The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracles products remains at the sole discretion of Oracle.

E-Business Suite R12 Cost Accounting Integrated with SLADiane Streubel Schreiber Foods Cost ManagerDouglas Volz OAUG Discrete Cost SIG Sub-CommitteeHerve Yu Oracle Costing Development

Oracle Process Costing MAC transitioning to SLA

Oracle Discrete Costing SLA enhancements

Case example: Discrete Costing-Product Line AccountingCosting Accounting Integrated with SLA Agenda

Oracle Process Costing MAC transitioning to SLASchreiber FoodsDiane StreubelManager - Cost & System Development

Converged inventory modelInventory Organizations that are Process will use Process CostingProcess users are denied access to Discrete Costing formsProcess Enabled organizations can not setup costs in the Discrete Costing applicationSub Ledger Architecture (SLA) replaces MAC

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

MACGMI (OPM Inventory)PurchasingGMD, GMEOrder Management11i OPMCosting Accounting Integrated with SLA OPM MAC transitioning to SLA

SLAOracle InventoryPurchasingGMD, GMEOrder ManagementR12 OPMCosting Accounting Integrated with SLA OPM MAC transitioning to SLA

Subledger accounting is an intermediate step between subledger products and the Oracle General LedgerEach transaction that requires accounting is represented by a complete and balanced subledger journal entry, stored in a common data model.Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

SubledgerGL ExportJournal ImportJournal PostingI n t e r f a c eGeneral LedgerFor G/L integration, discrete costing works the same as OPM costingCosting Accounting Integrated with SLA OPM MAC transitioning to SLA11i OPM

Oracle Subledger AccountingOracle General LedgerR12 OPMFor G/L integration, discrete costing works the same as OPM costingCosting Accounting Integrated with SLA OPM MAC transitioning to SLA

OPM MACCompleted material and/or resource transactions.OPM Subledger process processes these transactions to create Journal entriesSLACost Pre-processor will create accounting Events SLA accounting program processes the events to create the journal entriesCompleted material and/or resource transactions.Costing Accounting Integrated with SLA OPM MAC transitioning to SLA

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA Setup Forms

OPM MACSLACOMMENTSFiscal PolicyRetained with few modificationsEvent Fiscal PolicyRetained with few modificationsSourceProcess CategoryEventEvent EntitySub-EventEvent ClassAccount TitlesJournal Line Types (JLT)Accounting TemplateApplication Accounting Definitions (AAD)Users can define their own AADs or modify seeded informationAccount Mapping Attributes(SLA) SourcesSLA sources are used in ADRsPriorities and Account MappingAccount Derivation Rules (ADR)More flexible. Mapping can be done at Accounting flexfield level as well as segment levelTest MappingTest Accounting Builder (TAB)OPM Currency, OPM Ledger, OPM Exchange RatesUse GL setups

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Reports

OPM MACSLACOMMENTSTest and Actual Subledger AccountingDraft and Final AccountingSubledger ProgramAccounting Pre-ProcessorRun Subledger for multiple valuation/cost methods for a ledgerSupports multiple valuation methodsIn OPM there can only be one representation at a time. SLA supports multiple representations at the same timeRun Subledger process for a functional areaRun Pre-Processor by Process CategoryFlexible. User can have any number of categories. Assigned to one or more event classesDetailed Subledger ReportIs retained and has been modified to use SLA repository

Most of the steps are automated using migration scriptsAll the Account Definitions would be migrated as ADRsManual Steps to be completed are:Assign Account Derivation Rules to Journal Line DefinitionsValidate Application Accounting DefinitionAssign User Subledger Accounting Method to LedgerCosting Accounting Integrated with SLA OPM MAC transitioning to SLA

Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Process

NO LOSS of functionality by moving to SLA modelA new sub-menu created under Cost Management for SLA forms.Fiscal Policy and Event Fiscal Policy screens retained with minor modifications. Most of the fields will be read-only.OPM Event model mapped to SLA event model.Costing Accounting Integrated with SLA OPM MAC transitioning to SLA - Summary

Oracle Discrete Costing SLA EnhancementsOAUG Discrete Cost SIG Sub-Committee Douglas Volz Douglas Volz Consulting, Inc.

