A ledger determines the currency, chart of accounts, accounting calendar, ledger processing options and subledger accounting method, if used, for a legal entity, group of legal entities, or some other business purpose that does not involve legal entities.
You define ledgers when you create accounting setups in Accounting Setup Manager. Each accounting setup requires a primary ledger and optionally one or more secondary ledgers and reporting currencies.
There are two types of ledgers: primary and secondary.
Note: Additional actions are required if you are adding a new subledger level secondary/reporting ledger to an existing primary ledger that already has final accounted subledger journal entries. See the Oracle Subledger Accounting Implementation Guide section on Conversion of Historical Data for Reporting Currencies and Secondary Ledgers for the additional actions.
The primary ledger acts as the main record-keeping ledger. If used for the purpose of maintaining transactions for one or more legal entities, it uses the legal entities' main chart of accounts, accounting calendar, currency, subledger accounting method, and ledger processing options to record and report on all of their financial transactions. If used for another business purpose where no legal entities are involved, then the primary ledger is defined with the chart of accounts, accounting calendar, and currency that is suited for the business need. One primary ledger is required for each accounting setup.
Note: The currency for your local statutory reporting (transaction-based, such as VAT or withholding tax) must be the currency of your primary ledger. Oracle supports local compliance by having local currency as the primary ledger currency.
The secondary ledger is an optional, additional ledger that is associated with the primary ledger for an accounting setup. Secondary ledgers can be used to represent your primary ledger's accounting data in another accounting representation that differs in one or more of the following from the primary ledger:
Chart of accounts
Accounting calendar/period type combination
Currency
Subledger accounting method
Ledger processing options
Secondary ledgers can be used in many ways. For example, if a legal entity must perform corporate and statutory reporting, you can use the primary ledger to satisfy corporate reporting requirements and then use a secondary ledger to satisfy statutory reporting requirements.
If a legal entity is a subsidiary of a parent company and must produce its financial results according to the parent company's reporting requirements in addition to its own local reporting requirements, then a secondary ledger may be used to satisfy the additional reporting requirement.
Secondary ledgers can be maintained at the following data conversion levels:
Subledger: The Subledger level secondary ledger maintains subledger journals, general ledger journal entries, and balances in the additional accounting representation. This data conversion level uses both Oracle Subledger Accounting and General Ledger Posting to create the necessary journals in both your primary and secondary ledgers simultaneously.
Journal: The journal level secondary ledger maintains your primary ledger journal entries and balances in an additional accounting representation. This type of secondary ledger is maintained using the General Ledger Posting Program. Every time you post a journal in your primary ledger, the same journal can be automatically replicated and maintained in the secondary ledger for those journal sources and categories that are set up for this behavior.
Balance: The balance level secondary ledger maintains your primary ledger account balances in another accounting representation. This type of secondary ledger requires you to use Oracle General Ledger Consolidation to transfer your primary ledger balances to this secondary ledger.
Adjustments Only: The Adjustments Only Secondary Ledger is an incomplete accounting representation that only holds adjustments. The adjustments can be manual adjustments or automated adjustments from Oracle Subledger Accounting. This type of ledger must share the same chart of accounts, accounting calendar/period type combination, and currency as the associated primary ledger. To obtain a complete secondary accounting representation that includes both the transactional data and the adjustments, you must then combine the adjustments-only secondary ledger with the primary ledger when running reports.
Warning: The following warning message appears if you add the secondary ledger to the existing primary ledger:
Please note that Subledger Accounting will fail to create accounting for transaction reversal and accounting entries derived using business flows if the subledger level secondary ledger is added to a Primary Ledger that has final accounted transactions in any subledger application. Use the SLA Secondary/ALC Ledger Historic Upgrade program to replicate accounting entries in the secondary ledger or reporting currency before creating new transactions in the subledger applications.
For more information on secondary ledgers, see Secondary Ledgers.
Note: If you only need to represent your primary ledger transactions in another currency, you do not need to use secondary ledgers; you can use reporting currencies.
Note: Additional actions are required if you are adding a new subledger level secondary/reporting ledger to an existing primary ledger that already has final accounted subledger journal entries. See the Oracle Subledger Accounting Implementation Guide section on Conversion of Historical Data for Reporting Currencies and Secondary Ledgers for the additional actions.
For more information on reporting currencies, see Reporting Currencies.
If you want to maintain your accounting for your ledger in multiple currencies, you can use reporting currencies. Reporting currencies are additional currency representations of primary or secondary ledgers. Unlike secondary 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, if used, and ledger processing options. Reporting currencies can be used for supplementary reporting purposes, such as consolidation or management reporting. They can also be used if you operate in countries with highly inflationary economies.
Reporting currencies can be maintained at the following currency conversion levels:
Balance Level: The Balance level reporting currency is maintained only for GL account balances by using translation to convert the balances from the ledger currency to the reporting currency. Balance level reporting currencies can be assigned to primary and secondary ledgers using Accounting Setup Manager, or they can be system-generated the first time you run translation using a different currency.
