1. Open an accounting period.
2. Enter manual journal entries, including:
Standard JE
Foreign and dual currency JE
Statistical JE
Inter-company JE
Manual
Tax journals
Suspense journals
Recurring journals
Skeleton
Formula
Mass Allocation
3. Import journals from sub ledgers. If you encounter an error when trying to import a sub ledger journal, you can correct the import data and rerun journal import.
4. Define recurring journal formulas for transactions that have a common format or that you enter frequently. You can also create recurring journal formulas to create allocation entries. You can use recurring journals to create three types of journal entries:
Skeleton entries affect the same accounts each period, but have different posting amounts.
Standard recurring journal entries use the same accounts and amounts each period.
Formula entries use formulas to calculate journal amounts that vary from period to period.
5. Define Mass Allocation formulas to allocate a cost pool across a group of departments, companies, etc.
6. Generate recurring journal and Mass Allocation journal batches based on formulas you defined.
7. Review the details of your un-posted journal batches.
To view and optionally change un-posted journal batches online use the Enter Journals window.
To view un-posted journal batch detail online, use the Journal Inquiry window.
To print a report showing un-posted batch detail, produce an Un-posted Journals Report.
8. Edit un-posted journals to change information about an un-posted batch or its journal detail, including the batch period and the journal currency.
9. Post your journal batches manually or automatically.
10. Check for posting errors. General Ledger automatically produces a Posting Execution Report so you can check the results of your posting. This report notifies you of any errors.
11. Reverse journals. You can reverse a posted or un-postedjournal entry. Once you assign a reversing period to the journal, generate and post the reversing batch.
12. Revalue your foreign-denominated assets and liabilities to reflect exchange rate fluctuations at the end of each accounting period.
13. Translate your actual account balances to any foreign currency for reporting purposes.
14. Consolidate sets of books by defining and running a consolidation. You can consolidate sets of books that have different charts of accounts and calendars.
15. Produce financial reports and perform online inquiries to review current account balances.
Review account balances online using the Account Inquiry window.
Review posted journal details in the Posted Journals Report, as well as in the General Ledger and Account Analysis reports.
You can also define an unlimited variety of custom reports using the Financial Statement Generator to review account balances in the format of your choice.
16. Enter journals to clear suspense account balances. Examine General Ledger and Account Analysis reports to identify the source of suspense account entries.
17. Close the current accounting period.
18. Open the next accounting period.
Journal Entry
Entering Taxable Journal Entries
Generally, you enter journals for taxable amounts as usual, and enter additional taxation information, then calculate taxes before you post the journal.
After you calculate tax for a journal, the system does not recalculate tax if you revise any line in that journal.
After you calculate tax for a journal, the system does not recalculate tax if you revise any line in that journal.
Entering Statistical Journals
General Ledger provides two ways to enter statistical journals.
1. You can enter journals with only statistical debit and credit amounts.
2. If your user profile permits, you can also combine monetary and statistical amounts in the same journal line.
Note: Statistical journal entries do not require balanced debits and credits.
Note: If you use Multiple Reporting Currencies, statistical journals will be copied to your reporting sets of books, but the journals are not affected by the currency conversion process. You can change the currency for any un-posted journal entry. However, if you have already entered journal line information, the new currency must have equal or greater precision than the original currency. If you are using budgetary control, and have reserved funds for the journal entry, you must un-reserve funds before you can change the currency.
Checking or Reserving Funds for a Journal Batch
If you are using budgetary control, you can check, reserve, or un-reserve funds for individual journal entries or a journal batch.
Submitting Journal Batches for Approval
If Journal Approval is enabled for your set of books, journal batches whose journal source requires approval must be approved by a manager whose authorization limit is high enough to allow approval.
Entering Journals for a Prior Period
You can post journal entries to a prior accounting period, as well as to a prior fiscal year, as long as the prior period is open. When you post to a prior period, General Ledger automatically updates the beginning balances of all subsequent periods. In addition, if you post a journal entry into a prior year, General Ledger adjusts your retained earnings balance for the effect on your income and expense accounts.
Entering Journals for a Future Period
You can enter journal entries for as many future periods as you want. Although you can enter journal transactions to any accounting period with the status of Future-Entry, you cannot post journals into a period until you open the period.
