Implementation considerations for R12 General Ledger setups

Many clients ask for best practices and implementation considerations for implementing a new GL in 12i, here are some important implementation considerations:

Chart of Accounts:
–Share the same value set for the balancing segment across charts of accounts

Determine the Number of Legal Entities to Assign in an Accounting Setup based on:
–Statutory and legal requirements for legal entity accounting, such as document sequencing, tax accounting, and intercompany accounting
–Business Needs

Types of Accounting Setups:

1. Accounting Setup with No Legal Entity (LE)
–Can be used for GL only implementations
–Used for a business need where no legal entity is required or management reporting
–Cannot maintain legal entity context in subledger transactions
–Cannot set up Operating Units
–Cannot use Advanced Global Intercompany Accounting System

2. Accounting Setup with One LE
–Cannot perform lump sum payments across legal entities in AP

3. Accounting Setup with Multiple LEs
–Cannot perform autonomous document sequencing and tax that is unique per legal entity
–Consider local laws that prohibit commingling transactions with multiple LEs

Choosing the Ledger to be the Corporate Representation:

Best practice is to choose the primary ledger to be the corporate representation in the local currency:
–Provides the most detail
–Allows you to assign a subledger level reporting currency if you want to maintain a detailed additional currency representation
–Note: Secondary Ledgers cannot have subledger level reporting currencies assigned

Legal Entity (LE) Accounting:

1. LE above Ledger
–If you require multiple primary ledgers to perform accounting for the same legal entity, you must create dummy legal entities because a legal entity can only be assigned to one accounting setup, not multiple accounting setups

2. LE = Ledger
–If legal entity equals the primary ledger, you may choose not to assign balancing segment values to the legal entity

3. LE Below Ledger
–Legal entities should be represented by one or more balancing segment values

Balancing Segment Value (BSV) Assignment:

1. No BSVs Assigned = All values available for data entry
2. Assign specific BSVs to LEs at any time
3. Behind the scenes, BSVs assigned to LEs are automatically assigned to the ledgers
4. No BSV validation performed across accounting setups
5. BSV assignment is required for Intercompany Accounting
6. Optionally assign BSVs to the ledger for non-legal entity related transactions, such as management adjustments
7. Before BSVs can be assigned to the ledger, they must be assigned to LEs first, if used

Reporting Currencies (RC):

1. Journal and Subledger level RCs act like regular ledgers
2. To automatically populate historical data, run the Create Opening Balance Journals in Reporting Currency program.
3. Conversion for subledger sources that uptake SLA are disabled for Subledger Level SLs
4. When posting a journal to the PL, journals for the RC will be automatically created/posted in the same batch
–Ensure same open periods for source ledger and RC
5. Data access set should include same write access to source ledger and RCs to prevent posting errors

Subledgers that uptake SLA (Assets, Budget Execution, Cash Management, Cost Management, Inventory, Oracle Loans, Payables, Payroll, Property Manager, Purchasing, and Receivables)

Secondary Ledgers (SL):

1. Can be added at any time with an unlimited number allowed
2. To populate historical data, use Consolidation (GCS)
3. Secondary Ledgers cannot have Subledger Level RCs assigned
4. COA Mapping required if COAs are different between the PL and SL
–COA Mapping can be used if the COAs are the same except for Subledger Level SLs
5. Conversion for subledger sources that uptake SLA are disabled for Subledger Level SLs