You can use an additional segment in your chart of accounts to track more detail when General Ledger performs posting, year-end closing, translation, and revaluation activities.

To use the secondary tracking segment, identify one of your flexfield segments in your chart of accounts as the secondary tracking segment.

The balancing, intercompany, and natural account segment cannot be used as the secondary tracking segment. In the Ledger Options page in Accounting Setup Manager, enable the Track by Secondary Segment option. General Ledger tracks retained earnings, cumulative translation adjustment, and revaluation unrealized gain/loss specific to the balancing segment and secondary tracking segment value pair.

Below is a summary of the GL processes affected for each secondary tracking segment option in the Ledger Options page.

Closing and Translation

• Retained Earnings Update Process and the Open Period Program: Balances for all income statement account combinations for a given pair of primary balancing segment and secondary tracking segment values are closed out to a retained earnings account combination bearing the same primary balancing segment value and secondary tracking segment value at the beginning of a new fiscal year.

• Posting: When prior period posting occurs for income statement items, posting updates the corresponding retained earnings account using both the primary balancing segment value and the secondary tracking segment value.

• Translation: Translation for the retained earnings account is processed according to a primary balancing and secondary tracking segment value pair. The cumulative translation adjustment (CTA) account is also updated for each primary balancing and secondary tracking segment value pair.

Revaluation

• Revaluation: Revaluation gain or loss amounts will be posted to the balancing segment value and secondary tracking segment value pair.

  Note: Previously, secondary tracking segment support is enabled with two options. One option controlled closing and translation and another option controlled revaluation. The present secondary tracking option enables all these features together.

  For information on revaluation for average balance-enabled ledgers, see Revaluation.

  For information on upgraded ledgers, see Overview of Reporting Currencies.

  The following table provides an example of how the primary balancing segment and secondary tracking segment is used to close out the profit and loss accounts to retained earnings using the Open Period process at the beginning of the fiscal year. Adjustments to the CTA account by Translation are also depicted. The example assumes:

  • Chart of Accounts Structure: Company . Cost Center . Natural Account

  • Primary Balancing Segment: Company

  • Secondary Tracking Segment: Cost Center

  • YTD Equity Translation Method

  Year-End PD 12/04 P/L Balances

Year-End Account Balances

Year Beginning PD 1-05, closing of P/L to main retained earnings account: without Secondary Tracking Segment.

Example with Secondary Tracking Segment not Enabled

Year Beginning PD 1-05, closing of P/L to detail retained earnings account: Secondary Tracking Segment enabled.

Example with Secondary Tracking Segment Enabled

To activate tracking by secondary segment:

1. Assign the Flexfield Qualifier, Secondary Segment, to a segment in your chart of accounts.

   Note: Identify one flexfield segment (cannot be the balancing, intercompany, or natural account segment) from your chart of accounts as the secondary tracking segment.

2. Update the Ledger in Accounting Setup Manager and open the Ledger Options page. Enable the Track by Secondary Segment option.

   Note: Secondary tracking segment support is not available for average daily balance enabled ledgers. To track revaluation using the cost center segment as the secondary tracking segment in an average balance enabled ledger, set the profile option GL Revaluation: Tracking by Cost Center to Yes.

Below are the descriptions of the related General Ledger processing behaviors when secondary tracking segment option is enabled for your ledger.

Closing and Translation

Retained Earnings/Open Period: The open period program subtotals revenue and expense accounts to update the detailed retained earnings account maintained for each primary balancing and secondary tracking segment value pair at the beginning of each fiscal year. This applies to the entered amount balance for each transacted currency, as well as its corresponding ledger currency accounted amount.

Posting: When journals are backposted to an earlier period that has an income statement impact, posting updates the detail retained earnings account affected.

The Posting process subtotals revenue and expense balances to update the retained earnings account maintained for each primary balancing and secondary tracking segment value pair. This applies to the entered amount balance for each transacted currency, as well as its corresponding ledger currency accounted amount.

Translation: Retained earnings is translated by summing the translated revenue and expense accounts by a combination of primary balancing and secondary tracking segment value pair. This amount is closed to the matching detailed retained earnings account. For the YTD equity method of translation, the system also calculates a historical rate for the detail retained earnings account.

This behavior assumes you did not define an historical amount for the retained earnings account. Otherwise, translation uses the user-defined rate or amount.

When a cumulative translation adjustment is required to balance the translation, the CTA account is tracked by a primary balancing and secondary tracking segment value pair.

We recommend that you translate each period sequentially when using the Track by Secondary Segment option for your ledger.

To enable tracking revaluation gain and losses by the cost center segment.

Revaluation

Resulting gain or loss amounts are posted to the unrealized gain/loss accounts you specify, tracked by each primary balancing and secondary tracking segment value pair.