SLA Concepts
(1) Legal Entity >
The legal entity administers transaction level rules in compliance with national laws.
In the real world, legal entities have the right to own property, the right to trade, and the responsibility to comply with appropriate laws. They also often have the responsibility to account for themselves (balance sheet, income statement, specified reports) to company regulators, taxation authorities, and owners according to rules specified in the relevant legislation.
(2) Ledgers >
The Ledger represents an accounting representation for an organization that is accountable in a self-contained way.
A ledger provides balanced ledger accounting for the accounting entity and
serves as the repository of financial information. Consequently, it is the principal source of information for the analytical applications in the Oracle E-Business Suite.
Ledger balances have meaning - they assert that the balance:
1. on an account 2. at a given date
3. has a specific value in a particular currency and 4. is properly calculated.
This implies a consistent application of what we sometimes call \of Accounts (COA), Calendar, Currency, and accounting Convention. The COA provides the account; Calendar the date; Currency the amount; and Convention the calculation.
The accounting for a subledger transaction can be set up so that multiple ledgers are populated according to different rules and in different currencies. Ledgers
can be grouped into \wish to manage as though they were one ledger
Ledger and Ledger Sets together replace Sets of Books. The data of a Set of Books is contained in a Ledger.
The Set Of Books (in 11i) is combination of Chart Of Accounts, Calendar and Currency while Ledger (R12) is combination of COA, Calendar, Currency and the SLA method.
In R12, the SOB is replaced by Ledger (The column set_of_books_id has been replaced with ledger_id in all GL tables).
(3) Sub-Ledgers >
Subledger are applications to manage operational transactions with financials impact. Subledger stores accounting at transaction level of details and posts summarized activity information to a GL periodically to maintain centralized account balance for the company.
(4) Subledger Accounting (SLA) >
Oracle Subledger Accounting is a rule based engine for Generating accounting entries based on Subledger transactions from all Oracle applications.
Subledger Acounting is a set of services for R12 that significantly enhance accounting support across the E-Business suite and some of the changes introduced will be fully developed in Fusion.
In terms of its mechanics, SLA is a new schema into which all accounting entries are processed before being interfaced to the General Ledger
Detailed transaction information is captured in the subledgers and periodically posted (in summary or detail form) to the ledger.
(5) Primary, Secondary and Reporting Currency Ledgers >
There are 3 types of ledgers: Primary, Secondary and Reporting Currency ledgers.
1. Primary Ledger (PL):
This is the main ledger and has the most details of information. It can have more than one secondary ledger assigned.
2. Secondary Ledger (SL):
This is optional and differs in one or more of the 4C's 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.
3. Reporting Currency (RC):
Used when the only element that differ 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 RC's assigned. if a RC has not been assigned to a PL or SL, when a translation is run in a ledger the reporting currency is automatically added
(6) Subledger Accounting Methods (SLAM) >
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 are 5 Subledger Accounting Methods :
1. Accrual with Encumbrance Accounting 2. Cash with Encumburance Accounting 3. Standard Accrual (Default) 4. Standard Cash
5. US Federal Accounting.
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-publicsector 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.
Review Existing Setup
(1) Legal Entity / Ledger >
Resp: General Ledger Super User (Process Operations) > Setup > Financials > Accounting Setup Manager > Accounting Setups -
-query up : Ledger = OPM US
-‘Update Accounting Options’ – on ‘Primary Ledger’ = OPM US
? Legal Entity = PRU-Vision Process Industries (US)
– View Details – e.g, Registration Number, Legal Address, Tax Classifications.
? Review Ledger: OPM US
Ledger = OPM US Currency = USD
Chart Of Accounts: OPM Accounting Flex Accounting Calendar = OPM
Subledger Accounting Method = OPM ----> [Open Subledger Accounting Method ]
Subledger Accounting Owner = User
(2) Subledger Accounting Method (SLAM) >
[Open Subledger Accounting Method ] (from above)
This opens up the ‘Subledger Accounting Methods’ Forms screen showing –
Method Code = OPM Owner = User
Chart Of Acounts = OPM Accounting Flex
Application Accounting Definition Assignments >
Application = Process Manufacturing Financials Name = SM_AAD1
(3) Application Accounting Definition (AAD) >
Resp: OPM Financials > Setup > Subledger Accounting Setups > Accounting Methods Builder > Methods and Definitions > Subleger Accounting Methods -
- Query up – Method Code = OPM
? AAD = SM_AAD1 – click on ‘Application Accounting Definition’
This brings up AAD form showing – Event Class, Event Type Assignments and the Journal Line Type Assignments linked to ‘Application Accounting Definition’ - SM_AAD1