Subledger Accounting in Oracle EBS R12

8/17/2019 Subledger Accounting in Oracle EBS R12

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Subledger accounting in Oracle EBS R12

Subledger accounting in R12 is an enhanced accounting process.

The SLA process allows customers to personalize the process for

specic events. The user sets the rules to be followed. Accounts

are still dened the same wa as prior application versions via the

same forms. !rganizations are dened the same wa. "f there are

no rules entered into the SLA engine# the accounts dened the

traditional wa will be used to generate the $ournal entries posted

to %L. All setups to use preR12 functionalit are automatic. Thedefault base setup is &S %AA'. This uses the traditional account

denitions. This is delivered and wor(s out of the bo).

*ith SLA# account generation is now centralized as opposed to

each application being responsible for its own accounting. This

causes the setup steps for SLA to be the same across products#

i.e.# 'aables# Receivables# and +ost ,anagement.

Benefts o SLA include:

- or customers users dene and manage accounting parameters

in once centralized place. &sers do not have to have di/erent

setups for each subledger application.

- %ives customers 0e)ibilit to address di/erent and changing

accounting reuirements to meet business needs

- Allows users to dene all components of the $ournal entr in a

simple wa as opposed to generating accounting through logic

embedded in the accounting programs.

- Allows users to change accounting rules in response to new legal

reuirement changes in business practices or acuisition of new


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companies.

- &sers can easil control and modif accounting rules. SLA trac(s

all changes and ensures the programs creating the $ournal entries

are using the latest rules. This is called +ompilation and is a

'LS3L pac(age that validates and chec(s the rules that are being

used.

- SLA rules can be date based. So $ournal entries can be created

according to rules depending on accounting date of the

transaction.

SLA Engine

SLA uses a rules-based accounting engine that posts entries into

%L. The rules used

b the engine are user dened. The rules are stored in a common

repositor for all subledger applications.

A subledger application would be a product area# such as

"nventor# 'aables# Receivables# 'urchasing# etc. The R12 SLA

process has created a common accounting process to be used

across all applications.

This allows the customer to have a single method for dening

accounting behaviors. or R12# the subledger application for

"nventor and 'urchasing are combined into the subledger +ost

,anagement. The SLA process allows for the displa of the inventor valuation

accounts to be seen for a user dened date range. The engine

also allows the accounting department maintain control over

accounting and chart of accounts.

*hen rules are created# the rules engine will override user

entered accounts that might be incorrect. This is important tocontrol user errors that can occur within a period. The rules will


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automaticall redirect the costs to the correct account. The rules

can be created for most item attributes to allow for granularit of

costs if the customer reuires this level of detail.

Pre-R12 Accounting Process:

A transaction is received and accounted for in the local subledger

-or-

A transaction is costed and accounted for in the local subledger

The transaction is specicall passed to %L via the Transfer to %L

process.

4iew Accounting *indows will then show the details for these

transactions.

R12 Subledger Accounting Process:

After the Rules are established# the +ost ,anagement SLA

responsibilit allows for the creation of the user-dened

accounting data. The reuest group related to this process

includes all SLA processes as well as standard accounting

processes. A transaction would be received or costed.

SLA uses events for processing transactions. An event is the

recording of a change of status in the transaction life ccle# i.e.#

invoice approved# pament received# period close# etc. This allows

for a clear separation between transactions and accounting

representation. 5vents are the bridge between transactions and $ournal entries# so product teams are involved for coordinating

actions based on event models.

R12 Subledger Accounting Rules:

SLA uses a rules-based accounting engine that posts entries into

%L. The rules used b the engine are user dened. The rules are

stored in a common repositor for all subledger applications. Asubledger application would be a product area# such as "nventor#


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'aables# Receivables# 'urchasing# etc.

The R12 SLA process has created a common accounting process

to be used across all applications. This allows the customer to

have a single method for dening accounting behaviors. The

engine supports the use of multiple currencies. This also allows for

various audit tools and reports to be used when reviewing %L

postings.

The SLA process allows for the displa of the inventor valuation

accounts to be seen for a user dened date range. The engine

also allows the accounting department to maintain control over

accounting and chart of accounts for the ledgers used.

