How to create and use a supporting reference in Subledger Accounting Andrea Auld Senior Principal Instructor Oracle University October 22, 2018 This is a Title Slide with Picture and Product, Service, or Industry Logo slide ideal for including a picture and product/service/industry or org logo with a brief title, subtitle and presenter information. To Replace the LOGOs on this sample slide: Right-click a sample LOGO and choose Change Picture. Navigate to the location where the new logo is stored, select desired logo file and click on the Open button to replace the sample logo. The Presented with FPO logo placeholder box can be copy and paste to any of the Title Slides. Confidential – Oracle Internal/Restricted/Highly Restricted

Subledger Accounting – Supporting References What you’ll learn In this presentation we will cover: Basic Subledger Accounting Setup – Subledger Accounting Method, Application Accounting Definition, Journal Lines Definition, Journal Line types, Account Derivation rules How to create a Supporting reference to capture balances at a level not represented by a segment in your chart of accounts Subledger Accounting – Supporting References

Accounting Methods Builder (AMB) Overview Ledger Subledger Accounting Method Application Accounting Definition Journal Line Types Account Derivation Rules Journal Entry Descriptions Journal Line Definition Transaction Objects Sources Basic Subledger Accounting concepts -Every ledger is attached to one Subledger Accounting Method -Every Subledger Accounting Method consists of one or more Application Accounting Definitions, one per feeder application. -Every Application Accounting Definition contains one or more Journal Lines Definitions, one for each combination of Event Class and Event Type. -Every Journal Lines Definition has one or more Journal Line Types, each of which specifies whether the line should be a debit or a credit. -Every Journal Line Type is associated with one ore more Account Derivation Rules. An Account Derivation Rule can derive an entire accounting flexfield string or just a single segment such as the Natural Account segment. Subledger Accounting – Supporting References

Subledger Accounting – Supporting References Ledger Definition Every ledger is attached to one and only one Subledger Accounting Method.. Subledger Accounting – Supporting References

Subledger Accounting Method Every Subledger Accounting Method consists of one or more Application Accounting Definitions (AAD), one per feeder application. Subledger Accounting – Supporting References

Application Accounting Definition Every Application Accounting Definition contains one ore more Journal Lines Definitions – one for each unique combination of Event Class and Event type. For Payables an example of an Event class would be a transaction type like an AP invoice or an AP Credit Memo or an AP Debit Memo or an AP Payment or an AP reconciled payment For Payables an example of an Event Type would be an action that happens to a transaction that would create a different journal entry. For example, invoice Validation should create a journal entry that debits expense and credits liability, whereas Invoice Cancellation should create a journal entry that debits liability and credits expense. Application Accounting Definitions must be validated before they can be used. The validation process ensures that the various components are present = Journal Lines Deifnition, Journla Line Types, Account Derivation rules, etc. Subledger Accounting – Supporting References

Journal Lines Definition – Expense Line The Journal Lines Definition provides instructions on how to create each line in the journal entry for a specific combination of event class and event type. Each journal line type in a journal lines definition may be associated with conditions – for example, maybe that line is only created if the AP invoice has a distribution of type Freight or Item Expense or Tax, and if the transaction does not have that type of distribution the line does not get created. Each journal line type in a Journal Lines Definition is associated with one or more Account Derivation rules. An Account Derivation rule can produce a complete string by grabbing a default account combination from a source such as the transaction distribution, or the rule can simply produce a single segment, in which case you might need multiple rules. Rules with a segment type of ALL are evaluated first, and then segment-specific rules are evaluated. This journal lines definition has two Journal Line Types – one for the Expense (Debit) line and one for the Liability (Credit) line. Each of those Journal Line Types is associated with an Account Derivation rule and in this case, both Account Derivation Rules derive a complete Accounting Flexfield string. This slide shows the Expense Line Subledger Accounting – Supporting References

