1. Overview of the New Financial Architecture in Oracle E-Business Suite Release 12
Mary Burns

2. The following is intended to outline our general product direction
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

3. Agenda What We Set Out To Address Release Twelve: The Global Release
Global Architecture
MultiOrg Access Control
Subledger Accounting
Ledgers and Ledger Sets
Ledger Considerations
Global Business Functions
Legal Entities
Accounting Set Up Manager
E-Business Tax
Advanced Intercompany
Banking Model

4. <Insert Picture Here>
What we set out to address

5. Doing Business Globally is Complex Top Drivers of Complexity
National and International Laws & Regulations
Actions by Competitors
Changing Customer Requirements
Industry Standards and Regulations
Tax Codes
Changing Workforce Attitudes
International Reporting Standards
Language and Cultural Differences 1 2
Globalization is unstoppable. Regardless of geography, industry or income, companies are globalizing to gain new customers and access new markets. Is this a good thing? Nearly two-thirds of the CEOs we surveyed are positive about the impact that globalization will have on their organizations over the next three years.
Source: 9th Annual Global CEO Survey – Globalization and Complexity; PwC 2006 3 4 5 6 7
Globalization Changes Everything Complexity: Managing the Inevitable 8
Direct impact on Finance
Source: PWC, 9th Annual Global CEO Survey

6. Make it Simpler to do your job Control Costs by Managing Complexity
Major Focus
Standardizing operating practices and controls
69%
Standardizing policies and business rules
66%
Standardizing and integrating finance systems
59%
Adopting best practices
58%
Optimizing the finance organization and its reporting structure
52%
Reducing reliance on spreadsheets
33%
50%
Senior executives say simplification is driving the Finance agenda
Seeking High Performance, Corporate Finance Departments Turn to Simplification, PricewaterhouseCoopers Finds Standardization and Best Practices their Primary Focus
These findings are from interviews with 117 top executives of large, U.S.-based multinational businesses, for PricewaterhouseCoopers' Management Barometer.NEW YORK, April 17, Senior executives believe that their company's finance department lags competitively in its effectiveness and performance--with the leveraging of technology seen as a particular vulnerability. To regain their edge, more than half are going back to basics--turning to simplification, standardization, and best practices to improve performance and management information for decision-making.
Source: PWC Management Barometer

7. Make it Easier to do Your Job
How Finance Spends its Time
% Yet To…
50%
Improve processes or rationalize technologies
60%
Standardize policies, rules, and processes across the entire enterprise
73%
Implement a shared services model *
80%
Adopt best practices or simplify processes across the entire enterprise
26%
47%
27%
Even though many Finance organizations have aspired to a more strategic role in the business for some time, what’s surprising is how far they still have to go to achieve that goal. An IBM study of 250 CFOs in 2005 shows that Finance still spends nearly half its time on transaction processing, a quarter on control-related activities, and only a quarter on decision support. The figures on the right explain why progress has been slow. Only half the CFOs interviewed have tackled the basics of finance transformation by improving processes or rationalizing technologies.
The Agile CFO, IBM Business Consulting Services, 2005
* Deloitte Consulting, 2006

8. Customers: Centralize, Simplify, Standardize
Work Globally, to be more competitive
Think Globally, to make the right decisions
Manage Globally, to lower cost and increase performance
National Compliance
Local Regulation
National COA
Local Calendar
Corp. Compliance US GAAP / IAS-IFRS
Corp COA
Corp Calendar $
Joint Compliance US GAAP / IAS-IFRS
A$+$ €
Parent Compliance US GAAP / IAS-IFRS Corp COA
€+$ +
Easy Reporting
Transparent Audit, Reconciliation & Drilldown
Financial Data for Management - and Compliant
Analytics
Comprehensive and compliant
processing
Controlled Transaction Entry