*hen rules are created# the rules engine will override user

entered accounts that might be incorrect. This is important to

control user errors that can occur within a period. The rules will

automaticall redirect the costs to the correct account. The rules

can be created for most item attributes to allow for granularit of

costs if so desired.

Basic Steps to Build Accounts:

These steps are needed for each di/erent $ournal line tpe that is

going to be used. or e)ample# "nventor valuation# Receiving

valuation# *"' valuation# +ost of %oods Sold.

Step 1 +reate Account 6erivation Rule 7A6R8

Step 2 6ene conditions reuired for the A6R created

Step 9 +reate :ournal Line 6enitions 7:6L8 for an event class

a- uer the L!4 of seeded event classes

b- cop the seeded event class using the +op 6enition button

c- replace e)isting A6R in the :ournal Line tpe form with the newA6R


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this is in the Line Assignments sections# using Line Tpe

Step ; +reate new Applications Accounting 6enition 7AA68

The responsibilit to use is Receivables < Setup = Accounting =

Accounting ,ethods >uilder = ,ethods and 6enitions =

Subledger Accounting ,ethods

a- uer for the seeded AA6

b- cop from this to create a new AA6

c- associate the new :L6 assignments created in Step 9

d- validate the denition. "f successful continue to ne)t step or

continue creating the :L6s reuired. "f unsuccessful# chec( the

setup for all steps above before moving to ne)t steps.

Step ? Associate the new AA6 with the Subledger Accounting

,ethod 7SLA,8

a- uer SLA,s to view e)isting methods

b- for the e)isting AA6 enter an end date to stop this from being

used

c- attach the new AA6 with the start date

Step @ Assign the SLA, to the Ledger

The process is built from the bottom up.

Ledgers replace Set of >oo(s.

The 9+s are now (nown as the ;+s<

+hart of Accounts

+alendar

+urrencAccounting convention


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This allows for accounting to be used at the local level 7b

countr8 and also b the line of business 7sales# consulting# etc8.

The Ledger and Ledger Sets 7group of Ledgers8 use the ,ulti-!rg

Access control 7,!A+8 that is e)panded in R12.

5)amples of Subledger ,ethods 7SLA,s8

&S %AA'

R5+B %AA'

+ash >asis Accounting

Accrual >asis Accounting

The following SLA,S are seeded in !racle<

Standard Accrual

Standard +ash

5ncumbrance and &S ederal

'roduct teams are responsible for the following<

"dentif transaction entities with accounting impacts

6ene event tpes that correspond to di/erent status in the

lifeccle

+reate events for transactions when passing from status to

another Cthis is transparent to the customer although the creationis triggered b the user action.

6ene transaction ob$ects that provide data that SLA uses to

create $ournal entries

'opulation of transaction ob$ects is the responsibilit of product

teams

SLA Team is responsible for the following


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6ening data model for events

6evelop,aintain programs and A'"s that create and maintain

events and related ob$ects

'rocessing events as part of the +reate Accounting programs

Events

5vent 5ntities have 5vent +lasses. 5ach 5vent +lass has 5vent

Tpes.

There are four ,ain 5ntities for +ost ,anagement<

"nventor<

,aterial Accounting 5vents

5vent +lasses<

'! 6eliver in "nventor

Sales !rder "ssue

"nternal !rder to 5)pense

*"' ,aterial

+onsigned "nventor !wnership Transfer

,iscellaneous

"ntra!rg transfer

6irect "nterorg Shipment6irect "nterorg Receipts

"ntransit "nterorg Shipment !> Shipment

"ntransit "nterorg Receipt !> Receipt

All other intransit interorg transactions

,aterial cost update

Retroactive price ad$ustmentLogical "ntercompan


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*"' ,aterial Lot

'urchasingReceiving

*rite !/ Accounting 5vents

Receiving Accounting 5vents

*or( in 'rocess<

*"' Accounting 5vents

5vent +lass<

*"' Absorption

5vent Tpe<

Resource Absorption

Resource !verhead Absorption

Scrap Absorption

!utside 'rocessing

5vent Tpe<

!S' Transaction

Shoploor 6eliver for 6irect "tems

"'4 transfer to *or( !rder

*"' 4ariance

5vent Tpe<

'eriod +lose 4ariance :ob close 4ariance

inal +ompletion 4ariance

*"' Lot

5vent Tpe<

*"' Lot Split

*"' Lot ,erge*"' Lot &pdate 3uantit


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*"' Lot >onus

*"' +ost &pdate

5vent Tpe<

*"' +ost &pdate

The *or( in 'rocess list above shows the ,ain 5vent 5ntit is *"'

Accounting.

