Multi Period Accounting Presentation

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R12 Subledger Accounting Cookbook

Multi Period Accounting
NCOAUG Training Day
August 14, 2014
Prepared by:
Prithis Das
Dynamique Solutions LLC
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Presenters background
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Copyright Prithis Das

Oracle Applications experience goes back to 1997

Over 22 years of business process improvement experience
Consulting experience with Big 5 and other major
organizations
Oracle Certified Specialist in General Ledger
Chartered Accountant and Management Accountant from
India
Authored and presented papers on SLA, WebADI, Reports
Manager and other topics at several OAUG and local events
Just completed a major R12 upgrade and working on a Cash
Basis Secondary Ledger implementation
Contact:
Cell: 630.3649457
Email: Prithis.das@dynamiquesolutionsllc.com
Agenda
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Introduction to Multi Period Accounting

Typical Prepayment Process
Prepayment Scenario
Multiperiod Accounting Setups Optional Setups
SLA Setups for Multiperiod Accounting
Transaction Processing using MPA
Implementation Considerations
References
Q&A
Introduction to
Multi Period Accounting
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Introduction
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What is Multiperiod Accounting?

Multiperiod accounting enables users to create accounting for a
single accounting event for more than one GL period. The
functionality is primarily used to recognize revenue or a prepaid
expense or revenue across multiple GL periods.
Uses of Multiperiod Accounting

Automated recognition of Prepaid AP invoices
AR Revenue recognition
Can be used in Primary as well as Secondary Ledgers (for
Management reporting)
This presentation focuses on recognizing prepaid expenses

across multiple GL periods.
Typical Prepayment
Process
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Typical Prepayment process without Multiperiod Accounting

Setup/maintain Special Calendar
Setup Distribution Set
Create Prepayment invoice
Pay Prepayment invoice
Create Recurring invoice template for expense amortizations
Generate Recurring invoices
Apply to Prepayment Invoice each month manual process
Run Create Accounting/Transfer to GL
Use Prepayment Status Report.
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Typical Prepayment process with Multiperiod Accounting

Setup Multiperiod Accounting in Subledger Accounting
Create Standard invoice
Complete Deferred fields during invoice entry
Pay Standard invoice to pay the prepayment

Run Create Accounting/Transfer to GL
Use Multiperiod Accounting and Accrual Reversal Report
Periodically run Complete Multiperiod Accounting program
Prepayment Scenario
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Scenario
Prepayment for Software Support
A company prepays annual software maintenance of $12,000
on June 25th , 2014. The company needs to expense $1,000
each month for 12 months according to the following schedule:
Period
Amount
Period
Amount
Jul-14
$1,000
Jan-15
$1,000
Aug-14
$1,000
Feb-15
$1,000
Sep-14
$1,000
Mar-15
$1,000
Oct-14
$1,000
Apr-15
$1,000
Nov-14
$1,000
May-15
$1,000
Dec-14
$1,000
Jun-15
$1,000
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Scenario
Expected journal entries in Jun-14
Perio
d
Journal
Perio
d
Journal
Jun-14
Dr Prepaid Expense $12,000

Cr AP Liability $12,000
Jun-14
Dr AP Liability $12,000
Cr Bank $12,000
Expected journal entries Jul-14 to Jun-15

Perio
d
Journal
Perio
d
Amount
Jul-14
Dr Expense $1,000
Cr Prepaid Expenses $1000
Jan-15
Dr Expense $1,000
Aug14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-
Dr Expense $1,000
May-
Dr Expense $1,000
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Multiperiod Accounting Setups
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Optional Setups likely to be different for each

implementation, based on design
Value Set for Prepayment Type
Create Values for the Value Set
Descriptive Flexfield
Invoice Lines DFF
Subledger Accounting Setups likely to be similar for all

implementations
Mapping Set
Account Derivation Rule
Journal Line Types
Journal Line Definition
Application Accounting Definition

Subledger Accounting Method
Ledger
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Value Set for Prepayment Type
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Enter Values in Value Set for Prepayment Type

You can enter values for:
Specific types of Prepayments
Specific Vendors
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Invoice Lines DFF
You do not have

to make this
DFF context
sensitive. You
can make this
Global.
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Invoice Lines DFF
Assign the Value Set created in the earlier step
In this demo we
have selected
ATTRIBUTE15.
Typically you
would start at
ATTRIBUTE1 if
available.
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Invoice Lines DFF
You must
uncheck
Required
checkbox as not
all invoices are
Prepayments.
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Subledger Accounting Setups for

