Sunday, September 25, 2016

Oracle Accounting Setup Manager (ASM) Details

Oracle Accounting Setup Manager (ASM) is the new configuration tool for accounting setups in Oracle General Ledger in the Release 12 of Oracle E-Business suite.
This paper provides information to help familiarize the users of Oracle E-Business Suite with the new setup tool for the definition of ledgers and accounting setups as well as with some implementation considerations regarding the assignment of legal entities to ledgers and the use of subledger accounting methods. It will also describe the underlying tables for the Accounting Setup Manager user interface.

 

Introduction

One can clearly find the Set of Books concept of 11i is now obsolete with the introduction of Ledger in release 12 of Oracle Application.
Now one can use this Accounting Setup Manager for setting up the common financial setup components from a central location.
This will also help in setting up Legal Entity and assigning balancing segment values to legal entity, when multiple legal entities’ accounting are done within a single ledger.

Note: There is also a terminology change between Release 11i and Release 12: Sets of Books are upgraded and renamed to Ledgers – the upgrade retains all 11i settings.

 

Overview

In Release 12, the Accounting Setup Manager centralizes the setup and maintenance of common accounting-related setup that is shared across Oracle Financials applications, for example:
- Definition of legal entities and associated accounting setup to meet different accounting principles and reporting requirements of multiple countries using different currencies, charts of accounts and/or calendars.
- Secondary ledgers and reporting ledgers to create alternate accounting representations automatically.

 

Process Change

Accounting Setup Manager is used to create and maintain accounting setups. An accounting setup defines the accounting context for one or more legal entities or other business entities. The upgrade creates a separate accounting setup for each primary ledger that is upgraded from a set of books.
- Legal Entities: HR Organizations classified as GRE/LEs in Release 11i will be upgraded legal entities in Release 12. Legal entities can be assigned to a ledger and balancing segment values can optionally be mapped to legal entities to help identify transactions by legal entity.
- Operating Units: All HR Organizations classified as operating units will be preserved in Release 12. If operating units are assigned to a set of books, then they will be associated to a primary ledger in an accounting setup.
- Primary Ledger: Most sets of books in Release 11i will become primary ledgers in Release 12.
- Secondary Ledgers: Multiple-posting set of books (Global Accounting Engine) will upgrade to secondary ledgers.
- Reporting Currencies: Multiple Reporting Currency (MRC) reporting sets of books become reporting currencies in Release 12.
- Intercompany Accounts: The Release 11i Global Intercompany System (GIS) will be replaced by Advanced Global Intercompany System (AGIS) and GIS features will be migrated to the corresponding features in AGIS.
- Subledger Accounting Method: All upgraded ledgers in Release 12 will have a subledger accounting method assigned during the upgrade. Any reporting currencies assigned to the ledger inherit the subledger accounting method from the source ledger. The subledger accounting method enables Oracle General Ledger to integrate with Oracle subledgers using Subledger Accounting.

All upgraded, non-public sector ledgers will have a subledger accounting method assigned called Standard Accrual or Standard Cash. All upgraded public sector ledgers will have a subledger accounting method assigned called Encumbrance Accrual or Encumbrance Cash. For US Federal customers, all upgraded ledgers will have the US Federal Accounting subledger accounting method assigned to them.

Configuration Change

- Create legal entities and assign them to accounting setups – either assigned to ledgers or mapped to balancing segment values.
- Create primary and secondary ledgers and mappings for alternate accounting representations from single transaction (replacement for the Global Accounting Engine Dual Posting solution in Release 11i).