Release 11i account recognition pain points eliminated by SLA:SLA removes limitations for recording COGS and Revenue (still uses Cost Account Generator/workflow and A/R AutoAccounting)Recording inventory and WIP accounts with more flexibilityFlexible variance account recognition for:Invoice price variancePurchase price varianceAverage cost adjustmentStandard cost adjustmentManufacturing variancesAccount aliasesFreight chargesAnd most other inventory, manufacturing and related account entriesCosting Accounting Integrated with SLA Increased Flexibility: Oracle Discrete Costing SLA

Event Model: definition of the subledger transaction types and lifecycleEntity : Classification of source of transactionEvent Class: Classifies transaction types for accounting rule purposesEvent Type: for each transaction type, defines possible actions with accounting significance

ENTITY Material Transaction, Receiving or WIP or Write OffEVENT CLASSLogical grouping of events which have similar kind of accounting EVENT TYPEThe most granular level of business event which has accounting impactSub Ledger Accounting(SLA) Key Concepts

JOURNAL ENTRY SETUPSDefine/copy and modify journal line typesDefine/copy and modify account derivation rulesDefine/copy and modify descriptionsPROCESSEnter Transaction(s)Cost ManagerCreate Accounting*Transfer Journal Entries to GL*Run Create Accounting Cost Management concurrent request for accounting all transactions from the Cost Management SLA responsibility. Receiving Accounting can be generated in the Purchasing responsibilities using the Create Accounting Receiving concurrent request.

These requests have an option to transfer the entries created to General Ledger. A separate process is also available.Sub Ledger Accounting(SLA) Setup and Process

AccountingProgramSub Ledger Accounting(SLA) Setup and Process

Case Example: Discrete Costing-Product Line AccountingOracle Corporation - Discrete Costing Development Herve Yu Senior Principal Engineer

Example: Record Purchase Price Variance by Product Line

We have two brands of cell phones, Samsung and Nokia

We want to track variances by cell phone brands

We are going to use 2 different ways to address this same requirementCost/SLA mapping set capabilityCategory Accounting Cost/Global Accounting migrated to SLA in R12.1

A word for Inventory period close and Cost/SLA upgrade

Costing Accounting Integrated with SLA Case Example: Purchase Price Variance product Line

Cost/SLA mapping set capability

Product Line Setup Steps Set up your product line using SLA mapping set

Enter your SLA account derivation rule for Purchase Price Variance accounts

Associate the new account derivation rule to your Journal Line Type

Associate the Application Accounting Definition with Subledger Accounting MethodCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Product Line Accounting Descriptive flexfieldCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Product Line Accounting Descriptive flexfieldCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Mapping set Account Derivation RuleCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Mapping set Account Derivation RuleCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

SLA Journal Line / Derivation RuleCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Associate Journal Lines Definition to the Event ClassCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Note the same ADR is usable for Standard Cost UpdateCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Note the same ADR is usable for Standard Cost UpdateCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Associate SLA Definition to the SLA Method/LedgerCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Assign product line code to the inventory itemCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

The material subledger from 11i still existsInventoryPPVInventoryReceivingMatl Overhead AbsorptionCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

SLA Entries That Go to Your G/LCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

For the Standard Cost Update That Go to Your G/LCosting Accounting Integrated with SLA Cost/SLA mapping set capability:PPV by product Line

Category Accounting Cost/Global Accounting migrated to SLA in R12.1

Costing Accounting Integrated with SLA Product Line Category Accounting:Global AccountingCreate a new structure under the key flexfield Item Category

Costing Accounting Integrated with SLA Product Line Category Accounting:Global AccountingCreate a new structure under the key flexfield Item Category

Create category codes

Costing Accounting Integrated with SLA Product Line Category Accounting:Global AccountingCreate a new structure under the key flexfield Item Category

Create category codes

Create category set

Create a new structure under the key flexfield Item Category

Create category codes

Create category set

Assign Product Line Accounting functional area category set

Costing Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

Product Line category accountCosting Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

Account Derivation Rule would have used a source directlyCosting Accounting Integrated with SLA Product Line Category Accounting:Global Accounting

Summary Notes Product line accounting can be achieved in many ways without using Costing Hook.

In R12 SLA is the Oracle R12 accounting platform and Costing supplies application sources from INV,WIP,RCV to build the accounting journals.

One caveat: Pre-Release 12 subledger accounting reports are reading data from Costing distribution layer (such as the Material Account Distribution Summary or Detail Reports). Those reports will not show SLA journals. SLA provides a set of new accounting reports (such as Journal Entries Report, Accounting Analysis Report) which can be modified as desire using BI Publisher.Costing Accounting Integrated with SLA Case Example - Conclusion

Inventory Period Close ProcessInventory interim G/L transfer has been replaced by SLAThe Inventory Accounting Period close works just like it did before, however, SLA now sends accounting information to the general ledger

Upgrade ProcessCustomers have option of migrating the whole historical data to SLA or choose which periods data to be migrated.Customers get option to either upgrade in downtime when upgrading or anytime after the upgrade process.Default for Cost management is to migrate the present calendar year data to SLA.

Costing Accounting Integrated with SLA Inventory Period Close and Upgrade

Additional information are available: R12 Oracle Subledger Accounting Implementation Guide R12 Oracle Cost Management User Guide R12 Oracle Process Manufacturing Cost Management - User Guide Costing Accounting Integrated with SLA

THANK YOU

********************************