MPA
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Subledger Accounting Setups for MPA
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Mapping Set
Journal Line Type
Application Accounting
Definition
Subledger Accounting
Method
Ledger
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Navigation Paths from Payables Manager Responsibility

Mapping Set
Journal Line Type
Subledger Accounting Method
Ledger
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Mapping Set
Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Field
Data
Mapping Set
Code
XXPD_MPA_EXP_CCID
Mapping Set
Name
XXPD MPA ACCRUAL EXPENSE CCID
Mapping Set
Description
XXPD Multi-Period Accounting Invoices Amortization Expense Account

Link the Mapping
Set to the Value
Set created
earlier
For each Input

Value, enter the
Output Value:
Enter the target
Expense account
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for amortization
Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

Field
Data
Rule Code
XXPD_MPA_EXP_FLEX
Rule Name
XXPD MPA Prepaid to Expense Account

Flexfield
Description
XXPD MPA Prepaid to Expense Account

Assign the
Flexfield
Mapping Set =
XXPD MPA
ACCRUAL
EXPENSE CCID
created earlier.
Input Source =
Invoice Line
Flexfield
There
is no
Segment
15need
to assign a
Condition
Will receive a
Warning on save
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Journal Line Type - Accrual

Field
Data
Line Type
Code
XXPD_AP_ITEM_EXP_INV_MPA_ACC
Name
XXPD Multi Period Accounting and Regular Item

Expense Accrual
Description
XXPD Multi Period Accounting and Regular Item

Expense Accrual, replaces Item Expense JLT
For the accrual

journal line type,
set the Multiperiod
option to 'Accrual'
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Journal Line Type - Recognition

Field
Data
Line Type
Code
XXSL_AP_ITEM_EXP_INV_MPA_RECOG
Name
XXPD Multi Period Accounting Item Expense

Recognition
Description
XXPD Multi Period Accounting Item Expense

Recognition
For the recognition

journal line type,
set the Multiperiod
option to
'Recognition'.
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Journal Line Type Accrual Assign Sources

Assign sources to the following accounting attributes for the
accrual journal line type
Multiperiod
Start Date
Determines the accounting period and accounting date

for the first recognition journal entry
Multiperiod
End Date
Determines the accounting period and accounting date

for the last recognition journal entry
Multiperiod
Option
Determines whether multiperiod or single period

accounting to be generated for an accounting event
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Retrieve and Copy the seeded JLD Accrual, Invoices All.

Field
Data
Definition
Code
XXSL_AP_ITEM_EXP_INV_MPA_RECOG
Definition
Name
XXPD Accrual, Invoices All
Description
XXPD Oracle Payables Accrual Accounting Definition

(All)
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Journal Line Definition (User owned)

Copy the seeded Line Assignment Item Expense to a new
Assignment XXPD Multi Period Accounting and Regular Item
Expense Accrual
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

Inactivate the seeded line assignment Item Expense
Assign new JLT XXPD Multi Period Accounting and Regular
Item Expense Accrual
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

Assign the seeded Account Derivation Rule Invoice Distribution
Account to All Segments
Assign a Line Description (custom JLD in this example)
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

The Multiperiod Accounting button will be enabled for this
Journal Line Type
Click on the Multiperiod Accounting button
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Multiperiod Accounting Assignment

Options
Number of Journal Entries
GL Dates
Proration Type
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Multiperiod Accounting Assignment Options

Number of Journal Entries: Number of multiperiod
journal entries to be created
One
One multiperiod journal entry is created to

recognize the entire accrual amount.
Note: If this option is selected, it is not possible to
select a proration type since only one journal
entry is created for the entire accrual amount.
One per GL
Period
One multiperiod journal entry is created per GL

period between the dates defined by the
multiperiod start and end date accounting
attributes.
Source: Oracle Subledger Accounting Implementation Guide
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

GL Dates: Specifies when the multiperiod journal entries
are created in
the GL period
First Day GL Multiperiod journal entries have a GL date of the
Period
first day of the period
Example: 1-Oct-2014
Last Day GL Multiperiod journal entries have a GL date of the
Period:
last day of the period.
Example: 31-Oct-2014
Originating
Day
Multiperiod entries have the same GL date as the

originating journal entry.
Example: 22-Oct-2014
If Originating Day is 31-Oct, the next multiperiod
JE will have a date of 30-Nov.
Source: Oracle Subledger Accounting Implementation Guide

