Define one or more legal entities using Accounting Setup Manager's Legal Entities tab if planning to assign legal entities to accounting setups.
You can also define legal entities using Legal Entity Configurator. The Legal Entity pages of Accounting Setup Manager are the same as the Legal Entity pages in Legal Entity Configurator. The only difference is that you can assign balancing segment values to legal entities using Accounting Setup Manager.
Additional Information: See Overview.
Assigning balancing segment values to legal entities is optional; however, it is strongly recommended that you assign specific balancing segment values to each legal entity to help identify legal entities during transaction processing and reporting. This is particularly important for accounting setups that use the accounting setup where multiple legal entities share the same primary ledger.
By assigning balancing segment values to legal entities, you can also take advantage of all of the legal entity accounting features available, such as intercompany accounting.
If you do not assign any balancing segment values to your legal entities, then all balancing segment values will be available for transaction processing.
Note: If using multiple value sets for the balancing segment across charts of accounts, be sure to assign the correct value set to the legal entity. Once assigned, you cannot remove the value set from legal entities. However, there is no harm in assigning the wrong value set or assigning balancing segment values for the wrong value set; the system will ignore it during transaction processing.
Suggestion: If you are unsure about the value set to assign to each legal entity, allow Accounting Setup Manager to do it. When assigning a legal entity to an accounting setup, Accounting Setup Manager automatically assigns the correct value set associated with the legal entity's primary ledger and secondary ledger, if used.
Any balancing segment values assigned to a legal entity are automatically assigned to the legal entity's ledger when completing the accounting setup.
When entering transactions using Oracle subledgers, use only the valid balancing segment values that are assigned to the legal entity.
When entering journals in General Ledger, use only the valid balancing segment values assigned to the ledger's legal entities and the ledger itself.
If no balancing segment values are assigned to the legal entities or ledgers, then all balancing segment values will be available to enter transactions and journal entries.
Special Note for Disabling Legal Entities: If disabling a legal entity by entering an end date, also enter end dates for all assigned balancing segment values to prevent the use of the balancing segment value.
If you have an accounting setup with multiple legal entities assigned and specific balancing segment values assigned to legal entities, you cannot complete the accounting setup if the following violations exist:
overlapping balancing segment values assigned to the legal entities for the same accounting setup
balancing segment values assigned to some, not all, of the legal entities assigned to the same accounting setup
Note: Accounting Setup Manager does not check for overlapping balancing segment values assigned to legal entities in different accounting setups. Therefore, ensure that the correct balancing segment values are assigned to legal entities in all accounting setups.
Note: Before the accounting setup is complete, delete and add balancing segment values to legal entities at any time. After completing the accounting setup, you cannot delete balancing segment values from legal entities; you can end date the balancing segment value to prevent the use of it.
It is recommended that you designate the balancing segment of the chart of accounts as the legal entity or company segment. If there are multiple legal entities that use different charts of accounts, limit the number of value sets you define for the balancing segment to ease maintenance efforts. This allows you to share value sets across multiple charts of accounts and assign unique balancing segment values for each legal entity that is consistent across charts of accounts.