R12 Primary Ledger

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

1. chart of accounts
2. functional currency
3. accounting calendar,

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.

General Ledger Setup Flowchart

While you can set up your Oracle General Ledger application in many different ways, and defer optional set up steps until you are ready to use the corresponding functionality, we recommend you use the order suggested in the following flowchart: Some of the steps outlined in this flowchart and setup checklist are Required and some are Optional. You need to perform Optional steps only if you plan to use the related
feature or complete certain business functions.
The following setup steps are a high level overview of the setup steps related to Oracle
General Ledger and Accounting Setup Manager.

Leger is created in 5 stages

1. Create Legal Entity.

2. Define Leger.

3. Define Accounting Options.

4. Assign Legal entities to your Ledger .

5. Assign Balanceing Segment Values to respective Legal entities. 

Navigation: General Ledger --> Setup --> Financials --> Accounting Setup Manager --> Accounting Setups.

• Create legal entity

Click on Create Accounting Setup and then click on Create Legal entity.

 

Click on Apply and then click on Next.

• Define Leger

R12 Primary Ledger

Posted by Raju ERP 

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

1. chart of accounts
2. functional currency
3. accounting calendar,

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.

General Ledger Setup Flowchart

While you can set up your Oracle General Ledger application in many different ways, and defer optional set up steps until you are ready to use the corresponding functionality, we recommend you use the order suggested in the following flowchart: Some of the steps outlined in this flowchart and setup checklist are Required and some are Optional. You need to perform Optional steps only if you plan to use the related
feature or complete certain business functions.
The following setup steps are a high level overview of the setup steps related to Oracle
General Ledger and Accounting Setup Manager.

Leger is created in 5 stages

1. Create Legal Entity.

2. Define Leger.

3. Define Accounting Options.

4. Assign Legal entities to your Ledger .

5. Assign Balanceing Segment Values to respective Legal entities. 

Navigation: General Ledger --> Setup --> Financials --> Accounting Setup Manager --> Accounting Setups.

• Create legal entity

Click on Create Accounting Setup and then click on Create Legal entity.

 

Click on Apply and then click on Next.

• Define Leger

Click on Next and then Finsh.

Define Accounting OptionsDefine Accounting Options 

• Define Accounting Options

Click on Define Accounting Options and click on update.

 Click on Next, and assign Retained earnings Account.

  
  Click on Next, Next, and Finsh.

Assign Legal entities to your Ledger.Assign Legal entities to your Ledger. 

•  Assign Legal entities to your Ledger.

Click on Add Legal Entity.

  
 Click on Add Legal entity.

 Add your Legal entity and click on Apply.

• Assign Balancing segment values to legal entities

Click on the update Balancing Segment Values

Click on Add Balancing Segment Value.

Assign Balancing segment values to these legal entities.

Click on Apply and then click onComplete.

 Once you complete leger we are getting the following Warning.

 Click on Yes.

 Ofter click on the yes we are getting the following confirmation.

Click on Return to Accounting Setups.

Click on Next and then Finsh.

Define Accounting OptionsDefine Accounting Options 

• Define Accounting Options

Click on Define Accounting Options and click on update.

 Click on Next, and assign Retained earnings Account.

  
  Click on Next, Next, and Finsh.

Assign Legal entities to your Ledger.Assign Legal entities to your Ledger. 

•  Assign Legal entities to your Ledger.

Click on Add Legal Entity.

  
 Click on Add Legal entity.

 Add your Legal entity and click on Apply.

• Assign Balancing segment values to legal entities

Click on the update Balancing Segment Values

Click on Add Balancing Segment Value.

Assign Balancing segment values to these legal entities.

Click on Apply and then click onComplete.

 Once you complete leger we are getting the following Warning.

 Click on Yes.

 Ofter click on the yes we are getting the following confirmation.

Click on Return to Accounting Setups.

General Ledger Interview Questions

General Ledger Interview Questions in R12

1) Can a flexfield qualifier be changed after it has been created?

Ans)  No.

Once a segment qualifier has been designated for a specific segment and has been saved, it will permanently have the attributes with that qualifier.
For example, you accidentally designate the cost center segment as the natural account segment. Even though you do not compile this, the system saves the changes. And once it has been saved, it will have all the attributes designated for the natural account qualifier, even after it has been changed back, resaved with the correct qualifier and compiled. This is the inherent functionality of the software.
Unfortunately, there is no real easy solution for this issue. The only option is to create a new chart of accounts and attach a new set of books.

2) How to delete a segment value?

Ans) There is no supported way to delete a segment value. Segment values can only be disabled not deleted.

