SLA_R12Overview.pdf

7/28/2019 SLA_R12Overview.pdf

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Copyright 2006, Oracle. All rights reserved.

Release 12 : Sub Ledger Accounting

Milan Parikh

Principal Product Manager


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Agenda

Accounting Conventions

Business Requirements Market Drivers

Key Concepts

Key Features

Benefits

Implementation Considerations

Upgrade Considerations


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Accounting Conventions


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Accounting Convention

Accounting Convention/Standards are the rules thatgoverns the accounting of any particular transaction

They may differ from Country to Country

For example in India we have the ICAI which prescribesthe Accounting Conventions that Indian Companiesneed to follow

In US it is governed by US GAAP


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Accrual Accounting Convention

Expense Account to be debited

Liability Account to be Credited

Cash Accounting Convention

No Accounting Required

Accrual Accounting Convention

Liability Account to be Debited

Cash Account to be Credited

Cash Accounting Convention

Expense Account to be Debited

Cash Account to be Credited


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Within Accrual Accounting itself there could be

different requirement

For Example in Brazil there is a Legal Requirement

that the recoverable tax has to be recognized only at

the time of Payment

Let us take an Example of a case where a Invoice isthere for the following Items :

Laptop 15000

Non Recoverable Tax 1000

Recoverable Tax 1500


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In US GAAP Scenario the Accounting that would happen at the

time of Invoice and Payment is as follows:

AmountDr/CrDescription

17500CreditLiability

1500DebitRecoverable Tax

1000DebitNon Recoverable Tax

15000DebitExpense Account


17500CreditCash Account

17500DebitLiability Account

Invoice Accounting

Payment Accounting


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However for meeting the Brazilian requirements the Accounting

that has to happen is as follows:


17500CreditLiability

1500DebitInterim Tax

1000DebitNon Recoverable Tax

15000DebitExpense Account

1500CreditInterim Tax

1500DebitRecoverable Tax


17500CreditCash Account17500DebitLiability Account

Invoice Accounting

Payment Accounting


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Business Requirement


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Business Scenario

US GAAPUS GAAP

US COAUS COA

US CalendarUS Calendar

$$

US GAAPUS GAAP

US COAUS COA


French IASFrench IAS

PlanPlan ComptableComptable

French CalendarFrench Calendar

Operations in US, UK, France


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US GAAPUS GAAP

US COAUS COA


$$

US GAAPUS GAAP

US COAUS COA


$$

US GAAPUS GAAPUS COAUS COA


$$

Business Scenario

US GAAPUS GAAPUS COAUS COA


Reporting ledger

French IASFrench IAS

PlanPlan ComptableComptableFrench CalendarFrench Calendar

Secondary Ledger


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Market Drivers


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Market Drivers

Managing Multiple Accounting representations

Disparate Set up

Reconciliation challenges

Configurable Accounting Rules


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Key Concepts


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Key Concepts

Invoice

Validate Cancel

Header-Supplier A - 950

Lines

Expense 800

Tax 100

Freight 50

Expense 800 Debited Account A Laptop Expense

Tax 100 Debited Account B Tax for expense

Freight 50 Debited Account C Freight expense

Liability 950 Credited Account D Total Liability

This Invoice is called an Event Class in SLA

The Actions done on an Invoice is called

Events

SLA Processing


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Key Concepts

If the Line Type is Item the Line should be debited

If the Line Type is Item the account should be the corresponding

Invoice Distribution Account

If the Line Type is Item the description should be

Expense for &Supplier Name


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Key Concepts

Line Type Assignments Rule

This will decide whether a

particular line has to Debited

or Credited

Account Derivation RulesThis will decide the

accounts to which the

Debit and Credit will happen

Description RulesThis will decide thedescriptions to be

stamped

Journal Line Definition

Event Class and Event


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Key Concepts

Invoice

Validate Cancel

Header-Supplier A - 950

Lines

Expense 800

Tax 100

Freight 50

Expense 800 Debited Account A Laptop Expense

Tax 100 Debited Account B Tax for expense

Freight 50 Debited Account C Freight expense

Liability 950 Credited Account D Total Liability

This Invoice is called an Event Class in SLA

The Actions done on an Invoice is called

Events

SLA Processing


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Key Concepts

Event Model

Event Class: classifies transaction types for accounting rulepurposes

Event Type: for each transaction type, defines possible

actions with accounting significance


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Key Concepts: Event Classes

Payables

Invoice

Debit Memo

Prepayment

Payments

Refunds

Receivables

Invoice

Deposit Receipt

Bill Receivable

Assets

Additions

Adjustments Capitalization

Depreciation


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Key Concepts: Event Types

AP Invoice Events

Validated Adjusted

Cancelled

AR Receipt Events

Created

Applied

Unapplied

Updated

Reversed

FA Depreciation Events

Depreciation

Rollback depreciation


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Key Features


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Journal Lines Definition

Identify the journal line types, descriptions, and

account derivation rules that will be used to create ajournal entry for a particular event type


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Description

Line Type

Account Derivation Rule


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Journal Line Type


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Journal Line Type

Identify the natural side

Debit Credit

Gain/Loss

Identify the Balance Type

Set under which conditions the rule will create a line

Define the values needed for entry line generation,such as amount, currency, conversion rate information