Reviewing Budgetary Control Transactions
If you use budgetary control to check or reserve funds while entering journals, budgets, or encumbrances, you can review the results of your funds check or funds reservation request.
Reviewing Budgetary Control Transaction Detail
For each budgetary control transaction line, General Ledger displays the Result of your funds checking or reservation request on the account. General Ledger displays the Budget, Encumbrance, Actual and Funds
Available balances for the account. The budget balances are the balances in your funding budget. The available balance is calculated as:
Funds Available = Budget – Encumbrance – Actual
Allocating Amounts
Creating Allocation Entries
You can allocate amounts from any Cost Pool (Revenues, Expenses, Assets, or Liabilities) to various accounts using recurring journals and Mass-Allocation formulas.
With a recurring journal entry formula, you define a separate journal entry for each allocation. You can group related allocation entries together in a recurring journal batch.
With Mass Allocations, you define one formula to generate allocation journal entries for a group of cost centers, departments, divisions, and so on. You define the allocation pool, the allocation formula, and the target and offset accounts for each Mass Allocation formula. You can also group combine related Mass Allocation formulas into batches. Using recurring journal entry and Mass Allocation formulas, you can perform a variety of allocations, including:
Net Allocations - Net allocations are allocated amounts that reflect changes to the cost pool. Rather than reallocating the entire revised amount, a net allocation allocates only amounts that update the previous allocations. The net effect is the same as reversing the previous allocations and posting the entire new allocation amount. This enables you to rerun the allocations as many times as you want in the same accounting period without over allocating.
Step-Down Allocations - Step-down allocations distribute amounts from one allocation pool to a subsidiary allocation pool.
Rate-Based Allocations - Rate-based allocations use current, historical or estimated rates to allocate costs such as employee benefits, commissions, bad debt, warranty costs and overhead. For example, you might want to allocate warranty costs to each division based on sales revenues and a warranty loss rate.
Usage-Based Allocations - Usage-based allocations use statistics such as headcount, units sold, square footage, number of deliveries or computer time consumed to calculate allocation amounts.
Standard Costing Allocations - You can use statistics such as sales units, production units, number of deliveries or customers served to perform standard costing. For example, you might want to calculate cost of sales based on sales units and a standard cost per unit.
Recurring Journals
Define recurring journal formulas for transactions that you repeat every accounting period, such as Accruals, Depreciation charges, Allocations and Elimination entries
You can define recurring journal formulas for your functional currency, foreign currencies that have a fixed relationship with your functional currency, and statistical currency.
You can use recurring journals to create three types of journal entries:
Skeleton: Skeleton entries affect the same accounts each period, but have different posting amounts.
Standard: Standard recurring journal entries use the same accounts and amounts each period.
Formula Entries: Formula entries use formulas to calculate journal amounts that vary from period to period.
Copying Entries from an Existing Recurring Journal Batch
You can create a new recurring journal formula batch quickly by copying and modifying an existing recurring journal formula batch.
Creating Recurring Journal Formula Batches
To define a recurring journal formula entry, you must create a recurring journal formula batch. Your batch can contain a single recurring journal entry definition, or you can group related recurring journals into the same batch.
Entering Formulas with Easy Calc
Easy Calc is a powerful, yet easy-to-use calculation notation based on the mathematical logic used by Hewlett-Packard calculators. Easy Calc lets you enter complex formulas to calculate journal entries, allocations, budgets and report balances.
Mass-Allocations
Use a Mass-Allocation formula to create journals that allocate Revenues and Expenses across a group of Cost Canters, Departments, Divisions, and so on.
By including parent values in allocation formulas, you can allocate to the child values referenced by the parent without having to enumerate each child separately.
Hence, a single formula can perform multiple allocations.
You can create Mass-Allocations in your functional currency, a foreign currency or statistical currency.
To define Mass-Allocation formulas, you create a Mass-Allocation batch that contains one or more Mass-Allocation formula entries.
Entering a Target Account
Enter an account in the Target line to specify the destination for your allocations.
When the result of your allocation formula is a positive number, the resulting journal entry debits the target account and credits the offset account.
When the result of your allocation formula is a negative number, the resulting journal entry credits the target account and debits the offset account.
