A ledger determines the chart of accounts, accounting calendar, currency, subledger accounting method, and ledger processing options for each company, legal entity, or group of companies and legal entities.
Each accounting setup requires a primary ledger that acts as the main record-keeping ledger for none or one or more legal entities that use your main chart of accounts, accounting calendar, subledger accounting method, and currency to record and report on all of your financial transactions.
To maintain an additional accounting representation, use secondary ledgers.
To maintain an additional currency representation, use reporting currencies.
To report on account balances in multiple currencies, assign reporting currencies to ledgers.
Reporting currencies can only differ by currency from their source ledger and must share the same chart of accounts, accounting calendar/period type combination, subledger accounting method, and ledger processing options as their source ledger.
Reporting currencies can be maintained at one of the following currency conversion levels:
Subledger
Journal
Balance
Additional Information: Reporting Currencies
When creating an accounting setup structure, specify the ledger attributes for the primary ledger and optionally one or more secondary ledgers.
The ledgers assigned when creating the accounting setup structure are not completely defined; complete the ledger options for each ledger to complete the ledger definition.
To use ledgers to perform accounting, complete the following:
Complete the ledger options for each ledger using the Accounting Options page.
Complete the accounting setup.
Assign the ledger to the GL Ledger Name profile option for each Subledger responsibility to grant access to ledgers used by Oracle Subledgers.
Assign the appropriate data access set to the profile option GL: Data Access Set for each General Ledger responsibility to grant access to ledgers used by General Ledger.
Additional Information: Setting General Ledger Profile Options
If enabling average balance processing for the ledger, General Ledger tracks and maintains average and end - of - day balances.
Note: You can only enable average balances or average balance consolidation for your secondary ledger if average balances or average balance consolidation is also enabled for its primary ledger
Note: You cannot enable average balances if your ledger is enabled for secondary segment tracking.
Additional Information: Overview of Average Balancing Processing
This section describes the ledger options that must be completed.
The following prerequisites are needed to complete the ledger options for ledgers:
(Required) assign one or more ledgers to an accounting setup
define the following accounts:
(Required) Retained earnings account
Suspense account to enable suspense posting
Cumulative Translation Adjustment account to translate balances
(Recommended for Subledger Accounting) Rounding Differences account to use a specific account to track small currency differences during currency conversion
(Required for Average Balances) Non-Postable Net Income account to use average balance processing
This account captures the net activity of all revenue and expense accounts when calculating the average balance for retained earnings.
Reserve for Encumbrance account to use Encumbrance Accounting
(Recommended for Subledger Accounting) Entered Currency Balancing Account to use Subledger Accounting to balance foreign currency subledger journals by the entered currency and balancing segment value
Ledger Currency Balancing Account to use Subledger Accounting to balance subledger journals by the ledger currency and balancing segment value
(Required for Average Balances) Define transaction calendars to use average balance processing. Transaction calendars ensure journal entries created in General Ledger and Oracle Subledger Accounting, if used, are only booked on valid business days.
Define Journal Reversal Criteria to automatically reverse journals in General Ledger
Navigate to the Accounting Options page in one of the following ways:
After saving the accounting setup structure, click Define Accounting Options.
Query an existing accounting setup from the Accounting Setups page and then choose the Update Accounting Options icon.
Click the Update Ledger Options icon.
Enter all relevant fields for the following pages:
Ledger Definition
The following table provides descriptions for selected fields in the Ledger Definition page.
Ledger Definition Page
| Field | Description |
|---|---|
| Short Name | Ledger short name; appears in the title bar of windows and in some lists of values; can be changed at any time. |
| Currency | Main transaction currency for this ledger.
Note: If the ledger's currency does not match the functional currency as defined by FASB #52 (U.S.) and you need to report financial results in your functional currency, consider using General Ledger Translation or Reporting Currencies. Additional Information: Reporting Currencies and Reporting Currencies, Oracle General Ledger User Guide. |
| First Ever Opened Period | First period that can be opened for this ledger. This cannot be changed after you open the first period. |
| Number of Future Enterable Periods | Number of future periods to allow for journal entry within this ledger. General Ledger automatically assigns a status of Future Entry to accounting periods following the latest open period in the calendar based on the number of future enterable periods defined here. If you change the number of future enterable periods for the ledger, General Ledger does not change additional periods to the Future Enterable status until a new period is opened.