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Journal Line Type


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Journal Line Type


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Journal Line Type


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Define how the account will be derived

Constant

Source value

Mapping Set

Another Account Derivation Rule

Identify what will be derived

Flexfield

Segment/Qualifier

Value Set

Set under which conditions the rule will derive a value


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Journal Entry Description


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Define how the description on a journal entry or on

each of its lines will be built:

Constant

Source Value

Set under which conditions the rule will be used


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Transaction Objects and Source


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For Line Assignments, Account Derivation Rules and

Descriptions we saw that some sources were used

To Understand the meaning of a Object and a Source

let us take the same example of the Invoice Entry

T ti Obj t d S


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CCID

LINE_TYPE

GL_DATETAX_CODE

AMOUNTSUPPLIER_ID

INVOICE_LINE_IDINVOICE_IDAP_INVOICE_LINES_ALLAP_INVOICES_ALL

AP_INVOICE_EXTRACT_HEADER_V (header object)

AP_INVOICE_EXTRACT_DETAILS_V (line object)

SELECT ai.invoice_id, ai.supplier_id, ai.tax_code, al.invoice_line_id,al.amount, al,gl_date, al.line_type, al.ccid

FROM ap_invoices_all ai, ap_invoice_lines_all al

WHERE

T ti Obj t d S


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In this example, the Views AP_INVOICE_EXTRACT_HEADER_Vand AP_INVOICE_EXTRACT_DETAILS_V are called TransactionObjects

The Columns in the Header would be Supplier Name, Invoice Date,Invoice Number etc

The Columns in the Line object would be Invoice Amount, Invoice

distribution Account, Line Type etc.

The Columns in the above tables are called Sources

This Sources are available to be used for defining LineAssignments, Account Derivation Rules and Description Rules

T ti Obj t d S


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Transaction Objects

Data Model containing transaction information to be used inaccounting

Sources

Definition of transaction attributes that are available while definingthe rules

S b d A hi


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Sub Ledger Architecture

Vision Operations (USA) Ledger

Standard/GAAP Accrual Subledger Accounting Method

Payables Accrual Application Accounting Definition

Journal LineTypes

Account DerivationRules

Journal EntryDescriptions

Invoice Journal Line Definition

Transaction Objects

Sources


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Business Flow and Methods

B i Fl d M th d


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Business Flow and Method

Benefits

Preserve General ledger accounts across journal entries of

related transactions

Ensure proper General Ledger Balances

Types of Business Methods Prior Entry

Same Entry


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Business Method- Prior Entry

Invoice #100 $1000Invoice #100 $1000

0101--EXPEXP--200200

DRDR CRCR

$800$800

0101--EXPEXP--240240

DRDR CRCR

$200$200Invoice #100Invoice #100 -- Invoice #100Invoice #100 --

0101--LIABLIAB--200200

DRDR CRCR

0101--LIABLIAB--240240

DRDR CRCR

-- Invoice #100Invoice #100$200$200-- Invoice #100Invoice #100$800$800

--Pmt 1101 forPmt 1101 for

Invoice #100Invoice #100

$100$100Pmt 1101 forPmt 1101 for

Invoice #100Invoice #100 --Pmt 1101 forPmt 1101 for

Invoice #100Invoice #100 -- $400$400

0101--CASHCASH--200200

DRDR CRCR

0101--CASHCASH--240240

DRDR CRCR

$100$100$400$400 -- Pmt 1101 forPmt 1101 for


Payment #1101 $500Payment #1101 $500


B i M th d P i E t


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Business Method Prior Entry

B siness Method Prior Entr


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Business Method Prior Entry


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Sub Ledger Reports

Sub Ledger Reports


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Sub Ledger Reports

Open Account Balances Listing

Journal Entries Report

Account Analysis Report

Third Party Balances Report

Multiperiod Accounting Reports

Period Close Exceptions Report


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Benefits

Benefits of Subledger Accounting


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Benefits of Subledger Accounting

Rule-based accounting engine

In combination with secondary ledgers it allows multipleaccounting representations for a single business event

Introduces a common data model and UI across

subledgers

replaces various disparate 11i setups,

providing single source of truth for financial and

management analysis


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No need to fix anything if seeded definitions already working: Standard Accrual

Standard Cash

Accrual with Encumbrance Accounting Cash with Encumbrance Accounting

US Federal Accounting

Accounting customizations to be re-defined in SLA

Custom accounting reports need to be re-visited

Account generator type of account derivation mechanismscontinue to live in R12

Who should have access to SLA setup? Data access security (ledger access) can be enabled in

subledgers for accounting


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Full historic data upgrade Property Manager

Loans

Payables

Global Accounting Engine

Current fiscal year data upgrade Receivables

Assets

Projects

Costing (including Purchasing and Inventory)

No upgrade OPM

Public Sector/Federal

Optional pre-upgrade step Upgrade by request


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Q U E S T I O N SQ U E S T I O N S

A N S W E R SA N S W E R S


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Thank You

SLA_R12Overview.pdf

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