9. How Financials Release 12 Can Help The Global Business Release
WORK GLOBALLY
To Be More Competitive
THINK GLOBALLY
To Make the Right Decisions
MANAGE GLOBALLY
To Lower Cost & Increase Performance
Financial Control & Reporting
Performance Management
Integration
Credit-to-Cash
Profitability Management
Data Management
Procure-to-Pay
Business Intelligence
Reporting
Treasury & Tax
Global:
Of, relating to, or involving the entire earth; worldwide: global peace; global monetary policies, etc.
Comprehensive; total: a... global, generalized sense of well-being
Travel & Expense
“My business will be more competitive with better support for global work that crosses applications, divisions, and regions”
“I can make more informed and compliant decisions with a global view of customer / supplier / partner / operations.”
“R12 makes it easier and less expensive for me to implement , manage, and scale global applications.”
Business will be more competitive with better support for global work that crosses applications, divisions, and regions
Maintain a common system for global compliance. Internal Controls Manager provides a single system to standardize, document and audit internal controls and monitor ongoing compliance.
Operate more efficiently with single global access across multiple lines of business. The new Ledgers and Ledger Sets allow for processing and reporting across different accounting entities. With multi-organization access control (MOAC) transactions can be managed across multiple operating units.
Pre-built, adaptable vertical flows accelerate industry-specific business processes
Asset Management
Governance, Risk & Compliance

10. <Insert Picture Here>
Release Twelve
The Global Business Release:
A New Financial Architecture

11. Global Financial Architecture
General Ledger
Ledger & Ledger Sets
6 Major Initiatives
Ledger and Ledger Sets
Multi-Org Access Control
Subledger Accounting
Tax Engine
Intercompany
Bank Model
Subledger Accounting (SLA) Dr Cr
Bank Model -%
Tax Engine
Inter Company
Projects
Receivables
Inventory
Work in Process
Purchasing
Payables
Multi-Org Access Control

12. <Insert Picture Here>
Multi-Org
Access Control
Think
Work
Manage

13. MOAC: Multi-Org Access Control Role based access to Operating Units
Perform multiple tasks across operating units without changing responsibilities
Belgium
Legal Entity
Holland
Legal Entity
Denmark
Legal Entity
Functional Tasks
Order Management
Dunning, Collections, Billing
Requisition, Demand & Purchase Orders
Receiving & Drop Ship
Invoice Receipt, Disbursement
Customer Data Management
Accounting Setup
Single Responsibility
Belgium
Operating Unit
Holland
Operating Unit
Denmark
Operating Unit
Responsibility
Responsibility
Responsibility

14. Purpose Built Cross OU “Desks” Shared Services
Product Reference
Order Management
Dunning, Collections, Billing
Receivables
Requisition, Demand & Purchase Orders
Procurement
Receiving & Drop Ship
Supply Chain Management
Invoice Receipt, Disbursement
Payables
Customer Data Management
Trading Community Architecture
Accounting Setup
Accounting Setup Manager

15. Multiple Organization Access Control Summary of Changes
Security Profiles for data security
MO: Security Profile
List of operating units for a responsibility
Defined in HR
OU field on UI
all transactions
setup data specific to OU, like transaction type
Enhanced Multi-Org Reporting and Processing
Ledger/Ledger Set parameter on accounting reports and processes
OU parameter on other standard reports and processes
For example: submit the Payables Open Interface Import w/OU param null to import all records across all OUs

16. Multi-Org Access Control In practice
Select Operating Units
In daily use
Now, I’m going to explain how to define a security profile. Using Oracle HRMS, you can define your security profile using two forms: The Security Profile form or the Global Security Profile form that is shown here. Both forms look almost identical.
The Security Profile Form allows you to select operating units from only one Business Group. The Global Security profile Form allows you to select operating units from multiple Business Groups.
The decision on which form to use is really up to you and depends on your HR implementation and how you want to partition data. All you need to do is enter a name, and select the Security Type called “Secure organizations by organization hierarchy and/or organization list”. This allows you to assign multiple OUs. When assigning operating units, first select classification Operating Unit, and then select the organization or Operating Unit name. You can assign as many operating units as you want.
Run Reports Across Operating Units
Select Operating Unit classification
Classify Organization as operating unit