The 5vent +lasses are then listed with each 5vent Tpe that is part

of the 5vent +lass.

Defnitions:

Accounting Methods Builder

This is the process that created a SLA, and assigns it to the

Ledger.

Ledger

The ledger determines the rules that are applied when accounting

is generated. Ledgers replace Set of >oo(s. 5ach !perating &nit is

associated with a 'rimar Ledger. ,ultiple Legal 5ntities can be

tied to a Ledger through the accounting set up 0ow. ,ultiple

SLA,s can be assigned to a Ledger. There can be a primar and

Secondar ledger setup that can use di/erent accounting methodsin each ledger.

Subledger Accounting Method (SLAM)

This is the subledger accounting method that is built and assigned

to a Ledger. This will be created via the Accounting ,ethods

>uilder and includes all the details needed to created the

appropriate $ournal entries.Alic!tion Accounting "efnitions (AA")


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The application accounting denitions is made up of the :ournal

Line 6enition# :ournal line tpes# and Accounting 6erivation

Rules. These are developed using the event classes and tpes. A

new AA6 can be created or a seeded AA6 can be used. The

details are assigned and validated to be certain the setup at this

level is correct.

#ourn!l Line "efnitions (#L")

:LT# A6R and :56 are combined to create the :6L for an event.

These can be shared across AA6s and can be used to create sets

of line assignments for event classes and tpes.

or +ost ,anagement# The :ournal 5ntr 6escription is not seeded

b default in +osting application accounting denition. This has

been submitted as an enhancement reuest.

#ourn!l Line $%es (#L$)

The tpes are dened for each particular class to be used. These

must be assigned to the :ournal Line 6enition 7:6L8 to be used.

These determine the $ournal entr line options to be used. These

options include identifing the natural side used 7debit# credit#

gainloss8# accounting class# summarization# and other conditions

that will cause the rule to create a $ournal entr.

Account "eri&!tion Rule (A"R)

This is used to determine the accounting combinations that will beused for the $ournal entries. 4arious rules can be dened. These

can be dened b segment# accounting combination# or value set.

The simplest wa to derive an account is to establish the account

as a constant value-use the account combination that is dened in

the accounting chart of accounts.

M!ing Sets

These sets are optional and user dened. "f the user determines


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that the seeded details are insuDcient# then mapping sets can be

setup to allow for more specialization in the accounts. This is not

supported b development as this would reuire customization.

Seeded details are supported as the are provided b !racle code.

$r!ns!ction 'bectsSources

Transaction ob$ects and sources carr transaction information into

the rules dened for the accounting chart of accounts.

E&ent:

An event is the recording of a change of status in the transaction

life ccle# i.e.# invoice approved# pament received# period close#

etc. These are dened for each

SLA, used. 5vent classes and event tpes are used to create the

events to be used

E&ent *l!ss

This classies the tpes of transactions that are to be accounted

for. An e)ample of an event class is *"' 4ariance.

E&ent $%e

This denes actions that are possible for an event class that has

potential accounting signicance. 5)amples for the *"' 4ariance

5vent +LASS would have event TE'5S dened for 'eriod +lose

4ariance# :ob +lose 4ariance# and inal +ompletion 4ariance.

Profle 'tions or SLA<SLA: Enable Subledger Transaction Security in GL

SLA: Enable Data Access Security in Subledger

SLA: Additional Data Access Set

SLA: Allow Reports Journal source Oerride

FThese rst ; are used b %L for overall setup of SLA for %L

SLA: Enable Diagnostics


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This is onl enabled when there are errors in the +reate

Accounting process.