3) Is there a way to load values for a specific segment outside of the form?

Ans) iSetup is the Oracle product that provides supported APIs to load values into Oracle Applications flexfields.
To load code combinations ADI may be used. Uploading zero amount journals will create new code combinations.
In this case Dynamic Insertion should be enabled and all account segment values need to exist before the new account code combinations will be dynamically created.

4) What are the different types of Journals in General Ledger ?

Ans)  

1. Functional Currency Jv: This Journal, we enter Local Currency transaction purpose.

2. Foreign Currency Jv: this Journal, we enter other than local currency transaction purpose...before we define exchange rates

3.Suspense Jv: this Journal, whenever debit is not equal to credit that time, we enable in set of books window Suspense button, then it works otherwise it's not working

4.Tax Jv: this Journal, calculate taxation of Purchased items

5.Reverse Jv: this Journal whenever we enter recurring journal, at the time of we using..We have two methods...one is Debit to Credit and second one is sign (+ to -)

6.Recurring Jv :this one is We define one template, we use Periodically, these are 3 types
1.Standard 2.Skeleton 3.Formula

7.Mass Allocation Jv :Set of Expenses or Set of Revenue allocate different parts using Formula A*B/C
A is Total Cost Pool..B is Usage Factor...C is Total Usage Factor...

8. Batch JV: Group of Journal we enter at a time, We Define Control Amount

9. Stat JV: This JV we have one side of Amount either debit or Credit.....

5)  What is average Balance In Oracle Financials? 

Ans) The Average Balance feature of Oracle General Ledger provides organizations with the ability to track average and end-of-day balances, report average balance sheets, and create custom reports using both standard and average balances. Average balance processing is particularly important for financial institutions, since average balance sheets are required, in addition to standard balance sheets, by many regulatory agencies. Many organizations also use average balances for internal management reporting and

Profitability analysis.

The difference between an average and standard balance sheet is that balances are expressed as average amounts rather Than actual period-end amounts. An average balance is computed as the sum of the actual daily closing balance for a balance sheet account, divided by the number of calendar Days in the reporting period .

6) Is there a limit to the number of periods in a budget year or how many years a budget can span?

Ans) One can define budgetary control for n number of years however, one year can have maximum of 60 fiscal periods7)   

7) What is a funding budget?

Ans) A budget against which accounting transactions are checked for available funds when budgetary control is enable for your set of books.

8) What is planning budget

Ans) The plan for the future expenses is planning budget. It is a paper work. There is no funds requirement. It does not require journals. There are no restrictions for estimating of funds.

9) I was able to post a budget journal to a closed period, why? 

Ans) Yes you can do so, reason being budget journal is not linked with your accounting period. Once you have open the budget period then you can book budget journal for that whole period.

 10) What is the specific purpose of assigning Balancing Segment Values to the Legal Entity in Accounting Manager Setup (as once assigned, the same value is not allowed to be selected for any other Legal Entity), if this value is usable for the Operating Unit(s) that does not have this Legal Entity Context?
Ans) Summary of key facts:

1. Common COA Structure used for Primary and Secondary Ledgers
2. Ledger shared by Multiple Legal Entities
3. Specific Balancing Segment Values assigned to Specific Legal Entity (Overlap not allowed)
4. Specific Legal Entity Vision Operations Assigned to Payables Manager OU for Legal Entity Context
5. User preference set to Access Vision Operations OU by Default in Payables

Conclusion and Findings:

1. Balancing Segment Value Assignment to the Multiple Legal Entities, sharing the same Ledger does not seem to restrict the user of these Balancing Segment Values in the Feeder, Operating Unit specific Modules Like AP, wherein Legal Entity Context is passed to the OU through the link of the Primary Ledger.

2. However, access to these Balancing Segment Values could be controlled through Security Rules being assigned to the Value Set and the Respective Responsibility

3. The Key question is: If Legal Entity having the context to the Operating Unit that shares the common Ledger does not have assignment to it, what impact it has on the integrity of data when this access is otherwise allowed, except through Security Rules?

  

11) What are the interface tables in General Ledger ?

Ans)

GL_BUDGET_INTERFACE
GL_DAILY_RATES_INTERFACE
GL_IEA_INTERFACE
GL_INTERFACE
GL_INTERFACE_CONTROL
GL_INTERFACE_HISTORY 

 12) What is DFF.

Question: What does DFF mean?
Answer: DFF is a mechanism that lets us create new fields in screens that are delivered by Oracle.

