R12 Accounting Setup details (Outline)

The ledger is a basic concept in Release 12. The ledger replaces the 11i concept of a set of books. It represents an accounting representation for one or more legal entities or for a business need such as consolidation or management reporting.

Companies can now clearly and efficiently model its legal entities and their accounting representations in Release 12. This seems to be a major area in getting success of the shared service center and single instance initiatives where many or all legal entities of an enterprise are accounted for in a single instance, and data, setup, and processing must be effectively secured but also possibly shared.

Now, legal Entities can be mapped to entire Ledgers or if you account for more than one legal entity within a ledger, you can map a legal entity to balancing segments within a ledger.

While a set of books is defined by 3 C's
1. chart of accounts
2. functional currency
3. accounting calendar,
The addition in this list the ledger is defined by a 4th C: the accounting method,

This 4th C allows you to assign and manage a specific accounting method for each ledger. Therefore, when a legal entity is subject to multiple reporting requirements, separate ledgers can be used to record the accounting information.

Accounting Setup Manager is a new feature that streamlines the setup and implementation of Oracle Financial Applications. The Accounting Setup Manager will facilitate the setup required for simultaneous accounting for multiple reporting requirements.

With the Accounting Setup Manager, you can perform and maintain the following common setup components from a central location:
* Legal Entities
* Ledgers, primary and secondary
* Operating Units, which are assigned to primary ledgers
* Reporting Currencies, which is an enhanced feature
* Subledger Accounting Options.
This is where you define the accounting methods for each legal entity subledger transaction and associate them to the ledger where the accounting will be stored. * Intercompany Accounts and Balancing Rules * Accounting and Reporting Sequencing * Both Intercompany and Sequencing.

Upgrading?
The upgrade creates a separate accounting setup for each primary ledger that is Upgraded from a set of books. The status of the accounting setup will be completed. Each accounting setup is a grouping of accounting-related setup components.
The following lists the Release 12 setup components and how the Release 11i features map to them:
• Legal Entities: HR Organizations classified as GRE/ LE in Release 11i will be preserved as Legal Entities in Release 12. Legal entities can be manually assigned to a ledger and balancing segment values can optionally be mapped to legal entities to help you identify transactions by legal entity during transaction and journal processing.

• One Primary Ledger: Most sets of books in Release 11i will become primary ledgers in Release 12.
• Operating Units: All HR Organizations classified as operating units will be Preserved in Release 12. If operating units are assigned to a set of books, then they will be associated to a primary ledger in an accounting setup. You can now view all operating units assigned to an upgraded primary ledger using Accounting Setup Manager.
• Reporting Currencies: Multiple Reporting Currency (MRC) reporting sets of books become reporting currencies in Release 12.
• Secondary Ledgers: Multiple-Posting set of books (Global Accounting Engine) will upgrade to secondary ledgers.
• Intra-company Balancing: Inter-company Accounts in Release 11i is renamed to intra-company Balancing Rules, a feature provided by the new Advanced Global Inter-Company System.
• Inter-company Accounts The Release 11i Global Inter-company System (GIS) will be Replaced by Advanced Global Inter-company System (AGIS).