Oracle GL Concepts

Posted by Mahmoud Maher on December 12, 2009

1 Votes

Before any system can be used, it has to be “set up”. Hence usage follows setup. This is something

common. Therefore before the module GL becomes financials; it must be set up.

Oracle General Ledger is a complete financial management system for recording transactions, maintaining

account balances and creating financial statements.

A] VALUE SETS

The value set contains a predefined name which contains information regarding segments, viz., the data

type for the segment, maximum size of the segment (not more than 25 characters) minimum and maximum

values of the segments. Value set is required to ensure that there is consistency as regards codes used. For

the consistency a set of regulating rules have to be recorded. These rules ensure that only the values testing

positively against these conditions are accepted. It is a group of values and related attributed you assign to

a key flexfield segment or descriptive flexfield segment.

Note: For each segment there should be a separate value set.

VALIDATION TYPES FOR VALUE SETS

INDEPENDENT: It is an individual value set and there is no relation to this value set.

DEPENDENT: This value set always depends on an independent value set.

TABLE: This value set is used for retrieving the data or values existed in a table by using select statements.

NONE: Values cannot be stored by using this value set. During the transaction level values are entered.

PAIR :

SPECIAL: These value sets are used for descriptive flexfields.

FIELD: It is an area where data can be entered, updated and from where it can be deleted.
FLEXFIELD: A flexfield is a field made up of sub fields or segments. A flexfield appears on your forms as a

pop up window that contains a prompt for each segment. Each segment has a name and a set of valid rules.

There are two types of flexfields.

Key Flexfield: The flexfield used for pinpointing accurate information are called key flexfields. It is made up

of segments where each segment has both a value and a meaning, so we can think of flexfield as an

intelligent field that business can use to store information represented as codes.

Descriptive flexfield: The flexfield used for describing an entity is termed as descriptive flexfield. According

to the business requirements, descriptive flexfields are used to expand oracle application or to customize the

same. It enables to capture additional information from the transactions.

Accounting Key Flexfields:

The OGL module contains only one key flexfield “ accounting key flexfield’, which will give us the financial

information like how the data will be entered, how to generate reports, viz., financial statements. Without

writing any program-codes, it can be customized as per business requirements.

Structure: The combination of segments with value sets is called as a structure.

B] SEGMENT

Segment is a single sub field within a flexfield. You can define the structure and meaning of individual

segment when customizing a flexfield. It is also a part of the organization where information regarding

division, region, company, product, department, etc., can be stored.

Organization

Company

Department

Accounts

In GL module, there should be a minimum of 2 segments (company & accounts) and a maximum of 30

segments.

VIEW: Using the view name, the rest of the modules of oracle application can be mapped for reports.
ALLOW DYNAMIC INSERT [check box]: It allows the user to enter a new unique code combination required.

(It can be expanded as required).

Segment separator: They are . : – . Using segment separators the code combination values can be

identified.

Freeze Flexfield definition: After enabling this checkbox, the structural information cannot be modified. For

modifying information the checkbox has to be disabled.

Compile (push button): Once the freeze flexfield checkbox is enabled, the compile push button is activated.

This push button will create the code combinations and flexfield view for the flexfield structure. After clicking

the compile push button, the system will provide the user a “request”.

Request: It is the feedback information from the server. It finds the status of your structure and whether

the program is successfully compiled. For knowing about the request status the following path is to be used.

View – request.

We have 4 statuses of the request:

Stand by

Running

Pending

Error

Warning

Inactive

No manager

Completed

C] QUALIFIERS

Qualifiers are words that explain the functions performed by a particular segment. There are four flexfield

qualifiers provided by oracle for accounting flexfields. They are:

Balancing segment
Cost center segmen

Natural accounts

Inter-company adjustment

Balancing Segment: The balancing segment qualifier is to be assigned to the company segment or

enterprise segment or corporation segment. This assignment ensures that the debits at the company level

are equal to the credits by compiling with the matching principle of accounting.

Cost Center Segment: The cost center segment qualifier allows us to draw special readymade reports

provided by the module oracle assets. The use of it is high utility. Cost center assignment pertains to the

fixed assets. Use of cost center qualifier is not mandatory, it is optional. By attaching this qualifier to any

segment, income and expenditure of any cost division can be found out viz., department-wise, division-wise,

cost is basically incurred at department / division.

Natural Accounts: This qualifier allows the user to specify the account types. The standard account types

provided are:

Expenses

Revenue

Assets

Liabilities

Ownership / stockholders’ equity

Inter-company adjustment: For adjustment of inter-company transactions, this qualifier is used. It is not

mandatory.

Segment Qualifiers:

Allow Posting: By attaching this qualifier at any segment, the journals will be allowed to post at that

segment level.

Allow Budgeting: Budgets will be prepared at segment level when this qualifier is attached.
Account Type: The account types, viz., expenses, revenues, assets, liabilities, stockholder / ownership

describes the type of account. In addition to ‘allow posting’ and ‘allow budgeting’, this qualifier is also

attached to accounts.