Journal Level: The Journal level reporting currency is maintained for GL journal entries and balances when you post journals in your primary or secondary ledger. This type of reporting currency is maintained using the General Ledger Posting program. Each time you post a journal entry in the associated primary or secondary ledger, another journal is created and posted to the Journal level reporting currency within the same journal batch.
Subledger Level: The Subledger level reporting currency is maintained for primary ledgers only. They maintain a currency representation of the primary ledgers' subledger journals, journal entries, and balances. This type of reporting currency is maintained by Oracle Subledger Accounting (SLA) and the GL Posting program.
Journal level and Subledger level reporting currencies are intended for use by organizations that must regularly and routinely report their financial results in multiple currencies. For example, an organization with a once-a-year need to translate its financial statements to its parent company's currency for consolidation purposes, but no other foreign currency reporting needs should use the balance level reporting currency instead of journal or subledger levels.
The choice of balance level (translation) versus journal or subledger level reporting currencies depends on whether a company wants to track balances or transaction level details in the reporting currencies. Typically, you should consider using journal or subledger level reporting currencies when:
You operate in a country whose unstable currency makes it unsuitable for managing your business. As a result, you need to manage your business in a more stable currency and still be able to report your transactions and account balances in the unstable local currency
Your company is multinational, and you need to report financial information in a common currency other than that of the transaction or your ledger's currency.
General Ledger stores reporting currency amounts. These amounts can be used with many other General Ledger features, such as translation, consolidation, multi - currency accounting, and formula journals.
You can use General Ledger's online inquiry features to display information about reporting currencies. You can also request standard reports, as well as create your own custom Financials Statement Generator reports to report in reporting currency balances.
You define reporting currencies when you create accounting setups using Accounting Setup Manager.
See: Reporting Currencies.
Warning: The following warning message appears if you add the secondary ledger to the existing primary ledger:
Please note that Subledger Accounting will fail to create accounting for transaction reversal and accounting entries derived using business flows if the subledger level secondary ledger is added to a Primary Ledger that has final accounted transactions in any subledger application. Use the SLA Secondary/ALC Ledger Historic Upgrade program to replicate accounting entries in the secondary ledger or reporting currency before creating new transactions in the subledger applications.
The following need to be defined or enabled in Oracle General Ledger before you can create ledgers using Accounting Setup Manager:
Chart of accounts
Accounting calendar
Transaction calendar, if you plan to use average balance processing and want to ensure journals created in Oracle General Ledger and Oracle Subledger Accounting (SLA) only get booked on valid business days
Currencies
Currency conversion rate types and rates, if you plan to use more than one currency
Journal reversal criteria, if you plan to automatically reverse journals
The following accounts:
Retained Earnings account
Suspense account, if you want to enable suspense posting
Cumulative Translation Adjustment account, if you plan to translate balances
Rounding Differences account, if you want to use a specific account to track small currency differences during currency conversion
Non-Postable Net Income account, if you plan to use average balance processing. This account is used to capture the net activity of all revenue and expense accounts when calculating the average balance for retained earnings.
Reserve for Encumbrance account, if you plan to use Encumbrance Accounting
Entered Currency Balancing Account, if you plan to use Oracle Subledgers and want to balance foreign currency subledger journals by the entered currency and balancing segment value
Ledger Currency Balancing Account, if you plan to use Oracle Subledgers and want to balance subledger journals by the ledger currency and balancing segment value
See: Ledger Options.
If using Oracle Subledgers, you must assign a ledger to the GL Ledger Name profile option to indicate the ledger that will be used for transaction processing by your subledger applications. The ledger specified is automatically assigned to the GL: Data Access Set profile option to control the ledgers that can be used by Oracle General Ledger.
If you want to access more than one ledger for Oracle General Ledger, assign a data access set to the GL: Data Access Set profile option. This data access set should include the same ledger used by your Oracle Subledgers so you can view subledger data transferred to General Ledger.
See: Data Access Sets.
To achieve processing efficiencies, such as opening periods for multiple ledgers or summarizing balances across ledgers using FSGs, you can group multiple ledgers into a ledger set.
All ledgers in a ledger set must share the same chart of accounts and accounting calendar/period type combination. This includes reporting currencies at the Journal and Subledger levels that you may want to combine with the primary ledger to allow you to synchronize accounting periods or view data across ledgers.
See: Defining Ledger Sets.
Data access sets control which ledgers can be accessed by different responsibilities. Data access sets can also limit a user from accessing certain balancing segment values or management segment values or grant read - only or read and write access to data in a ledger.
General Ledger automatically creates a data access set when you define a ledger or ledger set. This system-generated data access set provides full read and write access to ledgers. You can also provide more limited access to your ledgers and ledger sets by defining your own data access sets.
Your System Administrator must assign the data access set that you want to use to the profile option GL: Data Access Set for each responsibility.
See: Data Access Sets.