Generating Mass-Allocation Journals
Generate Mass-Allocations to create un-posted journal batches based on your validated Mass-Allocation formulas. The generated journal batch contains one entry for each allocation formula in the batch. Use Mass-Allocation journals to reverse existing balances, post new allocation amounts, or generate journals that increment the existing balances to match the current allocation amount.
Choosing an Allocation Method
You can generate journals from allocation formulas using a full or incremental allocation method, depending on whether you want to replace or increment existing account balances.
Full Allocation Method
Choose the Full allocation method to generate journals that reverse previous allocations or to post new allocation amounts.
Incremental Allocation Method
Choose the Incremental allocation method when you want to update allocated balances without reversing the previous allocation batches.
Scheduling Your Allocation or Mass-Allocation Batch
You can generate your Allocation or Mass-Allocation Journal Batch according to schedules in Oracle Applications,
Auto-Allocation
To automate journal batch validation and generation for Mass-Allocations, Recurring Journals, Mass-Budgets, and Mass Encumbrances.
From the Auto-Allocation Workbench you can define Auto-Allocation sets and submit them for processing.
You can also schedule your Auto-Allocation Sets to run in future periods based on General Ledger schedules you create.
Use = Auto-Allocation to process journal batches you generate regularly, such as for month end closing.
Types
Parallel: Parallel Auto-Allocation validates and generates all the journal batches in your Auto-Allocation set simultaneously.
Step-Down: You must create journal batches in a specific sequence when using Step-Down Auto-Allocations. Order your journal batches so that the posted results of one step are used in the next step of the Auto-Allocation set.
You can choose any combination of Mass-Allocations, Recurring Journals, Mass-Budgets, and Mass Encumbrances. Step-Down Auto-Allocation sets automatically validate, generate, and post all journals created by the process.
Note: Journal Approval, which also uses Oracle Workflow for notifications and approvals, is an independent sub-process that can be launched by Auto-Allocation.
.
Step-Down Auto-Allocation Approval Process
Step-Down Auto-Allocation invokes an automated process managed by Oracle Workflow. The process initiates the GL Allocation process and directs batches to the GL Mass-Allocation process or the GL Recurring Journals process.
The Step-Down Auto-Allocation process consists of five main processes:
Automatic Step-Down Allocation Process
GL Allocation Process
GL Mass-Allocation Process
GL Recurring Journal Process
GL Posting Process
Posting
Post journal batches to update the account balances of your detail and summary accounts.
You can post Actual, Budget, or Encumbrance journal batches.
If you enabled suspense posting when you defined the set of books, General Ledger automatically balances each out-of-balance journal entry against a suspense account you specify for your set of books.
Auto-Post (Posting Journal Batches Automatically)
You can automatically post journal batches that meet specific criteria you’ve defined in an Auto-Post criteria set. Auto-Post priorities include combinations of journal source, journal category, balance type, and period.
Once you define Auto-Post criteria set, run the Auto-Post program to select and post any journal batches that meet the criteria defined by the criteria set.
If MRC is used, General Ledger will generate un-posted converted journal batches in your reporting sets of books automatically. You must define appropriate daily rates for your reporting currencies before you post journals in your primary set of books. After posting in your primary set of books, you must post the converted journal batches in your reporting sets of books to see the correct account balances
Reversing
Use reversing journal entries to reverse Accruals, Estimates, Errors or Temporary Adjustments and Reclassifications.
You can enter a reversal period and effective date at any time, even after the journal is posted. However, you cannot reverse batches and journals that you have already reversed.
If you use Multiple Reporting Currencies and reverse a journal entry in your primary set of books, General Ledger also reverses the corresponding entry in your reporting sets of books.
Entry
Journals Window
Reverse Journal Window
Reversing Journal Batch General Ledger creates a reversing journal entry for each journal entry in your batch. Note that this also generates a separate reversal batch for each reversed journal.
Automatic Journal Reversal
To automate the process and post the same automatically
Assigning Journal Reversal Criteria
To control how and when your journals are reversed.
You can also enable Auto-Reverse and Auto-Post to automatically generate and post your reversals
Automatic Journal Scheduling
Automatic Journal Scheduling lets you generate Recurring Journals, Auto-Allocation sets, and Mass-Allocations, Mass-Budgets and Budget Formulas according to a schedule you define. For example, you can schedule the same journal and allocation sets to be generated every month as part of your month-end closing procedures.
