2 Oracle Finance-Practical

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

ORACLE FINANCIALS

VOL - II

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Order management Accounts Receivable Fixed Assets Accounts Payable Inventory Purchase Order

OM-AR-GL: Order to Cash Process PO-AP-GL: Procure to Pay Process

Order Management, Purchase Order, Inventory = Distribution Modules General Ledger receives information from sub ledgers.

(Cash Management-Reconciliation Purpose)

Flex Field:

It‟s a field made up of sub-field or segment.

Type of Flex Field:

 Key Flex Field

 Descriptive Flex Field Key Flex Field:

It is an intelligent key code character made up of meaningful segments.(Identify an object)

Module Key Flex Field

GENERAL LEDGER

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AP No Key Flex Field

AR Sales Tax Location Flex Field & Territory Flex Field FA Category Flex Field, Asset Key Flex Field &

Location Flex Field

GL Accounting Flex Field

Descriptive Flex Field:

To track any additional information this is important for business. For Example:

Order Form:

Order No: XX

Part No: COM-878-LTN

Descriptive: Computer-Monitor-Light Color [ ]

Part No: (Key Flex Field)

Category: COM Computer

Item: 878 Monitor

Color: LTN Light Colour

Segments Values Descriptive In GL,

Date : Calendar(Accounting Calendar)

Particulars : Chart of Accounts(Organization Structure-Capture Info. Of Trans)

Amount : Currency(Functional Currency &Foreign Currency) Setups>Financials>Calendar

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Types: Monthly/Quarterly/Half-Yearly (Fiscal-Financial Year) 13 periods - Tracking Information from last year to current year.

Purpose of 13th _{Month-31.12.11 to 31.12.11/31.03.11 date information‟s can be transfer to}

current year.

On last date of year 31st _{march, we cannot pass all the entries and we can pass the entries}

during next working month. However we can give the effective date is 31st _{March for the same}

transaction

Currency –Setup>Currencies>Define:

In Chart of Accounts, we have 4 major components. 1. Segment: Minimum 2 & Maximum 30

Flex Field Qualifiers: Identification tag for segments (5 Flex Field Qualifiers)  Company – Balancing Segment**

 Department- Cost Center  Account-Natural Account**

 Inter Company-Inter Company Segments  Tracking-Secondary Tracking Segment

** Mandatory

Setup>Financials>key> Segments Setup>Financials>key> Values Setup>Financials>key>Aliases Setup>Financials>key> Rules

Value Set: Container for values and the related attributes for each segment of Flex Field List Type: Pop list-0 to 10

List of Values-11 to 200 Long List-200>

Security: No Security

Hierarchies-Apply to both parent and child

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Translatable: Restricted

Pair & Special: Based on Request

(Segment can have maximum size is 25 only & GL is an independent validation type) Dynamic Insert:

It allows all new combinations of segment values, which we created. Rollup Groups: Grouping a parent value use for reporting purpose Segment Qualifiers: Identification tag for values

2.Values:

Setting values for structure (KR COA- Karthik Chart of Accounts)

Periods Journal Posting

Open Y Y (Pass Journal Entries & Posting) Closed X X (No Journal Entries & Posting) Permanently Closed X X

Never Opened X X

Future Y X (Pass Journal Entries & No Posting)

3.Rules:

Cross Validation: Setup+Financials+Flexfield+Key+Rules Avoid illogical combinations.

It controls the combination of segment values that you create when you enter the value in flex field window.

Security Rule: Setup+Financials+Flexfield+Key+Security+Define Restrict the user to enter data at the responsibilities level.

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 Restrict data entry an online enquiry to specific values by using flex field security rule.

 System hides the values when user tries to enter segment value. It limits the access of different segment values for different responsibilities. After freezing the segment values (set up), make it compile.(Finished) If we can give security rights to parent, we cannot access child codes. GL 4. Aliases:

It makes the functions in shortest way like a single alphabet. It automatic picks up the entire code.

Example: R- Rent

Default Accounts in Set of Books: Retained Earnings

Account

: Difference between Revenue & Expenses transfer to Retained Earnings (Mandatory)

Encumbrance Account : Temporary block of funds

Suspense Account : Difference will be posted (Dr/Cr) Translatable Adjustment

Account

: Functional Currency to Foreign Currency

(Exchange profit/Loss Transfer to this Account) Net Income Account : Income – Expenses

Rounding Difference Account

: Rounding the decimal points

Oracle General Ledger - It‟s basically used for Adjustments and Apportionment only against payables , receivables and fixed assets.

Creation of Category:

Setup+ Journal + Categories Category: KR

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Setup + Financials +Flex Fields+ Key+ Values Application : ORACLE GENERAL LEDGER Title : Accounting Flex Field Structure : Operating Accounting Flex

Segment : Company

New Company: Value: 33

Translated value: 33

Description: KR Group of Companies

Child Value: 51 to 52 & changed that parent company in testing database We can move these child values to some other companies.

Segment Qualifiers for Created Company: Allow Budgeting – Yes & Allow Posting – Yes We cannot enter a journal for parent company if child value defined.

After creation of category and company, we can create a journal entry. Entering Journal:

Journal: KRJE1 Category: KR

Account: 33-000-7110-0000-000 = US$100,000 (Dr.) 7110 – Advertising 33-000-2210-0000-000 = US$100,000 (Cr.) 2210 - Accounts Payable After entering the data‟s. Click Check Funds – Reserve Funds

Status – Select for Posting

F11 Re-query – Paste the journal name and click Control F11 – Post it Post it and view journal from Tools- Accounting (T- Accounts)

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Review the Journal and select the month (Current Period/Entered Period) Click Reverse – Status: Processing

Re query it and paste the journal number – Status: Reversed GL Accounting Cycle:

Security Rule:

Setup>Financials>Flex Field> key > Security> Define Setup>Financials>Flex Field> key > Security> Assign DEFINE:

For defining security rule, we have to enable the security rule in segment. Setup+ Financials+ Flex Fields +Key + Segments

F11 – Control F11 (Oracle General Ledger – Accounting Flex Field)

Select Operating Flex Field – Click Segments – Select Department – Open Name: Department

Enable: Security

Now, we can define the security rules.

Application ORACLE GENERAL LEDGER Title Accounting Flex Field

Consolidation Balances Review Report Close Period Translation Revaluation Open Period Enter/Import Journal Review Posted Journal

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Segment Department (For Defining Security Rules, Select Department only)

Assigning security rules to department wise: Name: (We can give name in security rules)

Department Security- Department is restricted to 110 through 130 Single Department- Department is restricted to only department 110 Elements: (Department Security)

Include: 000 to ZZZ (IncluKRg all the department s)

Exclude: 000 to 109 (In that included, we have excluded 000 to 109 departments)

Exclude: 131 to ZZZ (And, exclude 111 to ZZZ. Therefore, we have included 110 to 130 only)

Elements: (Single Department)

Include: 000 to ZZZ (IncluKRg all the department s)

Exclude: 000 to 109 (In that included, we have excluded 000 to 109 departments) Exclude: 111 to ZZZ (And, exclude 111 to ZZZ. Therefore, we have included 110 only)

ASSIGN:

Setup> Financial> Flex Fields> key> Security> Assign Application : ORACLE GENERAL LEDGER

Title : Accounting Flex Field Structure : Operating Accounting Flex

Segment : Department (Defined Security Rules to be Assigned)

Find – F11- Control F11

Select: Title- Accounting Flex Field & Operations Accounting Flex Select: Structure- Operations Accounting Flex

Here, applications automatically generated and we have to fix the responsibility and defined name to that responsibility – Save it.