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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

See Document 1915795.1 on My Oracle Support for worked out
examples for each Proration Type
Proration Type: Specifies how the recognition amount
per period should be
calculated
360 days
Partial periods calculated by assuming 360 days in

a year
Days in
Period
Partial periods calculated by dividing the number

of partial period days by the actual number of
days in the period
First Period
Accrual amount divided by the number of periods

and recognized evenly starting with the first
period
Total Days
in Period
Both the partial periods and the whole periods are

based on the actual number of days in the period.
The number of days within each period is then
divided by the total number of days in the whole
multi accounting period. The result is then
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Mappin
g Set
ADR
JLT
JLD
Multiperiod Accounting Assignment options
AAD
SLAM
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Ledger
Line Assignments
Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
For the Accrual Journal Line Type
All Segments will use the seeded ADR Invoice Distribution Account
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Line Assignments
Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
For the Recognition Journal Line Type
All Segments will use the custom ADR XXPD MPA Prepaid to Expense
Account Flexfield
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger

Copy the seeded AAD Accrual Basis to a custom AAD XXPD
Accrual Basis
Replace the seeded JLD Assignment XXPD Accrual, Invoices
All to the custom JLD XXPD Accrual, Invoices All
Validate
the
Applicatio
n
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Accounting
Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
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Ledger
Subledger Accounting Methods

Copy the seeded SLAM Standard Accrual to a custom SLAM
XXPD Standard Accrual
Replace the seeded AAD Assignment Accrual Basis to the
custom AAD Assignment XXPD Accrual Basis
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Mappin
g Set
ADR
JLT
JLD
AAD
SLAM
Subledger Accounting Methods

Replace the SLAM Standard Accrual with the custom SLAM
XXPD Standard Accrual in your Primary Ledger
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Ledger
Transaction Processing for MPA
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Enter a Standard Invoice for Prepaid Software Maintenance

Invoice Type is Standard and not Prepayment
Say Invoice Date is 15th June, it was entered on 25th June
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At the Line level

Enter a Prepayment Distribution account
Check the Deferred Option checkbox
Enter the Deferred Start Date and Deferred End Date fields
Enter the Prepayment Type (select from LOV) in the DFF
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Create Accounting
Validate the Invoice, then run Create Accounting
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Create Accounting will spawn:

Accounting Program
Journal Import
Subledger Accounting Balances Update
Subledger Multiperiod Accounting and Accrual Reversal Report
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If Create Accounting and Account Program completes with a

yellow Warning or red Error, STOP!
Review the report to identify and troubleshoot the problem
Common causes for Create Accounting to Fail:
The Application Accounting Definition was not validated (in this case
the Create Accounting program completes in a red error)
The DFF at the Line level was not used. In this example the
Prepayment Type drives the Recognition accounting. So in the
absence of this information on the DFF the Accounting will fail
The General Ledger period was not open
Cross-validation or Security Rules were violated
Account Combination was disabled
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Create Accounting
Will generate the Subledger Accounting Program Report
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Subledger Multiperiod Accounting and Accrual Reversal

Report
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Report
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Report
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Report
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GL Journal Entry
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Perio
d
Journal
Perio
d
Journal
Jun-14

Jun-14
Cr Bank $12,000

Perio
d
Journal
Perio
d
Amount
Jul-14
Dr Expense $1,000
Jan-15
Dr Expense $1,000
Aug14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-
Dr Expense $1,000
May-
Dr Expense $1,000
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Complete Multiperiod Accounting concurrent program

Run in subsequent months from Jul-14 to Jun-15
Schedule this program to run automatically
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Creates journal entries for Expense Recognition for the period it
is run
Provides a report for the Multiperiod Journal Entries for that
period
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GL Journal Entry in each subsequent period through Jun-15
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Perio
d
Journal
Perio
d
Journal
Jun-14

