oracle e-business suite r12.1 general ledger overview...

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Key Content Contributors

Contributing Companies





R12.1: Oracle Financials

Module: Oracle General Ledger

Oracle General Ledger Process

Accounting Setup Manager

Ledger

Basic Journal Entries

Accounting Setups

Summary Accounts

Bootcamp Objectives



Advanced Journal Entries

Advanced Security

Financial Budgeting

Multi-Currency

Consolidations

Period Close

Financial Reporting

Section Objectives

Multi-Currency concepts

Use Currency Rate Manager

Perform Foreign currency journals Entry

Perform Revaluation of foreign currency balances

Translate functional balances into foreign currency



Overview of Secondary Tracking Segment

Use Foreign Currency Reports

What is Multi–Currency?

• Capability to handle transactions in any

number of currencies.



• Helps to develop and maintain

productive relationships with

international customers and vendors.

Multi Currency Concepts

Three key Multi currency concepts:

• Conversion:

– Conversion refers to foreign currency transactions that are immediately

converted at the time of entry to the functional currency of the ledger in

which the transaction takes place.

• Revaluation:



• Revaluation:

– Revaluation adjusts asset or liability accounts that may be materially

understated or overstated at the end of a period due to a significant

fluctuation in the exchange rate between the time the transaction was

entered and the end of the period.

• Translation:

– Translation restates an entire ledger or balances for a company from the

functional currency to a foreign currency.

Setup: Defining Foreign Currencies

• Enable multiple currencies as the first step to use the multi-currency

features.



Setup: Conversion Rate Types

• Conversion rate is used to convert foreign currency journal amounts

to functional currency equivalents.

• Conversion rate types:– Spot

– Corporate

– User

– EMU Fixed

– User Defined



– User Defined

Setup: Rates

• Rates are shared across ledgers

• Subledgers share the same General Ledger rate definition

• Loading rates automatically

• Maintain daily and historical rates



Setup: Rates Manager

• A new user-friendly tool to manage daily and historical rates

• Cross Rate rules can be applied to maintain consistency



Foreign Currency Journals from Subledger

• Many foreign-denominated transactions are originally entered and

then settled in subledgers such as Payables and Receivables.

Foreign currency obligation is entered in Oracle

Payables journal entry is recorded in General Ledger

Foreign currency is revalued and the unrealized gain or



entered in Oracle Payables

General Ledger unrealized gain or lost is recorded

Payables journal entry is recorded in General Ledger

Realized foreign currency gain or loss is calculated

Foreign currency obligation is paid in Oracle Payables

Concepts: Conversion

• Based on the foreign currency, conversion rate type and conversion

rate, General Ledger converts foreign currency journal amounts to

functional currency equivalents.

DR. Rent…………………..………………….2,500 Euro

CR. Cash…..…………………………………………2,500 Euro



Functional currency

CONVERT 1 Euro = .9 US Dollars

DR. Rent…………………..………………….… 2,250 US$

CR. Cash…..……………………………………….….. 2,250 US$

Foreign currency

Concepts: Revaluation

• Revalue account balances to reflect the change in the exchange rate

between the transaction entry date and the reporting date.

• Upon revaluation, the change will be applicable only on the functional

currency.

Foreign currencies

Foreign currencies



Functional currency Functional currency

Conversion at the time of the foreign currency transaction

Revaluation at the end of the accounting period

currencies currencies

Concepts: Revaluation Example

Entered Journal Entry Lines

DR. Rent…………………………………….10,000 Euro

CR. Cash….…………………………………………10,000 Euro

Convert 1 Euro = .8 US Dollars

DR. Rent…………………………………….… 8,000 US$



REVALUE 1 Euro = .81 US Dollars

CR. Unrealized Gain…………………………………….. 100 US$

DR. Rent…………………………………….… 8,000 US$

CR. Cash….……………………………………….….. 8,000 US$

DR. Rent…………………...………………….… 100 US$

Concepts: Translation

• Foreign currency translation is a process that lets you restate your

functional currency account balances into a reporting currency.

Functional Balance Sheet

Assets Liabilities100,000 60,000 Period end

Rate = 0.75

Functional currency



Foreign currency

ForeignBalance Sheet

Assets Liabilities

Period endRate = 0.75

HistoricalRate = 0.70

75,000 45,000

Owner's Equity

Owner's Equity

40,000

28,000

Concepts: Translation

• General Ledger selects translation rates based on the GL Account

Type and Translation Rate Type:

GL Account Type Translation Rate Type

Monetary Assets, Liabilities Period-End



Non-Monetary Assets, Liabilities Historical

Revenue, Expense Period-Average

Equity Historical

Translation: Balances & Rates Used

Account Type

Assets

Liabilities

Balance and Rate Used in Translation

Cumulative balance and period-end rate

Cumulative balance and period-end rate



Revenue

Expense

Equity

Periodic balances and period average rates

Periodic balances and period average rates

Cumulative balance and period-end rate unless historical rates are defined for these accounts

Foreign Currency Reports

• Daily Conversion Rates Listing

• Historical Rates Listing

• Period Rates Listing

• Foreign Currency General Ledger Report

• Foreign Currency Journals Report

• Foreign Currency Detail Trial Balance Report



• Foreign Currency Summary 1 Trial Balance

• Translation Trial Balance

• Foreign Account Analysis Report

• Foreign Account Analysis Report with Payables Detail

Multi–Currency Profile Options

•GL: Income Statement Accounts Revaluation Rule

•GL: Revaluation: Autoquery Last Run Ranges

•GL: Owners Equity Translation Rule



• Journals: Allow Multiple Exchange Rates

• Journals: Display Inverse Rate

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