Consolidations

R12 General Ledger Management Fundamentals

 Objectives

After completing this lesson, you should be able to:

Identify how the consolidation process is positioned
within the Oracle General Ledger business flow
Identify the key implementation issues regarding
consolidations
Identify the features and functionality of Global
Consolidation System (GCS)
Describe the elements of the Consolidation Workbench
Create eliminating entries
Identify reports and inquiry options available for
consolidations
 Overview of Consolidations

With Oracle General Ledger, you can consolidate any

number of subsidiaries that use different ledgers, even
those with different charts of accounts, currencies, and
calendars
Subsidiary 1 Subsidiary 2 Subsidiary 3

Run Consolidation
Parent
 Consolidation Tools

You can use the method that best suits your needs to
consolidate financial information.
Financial Statement Generator (FSG)
Global Consolidation System (GCS)

GCS FSG
 Consolidating Multiple Companies
Sharing a Single Ledger

Parent Structure: Co - CC - Acct

company Calendar: Monthly
Currency: USD
Use FSG to
consolidate
data

Subsidiary 1 Subsidiary 2 Subsidiary 3

Co-CC-Acct Co-CC-Acct Co-CC-Acct
Monthly Monthly Monthly
USD USD USD
Use FSG to consolidate subsidiaries that
share the same ledger
 Consolidating Multiple Companies
with Multiple Ledgers

Parent Structure: Co - CC - Acct - Prd

company Calendar: Monthly
Currency: USD
Use GCS to
map and
consolidate

Subsidiary 1 Subsidiary 2 Subsidiary 3

Co-CC-Acct Co-Acct-Prd Co-Acct-CC-Prd
Quarterly Monthly Weekly
USD Euro AUD
Global Consolidation System (GCS) Features and
Benefits

Global Consolidation System provides:

A workbench to view the consolidation status of your
subsidiaries
Sophisticated consolidation mapping rules to map
accounts and specify transfer rules from the subsidiary
to the parent
A color-coded consolidation monitor that guides you
through the consolidation steps
A Consolidation Hierarchy Viewer to graphically display
your consolidation structure
The Interface Data Transformer makes importing data
from external feeder systems easier
Global Consolidation System (GCS) Features and
Benefits (continued)

Global Consolidation System provides:

Automatic generation of eliminating entries
Multilevel drilldown capabilities to subsidiary balances
and subledgers
Interface Data Transformer (IDT)
Powerful report publishing capabilities using FSG and
Web ADI
Integrated multidimensional analysis using Oracle
Enterprise Planning and Budgeting
 Consolidating Data in Multiple Instances

Use Web ADI or IDT to copy data from another

instance to another
Oracle Oracle Instance B
Instance A
Web ADI
"Subsidiary 1"
Extract
Web ADI
Journal Entry
Subsidiary 1 Consolidate
Spreadsheet
Ledger

Parent
company
ledger
 Interface Data Transformer (IDT) Description

User-friendly tool that facilitates the importing of data from

external feeder systems into Oracle General Ledger and
Global Consolidation System

External Data loaded IDT Rules Reformatted Data

into GL_Interface Transform Data Imported to GL

External Data GL_INTERFACE Table GL Journals

 Interface Data Transformer (IDT)
Benefits

Easier Integration with Non-Oracle Systems:

Automatic data conversion that converts disparate data
formats into an Oracle format
Reapplication of the same rules each time you transfer
Automatic data validation on imported data provides
greater flexibility!
Conditions allow you to control when Transformation
Rules should be applied
 Interface Data Transformer (IDT)
Rule Set Description

Rule Sets provide instructions to transform data in the

GL_INTERFACE table:
Use String Functions to parse and concatenate
substrings
Call PL/SQL Functions to perform sophisticated
transformations
Reference Lookup Tables to convert one value into
another
 Interface Data Transformer
String Function Example

Parses and concatenates substrings

Column1 Column2 Column3 Column4
Source 100C B 540 20%

Column1 and Column2 are

concatenated, placing the
results in Column1.

Target 100CB Budget 108 20%

 Interface Data Transformer
PL/SQL Function Example

Performs sophisticated transformations

Column1 Column2 Column3 Column4
Source 100C B 540 20%

540 X 20% = 108

Column3 is multiplied by Column4,

placing the results in Column3

Target 100CB Budget 108 20%

 Interface Data Transformer
Lookup Table Example

Converts one value into another

Column1 Column2 Column3 Column4
Source 100C B 540 20%

A lookup table maps "B" to "Budget,"

placing the results in Column2

Target 100CB Budget 108 20%

 Interface Data Transformer Steps

Define Rule Set

Load Interface Table
Load the external data into the GL_INTERFACE table
using SQL Loader or another program
Specify a Source and Group ID in the flat file
Run Transformer Program

L
SQ
 Other Uses for
Global Consolidation System

Use Global Consolidation System (GCS) to transfer

balances if you make changes to your chart of accounts or
accounting calendar
 Consolidation Workbench

The Consolidation Workbench and State Controller provide

a central point of control for consolidating an unlimited
number of subsidiaries to your parent ledger

Access all
consolidation steps

Monitor consolidation View mappings

process and hierarchies
Consolidation Workbench (continued)

Find Consolidation Processes

Consolidation Workbench State Controller

Preparation/Transfer Mapping
Mapping Set
Elimination Translation Status
Transfer
Transfer Set
Review Journal
Post
Elimination Set
Elimination
Report
 Using the State Controller