17. <Insert Picture Here>
Subledger Accounting
Think
Work
Manage

18. Centralized Accounting Model, Rules, Engine and Repository
Centralized Accounting Policies Greater Control, Transparency and Auditability
General Ledger
Internal control and compliance with multiple accounting policies through user-defined accounting rules
Single source of truth for all subsystem accounting activity with a common data model and repository
Accounting, reconciliation and reporting facilitated by centralized data model
Streamline closing process with common posting engine
Auditable and transparent entries accessible with full drilldown
3rd Party Systems
Centralized Accounting Model,
Rules, Engine and Repository Dr Cr
Receivables
Inventory
Projects
3rd Party Systems
Work in Process
Purchasing
Payables

19. Subledger Accounting Centralized Rules, Common Repository: Global Control
Payables Invoice
French Rules
Plan Comptable
French Calendar
EUR
Ledger
Subledger Accounting Dr Cr
Accounting Rules
SarBox & 8th Dir.
User Editable
Subledger Daybooks (Journals)
Subledger Balancing
Reports, inquiries, open items, et cetera
Multiple Representations
Common Posting to GL Ledgers
Real time or Periodic
What it is
Faster, Easier Reconciliation
Corporate Rules = Accounting Standardization
Local Rules = Improved Local Compliance
Automate “Apples to Apples” Adjustments
Improved Audit- ability
Improved Internal Control
Some Benefits

20. Subledger Accounting Transaction Level Compliance
National Daily Journal Requirements
Internal Control: Central Definitions, Eliminate overrides
Policy Enforcement in Volume Processing
Transparent Accounting Rules
Debits & Credit at the point of the event
Automate Foreign Operation adjustments
Reconciliation Platform
“In accordance with the Underlying Records”
Event Class: Invoices
Event: Invoice Approved
Ledger: France (EUR)
GL Date: 20-Sep-2005
Description: Office supplies
Type Account Description Debit Credit
Asset purchase Paris: furniture 10,000
Misc expense Paris: supplies
Misc expense Nantes: supplies
Misc expense Nice: supplies
VAT ,836
Accounts Payable ABC Supplies 12,636
12,636 12,636

21. Ticked & Tied General Ledger SLA Detail
SLA Controls that GL Balances and SLA Balances tie, and that both tie to the document (invoice, payment, etc.) sources
General Ledger
SLA Detail

22. Multiple Accounting Representations Global Compliance – Statutory and Stock Market
Ledger A
Ledger B
Multiple Ledgers
French Rules
Plan Comptable
French Calendar
EUR
US GAAP US COA
US Calendar
EUR or Dr Cr
Subledger Accounting
Single subledger transaction
can create multiple
accounting representations
and in multiple currencies
Chose to use an alternative Ledger -
or just an Adjustment
Ledger or segment
Payables Invoice

23. SLA keeps the Subledgers & GL tied out Keep the auditors happy!
Subledger Applications
Accounting
Configurations
Journal Entry Setup
General
Ledger
Subledger
Journal Entries
Accounting Events
Accounting
Program GL
Journal Entries
and Balances
Subledger Accounting Service
Subledger
Balances
Transactions
(& adjustments)
Reconciled: Docs, SLA, GL in synch

24. <Insert Picture Here>
Ledgers and Ledger Sets
Think
Work
Manage

25. Ledger One Repository of Financial Truth
US GAAP US COA
US Calendar
EUR
Ledger B
Implements the 4 C’s:
Accounting Method
Chart of Accounts
Calendar
Currency
The balance on Creditors (COA) is 4.2M Eur (Currency) on March 31, 2006 (Calendar) according to IAS/IFRS definitions (Accounting Method)
Reporting Currency

26. Ledger Sets Global Information At A Glance
Ledger A
US GAAP US COA
US Calendar
EUR
Ledger B
French Rules
Plan Comptable
French Calendar
EUR
Reporting Currency

