Sub Ledger Accounting Oracle

Subledger Accounting (SLA) plays a central role in standardizing and implementing accounting policies, leveraging the R12 ledger architecture and legal entity enhancements.

As organizations continue to evolve, merge, acquire and divest, having ERP Applications that can easily and quickly adapt to structure changes is essential to their needs.

The R12 architecture ensures that legal compliance issues are isolated at the Legal Entity level, and the operation and security issues can be setup at the Operating Unit level. This, along with Multiple Organizations Access Control (MOAC), enables multiple legal entities and multiple lines of business—operating as a single operating unit with a single subledger and place—to implement standard processes and policies.

SLA is the repository of policies that control the accounting convention (one of the 4C`s) that’s tied to a ledger and ensures reconciliation of all the journals before they hit the ledger balances.

SLA features ease the pain of implementing accounting policies by taking away the need for customizations with certain setups (e.g. multiple liability accounts for different supplier types, matching entries for cost recognition and revenue within a single legal entity, multiple ledgers for regional reporting needs, etc.).

These are the SLA components that enable policy implementations:

Journal Line Type (JLT):

Defined for particular event class such as Accounting of an Invoice, JLT controls basic attributes of a journal line—balance types, the side, etc.—that determine the nature and treatment of that journal line.

Seeded JLTs may need extensions for implementing accounting policies. JLTs are defined for a seeded list of events, restricting them to modules within EBS. A separate, licensable product, Financials Accounting Hub (FAH), leverages the same structure but allows a definition of events to import accounting information from third-party applications.

Journal Entry Descriptions (JED):

JEDs determine the description of a journal line. We can add more information to a seeded journal line so that journal-based reports have richer information and ease reconciliation and other processes. Using the conditions and priorities, JEDs can carry attributes or different descriptions for the same journal entry.

Note: It’s best practice to leave one as default that uses a seeded description if none of the conditions are met.

Mapping Sets:

Similar to lookups and lookup sets, mapping sets store mapping of a transaction attribute to accounting segment values/flex field. The mapping sets are Key elements when we are mapping a particular segment (i.e. natural account to multiple supplier types.)

Account Derivation Rules (ADR):

ADRs are the rules which help implement accounting policies. They link source values in order to fetch target values. Setting up the extensions to Seeded SLA involves creating custom sources and using mapping sets to map them to target segment values.

Oracle provides a list of seeded sources which can be leveraged (using PLSQL code) to derive custom sources or be mapped to segment values using mapping in the account derivation rules.

It’s good practice to refer to the definition of the sources (sources are extracted in seeded views by Oracle and may have a different meaning than what its name might indicate).XLA_EVENT_SOURCES and XLA_AAD_SOURCES are the tables to use for identifying the view and the exact column name for your source. (To see it in the tables, you must assign a source on some ADR under AAD).

Journal Line Definition (JLD):

JLD brings all the elements together. It ties the JLT, descriptions and accounting rules to an event class. Any extensions done to SLA involves creating a custom JLD, copying the seeded one, and laying the changes on top.

Application Accounting Definition (AAD):

The AAD is a collection of JLD for a Module. SLA patches bring over new versions of these AADs (implemented as packages). Thus, the best practice is to copy over the seeded ones and make extensions on them. This means that, each time Oracle enhances the AAD, you need to analyze any subsequent patches to ensure the extensions are overlaid on a new copy. 

Sub ledger Accounting Method (SLAM):

The SLAM is collection of all the modules combined. It links the AAD collectively to a ledger.

For a detailed guide on how to implement SLA for your organization, refer to the Oracle Sub – Ledger Accounting Implementation Guide.