 

Considerations

- Sequencing is determined by the ledger. Journal entries may have multiple legal entities (each accounting line may be different), so there is no distinct legal entity of the journal header.
- In Release 11i, users could change settings for certain options on a primary set of books independently of its reporting set of books. The upgrade will preserve the Release 11i settings, but in Release 12 these options cannot be manually updated for reporting currencies because the reporting currency will inherit its settings from its source ledger.  If one modifies any of the ledger options for the source ledger after the upgrade, the settings on the reporting currency will automatically be changed to be synchronized with the source ledger.
- One can run the Accounting Setup Manager Pre-Update Diagnosis Report to view her/is Release 11i setup for Multiple Reporting Currencies, General Ledger, Global Accounting Engine, Assets, Payables, and Receivables. This report identifies potential problem areas where one may want to modify the setup in order to take advantage of new Release 12 functionality.

 

Accounting Setup Manager in Detail

What is Accounting Setup Manager?

It is one of the main features of the Ledger Architecture introduced in Release 12, which replaces the Set of Books form using a web-based interface.

Accounting Setup Manager or ASM is the central place where all the accounting setup is defined and maintained for:
- Legal Entities
- Ledgers
- Reporting Currencies
- Balancing Segment Value assignment
- Sequencing (Accounting and Reporting)
- Other accounting options like retained earnings account, suspense account, currency conversion type, etc.

 

Accounting Setup Manager Concepts

In release 12 the following concepts are introduced:
- Ledgers: sets of books are now called ledgers.
- Reporting Currencies: this is the new implementation of reporting sets of books.
- Inter and Intra Company Balancing: inter – across multiple legal entities and intra – within a legal entity. A new product called Advanced Global Intercompany System (AGIS) now handles intercompany transactions but the Intracompany setup and the definition of intercompany accounts can be done via ASM.
- Accounting and Reporting Sequencing: additional ways to assign document numbers to journal entries to satisfy legal requirements as gapless journal numbers. There are 2 types of sequencing that can be setup via ASM: Accounting sequencing and Reporting Sequencing.
- Subledger Accounting Method: determines the accounting standards to be followed according to industry or local country laws. The default Accounting Method is Accrual accounting.
- Legal Entities: This is not new in Release 12 but that has had some changes. The modeling of legal entities can be done as one legal entity per ledger or multiple legal entities in one ledger depending on business needs. It is not mandatory to have a legal entity. Legal entities are mandatory if Oracle Subledgers require a legal environment or if AGIS is going to be used.

 

Ledgers

Ledgers are defined by 4Cs as opposed to 3 in previous releases:
Chart of Accounts
Calendar
Currency
AcCounting Method

The 4Cs must be defined prior to starting an accounting setup. ASM does not provide access to the forms to perform that setup.
The setup for the first 3Cs is still done in General Ledger.
The setup for the Accounting Method, if one different than the default is to be used, is done via the Accounting Methods Builder.
There are 3 types of ledgers: Primary and Secondary ledgers and reporting currency ledgers.

Primary Ledger or PL

- It is the main ledger and has the most detail of information.
- It can have more than one secondary ledger assigned.

Secondary Ledger or SL

- It is optional and differs in one or more of the 4Cs from the PL.
- It provides an additional accounting representation of the PL to comply with legal requirements.
- The SL can only be assigned to one PL.

Reporting Currency or RC

- Used when the only element that differs from the PL is the Currency.
It is stored in the tables as a ledger but does not need to be setup as a ledger via ASM.
Primary and secondary ledgers can have RCs assigned.
If a RC has not been assigned to a PL/SL, when Translation is run in a ledger the reporting currency is automatically added to the ledger setup.

The secondary and reporting currency ledgers store additional accounting representations of the information present in the primary ledger. There are different levels of detail in which this information is stored, which are called Conversion levels.

Conversion Levels for Secondary Ledgers

Secondary ledgers have the following four conversion levels:

 

Subledger Journals level

This level maintains subledger journals, general ledger journal entries, and balances in the additional accounting representation. SLA creates the information directly into the SL for sources/categories that use SLA. For other sources/categories that do not use SLA, the GL Posting program creates the information in the SL.

