Oracle Release 12 promises improvements in finance functionality for multinational organizations. It introduces a single advanced tax engine across all transaction flows and centralized accounting rules. It also allows for multiple accounting representations of transactions and separates accounting from transactions. However, the multi-org framework remains largely unchanged, so full flexibility in areas like intercompany transactions may not be possible. Careful evaluation of local compliance needs and the impacts on shared service models will be required for implementations and upgrades.

1. Release 12 Brainstorm - OAUG E-
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OAUG Collaborate06
eBS Release 12
Impacts on Multi-Nationals
- Organizations, Accounting
& Taxes
Hans Kolbe, Celantra Systems Inc.,
Alex Fiteni CMA, Fiteni International LLC

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Why this Session?
 BECAUSE… The last major release of Oracle applications, Release 11i, has
brought us many key advantages in technology and functionality
– The initial problems in that release have often overshadowed the functionality
enhancements
– For many companies it has taken years until they were able to integrate new
functionality and take advantage of the new architecture
 WHEN ….. Oracle E-Business Suite Release 12
– Currently said to be made available by the last quarter of 2006
– Limited information and presentations available**
– Indications are that great opportunities for multi-national companies
– Oracle promises to get through the limitations of multi-org segmentation to a new
paradigm of “Data Segmentation AND Processing Efficiencies” in support of a
Shared Service Architecture for international implementations
– Improvements in development, testing, and release processes will hopefully
provide a less risky migration
 THEN ….. An early start to the discussion on the content and functionality of
the upgrade now may assist users to prepare for and evaluate their
implementation options
** Openworld 2005 Presentations

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Goal of this Session:
 Review Key initiatives of Release 12 in the finance area and their
impact:
– Multi-Org Access Control
– Ledger and Ledger Sets
– Sub-Ledger Accounting
– New Information Delivery
– Tax Compliance Functionality
 These elements impact different organizations in very different ways
 For discussions purposes, we have divided existing Oracle
implementations into three groups of organizational structures and we
will review the Rel 12 architecture on each group:
– “Top Down” structures with global processes and shared service
implementations
– “Customized” structures with modules and feeder systems spread across
multiple instances and environments
– “Bottom Up” structures with separated entities and processes,
collaborating in consolidation and planning only

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What This Session Is NOT About!
 Solving specific issues in 115i and/or 12
 Detailing specific functionality in R12
– In fact, we are limiting discussion to slides
24-25 of Seamus Moran Release 12 preview –
Sep 2005
 Providing specific advice or
recommendations on upgrade or
implementation strategies for Release 12

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Multi-Org – Now and Then
Set of Books
Legal Entity
Organization
Ledger
(Accountability)
Organization
(User Access
& Security)
Legal Entity
(Compliance)
BSV

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Multi-Org Access Control
Objective: Support SSC – Avoid duplication of data
 Question: Access - Multi-Org paradigm “Legal Entity above
Operating Unit” remains?
 Considerations: Most SSC’s operate for multiple LE’s and across
countries and languages. This may help, but greater flexibility is
needed. Need to be able to flexibly nominate data and transactions to
legal entities. We will be able to use this capability to resolve certain
operational problems
 Question: Can data be nominated to be available to multiple OU
and LE s?
 Considerations: It seems this also stays within the same paradigm.
Bank accounts is mentioned specifically to be setup across OUs within
one LE. We need this for customers, vendor addresses and sites – like
inventory

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Multi-Org Access Control
Objective: Access to Transactions across
across LE and OUs
 Examples:
 AR: Receive payment for one entity’s invoice into another entity’s bank
account
– automatic IC balancing with additional rules
 AP: Make payments for one entity’s invoice from another entity’s bank
account
– automatic IC balancing with additional rules
 AR: Book one cash receipt and apply cash to invoices from multiple legal
entities
– Automatic Credit Limit calculation and updating for one customer across many
entities
 AP: Enter Invoice in SSC without regard to legal owner
– Application finds correct owner based on PO or other parameter
 NOTE: IF they occur within the same LE, some of those will be possible (AR
Receipts and AP Payments)

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Inter-company Transactions
 UNFORTUNATELY, NO STRONG STATEMENT
FROM ORACLE AVAILABLE
– Product movement: Returns and changes on internal orders,
Pricing, Audit Trail
– Inter-company Non-Product transactions
– Non-billable or non-shippable items (demos, consignment
inventory, samples)
– Fixed Asset Inter-company Transfers
– Reconciliations
– Banking Off-Sets
 Overall, important improvements in 11.5.10 functionality
that will continue to be expanded, but no overall integrated
solution visible

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Sub-Ledger Accounting
 Separating the Accounting from the Transaction itself
is a GREAT STEP forward:
– Rules are more flexible and can be maintained in one place
 Accounting is stored in separate tables, simultaneously
accessed from GL and sub-ledger. No GL to sub-ledger
reconciliations anymore
 Current modules are operating this way:
– OPM (Sub-Ledger Accounting Setup and Tables)
– AX Global Accounting Engine
 Overall, very powerful improvements for accounting
flexibility and dual posting requirements in international
roll-outs.
– Unfortunately user gain will be limited, because sub-ledger
accounting still occurs within the strict multi-org frame work

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About Us:
Celantra Systems provides international program management
services with a strong focus on multi-org, inter-company, and global
compliance and implementation issues. Celantra Systems also offers
specialized software tools to augment application functionality in
global implementations. Celantra’s consulting and technical services
can add valuable impact in the integration of Oracle Apps with
boundary systems such as SAP, People Soft, trade and customs
compliance systems and others.
Hans Kolbe has managed and advised software implementation
projects for over 15, global projects for over 6 years. His extensive
knowledge on Oracle applications is combined with a formal
background as a German attorney, trained in international and
comparative law.

