Dear All,
as we all know that in Release 12, "Set of Books" have been Substituted by "Ledgers".
This Substitution is not just a transformation of name alone, the components has also undergone a change, more than a change you can call it as an addition.
In previous versions, set of books consists of,
C = Chart of Accounts
C = Calendar
C = Currency
In Release 12, ledgers Consists of
C = Chart of Accounts
C = Calendar
C = Currency
C = Accounting Method or Convention ( ***** New Component*****)
Lets see more about this new component....
Selection of Accounting method is nothing new for people using earlier versions of Oracle Applications, it is carried out at the Subledger level. The available methods were Accrual and Cash in previous versions.
In Release 12, the selection of Accounting method is done at the ledger creation level itself. And this is the only place where the accounting method is selected and not in any other place !
(Accounting method can be changed any time, it will not affect the existing transactions)
Lets us see what are the available (Seeded) Accounting methods in Release 12,
1) Accrual with Encumbrance Accounting
2) Cash with Encumbrance Accounting
3) Standard Accrual
4) Standard Cash
5) US Federal Accounting
Now lets see basis of Selection of Accounting methods:
All upgraded, non-public-sector ledgers will have a Subledger accounting method assigned called Standard Accrual or Standard Cash ( This is nothing but the same Cash and Accrual which we had in rel 11)
All upgraded public sector ledgers will have a subledger accounting method assigned called
Encumbrance Accrual or Encumbrance Cash. ( This come in to place when we use purchasing modules, and transfer of encumbrance journals becomes necessary)
For Federal customers, all upgraded ledgers will have the US Federal Accounting subledger accounting method assigned.
Note: You cannot delete the Subledger accounting method but you can change the Subledger accounting method and Subledger accounting options at any time. And also you can create a new Subledger method and attach it to your ledger.
Hope this clarifies about the fourth "C" in Release 12 !
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8 comments:
Good one. keep it up
Good article
Hi,
Our client reports in both accrual and cash basis methods of accounting. So, should i go for creation of primary ledger (Encumrance accrual) in accrual and secondary ledger (different chart of accounts and sub ledger accounting method (standard cash)) in cash method? How will the accounting entries be generated?
Client Requirement is:
1) Accrual
2) Cash Basis
The only difference is the accounting method, therefore you can use the same calendar, chart of accounts, currency.
Create 1 primary ledger with Accrual accounting method
Create 1 Secondary ledger with Cash accounting method and select the proper data conversion level, so that when ever you create an accrual transaction in primary ledger, same will be generated in the secondary ledger based on the cash rules. It is automated, it triggers when the posting of transaction happens in GL.
I am reachable at karthikeyanp1981@gmail.com
Excellent Explainations... Please keep the good work
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