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Therefore, the General Ledger Super User (Department) restricted to use the 100 through 130 Therefore, the General Ledger User (Single) restricted to use the 110 only

This is the security assigning procedure.

Cross Validation: Setup>Financial>Flex field>Key>Segments Just making to avoid “illogical combinations” as per accounting system. (To avoid illogical combinations)

In Segment,

Control F11- Application: Oracle General Ledger Flex field title: Accounting Flex Field Check whether Cross validate Segment check box enable or not – Make it Enable. GL Setup+Financial+Flexfield+key+Rules

In Structure- F11- Type Op%-Control F11

Captured: GL- Acc FF – Operations Accounting Flex- Vision Operations Accounting Flex Field In Cross Validation Rules, define the cross validation rule. (FF Segment- For example 3 entities)

 Account  Company  Legal

For each segment, we can assign the cross validation rules. Account: (Create) & Error Segment: Account

Error Message: Account – balance Sheet (Assets, Liabilities & O/E) must be used with department 000 (Balance Sheet) – This is an error message display when we enter illogical combinations as we defined. Elements: Type From To Include - 00-000-0000-0000-000 zz-zzz-zzzz-zzzz-zzz Exclude - 00-00-1000-0000-000 zz-599-1699-zzzz-zzz Exclude - 00-001-1700-0000-000 zz-599-3999-zzzz-zzz Exclude - 00-601-1000-0000-000 zz-zzz-1699-zzzz-zzz

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Company-Department-Account-Sub Account-Product

Here, first we have included everything (zzz), and then we have excluded certain accounts from this department to this department as defined.

(Making end user avoid entering unnecessary departments and accounts due typical error and allow him to enter the accounts with some restrictions)

Company: (Create) & Error Segment: Account

Error Message: Company- Department 730 can only be used with Company 01 This is an error message display when we enter illogical combinations as we defined Elements:

Type From To

Include - 00-000-0000-0000-000 zz-zzz-zzzz-zzzz-zzz Exclude - 02-730-0000-0000-000 02-730-zzzz-zzzz-zzz

Company – Department – Account – Sub Account – Product

Here, first we have included everything (zzz), and then we have excluded department 730 from Company 01. It means, this 730 department can only be used with company 01.

(Making end user should not enter this 730 department in company 02 and allow him to enter 730 departments with company 01 only)

Legal: (Create) & Error Segment: Account

Error Message: Legal: You cannot select Revenue accounts (4000-4999) with this department. This is an error message display when we enter illogical combinations as we defined

Elements:

Type From To

Include - 00-000-0000-0000-000 zz-zzz-zzzz-zzzz-zzz Exclude - 02-730-4000-0000-000 02-730-4999-zzzz-zzz

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Here, first we have included everything (zzz), and then we have excluded department 730 should not have Revenue accounts (4000-4999).It means; we cannot select Revenue accounts while selecting department 730.

(Making end user should not use the Revenue accounts while for the department 730) Aliases: Setup>Financial>Flex field>Key>Aliases

In Structure-F11-Type Op%-Control F11

Captured: GL- Acc FF- Operations Accounting Flex – Vision Operations Accounting Flex Field Enable the Short Hand Check box and size of alias size.

In Aliases Descriptions,

Alias Template Description

Secretarial 01-740-7615-0000-000 Secretarial Services

When we enter a journal, in account line we can select (…) – Accounting Aliases….In that, we should type secretarial…. It automatically selects secretarial services and entire template. Foreign Currency Journal:

Setup>Currencies>Rate>Types

Define your Conversion Rate Type- EUR Rate (For selecting purpose) Setup>Currencies>Rate>Daily

Define your conversions accorKRg to USD to EUR

USD to EUR: 0.8 (When we enter 0.8, it automatically generate 1.25 (USD/EUR-1/0.08) EUR=1.25 USD

Now, USD=1 (Functional)

Therefore, EUR=1/0.8 = 1.25 USD (Here 1 is USD & 1*0.08 = 1.25 USD) Enter a Journal (Functional Currency- USD)

Journal – KRJE08 Currency – USD

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Account Dr. Cr.

01-740-7615-00-0 10000

01-110-9999-0000-000 10000

When we enter journal in functional currency US$, 10000 is debited.

When we change the currency USD o EUR, the USD 10000*1.25 =USD 12500 will be debited from our account. (1.25 is defined for EUR)

Suspense Account:

Setup>Financials>Books>Define F11

Set of Books - Vision Operations%

It selects vision operations (USA)-Operations Accounting Flex

In Journal, check whether suspense account check box is enabled or not- Make it enable 01-000-2990-0000-000 (2990= Suspense Account)

For our information – 01-000-7826-0000-000 (782=Rounding) Now, we can enter journal with short balances

Dr-15000

Cr-10000

When it makes post, it automatically makes suspense account of Rs.5000/- for balance of that transaction) Debit Memo: Purchase materials-100,000/- Entry: (Journal) Purchase Amount Dr.100, 000 To Supplier Account Cr.100, 000

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Now, Payment entry:

Supplier Account Dr-100, 000 To Cash Account Cr - 90, 000 To Purchase Returns Cr – 10, 000 Tax Journal:

For learning purpose, we are using Vision Operations Set of Books In real time implementation, Set of books set by system administrator Setup>Financials>Books>Define

In GL Set of Books-F11-Vision Operations%-Control F11-Vision Operations (USA) Journaling, check whether Journal Entry Tax is enabled or not – Make it enable Setup>Tax>Tax Options

In Account level, enter the particular account of tax required and enables Amount includes tax In Tax Options:

In Set of Books Level: Tax Code: As Required Enable Amount includes Tax In Account Level:

Enter : Tax Account (1340-Prepaid Expenses)

Enter : Tax Type (Input-If Payable Tax/Output-If Receivable Tax) Enter : Tax Code (As Required)

Enable amount includes Tax. Save it.

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Define : Tax Code

Enter : Tax Type

Rate : 8% (Define as required)

GL Account : Define the 33-000-1340-0000-000 VAT Type : As Required

Save it.

Create a new journal for tax calculation. Journal: KRTAXJE

Category: KR

Tax: Required /Not Required In Line,

33-000-1340-0000-000 Rs.50000 (Dr.)

33-000-2210-0000-000 Rs.50000 (Cr)

Check Funds-Reserve Funds-Tax Journal It automatically calculates tax as defined.

Statistical Journal: (For Formula Based Recurring Journal) Statistical account starts with 9

For Number of share folder and Number of employees For Example,

Expense-Rent Amount- Rs.100, 000/-

This rent amount should allocate to various department of particular company.

Therefore, we have to define statistical journal along with the ratios for distributing this rent amount to such departments. The rent paid before allocation in payables itself.

However, we can distribute the paid rent to various departments as defined in statistical journal. In Journal, create a new journal (Currency – STAT)

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Check-Funds-Reserve Funds-Post it.