 

Journal level

This level maintains primary ledger journal entries and balances in an additional accounting representation.  Every time a journal is posted in the Primary ledger, it gets created in the Secondary Ledger.  Posting in the Secondary ledger happens in a separate step. It can be determined which journal sources/categories will be replicated when posting takes place. This is done in ASM in the Journal Conversion Rules.

 

Balances level

This level maintains primary ledger balances in another accounting representation. It uses the Consolidation program to transfer balances from the PL to the SL.

 

Adjustment only level

This type of ledger only provides an incomplete accounting representation holding only adjustments, which can be manual GL adjustment entries, or automated adjustments from SLA. The chart of accounts, accounting calendar, and currency must be the same as the primary ledger.

Note: Journals can be entered directly into any type of secondary ledger.

Conversion Levels for Reporting Currency Ledgers

Reporting currencies have the following three conversion levels:

 

Subledger level

Use SLA and the GL Posting programs. This level is equivalent to full MRC. A subledger level RC can only be assigned to primary ledgers.

 

Journal level

The GL journals only are replicated via the Posting program. The journal created for the RC is created within the same batch of the primary ledger journal batch and is automatically posted. This level is the equivalent of thin MRC.

 

Balances level

Use the GL Translation program to maintain balances in the reporting currency.

Note:  Journals can be entered directly into the subledger and journal level reporting currencies.

Following is a graphical representation of the conversion levels discussed above for secondary and reporting currency ledgers:

ASM Implementation Considerations

Legal Entities

- Legal entities are used to provide a legal environment for Oracle financial subledgers or transactions that require a legal entity context.
- The general rule is to have a primary ledger per legal entity.
- If legal entities differ in any of the 4Cs or require different ledger processing options like: average daily balances, journal approval, or sequencing a different primary ledger is required. Legal requirements will also drive the decision of how many legal entities per primary ledger should be assigned.
- Assigning balancing segment values to legal entities is strongly recommended to make easier the identification of transactions and for reporting purposes. Assignment of balancing segment values to legal entities is required for Intercompany accounting.

 

Subledger Accounting Methods

- The subledger accounting method is required if using Oracle Subledger Accounting.
- A subledger level secondary ledger requires a subledger accounting method for both the primary ledger and the secondary ledgers.
- The accounting method can be changed at any time. It will only affect new journals.
- Additional accounting methods may be defined. This is done in Subledger Accounting.
- There is optional information needed when an accounting method is selected in ASM, for instance: Entered Currency Balancing Account, Balance Subledger Entries by Ledger Currency. The screen shot below shows the fields under the Subledger Accounting section.

 

Setup Steps

The accounting setup manager allows creating an accounting setup including the tasks below. One can notice the items in Bold are required:

- Create/assign a legal entity if required.
- Assign a ledger name, a chart of accounts, accounting calendar-period type, currency and accounting method.

- Complete ledger options: retained earnings account, first ever open period, subledger accounting options, suspense account, rounding difference account, enable intracompany, journal approval, journal tax, rate type, cumulative translation adjustment account, enable journal reconciliation, budgetary control.
- Define and assign operating units to the primary ledger.
- Complete reporting currencies.
- Define intercompany accounts.
- Define intracompany balancing rules.
- Define sequencing options.
- Specify the ledger attributes for one or more secondary ledgers.
- Assign balancing segment values to legal entities.
- Assign balancing segment values to ledgers.

- Complete accounting setup.
The navigation steps to access the ASM in General Ledger are:
- Setup: Financials: Accounting Setup Manager:  Accounting Setups

 

Completing an Accounting Setup

An accounting setup needs to be complete before it can be used.

When clicking on the ‘Complete’ button in ASM, a message appears to confirm whether the setup should be saved. If the response is ‘Yes’, the General Ledger Accounting Setup Program is launched automatically.  This is a new program in Release 12, which is a flattening program introduced to pre-calculate data that can be used to speed up queries and data processing.