27. Ledger Sets Global Information At A Glance
Share:
Chart of Accounts
Calendar
Ledger Set
Ledger C
US GAAP
US COA
US Calendar
USD
Ledger A
US GAAP US COA
US Calendar
EUR
Ledger B
French Rules
Plan Comptable
French Calendar
EUR
Ledger D
US GAAP
US COA
US Calendar
AUD
Key benefits to many Ledgers in one set
Decision-driving business information always available
Simpler processing and General Ledger management
Data and definitions that can be shared and secured
Reporting Currency

28. Currency in Release 12 Transaction Currencies
Accounting Currency in Primary Ledger
Reporting Currency in Primary Ledger
More Accounting Currencies in Secondary Ledgers
For every transaction OR
For SLA Posting level / GL activity level
Balance level Translation or Remeasurement in Ledgers – within Ledger sets, run at one click
Balance & Activity level Translation or Remeasurement in Financial Consolidation Hub
Enhanced Revaluation
[Functional Currency term dropped: conflicts with IAS 21 / FAS 52]

29. Data Access, Definition Access
Data Access Sets
Grant and tailor access to Ledgers and Balancing Segment Values (i.e. Companies, Stores, Branches, etc.)
Accountant
Privileges
France Ledger
Canada Ledger
US Ledger
GL Manager
View
Write
Definition Access Sets – separate from data security
Share, restrict definitions; privileges to view, modify, etc.

30. <Insert Picture Here>
Ledger Considerations

31. Ledger Sets – Work them your way
Corporate
Ledger Set
adjustments
eliminations
UK Ledger Set
US Ledger Set
Legal Ledger
UK1
UK2
Adj Ledger
Adjustment
Ledger UK
Ledger US
US1
US3
US2
Management Ledger Set
Automate GAAP / IAS adjustments in an adjusting ledger
Eliminate within a Set with GCS
Consolidate Formally in FCH
Map from a non-conforming COA with a GCS Ledger
Set of 26 Ledgers in one country
Euro Zone in One Ledger Set
My Corporate Set in US GAAP
Statutory Set for Country Y Subs
Division X Worldwide Ledger Set

32. When to use a Secondary Ledger, an Adjusting Segment or an Adjusting Ledger?
Corp. wants GL balances per Parent GAAP
Corp. wants “Just the adjustments, thank you”
Corp. wants a complete Parent GAAP & Currency edition of the Sub’s books
Subsidiary books are pretty similar to parents
Mapping gets us most of the way to Parent
Subsidiary books are quite alien to parents
No inventory
Inventory is the big difference
Inventory is one of the big differences
National chart of accounts is clearly related to IAS IFRS or GAAP balances
Manageable series of reclassifications
National chart of accounts is radically different from corporate
National Controllership - Corp GAAP known
Regional Controllership - Corp GAAP administered
Parent Controllership Mexico plant, US parent
Balances are enough (Full drill down available)
See they’ve been properly adjusted to our rules
Every petty cash slip

33. <Insert Picture Here>
Global Business Functions
Think
Work
Manage

34. Legal Entity: Your Registered Companies
Public Company (ultimate parent)
Public Company
Subsidiary Company (regional parent)
Subsidiary Company (business parent)
Subsidiary Company
Legal Authorities
Countries, States, Local, Agencies, Taxation, Registrars, Regulators...
Regulates
Complies
Legal Entities
Registered Companies, Funds, Partnerships… Inc. LLC. Ltd. SA. GmBH. Etc. “exist in the outside world”
Managed & analyzed by
Parent companies (LEs) “own or control” subsidiaries (LEs)
No outside ring - must pick an LE
LEs create commercial transactions
Management Orgs
Divisions, LOBS, Plants, Cost Centers, Whatever = “Decision Making Tags”

35. LEs: Why and What? Why We Care What we’ve done
LEs pay the taxes - need tax registrations
Trade between LEs needs intercompany
LEs own the money and bank accounts
LEs file the accounts, take care of accounting
LEs comply with whatever needs compliance: “legal” in LE
Addresses, Officers, etc.
Enabled First Party stamp
Added Establishments: map Registrations to Authorities
GRE/LE not touched
Authorities as TCA parties
LE Configurator
Why We Care
What we’ve done