11. Powerful functionality.
Oracle
Taxes R.12
Alex Fiteni
Oracle Release 12 Seminar
Advanced tax
Engine
Order
Management
Procurement
Requisitioning
Accounts
Payable

12. Direct and Indirect Taxes
 R11i and prior
 Separate tax
engines for each
transaction flow
 US Sales Tax
 Value Added
Tax
 Movement
Taxes in L.A.
 Withholding
Tax
 Tax reporting
Ledger is view and
extract based
 External tax
engines for US only
Outside Tax
Engine
Hooks
Tax Calculation
Tax Ledger
Single
Source of
Truth
Multiple Taxes
On Transaction
FX Reports
 Release 12
 Single Tax Engine
across all flows
 Regime Based
 Transaction
Data driven
 Tax Rules and
Formulae
 Tax
Registrations
tied to Legal
Entities
 Tax Reporting
Ledger integrated
with XML Publisher
 Multiple External
Tax Engines
supported

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E-Business Tax
R12 Considerations
 Implementation
– Leverage new Tax
Registration and Legal
Entity structures
– Create own rules or use
seeded rules to meet local
compliance needs
– Carefully design tax
classifications to meet
larger needs
 Upgrade
– Upgrade ‘as is’ may not
serve all local compliance
needs well
– Develop a plan for
including under-served
markets
– Leverage Tax registrations
& Legal entity structures
– Create value with custom
rules

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Powerful functionality.
Oracle
Accounting
R.12
Alex Fiteni
Oracle Release 12 Seminar
R12 Accounting
Engine
Fulfillment
Cycle
Procurement
Cycle
Projects & ERP
Costing
Asset
Management

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Accounting Approaches
 R11i and prior
 Embedded
accounting in
each product
 Inconsistent
methods of
configuration
 AX accounting
engine limited
to certain
regimes
 Difficult to
modify
accounting
Ledger(s)
Accounting
Engine
Single
Source of
Truth
Multiple
Accounting
Representations
Accounting
Rules
 Release 12
 Multiple
Accounting
Representa-
tions of a
transaction
 Centrally
defined
Accounting
Rules
 Single
repository
for all
accounting

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R12 Considerations
 Implementation
– Accounting drivers may differ for
each reporting requirement
– Separate accounting for
Management Performance
reporting from local GAAP
requirements
– Automate certain compliance
reporting with Multiple
Accounting Representations
(MAR)
– Impacts of an MAR environment
on shared services, transaction
processing, chart of accounts,
ledger structures, etc.
– Monitor OLTP performance
– Leverage IASB and XBRL
standards to improve financial
reporting supply chain
– Importance of audit, reconciliation
and controls to ensure quality of
accounting information system
remains high
 Upgrade
– Exclusive and Shared Ledger
models will be supported:
 Exclusive – One Set of Books and
One Operating Unit
 Shared – One Set of Books, Many
Legal entities and Operating Units
– AX will be upgraded
 Pre-Upgrade
– Leverage Ledger Sets: Impacts of
separating Legal Entities (as
BSV’s) into Ledgers within a
Ledger Set
– Allow time to test, review &
reconcile results
 Post-Upgrade
– Leverage MAR: Re-configure
Ledgers & Accounting where
compliance is performed mostly
off-line

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About Us:
Fiteni International LLC
Our goal is to provide our clients with a global perspective of the impacts of local regulatory
requirements on their IT infrastructure and back-office systems, and providing feedback on
compliance risks and mitigation.
Our expertise in Oracle eBusiness Suite implementations, especially project management and
applications configuration optimization has helped clients to meet their fiduciary, indirect tax
compliance and internal control requirements. We have been used successful in a wide variety of
business sectors, as well as the not-for-profit sector, and government agencies.
Our focus on client needs is designed to ensure that an organization develops global business practices
that create value throughout the financial reporting supply chain.
Alex Fiteni CMA
Alex Fiteni is a principal of Fiteni International LLC, and brings a wide range of experience in both
accounting and information systems to his clients. Alex rose through the financial organization,
completing his career in that sector as CFO. As an information management specialist, he has held a
variety of positions in as a contributor and in management, most recently as a Director of
Applications Development with Oracle Corp. Alex is a a current member of the Society of
Management Accountants of British Columbia, Canada; and is a member of the OASIS Tax XML
Technical Committee.

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Thank you !
Hans Kolbe, Celantra Systems
hanskolbe@celantrasystem.com
+ 1 (415) 730 – 1131
Alex Fiteni, Fiteni International LLC
Alex@Fiteni.com
+1-650-799-5949