The ledger is a basic concept in Release 12. The ledger replaces the 11i concept of a set of books. It represents an accounting representation for one or more legal entities or for a business need such as consolidation or management reporting. Companies can now clearly and efficiently model its legal entities and their accounting representations in Release 12. This seems to be a major area in getting success of the shared service center and single instance initiatives where many or all legal entities of an enterprise are accounted for in a single instance, and data, setup, and processing must be effectively secured but also possibly shared.
Now, legal Entities can be mapped to entire Ledgers or if you account for more than one legal entity within a ledger, you can map a legal entity to balancing segments within a ledger.
While a set of books is defined by 3Cs
The addition in this list the ledger is defined by a 4th C: the accounting method,
This 4th C allows you to assign and manage a specific accounting method for each ledger. Therefore, when a legal entity is subject to multiple reporting requirements, separate ledgers can be used to record the accounting information.
Accounting Setup Manager is a new feature that allows you to set up your common financial setup components from a central location.
2. Definition Access Set:
Definition Access Sets are an optional security feature that allows you to secure shared
General Ledger definitions such as MassAllocations, Recurring Journal Formulas, and
Financial Statement Generator (FSG) components.
Definition Access Sets allow you to:
• Assign a user or group of users access to specific definitions.
• Specify what actions can be performed on secured definitions for a user or group of
For example, you can secure FSG reports to allow some users to modify the report
definition, other users to only view the report definition, while other users can modify,
view, and submit the report.
As we discussed earlier, Release 12 allows one to assign multiple ledgers to a responsibility. Alongside, one would also be able to choose the level of privileges that one could provide for each of these ledgers. For example, I may want my user to have complete Read Write privileges for Ledger A, but he should be able to only “View” the data that exists in Ledger B. Data Access Set also makes this kind of a combination possible.
The General Ledger Accounting Setup Program automatically creates a data access set for each ledger and reporting currency (journal level or subledger level) assigned to a completed accounting setup. The system-generated data access sets created for each ledger and reporting currency provide full read and write access to the ledger and all of its balancing segment values and management segment values.
4. Accounting Setup Manager:
Accounting Setup Manager is a new feature that streamlines the setup and implementation of Oracle Financial Applications.With the Accounting Setup Manager; one can perform and maintain the following common setup components from a central location:
- Legal Entities
- Ledgers, primary and secondary
- Operating Units, which are assigned to primary ledgers
- Reporting Currencies
- Subledger Accounting Options. This is where you define the accounting methods for each submodule and associate them to the ledger where the accounting is stored.
- Intercompany Accounts and Balancing Rules
- Accounting and Reporting Sequencing
A ledger set is a group of ledgers that share the same chart of accounts and calendar/period type combination. Ledger sets allow you to run processes and reports for multiple ledgers simultaneously.
For example, you can open/close periods for multiple ledgers at once, run recurring journals that update balances for multiple ledgers, or run consolidated financial reports that summarize balances across multiple ledgers in a ledger set. You can group all types of ledgers in a ledger set, such as primary ledger, secondary
ledgers, and reporting currencies (journal and subledger levels), as long as they share the same chart of accounts and calendar/period type combination. The same ledger can belong to multiple ledger sets, and ledger sets can contain other ledger sets.
In Release 12, in order to cater to the need for Legal compliance for countries like Europe and Latin America, two more sequencing options have been introduced as a part of standard application apart from existing Document Sequences. These Sequences can be assigned not only to journals in General Ledger module but also to those created in SLA:
• Accounting Sequence:
Accounting Sequences are assigned to GL journals when they are posted and to Subledger Journals once they complete accounting.
• Reporting Sequence:
Reporting Sequences are assigned to journals in GL and Subledger journals upon GL period closure. Once a period is closed, the close period program fires a ‘Create Reporting Sequences’ program as a shoot off. This program assigns reporting sequences to journals.