Therefore, we have defined statistical journal is 1:2:3 General statistical formula: A*B/C

A- Expensed Amount B- One Line Ratio C- Summation of Ratio

That‟s all – Based on statistical journal, we are going to define Recurring Journal Recurring Journal:

Types of Recurring Journal:

Types Amount Account

Standard Applicable Applicable

Skeleton No Applicable

Formula Formula Only

Dollar Issue bonus

Standard:

Set fixed account combinations and amounts Skeleton:

These journals have varying amounts in each accounting period.

We can define a journal entry without amounts and enter appropriate amounts in each accounting period.

ORACLE FINANCIALS

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A formula entry is a recurring entry that uses formula instead of amounts. Dollar:

To track out monetary balances Steps for creating Recurring Journal:

 Create recurring journal definition  Generate Recurring Journals  Review Entries

 Post

1. Standard: (Set fixed account combinations and amounts) Journal>Define>Recurring

Batch: KR Rent Batch (Create)

Journal: Rent Recurring Journal (Create) Rent- 7420 Category: KR (Attach) Currency: USD In Lines, 10 33-110-7420-0000-000 Rs.30000/- (Step-Enter-Rs.30000-Save it) 20 33-120-7420-0000-000 Rs.30000/- (Step-Enter-Rs.30000-Save it) 30 33-130-7420-0000-000 Rs.30000/- (Step-Enter-Rs.30000-Save it) Credit Entry: 33-000-2210-0000-000 Rs.0.00/- Save it

Generate and attach your period- Submit-View-Find &request –Status-Completed Go to Journal –

Source: Recurring (Attach) Category: KR (Attach)

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Created KR Rent Batch automatically generated Recurring Journal based on inputs given in Journal>Define>Recurring

Review the recurring journal and post it.

Therefore, the paid amounts (7420-Rent) distributed to 3 departments from the offset entry (Line 9999-000 Department amount distributed to 110,120,130)

This is standard recurring journal. 2. Skeleton:

These journals have varying amounts in each accounting period.

Therefore, we can define a journal entry without amounts and enter appropriate amounts in each accounting period.

Journal>Define>Recurring

Batch: KR SKELETON RENT (Create)

Journal: Skeleton Recurring Journal (Create) Rent-7420 Category: KR (Attach)

Currency: USD In Lines,

10 33-110-7420-0000-000 No Amount (Save it)

20 33-120-7420-0000-000 No Amount (Save it)

30 33-130-7420-0000-000 No Amount (Save it)

Credit Entry: 40 33-000-2210-0000-000 No Amount (Save it)

Generate and attach your period-Submit-View-Find Request-Status-Completed Go to Journal-

Source: Recurring (Attach) Category: KR (Attach)

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Created KR Rent Batch automatically generated Recurring Journal based on inputs given in Journal>Define Recurring

Review the recurring skeleton journal and Enter the amounts when and where required Post it. (If period is opened as defined in GL, it can be posted)

Else, Query the batch and review the same – Change period (Open Period) Ok-Save it- Post the Journal-Re query it- Status posted

Therefore, as per our requirement, we have entered the paid rent amount in various departments in recurring journal window. It will be distributed at the time of posted This is Skeleton Recurring Journal.

3. Formula: A formula entry is a recurring entry that uses formula instead of amounts. In this Formula Recurring Journal, we must use the Created Statistical Journal

Journal>Define>Recurring Batch: KR FORMULA RENT (Create)

Journal: Skeleton recurring Journal (Create) Rent-7420 Category: KR (Attach)

Currency: USD In Lines,

10 33-110-7420-0000-000 (STAT)

Step 1-Enter-No Amount- 33-110-9210-0000-000-YTD-STAT (Currency) Step 2- X -20 (Amount for Multiplication with Statistical)

20 33-120-7420-0000-000 (STAT)

Step 1-Enter-No Amount- 33-120-9210-0000-000-YTD-STAT (Currency) Step 2- +-50000 (Amount for Addition with Statistical)

Credit Entry: 9999 33-000-2210-0000-000 No Amount (Save it)

Save it

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Source: Recurring (Attach) Category: KR (Attach)

Find – Recurring Formula Journal summary will be displayed.

Created KR Rent Batch automatically generated Formula Recurring Journal formulated based on inputs given in statistical journal – Journal Output is

33-110-7420-0000-000 200,000 (Formula 20x Rs.10000 Statistical)

33-120-7420-0000-000 70000 (Formula 50000+ Rs.20000 Statistical)

33-00-2210-00-0 270000 (Offset entry created)

Post it. (If period is opened as defined in GL, it can be posted)

Else, Query the batch and review the same – Change period (Open period) Ok- Save it- Post the Journal- Re query it- Status posted

Therefore, as per our requirement, the formula recurring journal posted based on statistical journal.

This is Formula Recurring Journal.

4. Dollar: To track our monetary balances. Steps for Dollar Recurring Journal

1. First Pass a journal for Rent Account 2. Inquiry/Account-Check the entry

3. Define Dollar Recurring Journal-Define the dollar recurring lines with formula 4. Generate dollar journal-Source &Find-Review the passed Journal

Pass the regular journal entry (KR DOLLAR JE) for Commission payable or rent distribution. Then,

Journal>Define>Recurring

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Category: KR (Attach) Currency: USD

10 33-110-7420-0000-000 (Rent)

Step 1- Enter –No Amount – 33-110-7420-0000-000

- Actual –PTD-USD Step 1- X - 0.11 (Rate for Multiplication)

For creating offset entry,

9999 33-000-2210-0000-000 – That‟s all and Save it If we don‟t want offset entry, just

Save it

Generate and attach your period-Submit-View-Find Request-Status-Completed Go to Journal-

Source: Recurring (Attach) Category: KR (Attach)

Find- In Summary KR DOLLAR JE will be displayed.

Created KR Dollar Journal generate the dollar journal- Track monetary balances

(We cannot pass journal entry for parent company. Because, child values only created as department)

Mass Allocation: (Allocate particular expenses to various department)

A single journal entry formula that allocates revenues and expenses across a group of cost centers, departments, divisions and so on.

[A*B/C] A-Cost Pool Account

B-Ratios (1:2:3-Statistical 9210) C-Summation of Ratios (1+2+3=6)

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1. Create Mass Allocation Definition o Enter batch Information

o Create Mass Allocation Formula o Enter Mass Allocation Formula 2. Generate Journals

3. Review Journals 4. Post the Journals Before that,

Create a Statistical Journal(Currency-STAT)

In Line,

33-110-9210-0000-000 Rs.10000

33-120-9210-0000-000 Rs.20000

33-130-9210-0000-000 Rs.30000

No Offset Entry

Check Funds-Reserve Funds-Post It.

Therefore, we have defined statistical journal is 1:2:3 1. Pass expense journal (Advertisement Account-7110)

33-000-7110-0000-000 (Dr) Rs.90000

33-000-2210-0000-000 (Cr) Rs.90000

These expenses accounted in 000 No department (Parent) and will allocate to 100 (Resources Department) in extend, allocate to sub-divisions

2. Mass Allocation

Journal>Define >Allocation

Name: KR MASS ALLOCATION (Create) Balance Type: Actual

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[C- Constant L- Looping S-Summation]

Full Balance – It can select any currency and allocate

Single Entered Currency – Particular Functional Currency/Required Currency (Enable &USD) Full Cost Pool Allocation – Enable: Decimals also will be taken care

-Not Enable: Decimals will be rounded off and take rounded amount.