The General Ledger Accounting Setup program performs the necessary validations to make the setup components of an accounting setup ready for transaction processing and journal entry.
The following message appears in ASM when the program in launched:

Confirmation
JavaScript enabled browser required. You have just completed the accounting setup: <primary ledger name example: Vision Operations (USA) PL (Corp) (USD)>. The General Ledger Accounting Setup Program has been submitted. Please review concurrent request id, <request id>. Make sure this request completes successfully before you enter transactions.

Upon completion, some components cannot be deleted: legal entities, balancing segment values, and reporting currencies.
This program creates the following Data Access Sets:
- One for the Primary Ledger and the Reporting Currencies.
- One for the Reporting Currencies
- One for each Secondary ledger
- One for a ledger set

The General Ledger Accounting Setup program is also launched upon:
- The creation of a ledger set
- The creation of a data access set

 

Profiles

Once the setup program has completed successfully it is necessary to define the following profile options:
‘GL: Data Access Set’ replaces the ‘GL: Set of Books’ name profile option of previous releases.
This profile option can be assigned to a single ledger or a ledger set. This profile option is used by GL responsibilities.
The Oracle subledgers use the profile option ‘GL: Ledger Name’ to determine the ledger a subledger responsibility will have access to.
The ‘SLA: Enable Data Access Security in Subledgers’ profile option determines whether the General Ledger Data Access Set security mechanism is applied for a subledger application responsibility when viewing, reporting, or creating subledger journal entries associated with a given ledger.

 

Technical Overview

There are several new tables with ASM. Following is a description of the tables and what they store.

 

ASM Main Underlying Tables

- GL_LEDGERS: Replaces GL_SETS_OF_BOOKS. The field set_of_books_id is now called ledger_id. A backward compatible view called Gl_Set_Of_Books was created.
- GL_LEDGERS_CONFIGURATIONS: stores every accounting setup.
- GL_LEDGER_CONFIG_DETAILS: Keeps track of various configuration steps and statuses.
- GL_LEDGER_RELATIONSHIPS: stores all ledger relationships such as PL to RC and PL to SL.
- GL_JE_INCLUSION_RULES: stores Source-category conversion rules.
- GL_LE_VALUE_SETS and GL_LEGAL_ENTITIES_BSVS: store Balancing segment value (BSV) assignments to legal entities.
- GL_LEDGER_NORM_SEG_VALS: stores BSV assignments to ledgers. Every BSV or balancing segment value assigned to the legal entity is also assigned to the ledger. If no values are assigned to the legal entity, then all values are valid for the legal entity.

Each event could result in multiple tables getting updated. E.g. If you add a new ledger to a ledger set, then in addition to the ledger set tables, the data access set tables that store data to access the ledger set would also get updated.

Following is a graphical representation of the tables used in ASM:


Other tables

- GL_ACCESS_SET_ASSIGNMENTS and GL_ACCESS_SET_LEDGERS store flattened information to improve security checks on data access sets that contain privileges for ledger sets or parent segment values.
- GL_LEDGER_SET_ASSIGNMENTS stores flattened information to speed up queries on ledger sets that contain other ledger sets.
- GL_LEDGER_SEGMENT_VALUES stores information on balancing segment value assignments to ledgers. If a parent segment value is assigned, it will be expanded and stored as detail segment values.
- GL_SEG_VAL_HIERARCHIES stores parent and child segment value mappings based on the segment value hierarchy. Programs like MassAllocation and FSG use this data.

 

Using Accounting Setup Manager in R12

There are three main accounting setup steps:
- Create Accounting Structure
Is the frame work of the accounting setup and identifies the legal entities, if any type of accounting setup and ledgers.
- Defining Accounting Options
Depending upon the types of accounting setup defined, different accounting options must be completed.
- Complete Accounting Setup
Upon completion of the accounting setup the General Ledger Accounting Setup program is lunched automatically.

One can also note the possible status of the accounting setup as Complete, In Progress, and Not Started.