Year-End Closing Journals
Many organizations follow specific procedures to generate special journal entries to close and open fiscal years. These closing entries apply to both the income statement and balance sheet.
General Ledger is equipped to create actual closing journals for year-end and other closing periods. To process year-end closing journals, we recommend you:
Set up the last day of your fiscal year as an adjusting period.
Set up the first day of your new fiscal year as an adjusting period.
Ensure the period you are closing is an Open period.
Complete your routine accounting before the last day of the year.
Post your adjustments and closing entries in the adjusting period.
In the last adjusting period of the fiscal year you want to close:
Run the Create Income Statement Closing Journals process to transfer income statement year-end account balances of your revenue and expense accounts to the retained earnings account.
Run the Create Balance Sheet Closing Journals process to close and zero out the year-to-date balances of all balance sheet accounts: assets, liabilities, and owner’s equity. In the first adjusting period of your new fiscal year:
Run the Open Period program to open the first period of the New Year.
Reverse and post the balance sheet closing journals to reopen those balances.
Note: You are closing actual journals. You cannot close budget or encumbrance balances.
Warning: If you are using Multiple Reporting Currencies, make sure you define a conversion rule to prevent replication of your year-end closing journals from your primary set of books to each of your reporting sets of books.
Income Statement Closing Journals
The Income Statement Closing Journals program generates journals to close out the year-to-date (YTD) actual balances of a range of revenue and expense accounts. This program can be submitted for any open period.
General Ledger provides two options for the Income Statement Closing Journals.
You can choose to zero out each income statement account, and post the balance to the retained earnings account.
Alternatively, you can post the reciprocal of the net income balance to an income statement offset account instead of zeroing out each revenue and expense account.
Elimination Entry
The GL Automatic Inter-company Eliminations program eliminates inter-company balances.
Full Eliminations Elimination sets can optionally use an elimination company to fully eliminate a group of inter-company elimination entries for a set of subsidiaries.
Schedule you generate the elimination set every period to automatically create the elimination journal entries. You have the option of automatically posting the journal or wait till you review it.
Use Recurring Journals
> If you have formula based elimination entries
> If you want to eliminate Average Balances
The Automatic Inter-company Eliminations program automatically generates eliminating entries per the rules specified in the Define
Elimination Account Mapping window.
GIS
General Ledger’s Global Inter-company System (GIS) feature helps you manage your inter-company transactions through a highly centralized process.
With GIS, your parent and subsidiaries can send inter-company transactions to one another for review and approval, before the transactions are posted in each company’s set of books
If you prefer a decentralized approach where each subsidiary enters inter-company transactions autonomously, you can choose not to use GIS. In this case, each subsidiary enters inter-company transactions directly into their set of books.
You must enter separate transactions in each subsidiary set of books to reflect each subsidiary’s portion of a multi–company transaction. For each subsidiary:
Choose the subsidiary (GIS subsidiary) set of books by selecting a responsibility that has access to the set of books.
Enter the subsidiary’s portion of the multi–company transaction, making sure to balance the entry against an inter-company account. Post the transaction when complete. For example, to record a cash sale from Company A to Company B (subsidiaries of the same parent), you might make the entries shown in the next two tables:
Company A’s set of books:
Cash DR
Inter-company Sales CR
Company B’s set of books:
Inter-company Purchase DR
Cash CR
The inter-company accounts should be eliminated during the consolidation process.
The Global Inter-company System (GIS) provides a controlled, central location for subsidiaries to conduct inter-company
Transactions throughout a global organization.
GIS subsidiaries with different charts of accounts, calendars, currencies (i.e. SOB), and applications instances can exchange transactions with one another through GIS
GIS manages inter-company transactions that occur between sets of books
GIS supports your multi-company accounting efforts with the following features:
Account Generation: You can define Auto-Accounting rules that establish chart of account relationships between GIS senders and receivers. When you enter inter-company transactions, GIS refers to the Auto-Accounting rules to automatically generate account code combinations and amounts for the sender distribution, receiver distribution, and receiver clearing transaction lines.