The value is set to Ees and then the +reate Accounting process is

run again. The details are then captured and can be reported in

the Transaction !b$ects 6iagnostic Report. >ecause of

performance issues# the prole option needs to be reset right

awa to turn this o/ and the Sstem Administrator can run the

'urge Transaction ob$ects 6iagnostics process to clean up the

tables.

!ST: Receiing Accounting Option

This prole option controls whether the Receiving Transactions

'rocessor creates the accounting entries online or if the

transaction accounting entries need to be created via the +reate

Accounting process.

*ost M!n!ge+ent- SLA Resonsibilit%

This is a new responsibilit that allows for the setup of SLA and

also to access the +reate Accounting +ost ,anagement process.

The +reate Accounting process that can be used for receiving

transactions are +reate Accounting +ost ,anagement ... &se

'rocess +ategor G Receiving

!R+reate Accounting Receiving.

This last process# +reate Accounting Receiving# is part of

'urchasing responsibilit and can onl be run for receiving

transactions.

or Accrual reconciliation<---------------------------


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The R12 Accrual reconciliation process will use the accounting

entries from SLA as SLA is the source of truth for the real

accounting entries. Bence the accrual load can not report an

transactions prior to SLA upgrade start date.

,ost users processing the receiving transactions would use

instead of the +reate Accounting - +ost ,anagement is run via the

+ost ,anagement SLA responsibilit. This responsibilit should

have more securit and restrictions from users.

Proect M!nu!cturing !nd SLA-

or the %L posting option set to manufacturing# the cost collector

will continue to post the transaction information $ust as before.

The cost collector will pic( the account information from

mtlHtransactionHaccounts and wipHtransactionHaccounts. So if the

user has set up an account derivation rules in SLA# the will not

be respected b the cost collector.

or the other setup option# i.e when %L posting is set to 'ro$ects#

depending on whether the auto accounting option has been set to

es or no# the accounts will be passed in or not passed in. "f the

auto accounting rule option has been set to Ees# no accounts will

be passed to !racle 'ro$ects b the cost collector. "n this case# theuser is responsible for setting the auto accounting rules in !racle

pro$ects setup to derive the accounts. "f the auto accounting

option has been set to o# the accounts will continue to get

passed in $ust as before 7from ,TA and *TA8.

Bowever# the cost collector will pass in the distribution lin( from

,TA and *TA to !racle pro$ects. This distribution lin( will enable!racle pro$ects to lin( the distributions created in SLA tables bac(


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to the ,TA and *TA tables. The distribution lin(s are stored in the

columns invHsubHledgerHid and wipHsubHledgerHid in the ,TA and

*TA tables.

Periodic A&er!ge *osting !nd SLA - 'resentl there is no

support for SLA for 'eriodic Average +osting. This is on the

enhancement list but as of 12.1.1# this is not supported but is still

under review from product development.

So+e Reorts th!t h!&e been ch!nged:

+STRS++R Suppl +hain +ost Rollup

+STR5"4R - 5lemental "nventor 4alue Report

*ith "mplementation of Subledger Accounting Architecture feature

in R12# the role of +ost %roupSub "nventor is limited to

maintaining the &nit +ost in the Reports. All the Account

%eneration for Transaction will be ta(en care b SLA 5ngine rules.

So all account-related information has been removed from the

valuation reports.

$he ollo,ing cost hoo is i+!cted: *S$S*./B0ls0 The

SLA setups will ta(e the place of the stdHcostHdistHhoo(# which

allows the user to modied the accounts that are used fordistributions. This will no longer be used as the user can use

standard SLA process for this.

$roubleshooting suggestions:

1- Review logle for the +reate Accounting +ost ,anagement

2- 5nable 6< 6ebug to provide more details

9- Review the Transaction !b$ects 6iagnostic Report;- +onrm transactions are costed successfull via cost ,anager


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?- +hec( if the +reate Accounting +ost ,anagement process is

successful when using traditional accounts.

@- Run the Subledger 'eriod +lose 5)ceptions Report and review

errors# if an.

Subledger Accounting in Oracle EBS R12

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