7. Line Level Reconciliation
General Ledger Reconciliation allows users to reconcile transactions in General Ledger and ensure that the sum of these set of transactions is zero. An example where this functionality would be required is the VAT control account.
One can enable reconciliation either for Natural Account Values for specific code combinations. Using this new functionality, one can selective cross reference transactions by entering a "Reconciliation Reference" at the Journals Line level. One can perform account reconciliation either automatically with the General Ledger Automatic Reconciliation report, or manually in the Reconciliation Lines window.
• Use automatic reconciliation to reconcile journal lines that have matching balancing segments, account segments, and reconciliation references, or optionally where the reconciliation reference is blank.
• Use manual reconciliation to reconcile journal lines with different code combinations (including different balancing segments or account segments) or different reconciliation references.
For both automatic and manual reconciliation, the balance for the journal lines that you Want to reconcile must be zero. Reconciliations can be performed between transactions entered in the same or different currencies.
- Suppliers are defined as Parties within the Oracle Trading Community Architecture (TCA).
- Invoice Lines are introduced as an entity between the Invoice Header and Invoice Distributions to better match the structure of invoice documents and to improve the flow of information such as manufacturer, model and serial number from Purchasing through to Assets.
- Banks, bank branches, and internal bank accounts are defined centrally and are managed in Oracle Cash Management.
- Document sequencing of payments has moved to the Cash Management bank account setup.
- A new module called Oracle Payments now handles payments and all funds disbursement activities.
- Payment features controlled by Global Descriptive Flexfields (GDF) in prior releases have been consolidated and migrated into the data models of Oracle Payables, Oracle Payments, and Oracle Cash Management. The architecture of this solution moves attributes from the GDFs, which are now obsolete, to regular fields on the appropriate entity, including the invoice, payment format and document, supplier site, and bank account. Having a single code base as opposed to GDFs implemented per country simplifies global implementations and streamlines transaction processing.
- Oracle Subledger Accounting, a new module in Release 12, handles accounting definitions and all accounting setup associated with a Ledger. In Release 12, Oracle General Ledger has replaced the term Sets of Books with Ledgers. As part of this change, centralized accounting reports are available to all applications. Additionally, Oracle Payables introduces a new Trial Balance report.
· Oracle E-Business Tax, a new module in Release 12, manages transaction tax setup associated with trading partners and tax authorities, as well as transaction tax processing and reporting across the Oracle E-Business Suite. Part of the architecture of this solution moves tax attributes from Global Descriptive Flexfields (GDFs), which are obsolete in Release 12, to regular fields on the appropriate entities.
- A responsibility can be associated with multiple Operating Units using Multiple Organization Access Control (MOAC). Due to this change, all processing and some reporting in Oracle Payables are available across Operating Units from a single applications responsibility. Hence you can isolate your transaction data by operating unit for security and local level compliance while still enabling shared service center processing.
- Integration with E-Business Tax – Release 12 introduces Oracle E-Business Tax to manage tax across the E-Business Suite. During the upgrade, system and customer options used to control tax calculation and tax code defaulting are migrated from Oracle Receivables into Oracle E-Business Tax entities.
- Integration with Subledger Accounting – Release 12 introduces Subledger Accounting for managing accounting across Subledger transactions. Receivables no longer create any accounting entries. Existing Receivables accounting options and setups remain, and they affect the generation of accounting distributions in the Receivables data model.
- Centralized Banks and Bank Accounts Definitions – In Release 12, all internal banks and bank accounts you previously defined for your operations are migrated to central Cash Management entities. Remittance bank accounts are owned by a legal entity rather than by an operating unit. However, bank accounts you defined for your customers are migrated from the Payables entities to the centralized Payments entities. Oracle Payments centralizes and secures all payment instrument data, including external bank accounts, credit cards, and debit cards.
- Integration with Payments for Funds Capture – Release 12 introduces Oracle Payments, which is used by Oracle Receivables for processing funds capture.