Question: Oh good, but can these new fields be added without modifying/customization of the screen?.
Answer: Yes, certainly. Only some setup is needed, but no programmatic change is needed to setup DFF.

Question: Why the word Descriptive in Name DFF?
Answer: I think Oracle used this terminology because by means of setup...you are describing the structure of these new fields. Or may be Oracle simply used a silly word to distinguish DFF from KFF(discussed in latter training lesson).

Question: Are these DFF's flexible?
Answer: A little flexible, for example, depending upon the value in a field, we can make  either Field1 or Field2  to appear in DFF.

Question: So we create new fields in existing screen, but why the need of doing so?
Answer: Oracle delivers a standard set of fields for each screen, but different customers have different needs, hence Oracle lets us create new fields to the screen.

Question: Are these new fields that get created as a result of DFF free text?
I mean, can end user enter any junk into the new fields that are added via DFF?
Answer: If you attach a value set to the field(at time of setup of dff), then field will no longer be free text. The entered value in the field will be validated, also a list of valid values will be provided in LOV.

Question : Will the values that get entered by the user in dff fields be updated to database?
Answer: Indeed, this happens because for each field that you create using DFF will be mapped to  a column in Oracle Applications.

Question: Can I create a DFF on any database column?
Answer: Not really. Oracle delivers a predefined list of columns for each table that are meant for DFF usage. Only those columns can be mapped to DFF segments. These columns are named similar to ATTRIBUTE1, ATTRIBUTE2, ATTRIBUTE3 ETC. Usually Oracle provides upto 15 columns, but this number can vary. 

Question: Can I add hundreds of fields to a given screen?
Answer: This depends on the number of attribute columns in the table that screen uses. Also, those columns must be flagged as DFF enabled in DFF Registration screen. Don't need to worry much about this because all the ATTRIBUTE columns are by default flagged for their DFF usage.

Question: Hmmm, I can see that DFFs are related to table and columns...
Answer: Yes correct. Each DFF is mapped to one table. And also each segment(or call it field) is mapped to one of the attribute columns in that table.

Question: I want these fields to appear in screen only when certain conditions are met. Is it possible?
Answer: Yes, we have something known as Context Sensitive Descriptive Flexfields.

In Order to do this, we will follow the below steps(screenshots will follow) :-
1.    Navigate to the DFF Registration screen in Oracle Apps and query on Table AP_BANK_BRANCES. Now click on Reference Field
2.    Navigate to DFF Segments screen and query on the Title of the “Bank Branch” and Unfreeze the Flexfield and add segments as to Section "GLOBAL Data Elements" as shown in screenshots.

13)   What is Journal Import?

Ans) Journal import is an interface used to bring journal entries from legacy systems and other modules into the General Ledger.(Specifically Journal Import gets entries from legacy data into the GL base tables.
The tables populated during journal Import are
GL_JE_BATCHES,
GL_JE_HEADERS,
GL_JE_LINES,
GL_IMPORT_REFERENCES




14) What is the use of GL_Interface?

Ans) Gl_Interface is the primary interface table of General ledger. It acts as an interface between data originating from other modules such as AP,AR, Legacy data and the Gl Base tables.

15) What is Actual Flag?

Ans) Actual flag represents the Journal type.
A-Actual
B-Budget
E- Encumbrance.

16) What is Encumbrance?

Ans) It is a process of Reservation of funds for anticipated expenditure from a budget. Encumbrance integrates GL, Purchasing and Payables modules.

17) How many Key Flex Fields are there in General Ledger?

Ans)  One. Accounting Key Flex Field.

18) How many types of Budgets are there?

Ans) Two Types.
Expenditure Budgets
Revenue Budgets.

19)What are Spot Rate, Corporate Rate, Transaction Calendar and Accounting Calendar?

Ans) Spot Rate:
An exchange rate which you enter to perform conversion based on the rate on a specific date. It applies to the immediate delivery of currency.

 Corporate Rate:
An Exchange rate that we define to standardize rates for our company. This rate is the standard market rate determined by the senior financial management for use through out the organization.

 User Rate:
Conversion rate that is defined by the user.
EMU Fixed Rate: An exchange rate that is provided automatically by the General Ledger while entering journals. It uses a foreign currency that has a fixed relationship with the euro.
Transaction Calendar: Defines the business days and holidays for any calendar.
Accounting Calendar: Defines different types of calendars namely Fiscal, Federal Fiscal, Month etc.

20)What is Security Rule?

Ans) Security Rules are defined to control the access of a flexfield segment value (Financial information) at a responsibility level.

21) What are Cross Validation & ADI?

