R12 Financials Overview and new features at a glance (PART 1)

Why R12:

Release 12 is defined as “The Global Business Release.” Global is not just a geographic perspective, but also a comprehensive perspective; release 12 functionality spans across both industries and business functions.
•Flexible, centralized, global accounting structure
•300+ enhancements to best practice business processes
•Comprehensive governance, risk and compliance platform
•Truly integrated performance management
•Real-time profitability analysis
•Unified financial and operational analytic applications
•Integration with core industry applications
•Self-service report formats and publicationSuperior ownership experience

New architecture and benefits:

The major components of the new architecture include:
•Multi-Org Access Control
•Ledger and Ledger Sets
•Subledger Accounting
•Tax Engine
•Intercompany
•Bank Model

Benefits of the new architecture include:
•Maintain 1 Ledger with 1 OU for each Company (LE)
-Get privacy for each company’s data
-Manage each company’s national and local compliance
•Combine many companies’ ledgers in a set
-Share GL services and workload
-Get combined data
•Use MOAC to enable access to many OUs
-Process in and report across many Companies’ Operating Units


MOAC: Multi-Org Access Control:
MOAC provides role based access to Operating Units, and allows you to perform multiple tasks across operating units without changing responsibilities.


Subledger Accounting:
Subledger accounting provides centralized rules and a common repository, and global control of your accounts. Features include:
•Accounting Rules
-SarBox & 8th Dir.
-User Editable
•Subledger Daybooks (Journals)
•Subledger Balancing
•Reports, inquiries, open items, et cetera
•Multiple Representations
•Common Posting to GL Ledgers
•Real time or Periodic

Benefits of subledger accounting are:
•Faster, Easier Reconciliation
•Corporate Rules = Accounting Standardization
•Local Rules = Improved Local Compliance
•Automate “Apples to Apples” Adjustments
•Improved Audit- ability
•Improved Internal Control

Ledger:

•One Repository of Financial Truth
•Implements the 4 C’s:
–Chart of Accounts
–Currency
–Calendar
–Accounting Convention
•Example:
–The balance on Creditors (COA)
–is 4.2M Eur (Currency)
–on March 31, 2006 (Calendar)
–according to IAS/IFRS definitions (Accounting Convention)


Ledger Sets:
Ledger sets provide global information at a glance. Ledger sets share a chart of accounts and a calendar. The key benefits to many Ledgers in one set are:
•Decision-driving business information always available
•Simpler processing and General Ledger management
•Data and definitions that can be shared and secured


Ledger Architecture:
Typical Ledger Sets:
•All IAS/IFRS or US GAAP ledgers
•26 Subs in 1 country
•35 countries in 1 region


Legal Organization:
Legal Entities (Les) such as Parent companies, own or control subsidiaries. There are no group entities
•LEs pay the taxes and therefore need tax registrations
•Trade between LEs needs intercompany
•LEs own the money and bank accounts
•LEs file the accounts and take care of accounting
•LEs comply with whatever needs compliance: “legal” in LE


Enhanced Legal Support:
•Did not replace GRE/LE - employer
•Added TCA parties for the Authorities
•Added a Legal Entity Configurator
•Introduced the following new terms:
-Jurisdiction: A legislative category and territory, has legal rules
-Legal Authority: Legal body who enforces legislation, collects fees / taxes, etc
-Legal Function: Functions that companies are required to perform (e.g. produce yearly report, pay taxes, etc.)
-Legal Associations: Mapping companies to Ledgers, BSVs, OUs and other system entities


Examples of using Legal Entities:
•Accounting Setup Manager: Assign books, bookkeeping rules and currency management to your registered companies
•EBusiness Tax: Have your registered companies calculate, file, and pay the transaction taxes they owe
•Intercompany: Do business between and across your registered companies with full legal documentation
•Bank Model: Have your registered companies use their money to pay their bills, etc.