COLLABORATE 14 Presentation Template

Ledger, Ledger on the Wall... Who is the Fairest of Them All?

Prepared by:Hans Kolbe, Ren RmbellPrincipal ConsultantCelantra SystemsPrimary, Secondary or Reporting?Session ID#:14546REMINDER

Check in on the COLLABORATE mobile app#C14LV#C14LV12Primary, Secondary, Reporting & Consolidation Ledgers!?#C14LV23AgendaIntroductionAbout the PresentersCompany InformationLedger High-Level Constructs in R12 Ledger Details Options / Constraints Business Cases which Ledger Type to useLedger/Multi-Org simplification Cross-Legal Entity Operating Unit Questions / Answers#C14LV3 Slide 4About the Presenter: Hans KolbeHans Kolbe has managed and advised global software implementation projects for over 15 years. His extensive knowledge on Oracle applications is combined with a formal background as a German attorney, trained in international and comparative law. Chair of Multi-National SIG GroupSpecialist in Intercompany and multi-org configurations, international compliance and transaction taxhanskolbe@celantrasystems.comwww.celantrasystems.com415-730-1131

Visit the Celantra Booth 1055 at Collaborate 20144

#C14LV4Mohan IyerMohan Iyer is based in Fremont, CA. He has been working with Oracle based ERP Systems since 1994 and Oracle EBS since 1996. His extensive knowledge on Oracle applications and tools is combined with a deep understanding of functional, technical and project management challenges. Mohan has published a concise and extensive book about R12 financials options. Mohan is Chairperson of the GL-SIG mohan@fscpsolutions.comFSCP Solutions, Inc.#C14LV5

San Francisco, CA 94114 +1 415 824 8344 info@celantrasystems.com http://www.celantrasystems.comGlobal Implementations and Process Alignment: Plan, Design, and ExecuteCelantra Systems provides innovative solutions to todays most vexing issues in multi-national ERP configurations.

6Celantra Compliance Rule Engine (CCRE) and Compliance Sequencing Utility Celantra has released a number of automated compliance tools, based on the Celantra Compliance Rule Engine (CCRE)Celantra Sequencing Utilities supports Oracle clients with international operations. We ensure gapless date sequenced numbering for VAT and statutory journal reporting. Automated audit trails and reporting are provided. Visit the Celantra Booth 1055 at Collaborate 2014#C14LVLedgers High Level

Types and Building Blocks7#C14LV7Ledger Types R 12Primary Ledger Primary Transactions Operating Unit AssociationSecondary Ledger 4 different sub-types, i.e. data conversion levelsReporting Currency (not Ledger)Consolidation Ledger4+ different sub-types (conversion levels and profile options)

8#C14LV8Ledger Basic Building Blocks 4 CsChart of accounts CurrencyCalendar Accounting conventionsProcessing OptionsFirst Open PeriodRetained Earning AccountJournal ApprovalsAvg Balance Processing..

9#C14LV9Ledgers Details

Setups, Options and Constraints10#C14LV10Primary LedgerSetups (unique to Primary Ledger)Default Legal Entity AssociationOperating Unit Association

You may also define Inter- and Intra-Company DefinitionBalancing Segment Value (BSV) association to LE and Ledger

This makes the Primary Ledger the main transaction Ledger

11#C14LV11Primary Ledger Options12

#C14LV12Secondary Ledger4 CsChart of accounts CurrencyCalendar Accounting ConventionsProcessing Options

All can be different from Primary LedgerData Conversion LevelSub-LedgerJournalBalanceAdjustments

Conversion MechanismCOA Conversion/MappingCalendar / by Effective DateCurrency / FX RateSLA Method13#C14LV13Secondary Ledger Options14

#C14LV14Secondary Ledger Conversion Options15

#C14LV15Secondary LedgerData Conversion LevelSub-ledger Level ConversionSub-ledger transaction accounting is linked to primary & secondary ledger (SLA)Ledger Journals are moved directly into secondary Ledger (No SLA)

Journal Level ConversionAll Ledger Journals are copied in secondary Ledger, including the ones with sub-ledger source. Sources can be included/excluded. (check)Balance Level ConversionAccount balances are summarized in secondary Ledger (similar to translated ledger)

Adjustments Level Conversion Nothing gets copied. Only Adjustments are enteredCombine Adjustment and Primary Ledger in a Ledger set to do FSG reporting16#C14LV16Secondary LedgerConversion RuesCOA ConversionSimilar to Consolidation mapping rulesSegment mappingAccount mapping

CalendarEffective date determines the non-adjusting period in the secondary ledgerCurrencyRetain Transaction Rate Type Yes/No

Journal Specify Journal Source and Category to be converted

17#C14LV17Reporting CurrenciesCan be connected to a Primary or Secondary LedgerEvery ledger construct must be the same except the currencyReplaces the MRC ledger of R11

Currency conversion rules

18#C14LV18Reporting Currency Conversion Options19

#C14LV19Reporting Currency Conversion Options (Source/Category Combinations)20

#C14LV20Currency Conversion Options21

#C14LV21Consolidation LedgerStandard Consolidation Process: From many to onePerformed from multiple subsidiary ledgersPerformed after translation to a single currencyMultiple levels of consolidations are possibleConsolidation works on Balances (mostly)

Consolidation as Transformation: From one to one Performed to transform corporate accounting standards to local compliance and local COA You can consolidate transactional level detailsProvided you stay within the transacted functional currency *(?)22#C14LV2223Transform ACCOUNTING and GAAP Rules : Inventory Accounting: Record purchasing cost Local Statutory and GAAP Requirement: Total Purchase Cost into Cost of Purchases (France, Spain, Italy, Portugal, Belgium).