A: Cost Pool-Created Expense Journal- Allocating to 100 (Resources Department)- Constant

33-000-7110-0000-000 USD-PTD-Current Period C- C - C - C - C

B:Ratio-Created Statistical Journal- Department Looping to Stat ratios (100)- Looping

33-100-9210-0000-000 STAT-YTD-Current Period C- L - C - C - C

C: Summation- Summing Statistical Journal to 100 (Resources Department)- Summation

33-100-9210-0000-000 STAT-YTD-Current Period C- S - C - C - C

T: Target- Looping Expense Journal – From 100 (Resources Department)- Looping 33-100-7110-0000-000 USD-PTD-Current Period

C- L - C - C - C

O: Offset- Knock off Created Expense Journal Dr –Cr from 100 Expense Journal - Constant

33-100-7110-0000-000 USD-PTD-Current Period

C- C - C - C - C (As like Cost Pooling Account Line)

(Be sure to also follow the account segment cross validation rules. Because, the mass allocation validation program does not check across validation Rule. If cross validation rules are not

matched with mass allocation, it creates invalid journals)

Click Validate- Validate the entered Formula - Requery F11-Control F11-Status-Validated Generate it-Attach Period-Submit-View Request-Status-Completed

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Source- Mass Allocation Category- KR

Find- The defined formula allocating the cost pooling expenses to statistical department values as formulated

This is the mass allocation procedure. Inter Company:

In set of book, check whether Balance Inter Company Journals check box enable or not (Enable) Setup>Accounts>Intercompany

In this there are 2 options 1. Clearing Company Usage

Always use Many to Many

Clearing company Intercompany Transactions only

Always use Clearing Company- While transferring any asset between inter-companies, the asset payment will be routed some other particular company (Payment company will be varied)

Many to Many Inter Company- While transferring any asset between inter-companies, the asset payment will be routed from the same intercompany (Payment Company will be anyone

intercompany)

2. Default Options (Action: If no clearing company specified)

Error Out Use Default Clearing Company Use Default Balancing Account

Use Default Clearing Company- If it is enable, we have to define default payment clearing company for all the intercompany transactions.

Use Default Balancing Account – If it is enable, it will use default balancing account and it will not consider Always use clearing company & use default clearing company.

ORACLE FINANCIALS

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1. Define your set of books.

2. Enable Balance Interfund Journal in the Set of Books window. 3. Define your journal entry sources.

4. Define your journal entry categories. 5. (Optional) Define your interfund segment

Source: Manual (Attach as required) Category: KR (Attach)

Clearing: Many to Many Default: Error Out (1st _{we should define Many to Many and error out)}

Company Due from Account Due to Account

01 01-000-1811-0000-000 01-000-2371-0000-000 (For Transfer) 02 02-000-1812-0000-000 02-000-2372-0000-000 (For Transfer) 03 03-000-1813-0000-000 03-000-2373-0000-000 (For Transfer)

KR 33-000-1814-0000-000 01-000-2374-0000-000 (Payment Route)

All Other 33-000-1815-0000-000 33-000-2375-0000-000 (All other companies routed their payment through this company)

(2nd _{– After defining accounts, now you can choose always use-clearing company-KR)}

(Therefore,KR is routed company for all Intercompany transactions)

If we define Always Use Clearing Company, the clearing company will be defined in that check box and all the intercompany transactions payment will be routed through clearing company only.

Now, we can create a journal for intercompany transactions. Journal: KR ICJE01

Category: Inter Company Transfer Source: Inter Company

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J. Sureshraja M.com., MBA., CA (f).,

01-000-1560-0000-000 Rs.10000/- (Supplier of Asset)

Check Funds-Reserve Funds-Post

Requery it-It will automatically generate journal and make payment through KR It will generate journal as follows.

Account Dr. Cr.

3. Payable KR-000-2371 10000

2. Receivable KR-000-1812 10000

4. Receivable 01-000-1814 10000

1. Payable 02-000-2374 10000

Now,02 got an asset and 01 payable to KR and KR Receive the funds from 02 and pay to 01 This is the process when we are defining inter company transactions.

If the asset transfer is balance,it will be accepted.

If we change these options,it depends on company divisions and selects only one.

If the Error and Many to Many transactions is enable,the error message will be displayed while passing the entry.

This is what inter-company procedure and transactions.

BUDGET:

Budget is estimated account balances for a specified range of periods then compare estimated amounts with actual balances to determine variances.

Budget consists of periods, accounts and amounts

In oracle general ledger, create a budget by designating amounts to be a combination of accounted period. (If expensed amount is less than the budget –Favor)

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Budget Accounting Cycle:

 Define budgets and organizations  Enter budget amounts

 Review and correct budgets  Freeze budgets

 Report on budgets Types of Budget:

1. Non-Funding Budget

2. Funding Budget – Request Budgetary Control

(We can enable this budget define itself and we should not enable this in set of books) Open- Can make corrections (After create a budget, it‟s in current status, Then freeze it) Frozen- Cannot make corrections

1. Non-Funding Budget- Just plan the budget and does not meet the expenses and spend money (Long term oriented)

2. Planning the budget and match with actual expenses. (Immediate purpose)

1.Non-Funding Budget: 1.Define the Budget: Budget>Define>Budget Name: KR BUDGET NF Status: Open

(Should not enable the Require Budget Journals) Budget Periods: Jan-00 to Mar-00

Click Open Next Year

View-Request –Find-Status: Completed

2.Budget Organization:

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Display: 2-1-3-4-5

We can set passwords securities Click Ranges

Line Low High Type Currency

1 33-110-7110-0000-000 33-130-7110-0000-000 Entered USD Advertising Advertising

After making ranges, don‟t save it and then,

Click Range Assignments: (Just assign only one department)

Account: 33-110-7110-0000-000 (Low Account only defined here) After making range assignments, save it

Concurrent request process – Status Completed 3. Budget Amounts:

Budget>Enter>Amounts

Budget Organ: KR BUDGET ORGAN NF (Attach) Budget: KR BUDGET NF (Attach)

Accounts Periods: Jan-00 Mar-00 Worksheet Mode-For more accounts Single row mode- For only one account In Worksheet mode- Account

33-110-7110-0000-000

It will automatically generate defined budget periods without amounts. Click-Budget Rules

1. Divide Evenly-The defined amount will be diviKRg evenly for defining periods 2. Repeat per period- It will repeat the same amount for particular defined period

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3. 4/4/5 – Totally 52 weeks in a year; 4=1st _{Month=4 weeks}

4=2nd _{Month=4 weeks} 5=3rd _{Month=5 weeks}

Total=13 weeks x 4 Quarters =52 Weeks Select Divide Evenly

Amount – 90000

Apply & Ok – The defined amount will be divided evenly. Click-Budget Posting-View-Request-Find-Status-Completed

Check funds available or not with the help of Inquiry>Funds (Checking funds for one period and one account)

