Oracle Sub-Ledger accounting and use for secondary ledgers

1. Planning for Sub ledger accounting setup – SLAM for primary and secondary ledger set up
When there is a re-implementing or new implementation of R12 Oracle Financials SLAM will be one of the new concepts to understand
however before configuring SLAM understand how the high level design of the ledgers, chart of accounts and data sets relate to the setup
of SLAM in relation to primary and secondary ledgers.
Different Business Scenarios may exist:
Scenario 1 – Global Business operation with more than one parent company and reporting requirement United Kingdom IFRS (£) and US
GAAP ($) with separateforeign subsidiaries accounting in each country of operation withmany different functional currencies.
Scenario 2 – Global Business operation with one parent and one reporting requirement United Kingdom IFRS (£) and separate foreign
subsidiaries accounting in each country with many different functional currencies.
Scenario 3 – Business operation with one parent company US GAAP ($) and one separate local subsidiary accounting with one functional
currency USD ($) and with a local currency of EUR
Scenario 4 – Business operation with one parent IFRS (£) and many UK subsidiaries.
Pre-requisites to ledger and SLAM set up
> assume decisions will have been made on functional currency based on operations and adherence to IAS21
>assume decisions will have been made on multicurrency reporting based on business requirements
>assume decisions have been made on shared corporate chart of accounts
>assume decisions have been made on primary and secondary ledger use in Oracle based on shared ledger sets ,transaction and
accounting chart of accounts and use of multi-org and data access requirements, calendar requirements and accounting method and
currency.
According to each of the above the SLAM set up will vary according to solution but will be something like below:
Scenario 1 – Solution
This is a typical global business example where more than one consolidation is needed and there are many subsidiary companies.
Functional currency is likely to be that of each entity and therefore reporting needs to be in more than one currency.
Solution a)
In this case the many subsidiary entities can share the corporate chart of accounts i.e. the transaction chart of accounts.Secondary ledgers
will only be required by the 2 parent entities and the consolidation can be done from primary to secondary ledgers.
Each subsidiary entity will have its’ own ledger with its’ own currency, calendar and accounting method however the ledgers will all use
the corporate chart of accounts it will be shared across the group.
The corporate chart of accounts has to be able to support the transaction accounting in all entities.
Separate currency reports can be performed in both primary and secondary ledgers if required.
SLAM will need additional configuration for the secondary statutory reporting ledgers to support the required level of data conversion e.g.
journal.
Solution b)
If the corporate chart of accounts cannot support the scenario above then the subsidiaries may need to use a local accounting chart of
account and therefore a secondary ledgeris required for this chart of accounts.
SLAM can then use additional set ups so these entities can post the sub-ledger transactions or journal level to the secondary ledger for
internal reporting.

2. Scenario 2
As per scenario 1 but with only one consolidation required.
Scenario 3
In this scenario the functional currency of the subsidiary and the parent is USD.
Therefore the subsidiary can use the primary ledger with the corporate or statutory chart of accounts and use the multi-currency feature
to report in USD. The local subsidiary can also use the secondary ledger with their local chart of accounts and local currency EUR.
The consolidation can be done in the primary ledger of the parent and the local secondary ledger can be used for internal reporting and
local GAAP.
SLAM will need additional configuration to support the secondary ledger.
Scenario 4
A UK business with one functional currency and one corporate chart of accounts.The Primary ledger of the entities will use the transaction
corporate chart of accounts and functional currency for both will be GBP.There will be no requirement to report in another currency
however there may be a requirement to consolidate to a secondary ledger with a different chart of accounts.
In this case the parent entity may set up a secondary ledger to consolidate the results.
SLAM will need additional configuration to support the secondary ledger.

3. Additional SLAM set ups for use with secondary ledgers
The conversion can be performed at the following levels
Sub-ledger Level Secondary Ledgers
Journal Level Secondary Ledgers
Balance Level Secondary Ledgers
Adjustments Only Secondary Ledger
It is a prerequisite to create a chart of account mapping if the secondary ledger uses a different chart of accounts.
The accounting set up below is an example suitable for scenario 1 solution (a) in this example a French subsidiary is consolidated into the
US Parent.
Navigate to accounting set up in Oracle>
Ledger information
Primary Ledger
Chart of accounts
Accounting calendar
French Operations
Corporate
Monthly
Secondary ledger
Chart of accounts
Accounting calendar
US Statutory
US GAAP
Fiscal
Currency
Sub-ledger
accounting method
Euro
Standard accrual
Currency
Sub-ledger accounting
method
USD
USGAAP
Data conversion level
Journal
Disable conversion date
01-Feb-2013
Chart of accounts mapping
Corporate to Statutory mapping
Currency conversion rules
Source representation
Default rate types
Retain transaction rate type
French operations
Source representation
Corporate
Yes
Error Handling
If missing conversion rate
o report error
*Use last rate
Number of days to find last rate 15
Journal conversion Rules
Post journal automatically from source ledgero
Retain journal creator from source ledger
no