Note: You can enter journal batches for a future enterable period, but you cannot post the batches until a period is opened. Suggestion: Minimize the number of future enterable periods to prevent users from accidentally entering journal entries in an incorrect period. |
| Subledger Accounting Method | Subledger accounting method for this ledger; defined in Subledger Accounting. |
| Entered Currency Balancing Account | Posts differences from out-of-balance foreign currency journals in subledgers. |
| Use Cash Basis Accounting | This option pertains only to Oracle Payables. Payables uses this option for its Mass Additions Create program for determining expense account information.
Additional Information: Payables Options |
| Balance Subledger Entries by Ledger Currency | Enables balancing of subledger journal entries by ledger currency and balancing segment value |
| Ledger Currency Balancing Account | Posts out-of-balance subledger journal entries to this account. This account is only required if the Balance Subledger Entries by Ledger Currency option is selected. |
| Additional Information | Stores descriptive information about this ledger if the descriptive flexfield for this page has been enabled. |
Ledger Options
The following table provides descriptions for selected fields in the Ledger Options page.
Ledger Options Page
| Field | Description |
|---|---|
| Retained Earnings Account | Net balance of all income and expense accounts from the prior year are posted against the retained earnings account when the first period of a fiscal year is opened in General Ledger. The balancing segment and the segment nominated as the secondary tracking segment act as placeholders for this account. General Ledger automatically inserts the appropriate value when calculating retained earnings. |
| Track by Secondary Segment | If you assigned the Secondary Tracking Segment qualifier to a segment in your chart of accounts, you can enable this option to track more detail when General Ledger performs year-end closing, translation, and revaluation activities.
Note: You cannot enable both the Track by Secondary Segment and Average Balances options. Additional Information: Secondary Tracking Segment |
| Suspense Account | Allows suspense posting of out-of-balance journal entries. If you have multiple companies or balancing entities within a ledger, General Ledger automatically creates a suspense account for each balancing entity. You can also define additional suspense accounts to balance journal entries from specific sources and categories using the Suspense Accounts window. Note that if you update the suspense account for the ledger, the default suspense account is updated in the Suspense Accounts window. Likewise, if you update the default account in the Suspense Accounts window, the account will be updated for the ledger. If you do not enter a suspense account, you can only post journal entries that are balanced. Additional Information: Suspense Accounts |
| Rounding Differences Tracking Account | In General Ledger, this account tracks rounding differences that occur during currency conversions. If you do not enter an account, General Ledger will post rounding differences to the journal line with the largest amount. In Subledger Accounting, this account tracks currency conversion rounding differences that cause unbalanced journal entries. Subledger Accounting will issue an error if it encounters a subledger journal entry that is unbalanced because of rounding differences and an account is not specified. If your foreign currency transactions include different balancing segment values to represent multiple companies, General Ledger and Subledger Accounting will automatically create a rounding differences account for each balancing segment value. Note: A rounding differences account is recommended for Subledger Accounting. Note: Subledger Accounting offers features for controlling how the accounting program deals with rounding differences. For more details see Oracle Subledger Accounting Implementation Guide. |
| Enable Intracompany Balancing | Posts out-of-balance intracompany journals (debits do not equal credits for a particular company or balancing segment value within the same ledger) If you enable this option, you must define Intracompany Balancing Rules when you complete your Accounting Options to provide instructions on how to automatically balance intracompany journals against balancing accounts you specify. If you do not choose to enable intracompany balancing, you can only post intracompany journals that balance by balancing segment. Note: For accounting setups with multiple legal entities, enabling intracompany balancing enables both intercompany and intracompany balancing for a journal that includes multiple legal entities. |
| Enable Journal Approval | Use General Ledger's Journal Approval feature for the ledger. When Journal Approval is enabled and a journal entry's journal source requires approval, the journal must be approved by the appropriate level of management before any further action can be taken, such as posting. If Journal Approval is not enabled, approval is not required, even if the journal source requires approval. Note: When you enable Journal Approval, only journal entries that use actual amounts and the Manual journal source will automatically have Journal Approval enabled. To require journal approval for budget or encumbrance journals or for journals using a source other than Manual, you must select the Require Journal Approval check box for the appropriate journal source in the Journal Sources window in Oracle General Ledger. Additional Information: Setting Up Journal Approval |
| Journal Reversal Criteria Set | Automatically reverses this ledger's journals based on the Journal Reversal Criteria Set assigned.