Attach your budget-KR BUDGET NF

Account- Enter defined account – 33-110-7110-0000-000

It will display Rs.30000 as budgeted for one particular month (Jan 2000 only) Check balances and variances with the help of Inquiry >Account:

(Checking funds for all periods and for many account) (We can post lot of journals at one period time) Attach period (Jan 00 to Mar 00)

Select Budget & Attach your budget (KR BUDGET NF) and Enter budget account 33-110-7110-0000-000

It will display show balances, show journal details and show variances for Jan 00 to Mar 00. 2. Funding Budget:

1. Define the Budget: Budget>Define>Budget Name: KR BUDGET FUND Status: Open

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Control – None/Advisory/Absolute Budget Periods: Jan-00 to Mar-00 Click Open Next Year

View-Request –Find-Status: Completed 2. Budget Organization:

Budget>Define>Organization Name: KR BUDGET ORGAN FUND Display: 3-2-1-4-5

We can set password securities Click Ranges

Line Low High Type Currency

1 33-110-7120-0000-000

33-130-7120-0000-000

Entered USD

Public Relation Public Relation

After making ranges, don‟t save it and then,

Click Range Assignments: (Just assign only one department) Account: 33-120-7110-0000-000 (Low Account only defined here) After making range assignments, save it

Concurrent request process-Status Completed 3. Budget Amounts: (In Journals)

Budget>Enter >Journals

Budget Organ: KR BUDGET ORGAN FUND (Attach) Budget: KR BUDGET FUND (Attach)

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Single row mode- For only one account

In Worksheet mode - Account-Click (Control F11) 7120-120-33-0000-000

It will automatically generate defined budget periods without amounts. Click – Budget Rules

Select Divide Evenly Amount – 90000

Apply & Ok – The defined amount will be divided evenly. Click – Create Journals

Journal batch: KR BUDGET FUND JOURNAL BATCH (Create) Category: KR (Attach)

Click – Run Journal Import – Concurrent Request Generated – Click Done. View – Find – Status – Completed – View Output – Copy the Created Batch Go to Journal Journal>Post

In Find Journal batches – paste the copied batch with % Find – Post Journals Summary will be displayed

Enable all the budget periods and Post it. Concurrent request generated

Go to Journal – Journal>Enter

Select your Funding budget batch and find – Status – Posted This is the process of Funding and non – Funding budgets. *** In Budget – Funds Check Level

Funding budget requires Funds Check Level. (Requires Control) Control – None/Advisory/Absolute

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If Budgetary Control Group is Advisory, we can meet that expense with advisory message if the actual amount exceeds.

Absolute – Budget is created and reserve funds for Rs.90000/- for meet an expense.

If Budgetary Control Group is Absolute, we can meet that expense with Absolute message if the actual amount should be exact budgeted.

Period type:

Entered: For Funding and Non – Funding budgets Calculated: For Mass Budget and Formula Budget Boundary:

 If boundary is period type, we can use that fund for that period only (PTD)  If boundary is quarter type, we can use fund from period to quarter level (QTD)  If boundary is YTD type, we can use fund from period to year level (YTD), etc.

Period to Date

Quarter to Date Year to Date Project to Date

PTD Ok (If Bound is period) No No No QTD Ok (If Bound is Qtr) Ok (If Bound is Qtr) No No YTD Ok

(If Bound is YTD)

Ok

(If Bound is YTD)

Ok

(If Bound is YTD)

No PJTD Ok (If Bound is PJTD) Ok (If Bound is PJTD) Ok (If Bound is PJTD) Ok (If Bound is PJTD)

Budgetary Control Group (Funding budget requires Funds Check Level – Requires Control Budget>Define>Controls

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Funds Check Level – None/Advisory/Absolute Control – None/Advisory/Absolute

Advisory – Budget is created and reserve funds for Rs.90000/- for meet an expense.

If Budgetary Control Group is Advisory, we can meet that expense with advisory message if the actual amount exceeds. (In Journal, we can enter a journal for excess amount with an advisory message)

Absolute – Budget is created and reserve funds for Rs.90000/- for meet an expense.

If Budgetary Control Group is Absolute, we can meet that expense budgeted amount only. We cannot make payment for excess amount than budgeted amount.

Budgeted control room form allows you to define rules controlling how strongly a budget controls spenKRg. For each combination of journal source and category, you can define whether

expenditure beyond a budget or accepted without command accepted with an advisory or rejected.

When you submit funds check or find reservation request, GL searches for the budgetary control rule and match the source and category of your journal entry.

If no matches from, GL substitutes your source and category. Advisory/Absolute: (For Funding Budget Only)

If we want to make Advisory / Absolute funds check level, we have to follow the following steps. 1. Create a new budgetary control group (KR Budgetary Control Group)

2. Change the funds check level to Advisory/Absolute

3. Create new Funding budget organization for advisory/absolute function

4. Create Ranges and Enter the amount in Budget>Journals, budget rules and regular process up to posting.

5. After posting the budgeted journal (Advisory/Absolute), we can enter actual journal entry. In addition, budgetary control groups having following items.

1. Tolerance - % & Amount 2. Override Amount

1A.Tolerance %:

When we are defining budgetary control group as Advisory/Absolute, the tolerance % helps to add % amount with budgeted amount

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(Budget Rs.16000+Tolerance 10% on Budget Rs.1600=Rs.17600/- will be allowed maximum for making an expense journal to compare with budgeted.

1B.Tolerance Amount:

When we are defining budgetary control group as Advisory/Absolute, the tolerance amount helps to add the tolerance amount with budgeted amount

(Budget Rs.16000+Tolerance Amount Rs.2000=Rs.18000/- will be allowed maximum for making an expense journal to compare with budgeted.

If we defined both % and amount, it will consider whichever is less. % = Rs.1600

Amount = Rs.2000

In this situation, tolerance will consider Rs.1600/- only (Minimum) and it will be added with budgeted amount (Advisory/Absolute) for meet the expense.

2. Override amount:

The defined budget amount is Rs.90000/- (Absolute)

If we define a override amount is Rs.105000/- the expense journal will allow to meet Rs.105000/- as maximum budgeted.

Encumbrance: Temporary blocking of funds against budget. Encumbrance is a charge or lien to block the budget amount.

(Reserving Funds for making some particular or budgeted expenses)

In payable, there is an Encumbrance which is use to follow in our enterprises. In Encumbrance,

Commitment – Purchase Request only

Obligations – Purchase Request is converted in to Purchase Order Journals>Encumbrance

The budgeted amount for particular account= Rs.100000/-

The encumbrance journal for the same account = Rs.20000/- (Reserved/Temporary Blocked) Therefore, Balance = Rs.80000/- only can spend for that account expense.