Security: Your system administrator can control user access to GIS inter-company transactions to prevent senders and receivers from seeing the details of each other’s transactions.
Currency Conversion: GIS maintains a transaction in the entered currency. When the transaction is approved and transferred to a subsidiary set of books, a journal entry is created in the same entered currency. This journal entry is then automatically converted to the functional currency for the subsidiary’s set of books.
Inter-company Transaction Import: GIS includes an open interface table to import and validate inter-company transactions from varied sources into GIS.
GCS
Consolidation is the period–end process of combining the financial results of separate subsidiaries with the parent company to form a single, combined statement of financial results.
There are two methods you can use to achieve consolidated results with Oracle Applications:
Reporting Consolidations: Define an FSG report which consolidates data stored in a single set of books or which sums data across separate sets of books on the same applications instance.
Data Transfer Consolidations: Serves global enterprises with multiple SOB/Multiple Applications Instances. With data transfer consolidations, you move your financial data from diverse sets of books and data sources into a single consolidation set of books
If your companies are sharing a single set of books for operational accounting purposes, then you need only FSG.
To consolidate multiple companies whose accounting information is maintained in separate sets of books in one Applications instance or Xple instances, use the Global Consolidation System (GCS).
You should use GCS if one of the following is true in your organization:
Your companies require different account structures. For example, one company may need a six-segment chart of accounts, while another needs only a four segment chart of accounts.(i.e. Different SOBs)
Your companies use different accounting calendars. For example, one company may use a weekly calendar and another may use a monthly calendar. . (I.e. Different SOBs)
Your companies operate in different countries requiring them to use their own local currencies.(i.e. Different SOBs)
If you maintain your parent and all of its subsidiaries within one set of books and you do not have average balance processing enabled, you do not need to use GCS to view and report on your consolidated financial information ((Xple SOB)
You can consolidate budgets in addition to actual balances. If you plan to consolidate budgets, your subsidiary and parent sets of books must share the same calendar
With GCS, you can consolidate any business dimension at any level of detail from any point of view:
Any Source including ledger, databases, oracle and non oracle applications
Any Chart of Accounts
Any Calendar
Any Currency
Any Level of Detail txns, detail balances, and summary balances
Any Balance Type including actual, average, translated, budget, and statistical journals
Depending upon your company and subsidiary business needs, General Ledger offers a number of solutions to automatically account for inter-company transactions within a single set of books.(Single SOB)
General Ledger can automatically balance inter-company journals based on accounts you define in the Inter-company Accounts window provided the Balance Inter-company Journals option in the Set of Books window enabled. General Ledger creates balancing journal lines when you post, using the appropriate inter-company accounts you specify for the source, category, and balancing segment. (Single SOB)
If you maintain multiple companies within one set of books, you can use the Financial Statement Generator (FSG) or the report definition tool in the Applications Desktop Integrator (ADI) to create and generate consolidated financial statements using the consolidated parent accounts.(Single SOB)
You can maintain one set of books for multiple companies as long as the companies share the same account structure, accounting calendar, and functional currency. This ensures that each company is always in balance, which makes it easy for you to maintain and report on multiple companies as stand-alone entities when you maintain all their accounting records in the same set of books. (Single SOB)
You can create consolidated reports only in your parent set of books. . If you define a separate consolidation set of books with a unique chart of accounts, you will have to define new reports in that consolidation set of books
You also need separate sets of books if you use multiple Oracle Applications instances for your companies
Journal Approval
The GL Journal Approval Process obtains the necessary management approvals for manual journal batches. The process
Validates the journal batch,
Determines if approval is required,
Submits the batch to approvers (if required),
Then notifies appropriate individuals of the approval results.
The process has a result type of GL Journal Approval Process Result that gives one of four results:
Approval Not Required: The journal batch does not need approval.
Approved: The journal batch was approved by all necessary approvers. In some cases, this may be the preparer.
Rejected: The journal batch was rejected by an approver.
Validation Failed: The journal batch failed the validation process and was never submitted to the approver.
The process consists of 5 unique activities, some of which are reused, to comprise the 9 activity nodes that appear in the workflow diagram:
GL Initialization & Validation Process
GL Preparer Approval Process
GL Approval Process
GL Request Approval Process
GL No Approver Response Process
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