Subledger Accounting (SLA)

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First Release Version: 12.0

Subledger Accounting Introduction

Subledger Accounting is a new feature which enhances the functionality in Oracle General Ledger Applications by defining how journal entries are generated from Subledger transactions at the Subledger Accounting application level. The options are set up for the Primary and Secondary Ledgers only and are entered through the General Ledger's Accounting Setup Manager. A Set of Books in Release 11 is now a Ledger with its own Ledger Set in Release 12. Subledger Accounting creates the accounting like the earlier Release 11i Oracle Accounting Engine created the accounting.

See: Overview of the Financial Services Accounting Hub for Implementers, Oracle Financial Services Accounting Hub Implementation Guide

Subledger Accounting Options Setup

Subledger accounting options define how journal entries are generated from subledger transactions at the subledger application level. These options are set up for the primary and secondary ledgers only. All subledgers assigned to a ledger inherit the subledger accounting method from that ledger.

There are three accounting Options Set up Pages

1. Subledger Applications - This page displays options in the context of a primary or secondary ledger by application. Particular applications may have the Subledger Accounting disabled for a secondary ledger.

2. Update Accounting Options - Displays the Subledger Accounting options for the ledger and the subledger application.

3. Update System Options - System Options define the processing size at the event class level for the number of items in one commit cycle. The Create Accounting program processes the default processing units at the application level.

Accounting Methods Builder

The Accounting Methods Builder (AMB) functionality creates and modifies Subledger Journal Line setups and Application Accounting Definitions. These Application Accounting Definitions define the journal entries that enable an organization to meet specific fiscal, regulatory, and analytical requirements. These definitions are then grouped into Subledger Accounting Methods and assigned collectively to a ledger. (Accounting Methods Builder)

The AMB includes the following features:

• Accounting options that determine different characteristics of the journal entry
• Descriptions that appear on the subledger journal header and lines which provide additional information about the journal entry
• Account derivation rules to construct the accounts for a subledger journal entry line
• Conditions that determine when subledger journal entry accounts and lines are created

The AMB includes journal entry setup components to configure each of the following elements:

• Journal Line Types: Control journal entry line options such as balance type, side, and summarization
• Journal Entry Descriptions: Control the description for the journal entry headers and lines
• Account Derivation Rules: Control the derivation of Accounting Flexfield combinations for the journal entry lines

Set WEBWORKFLOWREPORTFORMAT = |$topic|$status|$lasttime|$history|$revision|$author|$date|$parent| The following are the components of the Accounting Methods Builder

• Line Types
• Journal Entry Descriptions
• Mapping Sets
• Account Derivation Rules
• Journal Line Definitions
• Application Accounting Definitions
• Subledger Accounting Methods

The journal entry setup components are associated with journal lines definitions that are attached to application accounting definitions. Grouping detailed subledger accounting definitions for different kinds of transactions into consistent sets will address different accounting needs. To use application accounting definitions, they must be included in a subledger accounting method and then assigned to a ledger.

Create Accounting and Transfer Journal Entries to GL Programs

Create Accounting program processes all eligible accounting events to create subledger journal entries. The program validates and creates subledger journal entries; transfers the current batch journal entry to General Ledger and starts the posting process; and, Generates the Subledger Accounting Program Report for the program. The diagnostic framework provides the ability to review the journal entries created by the Subledger Accounting program.

Subledger Journal Entry

The Subledger Accounting's purpose is to generate journal entries for transactions that occur in subledgers. It is critical to have a clear and common definition of a subledger journal entry to ensure the validity of all journal entries generated by Subledger Accounting.

A valid subledger journal entry must satisfy all the following rules and validations:

• The subledger journal entry must have one header.
• Actual and encumbrance journal entries must have at least two journal entry lines.
• Actual and encumbrance journal entries must be balanced in both entered and ledger currencies.
• Actual and encumbrance entries must be balanced by balancing segment.
• STAT journal entries do not need to be balanced.
• Encumbrance journal entries can only be created for ledgers that are enabled for encumbrance accounting.
• The subledger journal entry must have valid monetary amounts.
• The actual journal entry must be created in an open or future open GL period; Budget journal entries must be created in an open budget year; Encumbrance journal entry must be created in an open encumbrance year.
• All the lines on a subledger journal entry must have valid accounts.
• Budget journal entries are not created for reporting currencies and secondary ledgers.

If any of these rules and validations are not applied successfully, the journal entry will result in an invalid status.

Subledger Inquiries and Reports

Subledger has functionality for accounting events drill-down and inquiries. Inquiries can be performed on accounting events, journal entries and journal entry lines using various selection criteria:

• Information on an accounting event or journal entry error
• Subledger journal entry headers for a given accounting event
• Comparison of journal entry information for two journal entries
• Review journal entry lines for a number of different documents or transactions
• Review a journal entry in t-account format
• Review the transactions underlying the accounting event or journal entry

Subledger Accounting provides the following reports:

• Journal Entries Report
• Account Analysis Report
• Third Party Balances Report
• Multi-period Accounting Reports
• Period Close Exceptions Report

The reports are XML based and other Reports can be generated using Oracle XML Publisher.

Additionally, there is an Open Account Balances Listing which will identify General Ledger accounts with outstanding balances, and display the subledger transactions that contribute to that balance. Open account balance definitions must be created and configured to define the accounts to be tracked in the Open Account Balances Listing and produce the XML report.

Financial Services Accounting Hub

Oracle Financial Services Accounting Hub is a set of processes used to create subledger journal entries. (Financial Consolidation HUB)

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• Related: General Ledger, Journal Entry, Financial Consolidation HUB, Financial Services Accounting HUB, Accounting Methods Builder, Accounts Receivable, Accounts Payable, Oracle Assets, Project Accounting

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Collaborating Authors and Reviewers: BillDaley - 20 Mar 2007