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

1. Create a Funding budget for Rs.60000/- (Creation of Budget Definition, Budget

Organization, Budgetary Controls, Journals and up to posted – Rs.60000/3M = 20000 PM) 2. Then, create encumbrance journal (Journals>Encumbrance) for Rs.8000/- Post it 3. In Inquiry – Funds – Budget Rs.20000; Encumbrance; Rs.8000; Actual Rs.9000; Ava:3K

a. Therefore, the Rs.8000 is temporary blocked out of Rs.20000 for that particular account and actual spent Rs.9000 only. The Remaining funds available = Rs.3000/-

Budget Transfer:

 Account to Account

 Fixed Amount or Percentage

 GL automatically runs journal import and  An un-posted journal is created

Budget>Enter>Transfer

Budget: KR BUDGET FUND (Funding Budget) – Select

Batch Name: KR BUDGET FUND TRANSFER BATCH (Funding Budget Transfer) – Create

From To

Budget Organization Account Budget Organization Account

KR BUD ORGAN FUND 33-110-7210-0000-000

KR BUD ORGAN NF 33-110-7110-0000-000

Click: Transfer amounts

Select Period: Jan 00/Feb 00 /Mar 00

Define: % or Amount for Transfer from particular account to transfer account (Rs.2000/-) After defining period and amount, click transfer by period range – Old & New balances will be displayed.

To see the transfer impact: Inquiry – Funds

Select Account: KR FUNDING BUDGET 33-110-7210-0000-000

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Budget Rs.18000; Encumbrance; Rs.8000; Actual Rs.9000; Funds Available: Rs.1000/- Only This is the result after budget transfer.

Formula Based Budget: (For Non – Funding Budget Only) In Budget Organization,

F11 – KR% - Control F11

Select: KR BUDGET ORGAN NF (Non Fund)

Go to Ranges – Add New Line and define High and Low Accounts with Type: Calculated In continuation, click ranges and define the account and type Calculated

Save it – Concurrent Request – View – Request – Find – Status: Completed

Now, we have created an account for formula based non – Funding budget (Calculated) Then,

Budget>Define>Formula

Batch: KR NF Formula Batch (Create) Journal: 8115Journal (Create)

Category: KR (Attach) Currency: USD In Lines, 10 33-110-8115-0000-000 In Formula,

1 Enter Rs.0 33-110-9350-0000-000 Actual YTD STAT

2 X Rs.10 (For X)

Save it

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Result:

Rs.10000 (Statistical) x10 = Budget Amount Rs.100, 000/- (Formula based Non- fund budget) Then check the non- Funding budget with formula based calculation Result,

+Inquiry+Account = Select periods & Budget Type and Account – Result Rs.100, 000/- (Budget) That‟s all.

Revaluation:

Translation foreign currency balances to local currencies  Daily Rate

 Period end rate  One time rate

Difference between foreign and local currency = Unrealized gain or loss Setup>Currencies>Rates>Daily

Daily Rate: For daily currency rate purpose

From To Date Type USD to EUR EUR to USD

USD EUR 01APR-04 KR EUR 0.5 2.0

0.5 USD = 1 Euro (1 Euro/0.5 USD = 2 Euro) Therefore, 1 USD = 2 Euro

Setup>Currencies>Rates>Period

Period Rate: For year-end or month end average closing purpose

From To Type Period Average End Revaluation

USD EUR Actual APR-04 1 0.8 1.25

First Enter the Period and then enter the convertible currency type – EUR Average/End/= 1/0.8= 1.25 Revaluation Rate

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Now we can enter currency conversion journal. Go to Journal>Enter

Journal: KR REVAL 01 Currency: EUR (Change the Currency from USD to EUR) Period: Mar – 04

Category: KR

Entered Converted

Line Account Dr. (EUR) Cr. (EUR) Dr. (USD) Cr. (USD)

1. 33-000-1560-0000-000 100, 000 0 125, 000 2. 33-000-2210-0000-000 0 100, 000 0 125,000

We have changed the functional currency USD to EUR in journal.

Therefore, when we are entering 100, 000 EUR, it will automatically converted as USD [Euro 100, 000 @ 1.25 USD = USD 125,000] This is what conversion entry from functional currency to another currency. Actually, we have entered Euro 100, 000 and it will debit USD 125000 from our account.

Now, we can do revaluation. Go to Currency>Revaluation

Revaluation: KR Revaluation (Create)

Auto Post Revaluation: (If it enables, the revaluation entry will be posted automatically after perform the function.

Currency Options:

All Currencies: We can use revaluation for multiple currencies Single Currency: Euro

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J. Sureshraja M.com., MBA., CA (f).,

Period Rates: Enable it Gain/Loss Accounts: 000-7846-0000-000 (Gain) 000-7848-0000-000 (Loss) Revaluation Changes: Low High 33-00-1560-00-0 33-000-1560-0000-000

Click Revaluation – It will generate and run the revaluation program. Name: Program – Revalue Balances (Automatic Generated)

Parameters – Period – Apr-04

Submit – Concurrent Request – View – Status – Completed Go to Journal>Enter

Source: Revaluation Period: Apr-04

Find – Journal Summary - Review your Currency Conversion Entered Journal Post it and Entry is,

Dr. Cr. Result: 33-000-1560-0000-000 - - 33-000-7848-0000-000 - 75, 000 (USD) – Loss 1.25 USD – 1 Euro 1 USD - ? 0.8 USD 125000 – To be Paid

EUR 100000*0.5 = USD 200, 000 (1 EUR/0.5 Period End = 2 USD) USD 200, 000 – Actual Paid

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Revaluation – For Example, UAE USD

0.5 2 Therefore, 1 USD = 2 UAE ? = 1 UAE

0.5 USD * 100, 000 UAE = 50000 USD to be Received 0.25 USD * 100, 000 UAE = 25000 USD Received Revaluation Value

Therefore, 50000 – 25000 = 25000 USD (Exchange Fluctuation Loss) Translation:

Translation of functional (local) currency to any foreign currency. However,

In translation, we should not change local currency to foreign currency in journal entry Functional Currency Foreign Currency

USD EUR

1 0.25

Therefore, 1/0.25 = 4 (1 EUR = 4 USD) Currency>Translation

Value Translation Period

KR EUR Apr-04

Click – Translation – Required ID will be generated Check Converted Balances:

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Type your account and show converted balances

Entered 100, 000 USD * 0.25 EUR = USD 25000 Actual Paid

Finally in translation, we have entered USD 100000 and USD 25000 only accounted in our book based on translation

Cumulative Translation: (Like Debtors and Creditors Reinstatement at end of year) Reports>Request>Standard

Name: Trail Balance Detail Company: 33

Currency: USD Period: Apr-04 Type: PTD

Submit – Request

The difference of translations transfer to cumulative translation account

The difference between month and year rates transfer to cumulative translation adjustment And it is purely based on year-end and period end rates.

Consolidation:

If Enterprise dealing Single Currency (Single Set of Books) – Consolidation will be easy

If Enterprise dealing Multiple Currency (Multiple Set of Books) – Consolidation is bit complicated - Accounting Rules

- Segment Rules – This is applicable

Now, Pass journal entry in both parent and subsidiary company In parent: (Vision Operations)

Journal – KR MASSCONSOLIDATION 1EO1 33-000-7695-0000-000 20000 -

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Switch to Vision Services (Subsidiary) – Check whether your 33 company in services or create Journal – KR MASSCON JE SUBSIDIARY

01-110-7675-0000-000 10000 - 01-120-7675-0000-000 12000 01-130-7675-0000-000 13000 01-000-2210-0000-000 - 36000 Save it In subsidiary, Consolidation>Define>Map

Mapping: KR Mass Con Mapping Rule Subsidiary: Vision Services

Parent: Vision Operations Currency: USD

Enable – Audit Mode Usage – Standard Aug – For Banking Method:

Transactions (Same Currency) Balances (Difference Value) Click Segment rules:

Company Copy Value From Services Company

Department Use Rollup Rules Services Department

Parent – 000 – Detail Ranges Subsidiary – 110 to 110

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Account Copy Value from Services Account

Sub Account Assign Single Value 0000

Product Copy value from Services Product

Save it

Period – Mar 2006 Mar 2006

Click – Transfer – Submit

Conversion Mapping Rules – We can define in anywhere either subsidiary or parent company Go to parent (Vision Operations)

In Journal:

Source – Consolidation – Apr 2006

In this, we can get subsidiary journal entry as un – posted. You just review and post it. Then, Subsidiary journal entry posted in parent company.