Additional Information: Assigning Journal Reversal Criteria |
| Default Period End and Average Rate Types | Used to translate actual account balances
Note: The rate types specified for the ledger are used to assign default rate types for any balance level reporting currencies assigned to this ledger. You can override the default rate types for each balance level reporting currency. |
| Cumulative Translation Adjustment Account | This account is necessary to translate the ledger's currency balances into a balance level reporting currency. For journal level reporting currencies, this account is used when revaluing foreign currency denominated balances. General Ledger automatically posts any net adjustments resulting from currency translation to this account, in accordance with FAS 52 (U.S.) and IAS 21. If you have multiple companies or balancing entities within a ledger, General Ledger automatically creates a translation adjustment account for each company or balancing entity. The difference in revaluation adjustments between the ledger and its journal level reporting currencies are recorded to the cumulative translation adjustment account. The balancing segment and the nominated secondary tracking segment act as placeholders in this field. General Ledger automatically inserts the appropriate value when translation or revaluation is run. Set the account type of your Cumulative Translation Adjustment account to Owner's Equity to create a translation adjustment on your balance sheet. Set the account type of this account to Revenue or Expense to create a translation gain/loss on your income statement. |
Advanced Options
The following table provides descriptions for selected fields in the Advanced Options page.
Advanced Options Page
| Field | Description |
|---|---|
| Journal Reconciliation | Allows you to reconcile transactions in accounts that should balance to zero, such as a suspense account, or a Value Added Tax control account.
Additional Information: Entering Journals |
| Require Budget Journals | Allows you to require budget journals for all budgets. If using budgetary control, General Ledger already requires you to create budget journals for your funding budget. If you want to require budget journals for all budgets, choose this option. |
| Reserve for Encumbrance Account | Allows encumbrance accounting for the ledger; required for budgetary control. If you enter an out-of-balance encumbrance entry, General Ledger automatically posts the difference against the account you specify here. If you have multiple companies or balancing entities within a ledger, General Ledger automatically creates a Reserve for Encumbrance account for each balancing entity. When you enter a Reserve for Encumbrance account without enabling budgetary control, you can still enter manual encumbrances via journal entry, but you cannot generate encumbrances from requisitions and purchase orders. Additional Information: Overview of Encumbrance Accounting |
| Mark Funding Budget as Commitment Budget | This option is specific to Oracle Public Sector Financials (International) and is only displayed for the secondary ledger. This option determines the secondary ledger that accommodates the commitment budget. |
| Enable Average Balances | Allows you to use the ledger for average balance processing. In an average balances ledger, your standard and average balances are tightly linked. Each time you post a journal entry, Oracle General Ledger updates both the standard (period-based) balances and corresponding average balances for your balance sheet accounts. If enabled, enter data in the following fields that are displayed:
Note: You can only enable average balance processing for those ledgers that require it. This ensures that you incur no additional overhead unless you need average balance processing enabled. Note: You can only enable average balances for a secondary ledger if its primary ledger has average balances or average balance consolidation enabled. Note: You cannot enable average balances if your ledger is enabled for secondary segment tracking. Additional Information: Overview of Average Balance Processing |
| Enable Average Balance Consolidation | Select this option if you do not want to maintain a link between standard and average balances to allow you to update standard and average balances independently. Many users use this type of ledger for consolidation purposes to allow them to consolidate standard and average balances separately in order to make adjustments to those balances independently.
Note: You can only enable average balance consolidation for a secondary ledger if its primary ledger has average balances or average balance consolidation enabled. Additional Information: Consolidation |
Click Next to review your ledger options and then click Finish to complete your ledger definition.
After the ledger has a complete status, you can only update some ledger options.
The following ledger options cannot be changed:
Currency
Chart of Accounts
Accounting Calendar
Period Type
Average Balance Processing
Net Income Account
Transaction Calendar
Note: The Track by Secondary Segment option cannot be changed once the Accounting Setup status is complete.
Note: The First Ever Opened Period cannot be changed once the first period is opened for the ledger.
The ledger options must have a status of Complete.
In the Accounting Setups page, search for accounting setups by ledger.
Navigate to the Accounting Options page.
To navigate to the ledger definition pages, click the Update icon for the ledger; or click the ledger name link and then the Update button.
Make changes to the ledger and then click Finish.