Journal Lines Definition – Liability line The Journal Lines Definition provides instructions on how to create each line in the journal entry for a specific combination of event class and event type. Each journal line type in a journal lines definition may be associated with conditions – for example, maybe that line is only created if the AP invoice has a distribution of type Freight or Item Expense or Tax, and if the transaction does not have that type of distribution the line does not get created. Each journal line type in a Journal Lines Definition is associated with one or more Account Derivation rules. An Account Derivation rule can produce a complete string by grabbing a default account combination from a source such as the transaction distribution, or the rule can simply produce a single segment, in which case you might need multiple rules. Rules with a segment type of ALL are evaluated first, and then segment-specific rules are evaluated. This slide shows the Liability line. Subledger Accounting – Supporting References

Journal Line Types – Expense Line The Journal Line Type for the Expense line shows that the line should be created as a Debit, and if there are multiple distributions on the transaction with the same account combination, then the lines will NOT be merged into a single subledger journal entry line. Subledger Accounting – Supporting References

Journal Line Types – Liability Line The Journal Line Type for the Liability line shows that the line should be created as a Debit, and if there are multiple distributions on the transaction with the same account combination, then the lines will NOT be merged into a single subledger journal entry line. Subledger Accounting – Supporting References

Account Derivation Rules – Expense Line The Account Derivation rule for the Expense line shows derivation of a complete accounting flexfield combination which will be used regardless of the account combination on the transaction distribution. Note that this Account Derivation Rule has a condition that the supplier name must be Advantage Corp. Subledger Accounting – Supporting References

Account Derivation Rules – Liability Line The Account Derivation rule for the Liability line shows derivation of a complete accounting flexfield combination which will be used regardless of the account combination on the transaction distribution. Subledger Accounting – Supporting References

Supplier Type supporting reference The supporting reference definition allows us to specify a particular attribute which will be used to calculate supporting reference balances. We have chosen supplier type. So, for example, we have a single AP liability account 01-000-2220-0000-000, but we will be able to view supporting reference balances within that liability account balance – so if the balance in account 01-000-2220-0000-000 was 1000.00, 500.00 might be from the UTILITY supplier type and 500. might be from the EMPLOYEE Supplier type. Notice that most pieces of information from the document can be used as a supporting reference as long as they were defined by product development as a valid source column in the transaction tables. Subledger Accounting – Supporting References

Subledger Accounting – Supporting References Supporting Reference attached to the appropriate Journal Line Type in the Journal Lines Definition Once we’ve created the supporting reference we must attach it to the appropriate journal line type in the journal lines definition for the transaction type against which we wish to capture this additional level of detail. Subledger Accounting – Supporting References

Enter a Payables invoice to test I enter an AP invoice from Advantage Corp, so it meets the criteria of the account derivation rule for the expense account in my Subledger Accounting method. Advantage Corp belongs to the “VENDOR” supplier type (as opposed to the “UTILITY” supplier type. Subledger Accounting – Supporting References

Validate invoice/Create Accounting Before I can run Create Accounting I must validate the invoice to verify it meets any matching requirements and the vendor is not on payment hold. Then I can run Create Accounting in Final mode, which will create a Subledger Journal Entry and a General Ledger Journal entry and will post the General Ledger Journal entry to update ledger balances. Subledger Accounting – Supporting References

Subledger Journal Entry This shows the resulting Subledger journal entry. The expense line was created as a debit using account 01-410-7740-0000-000 from the Account Derivation rule attached to the expense line. The Liability line was created as a credit using account 01-000-2220-0000-00 from the Account Derivation rule attached to the Liability line. Note the Accounting class was derived from the line types as well. Subledger Accounting – Supporting References

Supporting Reference Balance Inquiry The Supporting Reference balance inquiry screen lets me do an inquiry for the balance in account 01-000-2220-0000-000, broken out by each possible value of the supporting reference which was the supplier type. So the total balance is associated with the Vendor Supplier type to which Advantage Corp belongs. Subledger Accounting – Supporting References

Subledger Accounting – Supporting References Summary In this presentation you learned about: Basic Subledger Accounting Setup – Subledger Accounting Method, Application Accounting Definition, Journal Lines Definition, Journal Line types, Account Derivation rules How to create a Supporting reference to capture balances at a level not represented by a segment in your chart of accounts Subledger Accounting – Supporting References