subledger transactions if the
subledger integrates with Subledger Accounting. General Ledger Posting creates the
journal entries for all other transactions that do no integrate with Subledger Accounting,
including manual journal entries.
The journal level secondary ledger maintains primary ledger journal entries and balances
in an additional accounting representation. This type of secondary ledger is maintained
using the General Ledger Posting program. Every time a journal is posted in the primary
ledger, the same journal can be automatically replicated and maintained in the secondary
ledger for those journal sources and categories that are set up for this behavior.
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The balance level secondary ledger maintains primary ledger account balances in another
accounting representation. This type of secondary ledger requires Oracle General Ledger
Consolidation to transfer primary ledger balances to this secondary ledger.
The adjustments only secondary ledger level is an incomplete accounting representation
that holds only adjustments. The adjustments can be manual adjustments or automated
adjustments from Subledger Accounting. This type of ledger must share the same chart of
accounts, accounting calendar/period type combination, and currency as the associated
primary ledger. To obtain a complete secondary accounting representation that includes
both the transactional data and the adjustments, use ledger sets to combine the
adjustments-only secondary ledger with the primary ledger when running reports.
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Reporting Currencies
Reporting Currencies
If you only need a different currency representation of the primary or secondary ledgers, assign
reporting currencies to them. Unlike secondary ledgers, reporting currencies must share the
same chart of accounts, accounting calendar/period type combination, subledger accounting
method, and ledger processing options as their source ledger.
As a general rule, always use reporting currencies instead of secondary ledgers if you only
need to maintain an accounting representation that differs in currency alone.
You can assign reporting currencies to both primary and secondary ledgers. Reporting
currencies are maintained at one of the following currency conversion levels:
The subledger level reporting currency maintains a complete currency representation of
your subledger journals, General Ledger journals entries, and balances. When using the
subledger level reporting currency, define currency conversion rules. These rules provide
instructions on how to convert subledger and general ledger data to one or more subledger
level reporting currencies. Subledger level reporting currencies are maintained using both
Subledger Accounting and the General Ledger Posting program to create the necessary
subledger journals and General Ledger journals in both the primary and secondary ledgers
simultaneously. Subledger Accounting creates the journal entries from subledger
Copyright Oracle, 2007. All rights reserved.
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- Ledger Processing Options: One legal entity wants to translate revenue and expense
accounts using period-end balances while another legal entity wants to use year-todate balances.
Need autonomous document sequencing of transactions and journals for each legal entity
Need to open and close periods autonomously for each legal entity
Have tax requirements that are specific for a legal entity
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Summary
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