Reconciliation Flag: For account segment to reconcile the accounts with any sub accounts.

Control account: For controlling the sub accounts, if any.

D] CURRENCY (Define or enable)

Code Description Territory (country) Precision

INR Indian Rupee India 2

USD US Dollar USA 2

AUD Australian Dollar Australia 2

(ISO has recognized approx. 240 country’s currency)

Using the currency code, we can record the expenses and income of every country. Whenever, oracle

application is installed, it creates all the ISO currency codes. If those defined currencies are to be used, we

have to enable that currency.

Non ISO currency codes can also be created.

E] PERIOD TYPES

Period – Daily / Monthly / Quarterly

Using period types, you can divide the financial year as per requirements for reporting purposes. In a fiscal

year, two calendar years are covered.

Future Period: If the user gives No1 option, one future period will be opened.

F] CALENDAR

Accounting calendar

This calendar defines your accounting periods and fiscal years in OGL. Using accounting calendar window,

accounting calendars are defined. Oracle financial analyzer will automatically create a “Time Dimension”

using your accounting calendar. Give a prefix to every period to identify the same.
Fiscal Calendar

Without relation to a calendar year, any yearly accounting period is called a fiscal year. If fiscal year has

been defined, the user should specify the AD of termination of the year.

Calendar Year

If the calendar year has been defined, the user can specify the AD of commencement.

Transaction Calendar

Using this calendar, you can setup the business on and off days (i.e., holidays). Apart from weekly holidays,

additional holidays can be included. This calendar helps to restrict the user to enter any transactions on any

holiday or business off days. The financial institutions will generate average balances reports with the help

of this calendar.

G] SET OF BOOKS

A financial reporting entity that uses a particular chart of accounts, functional currency and accounting

calendar, at least one set of books has to be defined for each business location.

Standard Options

Allow suspense posting

Enable average balance

Journal approval

Journal Entry tax

Budgetary Control Options

Enable Budget Control

Required Budget Journal

Average Balance options (Amount Rate Type)

QTD – Quarter To Date

PTD – Period To Date

YTD – Year To Date

EOD – End Of Day

Mandatory Accounts

Retained Earnings: The earlier period or earlier year balances will be transferred whenever the user closes

the accounting period. This is a compulsory account to be created.

Suspense account: The difference in the amounts of debit and credit of the transactions will be transferred

to this account. If the user, enables the ‘allow suspense posting’ checkbox in the standard option then this

account gets activated.

Rounding off adjustment: The transaction total amounts can be adjusted (rounded off) to the nearest

currency denomination and the difference is posted to this account.

Translation Adjustment account: If the user wants to translate the functional currency balances to foreign

currency and if there is fluctuation in the currency rates in between the periods then the difference because

of currency rates will be recorded in this account.

Reserve for encumbrance: Prepayments or anticipated expenditure is called as encumbrance. If budgets are

to be prepared, this account will be created by enabling ”budget control” in the budget control option.

Net Income: If the average balance option is enabled in the set of books, enabling “average balance” check

box in standard options will create the net income account. This account is not to be posted manually.

Account Name

Retained Earnings

Suspense Account

Rounding Off Difference Account

Translation Adjustment

Reserve for encumbrance

Net Income

H] USER PROFILE
After defining set of books, the books will have to be assigned to a single or multiple users. After assigning

the books, the user can perform and record transaction in the set of books.

I] OPEN / CLOSE ACCOUNTING PERIODS

After assigning the set of books, for recording the accounting transactions, the user should open the desired

accounting period. Once the transactions are completed, the period can be closed.

The five statuses of accounting periods are:

Never Opened

Open

Future period

Closed

Permanently closed

J] DETAILS OF TABLES IN GL

Fundamental (Master) Tables:

Fnd_Applications

Fnd_ID_Flex_Structure

Fnd_ID_Flex_Code

Fnd_Tables

Fnd_Flex_Values

Fnd_ID_Value_Sets

Fnd_Columns

Base or Set Up Tables

Gl_Code_Combination (view)

GL_Set_Of_Books
STEPS FOR DEFINATION OF SET OF BOOKS

1. Define value sets

Setup: Financials: Flexfield: Validation: Sets

2. Define key flexfield segments

Setup: Financials: Flexfield: Key: Segments

3. Enter the segment values

Setup: Financials: Flexfield: Key: Values

4. Define or enable currency

Setup: Financials: Currency: Define

5. Define period types

Setup: Financials: Calendar: Type

6. Define accounting calendar

Setup: Financials: Calendar: Accounting

7. Define transaction calendar

Setup: Financials: Calendar: Transaction

8. Define set of books

Setup: Financials: Books: Define

9. Attach set of books to profile

Other: Profile

10.Sign in again

11.Open the accounting period

Setup: Open/ Close