36. Tabulate your Registered Companies and other forms of LE
Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses

37. Legal Entity Legal Entity: Where LE fits in…
Transaction Taxes -Complies & Files, Pays
Actual Registered Companies, etc.
Business Group
Maintains its Subledger Documents in many OUs Default Legal Context (DLC)
GRE/LE
Et Cetera, 11i
Legal Entity
Registrations with Authorities
Files
Operating Units
Accounts for itself in a Ledger or BSVs
Exists Locally
Establishments
Files
Legal Entity:
Vehicle for compliance
Ledger
Registrations with Authorities

38. Get the LE Right Compliance Falls Into Place
Transaction Taxes -Complies & Files, Pays
Let’s put LEs to work
Isolate legal compliance from management needs
Track your registered companies
Make your compliance flow more easily
Accounting Setup Manager
Assign books, bookkeeping rules and currency management to your registered companies
EBusiness Tax
Have your registered companies calculate, file, and pay the transaction taxes they owe
Intercompany
Do business between and across your registered companies with full legal documentation
Bank Model
Have your registered companies use their money to pay their bills, et cetera
Actual Registered Companies, etc.
Business Group
Maintains its Subledger Documents in many OUs Default Legal Context (DLC)
GRE/LE
Et Cetera, 11i
Legal Entity
Registrations with Authorities
Files
Operating Units
Accounts for itself in a Ledger or BSVs
Exists Locally
Establishments
Files
Legal Entity:
Vehicle for compliance
Ledger
Registrations with Authorities

39. <Insert Picture Here>
Accounting Setup Manager (ASM)
Think
Work
Manage

40. Centralized Set-up Accounting Setup Manager
Define Legal Entities & Associated Rules
Ensure Complete & Accurate Setup via Online Checklist
One Place to manage
Your Global Accounting Rules, Currencies, Ledgers,
And Ledger Sets
Define Multiple Ledgers for Rules & Currencies
Set Accounting Rules for All EBS Apps

41. <Insert Picture Here>
E-Business Tax
Think
Work
Manage

42. Centralized Global Tax Less Complex Global Tax Compliance
Business Needs
Solution
Automation
Tax content for certain countries
Vertex and Taxware integration for U.S.
Integrity checks during setup process
Constant Changes in Tax Laws and Regulations
Date effective setup
Tax rules flow for change or creating rules
Tax simulator for setup, rules, and transactions
Local Compliance
Tax registrations and tax reporting codes
Tax lines determine applicable taxes
Configurable tax reporting templates
Information Visibility
Single set up for all Oracle applications
Use of E-Business Suite components such as trading partner geography, trading partner classification, legal entity, inventory item categorization, and accounting event.

43. Oracle E-Business Tax Processing taxes for transactions and reporting
Tax Transactions
Purchasing
 Compliance, Assurance
 Efficiency, Global Visibility
Payables
Parties
Places
Products
Processes
Determine Regimes
Taxable
Basis
Calculate
Tax Amount
Tax Status & Rate
Applicable Taxes
Single Interface for Transactions
Transparent Integration with Tax Partner Services
Sales Orders
Receivables
 Extensible
 Service Oriented Architecture
Tax Reports
- PDF, HTML, RTF - Security enabled
Taxes,
Rules …

44. <Insert Picture Here>
Advanced Intercompany (AGIS)
Think
Work
Manage

45. Advanced Global Intercompany System
Advanced Global Intercompany System Address the Top Barrier to a Fast Close
Advanced Global Intercompany System
Subledger Invoices & Documents
Web UI
Open Interfaces / API
Online Reconciliation Reporting
XML Publisher Reports
Generate subledger invoices
Control transaction entry with Intercompany Calendar
Fully Configurable Approval Rules
Flexible Security Model
Centrally defined Intercompany Accounts
Excel
(Web ADI)
Subledger Accounting Dr Cr
General Ledger
Receivables
Payables

46. AGIS at Work Rebilling a Corporate Cost from an USA HQ
GL Entries created for US subsidiaries
AP and AR Invoices created for France and Italy
Inter Company
California Company
Subledger Invoices & Documents
General Ledger Entries
Illinois Company
New York Company
France Company
Italy Company
Company California Initiates a Manual Intercompany Transaction, either via the ‘Self Service’ Web Interface or form and Excel Spreadsheet (using Web ADI)
Intercompany determines if invoices are required based on AGIS set up and Legal Rules, A Legal Rule will take precedence over AGIS System Options.