Ans) CVS – Cross validate segments – Allows only valid code combinations.
ADI – Allow dynamic inserts. – Allows any code combination irrespective of validity.
ADI would prevail if both of CVS and ADI are checked.

22)What is Translation?

Ans) Translation is a process used to convert functional currency to other reporting currencies at the account balances level.

23)What is Revaluation?

Ans) It is process used to revalue assets and liabilities denominated in foreign currency into functional currency based on period end exchange rate we specify. Unrealized gains/losses are resulted because of exchange rate fluctuations which are recorded in unrealized gain/loss account in GL.

24)What is FSG (Financial Statement Generator)?

Ans) Financial statement generator feature helps us to generate reports such as balance sheets and income statements with out programming. It also provides a high degree of control on the rows, columns, contents and calculations on the report. Different components such as row set, column set, content set, row order, display set have to be defined before a statement is generated, of which row set and column set are mandatory.

25) What is Consolidation?

Ans) Consolidation is a period-end process of combining the financial results of separate business subsidiaries with the parent company to form a single combined statement of financial results.

26) At what level General Ledger data is secured?

Ans) GL data is secured at Set of Book level. Subledger module data is secured at Responsibility level (i.e., at Operating Unit Level).

27) Difference between Primary Ledger and Secondary Ledger in R12 ?

Ans) Primary ledger:

The primary ledger acts as the primary accounting representation

Secondary Leger:
Secondary ledgers represent the primary ledger's accounting data in another accounting representation that differs in one or more of the following ways:

• chart of accounts
• accounting calendar/period type combination
• currency
• subledger accounting method
• ledger processing options

Use secondary ledgers for supplementary purposes, such as consolidation, statutory reporting, or adjustments for one or more legal entities within the same accounting setup. For example, use a primary ledger for corporate accounting purposes that uses the corporate chart of accounts and subledger accounting method, and use a secondary ledger for statutory reporting purposes that uses the statutory chart of accounts and subledger accounting method. This allows you to maintain both a corporate and statutory representation of the same legal entity's transactions in parallel.
Assign one or more secondary ledgers to each primary ledger for an accounting setup.
The secondary ledgers assigned can only perform the accounting for the legal entities within the same accounting setup. 

How to define Bank

How to define Bank In R12

Define Bank:

You can define a bank or a clearing house. Define Banks to record internal banks, where you are the account holder of a receipt and/or disbursement account. If you use Payables, you can define external
banks where your suppliers are the account holders. Also, if you use Oracle Receivables, define banks to record external banks where your customers are the account holders of disbursement accounts. Define
Clearing Houses to record banks that process a magnetic tape of your receipt information which you send to them. These clearing institutions then create tapes of your customer receipt information which they forward to each of your remittance banks.

Setups for Defining the Banks

1.Define Grants and Roles:

Navigation: User Management --> Role & Role Inheritance.

Select the User Management Responsibility.

Click on Roles & Role Inheritance.

Enter Type, Category and Name of the payable responsibility name and click on GO.

Click on Update.

Click on Security Wizards.

Click on Save and Proceed.

Click on CE UMX Security Wizard.

Click on Add Legal Entities.

Select Bank Account Grants Use and Maintenance and Bank Account Transfers and then click on Apply.

Click on Apply.

2. Define Bank.

Navigation: Payable Manager --> Setup --> Payments --> Bank and Branches.

Click on Bank tab.

Click on Create.

Enter the Country and Bank Name and then click on Save and Next button.

If you want enter the bank address then enter required the information.

Click on Save and Next.

If you want enter the contacts details of the bank then enter the information.

Click on Finish

Define Branch:

Click on Create Branch.

Click on Continue.

Enter Branch Name Branch Type and then click on save and next button.

Enter the branch address details and then click on save and next button.

Enter the branch contact details and then click on Finsh.

Define Bank Account:

Click on Create Bank Account.

Click on Continue.

Select the Legal entity and Enable modules which we want to use this bank account.

Click on Next.

Enter the Bank account Name, Number and currency and then click on save and next.

Enter the cash and cash clearing accounts and then click on save and next button.

Add Operating unit to your bank

Click on Add Organization Access.

Enable Account use for Payable and Receivables and Organization Name and then click on Continue.

Click on Apply.

Click on Finish.

