R12 Financials was designed for global companies with different accounting requirements. It replaces the concept of Sets of Books with Ledgers and Ledger Sets. Transactions can be entered once and populated to different ledgers based on rules. Subledger Accounting allows a single transaction to be credited and debited correctly across entities without adjustments. Multi-Org Access Control removes responsibilities from single operating units, allowing cross-unit functions without changing security profiles. Legal entities now represent real-world organizations with separate tax and regulatory compliance.

1. tel: 407.591.4950 | toll-free: 1.888.943.5363 | web: www.eprentise.com
R12 Financials Overview
an eprentise white paper

2. R12 Financials Overview
Copyright © 2014 eprentise, LLC. All rights reserved. www.eprentise.com | Page 2
© 2014 eprentise, LLC. All rights reserved.
eprentise® is a registered trademark of eprentise, LLC.
FlexField Express and FlexField are registered trademarks of Sage Implementations, LLC.
Oracle, Oracle Applications, and E-Business Suite are registered trademarks of Oracle Corporation.
All other company or product names are used for identification only and may be trademarks of their respective owners.
Author: Helene Abrams
Published: April 20, 2008
www.eprentise.com

3. R12 Financials Overview
Copyright © 2014 eprentise, LLC. All rights reserved. www.eprentise.com | Page 3
There are many differences not only in the way that R12 handles your business, but also in the underlying
structures of the Financials. Essentially, R12 was designed to accommodate global companies with
different accounting requirements who need to allow their data to be shared among different entities. The
most significant of these changes is that in R12, there is no concept of Sets of Books. Ledger and Ledger
Sets together replace Sets of Books. The data of a Set of Books is contained in a ledger. The management
of the set of books (open and closing, reporting, allocating, etc.) is now at the Ledger Set level A ledger
and is defined by the 4 Cs: Calendar, Currency, Chart of Accounts (these should be familiar as the
definition of a set of books), and Convention.
Convention refers to the Accounting Method (e.g. GAAP, IAS) used. From a single transaction ledger, you
can generate rules that will populate different subledgers. For example, if you have different tax
jurisdictions, you would have a ledger that would track the accounting and reporting necessary for each of
the jurisdictions. You would only enter the transaction one time, and then populate that transaction to
different ledgers depending on the rules that you create. Detailed transaction information is captured in
the subledgers and periodically posted (in summary or detail form) to the ledger. Within the ledgers, you
define accounting rules to comply with Sarbanes Oxley, providing an audit trail and easier reconciliation.
You can balance at the subledger level.
Subledger Accounting allows you to define centralized rules and provides multiple accounting
representations of a single transaction in multiple currencies. One of the main advantages is to be able to
create a single payment transaction for different legal entities or different operating units and create a
rule that allows that transaction to be credited and debited correctly without creating overrides and
adjusting entries. A ledger owner might be a legal entity or a group of companies in a common legal
environment, or a foreign branch. Ledgers are also used to consolidate financial transactions. Accounting
entries can account for themselves in ledgers that are prepared under different conventions with different
charts of accounts, and value transactions in different currencies. One of the ledgers is the primary ledger.
A ledger set is a collection of ledgers that you wish to manage as though they were one ledger.
Many functions are available across ledgers:
 Open/Close Periods
 Create Journals
 Translate and Revalue Balances
 View Information
 Submit Standard Reports
 Submit Financial Statements
Another major change is the Multi-Org Access Control (MOAC). MOAC allows you to perform functions
across operating units without changing responsibilities. A responsibility is no-longer tied to a single
operating unit. Instead, from within HR, you can assign a list of operating units to a responsibility and
assign security to that operating unit through a security profile. By setting the operating unit to null, you
can import all transactions for all operating units through the open interface programs at the same time.
You can also create and report on transactions that cross operating units or operate a shared services
center with centralized processing.
In R12, the concept of legal entity has been enhanced. A legal entity exists in the outside world and may
be regulated by different governing bodies (i.e. country, state, tax authority). A legal entity pays taxes, has

4. R12 Financials Overview
Copyright © 2014 eprentise, LLC. All rights reserved. www.eprentise.com | Page 4
bank accounts, and complies with different regulatory agencies. Transactions that occur between and
across legal entities are intercompany transactions. Bank accounts are now associated with legal entities
rather than with operating units, allowing for a single bank account to serve multiple operating units.
Income statements and balance sheets are generated along with tax forms for every legal entity. In HR,
there is the Government Reporting Legal Entity (GRLE) which represents the registered legal entity who is
the employer in HR.
Curious?
For more information, please call eprentise at 1.888.943.5363 or visit www.eprentise.com.
About eprentise
eprentise provides transformation software products that allow growing companies to make their Oracle® E-Business
Suite (EBS) systems agile enough to support changing business requirements, avoid a reimplementation and lower the
total cost of ownership of enterprise resource planning (ERP). While enabling real-time access to complete, consistent
and correct data across the enterprise, eprentise software is able to consolidate multiple production instances, change
existing configurations such as charts of accounts and calendars, and merge, split or move sets of books, operating
units, legal entities, business groups and inventory organizations.