This is what consolidation process – That‟s all

GL Reports: Trial Balance/Ledger Report/Variance Report/Etc. To view the reports – Reports>Request>Standard

Attach your Request – Submit and View Financial Statement Generator (FSG)

Preparing statement for ledger accounts with balances only for MIS  Row Set (Mandatory) –format of content in Rows in FS

 Column Set (Mandatory) – format of content in columns in FSG report  Column Builder (Mandatory)

 Row Order  Content Set  Display Set

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J. Sureshraja M.com., MBA., CA (f).,

 Variance Report 1. Define a Row Set:

Reports>Define>Row Set Name: KR Reports

Click – Define Rows

Line 10 Line item: Expense for 110 Line 20 Line item: Expense for 120 Line 30 Line item: Expense for 130

Accounting Assignments:

Line 10 33-110-7695-0000-000 (Save) Line 20 33-120-7695-0000-000 (Save) Line 30 33-130-7695-0000-000 (Save)

Line 40 Expenses Total

Click – Calculation Formula:

Line Enter Low High

1 + 10 30 (Line Total)

2. Define a Column Set:

Reports>Define>Column Set Name: KR Reports

Click – Define Column

Position: 51 Amount Type: PTO – Actual Sequence: 10 Currency: USD

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(-1 = March; 0=Current Month; 1=Next Month) Display Zone: Enable

Position: 76 Amount Type: PTO – Actual Sequence: 20 Currency: USD

Offset: 0 Save it. 110 – 100 (100 is 20% of 500 – Percent of Column) 120 – 200 130 – 300 --- 500 ---

Click: Build Column Set Adjustment: Ok

Save it

3. Reports>Define>Report KR Financial Report

Attach your Rows and Column Run report

New run window opened – KR Financial Report Submit – View – Request – Completed – Output Report will be generated

For Variance Report,

Pass an expense journal entry for budgeted amount. Then only, variance report will be generated

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Row Set & Column Set – Amount Type: ITO – Variance (Transferred value =1 ) Make it Process – View Output

Variance report also include in that report. Inter Company Transaction:

Inter-Company transaction held in difference set of books  Subsidiaries

 Transactions type  Clearing Account

1. Setup>Inter-company>Subsidiaries

Subsidiary: Vision Services (Create/Your Inter-company) Inter-Company Book: Attach Inter-Company Book

Currency: USD

Company: 01 (Another Company) – Attach as required 2. Transaction Type: Create KR Transaction Type

3. Clearing Accounts: Clearing Accounts (1810) After Setup Now,

Transactions>Enter (In Find Transaction – Click View) – This is for parent company

Attach: Receiver & Sender & Period & Transaction Type

(Services) (Operations)

In Line:

Account Amount (Cr.)

CT-000-1810-0000-000 100000

Inter-Company Clearing Report:

Account Amount (Dr.)

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(Receivable)

Approve: Number will be created Submit: Completed

Switch Responsibility to Vision Services: Same process as like parent company

M1-000-2371-0000-000 (Payable)

Approve: Number will be created Submit: Completed

View – Request – Single Request Completed

View – Request – Single Request

Name: Program – Intercompany Transaction/Transfer Parameter: Attach

Submit – View from Transaction + Enter Number will be generated

Attach the generated number – Yes (Transferred)

ORACLE – FIXED ASSETS FIXED ASSETS:

It ensures a particular company property and equipments are accurate and for calculating depreciations as per companies act and income tax acts.

Setups in Setup

Setup>Asset system>Fiscal years

1. Create Fiscal year – KR ACCOUNTING YEAR 2005 – APR 05 TO MAR 06

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APR-05 = 01-APR-05 TO 30-APR-05 Up to 01-MAR-06 TO 31-MAR-06

3. Setup>Asset system>Prorate Conventions – KR CURMON (Current Month Convention (Define))

Period: 01-APR-05 TO 30- APR-05 Prorate Date: 01-APR-05

(Prorate0: Purchased on 01.12.11 – Calculate depreciation from December and not from beginning of the year.)

If we define Prorate for 15 Days – Purchased 20.12.11 – Calculate depreciation for 15 days

4. Book Controls: KR CORP BOOK – Under Corp Book Calendar:

GL Set of Books – Vision Operation

Depreciation/Fiscal/Prorate – Automatic generation by definition of KR Current Period – We defined from Apr- 06.However, it takes May-05 Natural Accounts:

Company – 27 – Vision Consulting Limited Department – 730 – Finance

Account – 9999 – Not Applicable Sub-Account – 0000 – No Sub Account Product – 000 – No Product

Journal Categories:

Journal Resource – Assets

Others – General; Fill all the fields; Addition, Adjustment

After Book Controls, we have to create Asset Categories in Flex Fields of General Ledger (GL) Operations

Switch to GL Responsibility – GL Vision Operations KEY FLEX FIELD

CATEGORY FLEX FIELD

LOCATION FLEX FIELD

ASSET KEY FLEX FIELD

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1. Find Key flex field segment: Category Application – Oracle Assets

Title – Category Flex field

Structure – Vision Category Flex field Segment – Major Category

Find (Create Major Category Items in Segment Values)

In Find – Segment Values window opened for (Major/Minor) Creation of Fixed Assets 1. KR Land &BuilKRg

2. KR Plant & Machinery 3. KR Vehicles

4. KR Office Equipment 5. KR Expensed Asset 6. KR Intangible Asset

Click Find (i.e. torch button, it change to MINOR category) Now, we can create minor items under major items

If Independent Value is Major Category, dependent value is minor category Under KR Land & BuilKRg

Block1 – KR LAND Block2 – KR BUILKRG Under KR Plant & Machinery Plant1 – KR Plant

Plant2 – KR Machinery Under KR Vehicles Ford – KR Cars Lancer – KR Bike

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2. Find Key flex field segment – Location: Application – oracle Assets

Title – Location Flex field (BuilKRg/City/State/Country) Structure – Vision Flex field Location Flex field

Segment – BuilKRg/City/State/Country Under BuilKRg [Add New]

Area 1 Area 2

Under City [New] Chennai

Bangalore

Under State [New] TamilNadu

Karnataka

Under Country [New] India

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Title – Asset key flex field Structure – Asset Key Flex field

Segment – Asset Key (Some construction, electrical and mechanical related assets) Under Asset Key

Factory Office

In General Ledger – Aliases

For creation of Aliases, we have to create all the short names in General Ledger itself belong to particular company

After creation of key flex fields in order o fixed assets, switch over to Oracle Assets for giving linking categories to books

