An Introduction to Subledger Accounting
By Chris Rudd
By hamsun-Oracle on Jan 23, 2014
R12 saw the introduction of Oracle Subledger Accounting (SLA), a rule-based
accounting engine that centralizes accounting for Oracle E-Business Suite products
in Release 12 and above.
SLA is not a separate product in itself, but is Oracle’s engine catering to the accounting needs of Oracle applications. There are no SLA responsibilities, you do not log into SLA, Subledger Accounting forms and programs are embedded within standard Oracle Application responsibilities (for example, Payables Manager).
Multiple Accounting Representations
Together with the new ledger support in General Ledger (GL), SLA provides
the ability to maintain multiple accounting representations in a single instance.
A Subledger Accounting Method is linked to a ledger and the rules contained within that Subledger Accounting Method determines how a transaction is represented in that ledger.
In R12, you can have Primary, Secondary and Reporting Currency Ledgers. Your primary ledger is your main reporting ledger, a Secondary Ledger can be used if you have the need for another accounting representation and a reporting currency ledger is used where you need to report in another currency.
A US Corporation has an operation in France. The French operation is subject to French accounting regulations, and therefore must report its activities to the local authorities in Euros, according to the French business calendar, French chart of accounts, and the French interpretation of IFRS (International Financial Reporting Standards).
This would be the French Primary Ledger. However, the US headquarters/parent company would need to have a consolidated global visibility of the worldwide operations so you can use a Secondary Ledger linked to the French Primary Ledger. The Secondary Ledger will share the same currency, COA, calendar and Subledger Accounting Method as those at HQ.
In the definition above, Subledger Accounting allows:
• multiple accounting methods to be defined
• separate accounting methods to be used on different ledgers
Journal entries will be created for both ledgers for a single subledger posting (French activities accounted for on the primary ledger according to the IFRS method, and on the secondary ledger according to the US GAAP method).
Oracle provides a number of seeded Subledger Accounting Methods, for example Standard Accrual. If you want to change the accounting rules then you can copy the seeded method and create your own Subledger Accounting Method.
So now all of the subledgers create accounting in the same consistent way, with the ability to do online accounting for a transaction or to submit a standard request to account for all transactions in a module. You can create draft accounting, useful if you are playing with the rules, or if you wish to review before posting. Final Accounting which is complete and ready to post to GL or Final Post, which is complete and will post in GL.
Once data is posted to GL, there’s a full audit trail with drilldown all the way to the actual subledger transaction. Come along to the R12.x Oracle Subledger Accounting Fundamentals class to learn more about this and other features of SLA or send me an eMail with any questions: email@example.com.
About the Author:
Chris Rudd joined Oracle in May 1999. She is a Principal Training Consultant at Oracle University. Using her detailed product knowledge Chris delivers both In Class and Live Virtual Class courses for the Oracle E-Business Suite Financials and Oracle Fusion Financial products