Ledger Configuration in Oracle R12 Part -3

In this Article we will look in to the Steps and necessary configurations involved in defining Ledger in Oracle R12

Setting Up Ledger:

Create Legal Entity: If it is required to assign a legal entity, It can be crated and assigned to a Ledger from accounting setup manager.

Assign the Legal Entity to Ledger

Setting Up Ledger Options:,

Before setting up Ledger options Decide up on the values that are required to be entered in the corresponding fields in the Ledger options.

Define Ledger:

While defining the ledger you may use the calendar, Chart of Accounts, Currency and Sub-Ledger Accounting method defined earlier. As part of ledger setup it is mandatory to finalize these values before defining Ledger.

Define Ledger options.

As part of the Ledger options Definition Below mentioned are the Values which needs to be defined which will control how journals and transactions are processed for that ledger hence it is very important to have the values for all the below mentioned Options Decided before setting up the Ledger on the basis of business Functional requirement:

• First Ever Opened Period

• Number of Future Enterable Periods

• Retained Earnings Account

• Sub-ledger accounting method,

• Option to track balances using a secondary segment

• Suspense Account

• Rounding Differences Tracking Account

• Intercompany Balancing option

• Journal Approval

• Journal Entry Tax

• Journal Reversal Criteria Set

• Default Period End Rate Type

• Default Period Average Rate Type

• Cumulative Translation Adjustment Account

• Journal Reconciliation

• Budgetary Control

• Reserve for Encumbrance Account

• Average Balance Processing

• Average Balance Consolidation

• Net Income Account

• Transaction Calendar

If there are legal entities that require any one of the above ledger processing options to be different, then define a separate primary ledger for each legal entity and therefore, a new accounting setup

You will not be able to use the Ledger Unless the Ledger options setup Shows as Complete in the ledger setup Screen.

Ledger Configuration in Oracle R12 Part 2

Accounting Setup Steps:

There are mainly three steps for creation of accounting Setups. Each accounting setup is a grouping of accounting-related setup components as mentioned below.

1.       Create an accounting setup structure.

a.      Create and Assign legal entities

b.      Specify the ledger attributes for the primary ledger.

c.      If Secondary Ledger setup is required, Specify the ledger attributes for secondary ledgers

d.      Assign reporting currencies.

2.       Update accounting options.

a.      Complete ledger options as per the requirement.

b.      Assign balancing segment values to legal entities and Ledger

c.      Define Subledger accounting options.

d.      Define and assign operating units to the primary ledger.

e.      Define relevant intercompany setups including Accounts and Intercompany balancing Rules.

f.       Define sequencing options.

3.       Complete the accounting setup

Review and Complete accounting setups. The status of the accounting setup should be completed before it can be used for the transactions.

Ledger Setup Prerequisites:

In Order to create a Ledger in Oracle Applications in R12, It is required to complete certain Prerequisite setups before creating Ledger.

• ·        Chart of Accounts Setup.
• ·        Calendar and Periods related Setup.
• ·        Legal Entity Setup.
• ·        Currency and Conversion Rate type Setups.
• ·        Subledger Accounting Method Setup.
• Define Account Code Combinations and Values that needs to be setup for Ledger Options. 

Ledgers in Oracle R12 Part -1

Ledger in Oracle Applications R12:

Ledger is a financial reporting entity, which represents an accounting representation for an organization that is accountable in a self-contained way. Ledger is the highest level which impacts accounting. Ledger uses below mentioned components to secure and Manage the transaction information such as Journal entries and Balances) by ledger

·        Chart of accounts

·        Functional currency

·        Accounting calendar

·        Sub-ledger accounting method.

Ledger represents the core of a Company’s financial records where every transaction flows through.  It provides balanced ledger accounting for the accounting entity and serves as a repository of financial information. Multiple Legal entities can be assigned to a Ledger. A Ledger can be associated with multiple Legal Entities and operating Units. Ledger in R12 replaces the Set of Books in 11i Version of Oracle applications.

Accounting Setup Manager:

Accounting Setup manager is a new feature in R12 which is a centralized location for setup and maintenance of common financial components within an accounting setup. The status of the accounting setup should be completed before it can be used for the transactions. Each accounting setup is a grouping of accounting-related setup components.

Below Components can be setup and Maintained using Accounting Setup Manager.

• ·        Legal Entities Setup and Assignment to balancing segments and Ledger.
• ·        Ledger and Ledger options Setup and Maintenance (Primary and Secondary Ledger).
• ·        Operating Unit
• ·        Reporting Currencies
• ·        Intercompany balancing Rules and Intercompany Accounts
• ·        Sequencing (Accounting and Reporting Sequence)