Jun-14
Cr Bank $12,000

Perio
d
Journal
Perio
d
Amount
Jul-14
Dr Expense $1,000
Jan-15
Dr Expense $1,000
Aug14
Dr Expense $1,000
Feb-15
Dr Expense $1,000
Sep14
Dr Expense $1,000
Mar-15
Dr Expense $1,000
Oct14
Dr Expense $1,000
Apr-15
Dr Expense $1,000
Nov-
Dr Expense $1,000
May-
Dr Expense $1,000
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Enhancement possibilities
Use a DFF for Prepayment Type and a Mapping Set to drive the
expense account (as shown in this example)
Alternately, use the Prepayment Account on the invoice to drive
the Expense account using a Mapping Set
Invoice having regular expense or Asset purchase in addition

to Prepayment expense
Use Deferred option fields only for those lines which are
prepayment in nature
What if Prepaid Invoice is already paid outside Oracle

Can enter Invoice in Oracle and set Deferred start and end
dates. System will take care of the rest and account correctly
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Existing open Prepayments when MPA is implemented

There is no way to convert Prepayment invoices to Standard
invoices using MPA. Process Prepayment invoices as usual till
they are closed.
If the journal effective date of a journal imported from the

Subledger defaults to the last date of the period, you will have
to adjust the summarization Subledger Accounting Options
for the Ledger
Critical patches released for Multiperiod Accounting in SLA
7109881, 8505463, 8635648, 8664504, 9954676, 9162117,
10394715, 11654120, 13023651 and 13415216.
Patch 13018752:R12.XLA.B is recommended for Proration Type
First Period amounts fix
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Do we need two accrual journal line types to achieve single

period accounting and multiperiod accounting?
No, two separate accrual journal line types are not required.
With the same accrual journal line type, single period and
multiperiod accounting can be created.
Whether multiperiod or single period accounting is to be created
for a transaction is determined based on the value passed for
the Multiperiod Option accounting attribute.
If the value passed is 'Y' then multiperiod accounting is created.
If the value passed is 'N' or null then single period accounting is
created.
No changes in MPA functionality from 12.1.3 to 12.2 as of

today
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References
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References
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Oracle Subledger Accounting Implementation Guide

(E13628-04)
Document 1399611.1 on My Oracle Support
Out-dated information (12.1.2), but useful for basic setups
Document 1915795.1 for 12.1.3 on My Oracle Support

Most current document (Aug-2014)
Gives explanation of Proration Type options with examples
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Q&A
Additional questions?
Contact
Email
Prithis.Das@dynamiquesolutionsllc.co
m
Cell
630.3649457
Website
Dynamiquesolutionsllc.com
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R12 Subledger Accounting Cookbook

Copyright Prithis Das

Oracle Applications experience goes back to 1997

Copyright Prithis Das

Introduction to Multi Period Accounting

Copyright Prithis Das

Copyright Prithis Das

What is Multiperiod Accounting?

Uses of Multiperiod Accounting

This presentation focuses on recognizing prepaid expenses

Copyright Prithis Das

Typical Prepayment Process

Copyright Prithis Das

Typical Prepayment process without Multiperiod Accounting

Typical Prepayment Process

Copyright Prithis Das

Typical Prepayment process with Multiperiod Accounting

Complete Deferred fields during invoice entry

Pay Standard invoice to pay the prepayment

Copyright Prithis Das

Copyright Prithis Das

Copyright Prithis Das

Dr Prepaid Expense $12,000

Expected journal entries Jul-14 to Jun-15

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Optional Setups likely to be different for each

Create Values for the Value Set

Invoice Lines DFF

Subledger Accounting Setups likely to be similar for all

Application Accounting Definition

Multiperiod Accounting Setups

Copyright Prithis Das

Value Set for Prepayment Type

Multiperiod Accounting Setups

Copyright Prithis Das

Enter Values in Value Set for Prepayment Type

Multiperiod Accounting Setups

Copyright Prithis Das

You do not have

Copyright Prithis Das

Multiperiod Accounting Setups

Copyright Prithis Das

Multiperiod Accounting Setups

Subledger Accounting Setups for

Copyright Prithis Das

Subledger Accounting Setups for MPA

Copyright Prithis Das

Subledger Accounting Setups for MPA

Copyright Prithis Das

Navigation Paths from Payables Manager Responsibility

Subledger Accounting Setups for MPA

Copyright Prithis Das

XXPD MPA ACCRUAL EXPENSE CCID

XXPD Multi-Period Accounting Invoices Amortization Expense Account

For each Input

Subledger Accounting Setups for MPA

Copyright Prithis Das

Account Derivation Rule

XXPD MPA Prepaid to Expense Account

XXPD MPA Prepaid to Expense Account