US Enterprise Requirement (US GAAP compliant): Record Standard cost and Purchase Price Variance

#C14LV2324Local GAAP TransactionAccrued Payables Cr 2,200Purchase Cost: Dr 2,200Example: PO Receipt for Raw Materials: Purchase Price 2200 EUR, Standard Cost 2000US GAAP Transaction:Accrued Payables Cr. 2,200 Inventory Acct. Dr 2,000Purchase Price Variance Dr 200Segment and Account MappingUS GAAP Books Fiscal Books Accounts Payable ---------------> Accounts Payable Inventory Account ------------------> Cost of Purchases Variance Account --------------> Cost of Purchases #C14LV2425Reliable: Consolidation is an old standard GL function. No bugs, no separate patches.Accounting Transformation: Consolidation allows rule based account mapping from primary to statutory books. Periods/Adjustments: Consolidation can accommodate a statutory set of books with different calendar, periods, adjustmentsAudit Trail: Consolidation provides a solid audit trail between the books. Drill-down from statutory books to primary sub-ledger available.Consolidation - Review #C14LV2526Statutory Compliance Functions are part of Consolidation Functionality (since 11I) An option is provided to import batch name, journal name, line description, and date of the original GL transaction.Exclude by Source: Also, consolidation provides an option to exclude transactions journal category. Foreign currency journals automatically retain their original currency and conversion information. No setup required. The setup is done through configuration of profile options and journal categories. Same Functional Currency required: Detail consolidation only available, if both ledgers operate in the same functional currency. Consolidation - Review #C14LV2627General Limitations on Local Statutory Compliance ToolsDetail needs to be in Source: SLA or detail consolidation can only provide transformation and mapping for those transactions that are available. It does not create additional detail, additional separation of entries or additional sequences. This is critical for the setup of the primary GL books and transaction setup.

Examples: Payroll Detail required for statutory reporting must be booked in primary books (need additional accounts in global COA, a statutory account segment or sub-accounts)#C14LV27GotchasNote /Gotcha: Legal Entity cannot be assigned to multiple ledgers, unless they are secondary ledgers. Then the assignment is inherited from the primary ledger. However, BSVs can be assigned to multiple ledgers, example consolidation ledgers. Typically consolidation ledgers have no legal entities assigned to them.

If LE assignment to BSV needs to be changed, you need patch from Oracle. NEW PATCH. 28#C14LV2829How does the Ledger model influence the e-Business Suite Organizational Model?

Business Cases

#C14LV29Opportunities using the Ledger, Legal Entity and Operating Unit optionsModel the Ledger and Legal structure independent of operational structure

Reduce time to integrate acquisitions and roll-out new modules and functionality

Ensure global processes by reducing number of configurations and synchronizations challenges

Simplify and speed up monthly closing

30#C14LV30Traditional Silo Model1 Ledger-1 Legal Entity-1 Operating Unit 31SecondaryLedger PrimaryLedger Secondary Ledger PrimaryLedger Secondary Ledger PrimaryLedger Secondary Ledger PrimaryLedger SecondaryLedger PrimaryLedger LEOULEOULEOULEOULEOU#C14LV31PrimaryLedgerLEOULEOULEOULEOULEOUAdvanced Silo Model1 Ledger-n Legal Entities-n Operating Units

SecondaryLedger#C14LV32New Cross Legal Entity Operating Unit (CLEO)1 Ledger-n Legal Entities-1 Operating Unit

SecondaryLedgerPrimaryLedgerLELELEOULELESecondaryLedger#C14LV33Business Cases: International: Many small subsidiaries in the EURO Zone, including France with local COA: what is the best configuration? Can I use a single Ledger? How? How are the Oracle localizations supportedHow to resolve Document, Accounting and Reporting Sequences - Celantra Compliance rule engine allows dynamic configuration to local ledger and provides multi-country solutions. Sequencing Utility needed if multiple LEs in single ledger International: Can I have a single primary ledger and multiple secondary ledgers in local currency? For Asia Pac or non-EURO countriesHow are currency variations handled?

34#C14LV34Capabilities using the R12 multi-ledger multi-org options Use Ledger Sets to access a set of ledgers for operational efficiency using a single responsibility

Use ledger sets to manage reporting using multi-ledger columnar reporting

Use Multi-Organizational Access Control (MOAC) to access multiple operating units (subledgers) using a single responsibility

Review tasks that can be performed on multiple ledgers using ledger setsControl access and capability using Data Access sets

35#C14LV35Open QuestionsCompare Maintenance OverheadComparison Secondary Ledger vs. ConsolidationChoices for Calendar Conversion rulesDefining Adjustment periods

Note /Gotcha: Legal Entity cannot be assigned to multiple ledgers, unless they are secondary ledgers. Then the assignment is inherited from the primary ledger. However, BSVs can be assigned to multiple ledgers, example consolidation ledgers. Typically consolidation ledgers have no legal entities assigned to them. 2nd Note: If LE assignment needs to be changed, you need patch from Oracle (QC watch out)

36#C14LV36Another Business Case: Thin versus Thick COA: Can I utilize a thin primary COA (4-5 segments) and use secondary ledger for management reporting with 12 segment COA ?

37#C14LV37Please complete the session evaluationWe appreciate your feedback and insightYou may complete the session evaluation either on paper or online via the mobile app#C14LV#C14LV38