At consolidated corporate level you compare financial data for your world-wide subsidiaries. If subsidiaries use different local COA for regulatory reports, or industry needs, direct comparison is a challenge as

  • you use different ways of measuring results, which decreases visibility and control.
  • corporate group must wait for results to be mapped to the corporate COA before insight to consolidated results.

 

checklist

 

Introduce a corporate COA to standardize your financial data across your world-wide operations. Value and classify account balances uniformly through a corporate COA. Compare financial statements world-wide with confidence. 

 

 

Key Benefits

compare

 

Gain Financial Insights Early

You can compare and analyze how well your business performs, regardless of where in the world your business resides. Many transactions (invoices, payments, etc.) are recorded in Oracle Cloud ERP near real-time or daily. A corporate COA allows you to deliver corporate wide financial insight throughout the month even before period close.

 

 

globe

 

Compare and Consolidate Financial Data Globally

You can consolidate and report on data easily when you use a corporate chart of accounts.

 

 

 

reconcile

 

Design Chart of Accounts to Reconcile Balances
When you design your corporate chart of accounts you usually include legal entity, cost center and natural account segments as a given. To help reconcile data, track management reporting dimensions at a summary level, such as by line of business, product line, or location.


 

exceptions

 

Consider Exceptions

Exceptions may apply if your enterprise is a decentralized conglomerate that operates in diverse industries. In that case, each industry requires a different financial reporting structure. Therefore, you could design a separate COA per industry.

 

 

Design Chart of Accounts to Reconcile Balances


When you design your corporate chart of accounts you usually include legal entity, cost center and natural account segments as a given. To help reconcile data track management reporting dimensions at a summary level, such as by line of business, product line, or location.

Figure 1. Example of an enterprise adopting a corporate chart of accounts
Figure 1. Example of an enterprise adopting a corporate chart of accounts

 

When you assign a corporate COA to your primary ledgers your subledger users see the corporate COA in all UIs and reports. This is an advantage, especially for multi-national shared service centers, where users may be processing finance data across countries on a regular basis.


You can define a secondary ledger with COA structure for local regulatory reporting.  Oracle Cloud ERP generates accounting simultaneously for both primary and secondary ledgers.

 

You map your corporate COA to local COA using the General Ledger COA mapping feature. If the local natural account segment can be derived from the corporate natural account; or a combination of the natural account and another segment, then you can define a COA mapping to automatically derive it in a secondary ledger. Mapping two corporate COA segments to a single local COA segment was introduced in update 22A.  

 

If needed, you define subledger accounting rules to generate accounting entries in the secondary ledger.  Subledger Accounting rules are necessary when:

 

  • You have not included a local segment in the corporate COA. 
  • The corporate and local COAs are orthogonal (i.e., there is no comprehensive mapping from corporate COA to local COA).
  • There are other reasons for separate accounting rules. These include transactions that are accounted only in one ledger; or are accounted completely differently.

 

 

If your business footprint is complex, such as shown in example below where:

 

  • Some subsidiaries use separate chart of accounts in existing legacy systems
  • Other subsidiaries use the corporate chart of accounts in Oracle Cloud ERP

 

Mapping
Figure 2. Example of disparate systems that integrate to
Accounting Hub which natively integrates to GL in Oracle Cloud.

 

  • Use the GL chart of accounts mapping feature for the balance conversion if the mapping between the legacy system COA and the corporate COA is easy. 
  • Subscribe to Oracle Cloud Accounting Hub to harmonize accounting from disparate ERP and transaction systems if the COA mapping is not easy. 
  • That way you create consistent and standardized accounting with the corporate COA for these ERP systems.  

 

 

 

If your consolidation needs are very complex, consider Oracle Fusion Cloud EPM Financial Consolidation and Close (FCCS).  In that system you can:

  • Manage the period close process
  • Assign tasks
  • Schedule and monitor workflows
  • Capture supplementary and non-financial data from 3rd party sources
  • Define advanced consolidations with complex ownership arrangements
  • Analyze data across multiple ERP systems

 

Conclusion

A corporate chart of accounts for your world-wide operations helps you reconcile data easily and deliver financial insight faster.