The 4C’s are selected in this step along with the primary ledger name. The definition of the Chart of Account, Calendar, Currency and Subledger Accounting Method is a prerequisite step. One can notice that fields with a “*” are required fields. The Subledger Accounting method is not mandatory and if nothing is defined then the default is Standard Accrual.

Secondary ledgers can be defined during this process; else can be added at any later point of time.
Saving these choices made is the last step involved in creating accounting structure. No changes to the 4C’s can be made once they have been saved.

Since the accounting setup is not yet complete, the primary ledgers cannot be used at this point.

Now one can click on Define Accounting Option (B) to continue with the setup.
Once back in the Accounting Options page, click on the update icon for Ledger Options.

One can view the status against Ledger Options is In Progress. Here the user can view the ledger option will be completed in 4 steps.
First Step Includes:
-          Standard information derived from the information initially provided during the accounting structure definition.
-          Accounting Calendar Information: Select the first ever open period for the ledger from the list of values. The number of future periods defaults to 1.
-          Subledger Accounting Information: An accounting method can be selected at this point. If one is selected then more fields will be enabled under this section.


Second Step Includes:


In this step the mail accounts are defined: Retained Earnings, Suspense and Rounding Difference Accounts.
One can also decides upon the intercompany balancing, journal approval and tax journals will be enabled.
An existing journal reversal criteria set can be selected for the ledger.
Additionally one can define the Currency Translation Options i.e. different period end rate type and period average rate type along with CTA (Cumulative Translation Adjustment Account) details.

Third Step Includes:
-The third step decides whether Journal Reconciliation, Budgetary Control and Average Balances will be enabled for the ledger.

Fourth Step Includes:
The review screen where one will be able to view all the setup information before confirming them to finish.

One will be able to navigate back to alter the information as desired if there are in discrepancy.
Now one will be able to find the status as completed for the primary ledger

The user is now able to update the Reporting Currency options as one can view the status are in progress and not yet completed.

One can click on the update icon to proceed.
The user can enter / edit the Reporting Currency Name, Short Name, Description and Ledger Options along with the Currency Translation options and error handling options for the missing rates.


Now one can apply and then complete the status for the Reporting Currency.

Here one can find the status is now changed to complete for the reporting currency.

If one wants s/he can now again click in the Primary Ledger update icon to update the Subledger Accounting method.

Additionally one can find the fields like Entered Currency Balancing Account à Posts differences from out of balance foreign currency journals in subledgers.
Balancing Subledger Entries by Ledger Currency à Enables balancing of subledger journal entries by ledger currency and balancing segment value.

Once the subledger accounting method is selected and updated, one can view the confirmation message.

It’s evident from below screen shot that the subledger accounting method is now complete.

Now one can additionally add the Secondary Ledger to the pre defined primary ledger. The accounting structure of a secondary ledger is also defined using 4C’s along with the Data Conversion Level.
In this example one can find the data conversion level is set to subledger level.

Here one will be able to choose Subledger level conversion level as it has been defined in the Subledger Accounting Option in the previous step.

Note: The subledger accounting method can only be defined for the conversion type of Subledger / Adjustment only.
One can notice there is a requirement to define the mapping sets for the Primary to Secondary Ledger Mapping, as both the ledger has different chart of accounts.
The user needs to complete the Ledger Option for secondary ledger the same way this has been performed for the primary ledger.

Now one will be able to view the Primary to Secondary Ledger Mapping has been enabled for updation. This can now be updated to attach the mapping set for the two different ledgers using respective chart of accounts.

The user can perform the reporting currency setup for the secondary ledger if required as this has been performed earlier.
Now one can additionally define the non mandatory fields like Operating Unit, Intercompany Accounting option and sequencing as there are not mandatory setups to complete the Ledger.
The user will be able to view the defined ledgers in the accounting setup manager if searched with the initials:


No comments:

Post a Comment

Best Blogger TipsGet Flower Effect