47. <Insert Picture Here>
Banking Model
Think
Work
Manage

48. Centralized Banking Shared Services Disbursements
Bank account is now associated with LE entity rather than Operating Unit
Single bank account serves multiple Operating Units
Any and all Operating Units associated with a ledger can be permitted to use the bank account LE
OU A
OU B
OU C
Inventory
Receivables
Receivables
Projects
Projects
Work in Process
Plus
Purchasing
Payables
Payables
Assets
Centralized Credit Card Model
Credit Card Encryption
Supplier & Customer Banks in TCA

49. Single Payment Instruction
Bank Model: Example of What You Can Do Pay invoices from different OUs with 1 instruction
OU A
OU B
OU C
Bank
Single Payment Instruction
Invoices
Payments
Sub Ledger Accounting
New Payments Module
New Bank Model
New Bank & Credit Card Features

50. Banks
Legal Entity
Operating Units

51. <Insert Picture Here>
Sharing Services
Think
Work
Manage

52. All Together: Easier To Share Services Central processing, Distributed impact
Formal SSCs At home or overseas
Call Centers, Outsourcing Offshoring, SAS 70, On Demand
SSCs (Formal)
SLAs & Tax
Inter-LE
Ledger and Ledger Sets
Subledger Accounting
Intercompany, Tax Engine
MOAC across LEs, Bank
Internal Controls Manager
Shared Service Infrastructure (Serves Informal and Formal)
Organizational Access
Cross Org Processes Banking Model Inter Unit Accounting
Informal Service Sharing Process Efficiency
Decentralized Depts.
Centralized Depts..
Normal Business Practice
Ledgers & Ledger Sets
Ledgers with Balancing Segments
MOAC across OUs
Intercompany
Bank Model Tax

53. What the Architecture Gets You
Work Globally
Global Order Desk
Global Procurement
Global Billing
Global Dunning
Think Globally
Global Ledger Sets – worldwide insight
Global Reporting
Manage Globally
Global Accounting Rules
Global Set-up
Global Integration
Release 12 Subsidiary LEs….
Company
Company
Company
…account for themselves in Ledgers, and…
Ledger Set
manage their subledger data in Operating Units
Multi-Org Access Control
Inventory
Receivables
Projects
Work in Process
Purchasing
Payables

54. Share Services, maintain privacy Exploit Cross-OU Processes
Yesterday: An LE Group in 1 SoB with 1 OU - no partitioning
R12: Introduce partitioning without sacrificing processes
Assets
Projects
Receivables
Payables
Purchasing
Inventory
Work in Process
Ledgers in Ledger Sets,
New OUs
MOAC
Inventory
Work in Process
Assets
Projects
Receivables
Payables
Purchasing

55. Release 12: The Global Business Release
National Compliance
Local Regulation
National COA
Local Calendar
Corp. Compliance US GAAP / IAS-IFRS
Corp COA
Corp Calendar $
Joint Compliance US GAAP / IAS-IFRS
A$+$ €
Parent Compliance US GAAP / IAS-IFRS Corp COA
€+$ +
Work Globally, to be more competitive
Think Globally, to make the right decisions
Manage Globally, to lower cost and increase performance
XML Publisher Reporting
OICM
DBI, FCH
Ledger Sets, Ledgers
Profitability Mgr,
EPB
General Ledger
Transactions
Subledger
SLA,
Tax
MOAC,
+300 Features
Intercompany,
Bank, Payments ü
TCA, LE

56. Q
&
Q U E S T I O N S A