Defining Internal Bank Accounts:

You define internal bank accounts to define bank accounts for which you are the account holder. Oracle Receivables uses internal bank accounts to receive payments from customers. Oracle Payables uses
internal bank accounts to disburse funds to suppliers.
Prerequisite

• You have installed Oracle Receivables.
• Define custom payment formats for Payables payment documents

To define a basic bank account for receipts:
1. In the Banks window query an existing Bank.
2. Choose the Bank Accounts button. Enter the Bank Account Name and Bank Account Number. Optionally enter an Account Type andDescription.
3. If you want to use Bank Account validation, enter Check Digits.
4. Select Internal Account Use.
5. In the GL Accounts region, enter a Cash Account.
6. In the Receivables Options region, enter GL Account informationfor Remitted Receipts, Factored Receipts, and Short Term Debt.
7. In the More Receivables Options region, optionally enter Receipt and Discount GL Account information. 

8. Optionally enter contact information in the Contact region.
9. Save your work.

Prerequisite

• You have installed Payables

To define a basic bank account for disbursements:
1. In the Banks window query an existing Bank.
2. Choose Bank Accounts. Enter the Bank Account Name and Bank Account Number.. If you will use this bank for payments you make with the EDI Gateway, enter an Account Type. Optionally enter a Description. The currency defaults from your functional currency. If you want to use Bank Account validation, enter Check Digits.
3. Select Internal Account Use.
4. In the GL Accounts region, enter a Cash Account.
5. In the Payables Options region, enter default information for your payment batches. Record whether you allow zero–amount payments and whether this is a pooled account.
6. Optionally enter contact information in the Account Contacts region.
7. Proceed with Defining and Maintaining Payables Payment

Defining Customer Bank Accounts

If you use Oracle Receivables, you can enter bank account information for your customers. Receivables uses this information when you receive electronic payments from your customers.
To define a customer bank account:
1. In the Banks window query an existing Bank.
2. Choose the Bank Accounts button. Enter the Bank Account Name and Bank Account Number. Optionally enter an Account Type and Description.
3. Select Customer Account Use.
4. Optionally enter contact information in the Contact region.
5. Save your work.

Defining Supplier Bank Accounts
You can enter information for bank accounts for which your supplier is the account holder. You then assign these accounts to the supplier and its sites. Payables uses this bank information when you create electronic payments for your suppliers.

Prerequisite

•  Define the suppliers and supplier sites that use the bank account to receive electronic payments.

To define a supplier bank account:
1. In the Banks window query an existing Bank.
2. Choose the Bank Accounts button. Enter the Bank Account Name and Bank Account Number. Enter the EDI ID number. Optionally enter an Account Type and Description. Optionally change the account currency, which defaults from your functional currency. If you want to use Bank Account validation, enter Check Digits.
3. Select Supplier as the Account Use.
4. In the Supplier Assignments region list the supplier, and optionally list supplier sites, that use the account to receive electronic payments.
5. Optionally enter account holder information in the Account Holder region. Optionally enter contact information in the Account Contacts region.
6. Save your work.
7. In the Bank Accounts region of the Suppliers and Supplier Sites windows, verify for each supplier and site that all appropriate bank accounts are listed. For suppliers and supplier sites with multiple bank accounts, designate as the primary bank account one bankaccount per period and per currency. 

Defining Multiple Currency Bank Accounts
If you define a multiple currency bank account, you should use manual payment reconciliation with it. Payables stores the payment currency you enter when you initiate a Payment Batch, enter a manual payment,
or create a Quick payment. The bank file details you receive from a bank will contain the bank account currency. Since the payment and bank account currencies could differ when you use a multiple currency
bank account, automatic reconciliation could result in numerous exceptions.
If you define a multiple currency bank account for payments, the currency of the bank account must be the same as your functional currency.

Prerequisites 

• Enable the Use Multiple Currencies Payables option.
• Enable the currencies you need in the Currencies window.

To define a multiple currency bank account:
1. Define a basic bank account for receipts or disbursements.  

• If you are defining a bank account for receipts, in the Receivables
Options region, enable the Multiple Currency Receipts option.
• If you are defining a bank account for disbursements, in the
Payables Options region, enable the Multiple Currency Payments
option and enter Realized Gain and Realized Loss accounts.
Payables Setup 2 – 123
Proceed with Defining and Maintaining Payables Payment
Documents: page 2 – 124. You can define payment documents
that use a payment format with any currency.
2. Save your work.
Defining Foreign Currency Bank Accounts
Prerequisites
q Enable the Use Multiple Currencies Payables option.
q Enable the currencies you need in the Currencies window. See:
Currencies Window (Oracle Applications System Administrator’s
Guide).
To define a foreign currency bank account:
1. Define a basic bank account for receipts or disbursements. 

• If you are defining a bank account for disbursements, in the Payables Options region, enter Realized Gain and Realized LossAccounts.
2. Save your work.