Setup>Asset System>Asset Categories (Linking Minor Assets to Major Assets with Dep Method)

Asset Categories – [F11] – KR LAND & BUILKRG – BLOCK 1 Category type – Non Lease

Ownership – Owned

GL Accounts: Book – KR CORP BOOK Asset Cost – 27-000-1620-0000-000 Asset Clearing – 27-000-1570-0000-000 Dep.Expense Segment – 7320 Accumulated Depreciation – 27-000-1620-0000-000 Bonus Expenses – 7320 Bonus Reserve – 27-000-1620-0000-000 Revaluation Reserve – 27-000-1670-0000-000 Revaluation Amortization – 27-000-1680-0000-000 CIP Cost – 27-000-1580-0000-000

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CIP Clearing – 27-000-1590-0000-000

(Company – Department – Account – Sub Account – Product)

(Benchmark – Engineering Dept – Office Equipments – Air Conditioning/N.A- Samsung) Under Asset Categories – Default Rules

Method – Straight Line Life Years – 10 (Compulsory) Months – 0 (Automatic Generated) Salvage Value – 10%

Following Assets items linked to Asset Categories KR Land & BuilKRg – Block 2

KR Plant & Machinery – Machine 1 KR Plant & Machinery – Machine 2 KR Vehicles – Ford

KR Vehicles – Benz KR Vehicles – Lancer

Setup>Asset System>Location (Linking Major Assets to Location) Locations – [Country – State – City – BuilKRg]

This location talk is applicable for all assets

Depreciation Methods:

Setup>Depreciation>Methods (Defining Depreciation for Assets)

1. Flat Rate Method – On NBV/On Cost

2. Calculated Method – On Cost Only – Not in NBV (Straight Line Method Only) 3. Table Based Method – On NBV/On Cost

4. Production Method – On NBV/On Cost 5. Formula Based Method – On NBV/On Cost

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Method Type – Flat Calculation Basis – Cost Dep: Use Recoverable Cost Depreciation in Retired – Right Exclude Salvage Value – As Required

Straight Line Method – Blank (Not Required) Life Years – Blank (Not Required)

Rates: Basic – 10%

Adjusting – 10% (If any machine works above assigned hours, the excess hrs is adjusted) Adjusted – 11%

2.Calculated Rate Method: Method – KR CALC MET Method Type – Calculated Calculation Basis – Cost

Depreciation in Retired – Right

Exclude Salvage Value – Blank (Not Required) Straight Line Method – Right

Life years – 10 (As Required) Rates: Not Applicable 3. Table Based Method:

Method – KR Table bas Method Type – Table Calculation Basis – Cost

Depreciation in Retired – Right

Exclude Salvage Value – Blank (Not Required) Straight Line Method – As Required

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Prorate Periods per Year – 12 Rates:

YEAR PERIOD ANNUAL RATE

1 1(M) 0.3

2 1(M) 0.2

3 1(M) 0.5

Year:

If we defined Life year 3 means, the depreciation year will be 4 years. (1st _{year is auto}

generated. Because, If we purchased any asset May 2005 means, depreciation will be calculated for 05-06, 06-07, 07-08 and these years closed on April 2008 only. Therefore May 2005, May 2006, May 2007, April 2008 = 4 years will be generated for 3 years life)

Period:

Period defined as monthly. It takes 3 years for 12 months

(1st _{year – 1}st _{month, 2}nd _{year – 1}st _{month, 3}rd _{year – 1}st _{month, 4}th _{year – 1}st _month)

For 1st _{Month, we should change the depreciation rate (0.1 or 0.4 or 0.3 or 0.2)}

It‟s purely based on company policy for every month depreciation on table based depreciation Annual Rate:

The annual rate should be equal to 1 (0.1+0.4+0.3+0.2 = 1)

4. Production Based Method: Method – KR PROD MET

Method Type – Production Calculation Basis – Cost

Depreciation in Retired – Right

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Life years – Blank (Not Required)

Prorate Periods per Year – Blank (Not Required) 5. Formula Based Method

Method – KR FORMULA Method Type – FORMULA Calculation Basis – Cost

Depreciation in Retired – Right Exclude Salvage Value – As Required

Straight Line Method – Automatic generated Life Years – As Required – 12

Prorate Periods per Year – 0 Define Formula:

DECODE (SIGN (<REMAINING LIFE 1>, 13), 1, 0.2, 0, 0.6,-1, 0.8)

It‟s purely IF condition statement. It calculates depreciation based on remaining life years positive, negative or equal.

In this Test Formula, there are 3 operations such as,

1. Variables = Life/production capacity/remaining life1/&2/salvage value/short year.

We can define the formulas for calculating depreciation based on the requirement of company 2. Functions = Decode, Greatest. Least, Power, Round, Sign, Sort

We can give the conditions with the help of above functions for defining the formulas. 3. Formulas = Defined formula added in that column

Quick codes: setup>asset system>quick codes AdKRg Companies

After Setting up of Depreciation Methods, we can add companies and assets in accounting flex fields

Switch over to Oracle GL Operations for adKRg companies &assets Setup>Financials>Flex fields>Key>Values

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

Title – Accounting Flex Field (For creating of account items) Structure – Operations Accounting Flex field

Segment – Company/Account/Department/Sub-Account/Product Already we have created,

Major Categories of Assets, Minor Categories of Assets, Calendar Years,

Fiscal Years

Prorate Conventions Asset Keys

Locations &

Everything Linked to Book Controls

However, we can add certain assets under the minor categories as per Company Requirement.

 DISTRIBUTION SET

For Addition of Assets, We can switch over to Oracle Assets Operations Assets>Asset Workbench

In Assets, we are having New & Quick Additions. (Other options are based on requirement) New:

a) Asset details:

We can fill – up the asset details (TN05 – D1000 – Benz Car – 2 Units) and link the categories as instructed.

b) Source Lines: Supplier – Invoice Number, Name, PO Number (Continue & Then) c) Books: For this new benz car, we can add the Corp Book and enter the cost of assets

(Continue)

ORACLE FINANCIALS

J. Sureshraja M.com., MBA., CA (f).,

(Linkings)

With the help of above options, we have created new Benz Car – 2 Units with all requirements.

Quick Additions: ExcluKRg detailed requirements

We can fill – up the new asset details in quick additions (TN05 – D2000 – Ford Car – 1 Units) and link the categories as instructed.

Result: Transaction Saved & Reference Numbers are – 4481 & 4482 Add additions for all Assets

For Assigning Depreciation: After Creation of Various Assets

Minimize all the existing windows and go to Setup>Asset system>Asset Categories In this you can define/ already defined depreciation methods for assets as per company requirement. (We can change salvage value % manually)

Then, Assets>Asset Workbench

Now, we can attach the book and enter the values of assets and select depreciation. It permits to view financial information and other information of particular assets For Calculating Depreciation:

Depreciation>Run Depreciation Book: KR CORP Book

Period: Monthly Closing Period

Close Period: Enable (Once the program closes the period, we cannot reopen the same period)

Now we can go to Asset workbench and view the financial information of all the assets incluKRg calculated depreciation values based on the allocated depreciation methods (We cannot perform a Reserve Adjustment on fully retired assets)

Switch responsibility to Payables Mass Addition: