GL Cycle
1. Open an accounting period.
2. Enter manual journal entries, including:
Standard JE
Foreign and dual currency JE
Statistical JE
Intercomany JE
Manual
Tax journals
Suspense journals
Recurring journals
Skeleton
Formula
Mass
Allocation
3. Import journals from subledgers. If you encounter an
error when trying to import a subledger 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 MassAllocation journal batches based on formulas you
defined.
7. Review
the details of your unposted journal batches.
To view and optionally change unposted
journal batches online use the Enter Journals window.
To view unposted journal batch detail
online, use the Journal Inquiry window.
To print a report showing unposted
batch detail, produce an Unposted Journals Report.
8. Edit
unposted journals to change information about an unposted 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 unposted journal 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 unposted 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 unreserved
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 unreserved 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 centres,
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 EasyCalc
EasyCalc is a powerful, yet easy-to-use
calculation notation based on the mathematical logic used by Hewlett-Packard
calculators. EasyCalc lets you enter complex formulas to calculate journal
entries, allocations, budgets and report balances.
Mass Allocations
·
Use a MassAllocation 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 MassAllocations in your
functional currency, a foreign currency or statistical currency.
·
To define MassAllocation formulas, you
create a MassAllocation batch that contains one or more MassAllocation 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 MassAllocation Journals
Generate MassAllocations to create
unposted journal batches based on your validated MassAllocation formulas. The
generated journal batch contains one entry for each allocation formula in the
batch. Use MassAllocation 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
MassAllocation Batch
You can generate your Allocation or
MassAllocation Journal Batch according to schedules in Oracle Applications,
AutoAllocation
·
To automate journal batch validation and
generation for MassAllocations, Recurring Journals, MassBudgets, and Mass
Encumbrances.
·
From the AutoAllocation Workbench you can
define AutoAllocation sets and submit them for processing.
·
You can also schedule your AutoAllocation
Sets to run in future periods based on General Ledger schedules you create.
·
Use
= AutoAllocation to process journal batches you generate regularly, such as for
month end closing.
·
Types
Parallel: Parallel
AutoAllocation validates and generates all the journal batches in your
AutoAllocation set simultaneously.
Step-Down: You
must create journal batches in a specific sequence when using Step-Down
AutoAllocations.Order your journal batches so that the posted results of one
step are used in the next step of the AutoAllocation set.
You can choose any
combination of MassAllocations, Recurring Journals, MassBudgets, and Mass
Encumbrances. Step-Down AutoAllocation 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 subprocess that can be launched by AutoAllocation.
.
Step-Down AutoAllocation Approval Process
Step-Down AutoAllocation invokes an
automated process managed by Oracle Workflow. The process initiates the GL
Allocation process and directs batches to the GL MassAllocation process or the
GL Recurring Journals process.
The Step-Down AutoAllocation process
consists of five main processes:
utomatic Step-Down Allocation
Process
GL Allocation Process
GL MassAllocation 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.
AutoPost (Posting Journal Batches Automatically)
You can automatically post journal batches
that meet specific criteria you’ve defined in an AutoPost criteria set.
AutoPost priorities include combinations of journal source, journal category,
balance type, and period.
·
Once you define an AutoPost criteria
set, run the AutoPost 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 unposted 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 AutoReverse and
AutoPost to automatically generate and post your reversals
Automatic Journal Scheduling
·
Automatic Journal Scheduling lets you
generate Recurring Journals, AutoAllocation sets, MassAllocations, MassBudgets
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.
5
You can choose to zero out each income
statement account, and post the balance to the retained earnings account.
6
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 Intercompany Eliminations
program eliminates intercompany balances.
·
Full Eliminations
Elimination sets can optionally use an elimination company to fully eliminate a
group of intercompany
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 Intercompany Eliminations
program automatically generates eliminating entries per the rules specified in
the Define
Elimination Account Mapping window.
GIS
General Ledger’s
Global Intercompany System (GIS) feature helps you manage your intercompany
transactions through a highly centralized process.
With GIS, your
parent and subsidiaries can send intercompany 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 intercompany transactions
autonomously, you can choose not to use GIS. In this case, each subsidiary
enters intercompany 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:
5
Choose
the subsidiary(GIS subsidiary) set of books by selecting a responsibility that
has access to the set of books.
6
Enter
the subsidiary’s portion of the multi–company transaction, making sure to
balance the entry against an intercompany 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
Intercompany Sales CR
Company B’s set of books:
Intercompany Purchase DR
Cash CR
The intercompany accounts should be eliminated during the consolidation
process.
·
The
Global Intercompany System (GIS) provides a controlled, central location for
subsidiaries to conduct intercompany
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 intercompany transactions that occur between sets of books
·
GIS
supports your multicompany accounting efforts with the following features:
Account Generation: You can define AutoAccounting rules that establish
chart of account relationships between GIS senders and receivers. When you
enter intercompany transactions, GIS refers to the AutoAccounting 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 intercompany 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.
Intercompany Transaction Import: GIS includes an open interface table to
import and validate intercompany 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.(ie Different SOBs)
·
Your
companies use different accounting calendars. For example, one company may use
a weekly calendar and another may use a monthly calendar. .(ie Different SOBs)
·
Your
companies operate in different countries requiring them to use their own local
currencies.(ie 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 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 intercompany transactions within a
single set of books.(Single SOB)
·
General
Ledger can automatically balance intercompany journals based on accounts you
define in the Intercompany Accounts window provided the Balance
Intercompany Journals option in the Set of Books window enabled. General
Ledger creates balancing journal lines when you post, using the appropriate
intercompany 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