Button Name Consolidation Step

Mapping Map consolidation data

Mapping Set
Translation Status Prepare consolidation data

Transfer Transfer consolidation data

Transfer Set
Review Journal Review and post to consolidate
Post data and update consolidated
balances
Elimination Set Create eliminating entries
Eliminate

Report Report on consolidated balances

 State Controller Button Colors

Mapping
Mapping Set Blue Recommended
Translation Status
Transfer Gray Not Recommended

Transfer Set
Red Warning
Review Journal
Post
Elimination Set
Eliminate
Report
 Defining a Consolidation Mapping

A consolidation mapping is a set of instructions for

mapping accounts or entire account segments from a
subsidiary ledger to the parent ledger
Define a consolidation mapping for each subsidiary you
want to consolidate

Mapping Rules

Subsidiary Parent
Ledgers Ledger
 Mapping Rules

You can define segment rules, account rules or a

combination of both
If you use segment rules you must define a segment
rule action for each segment in the parent's chart of
accounts, but you cannot define more than one action
Account rules override segment rules, if there is a
conflict. Suggestion:
Use segment rules to define the default mapping
Use account rules to define exceptions
 Using Account Mapping Rules

Account rules map a specific subsidiary account or range

of accounts to a specific account in the parent ledger

Subsidiary maps to Parent

02.300.5410.100 01.5000.100

Low 02.400.5400.100
01.5200.100
High 02.400.6999.100
 Using Segment Mapping Rules

Segment rules map subsidiary account segments to parent

account segments

Subsidiary Maps to Parent

Department Cost Center

Account Account
Product Location
 Using Segment Rollup Rules

A rollup rule consists of the following:

Rule Description
Parent Segment Subsidiary values rollup into the specified
Detail Value parent detail segment value.

Transfer Level Specifies whether to rollup detail or

summary data.
Using Specifies whether Parent, Detail Ranges, or
Parent Ranges from subsidiary are mapped.
Dependent on Transfer Level selected.

Subsidiary If you specify Parent in the Using field, enter

Segment Parent the parent account value for the subsidiary.
Value or If you specify Detail Ranges or Parent Ranges,
Segment Ranges enter the account ranges for the subsidiary.
 Defining a Consolidation Mapping Set

Create a mapping set to transfer data for multiple

subsidiaries simultaneously

Transfer to Parent
Mapping Set Company Ledger

Subsidiary 1 Subsidiary 2 Subsidiary 3

Mapping Mapping Mapping
Rules Rules Rules
 Consolidation Hierarchy Viewer

Vision Corporation (UK) (Vision Corporate Mapping)

- Currency: GBP
Calendar: Fiscal
Chart of Accounts: Co-Dept-Acct

Vision Operations (USA) (Vision Operations Mapping)

+ Currency: USD
Calendar: Accounting
Chart of Accounts: Co-Dept-Acct-Sub-Acct-Prod

Vision Services (USA) (Services to Corporate)

Currency: USD
Calendar: Weekly
Chart of Accounts: Co-Serv Dept-Serv Acct-Prod

Vision Services (SNG) (Distribution to Corporate)

Currency: SGD
Calendar: Accounting
Chart of Accounts: Co-Dept-Acct-Prod
 Preparing Subsidiary Data

Before you transfer balances from a subsidiary ledger:

Revalue balances
Translate to functional currency
Run trial balance reports

Revalue balances

Translate balances
Subsidiary Run reports
Ledger
 Revaluation Process

Revaluation is the process that:

Reviews a foreign currency balance
Reconverts the functional currency using the
Revaluation Rate
Creates a journal entry to adjust the functional balance
to the reconverted amount

Foreign
currencies
Functional
currency
 Translation

Foreign currency translation is the process that restates

the functional currency account balances into another
currency

Subsidiary
functional
currency

Parent
functional
currency
 Transferring Subsidiary Data
to Parent Ledger
You can transfer
data from your
subsidiary ledgers
by:
Consolidating Consolidating
balances transactions

Transferring
consolidation
sets
Consolidation Tracking and Reversals
Posting Consolidation Journal Entries

Run Journal Import Review

Run Reports Post

 Global Consolidation System
Cross Instance Data Transfer

Transfer
Subsidiary
Data
Remote
Parent
Instance

Cross Instance Data Transfer enables you to

transfer subsidiary data to your remote
parent instance over your corporate intranet
 Cross Instance Data Transfer Security

Using Cross Instance Data Transfer Security:

You create a specific username for the central
consolidation database instance with limited
access to specific objects in the database
Subsidiaries use this username to define
database links for cross instance data transfers
 Global Consolidation System
Parallel Consolidation

Parallel Consolidation enables organizations to:

Run multiple concurrent consolidation processes
in parallel for different subsidiaries
Uses separate GL_INTERFACE tables to increase
processing speed
Must select the Run Journal Import option in the
Transfer Consolidation Data or Transfer
Consolidation Data Set forms
Creating Eliminating Entries

Company A Company B
 Formula-Based Eliminations

Use recurring journal entries set up with specific formulas

or partial eliminating entries, such as those for:
Intercompany profit eliminations
Minority interest eliminations
Cross-ownerships
Intercompany transactions with partially owned
subsidiaries
You cannot use the Automatic Intercompany Eliminations
program to eliminate formulabased eliminations or
average balances
 Automatic Intercompany
Eliminations Program

Define Elimination Set Run Elimination

Source Target
Account Account in
from Parent or
Source Target Account Elimination
Subsidiary
Account in Parent or Company
from Elimination
Subsidiary Company
 Defining an Elimination Set

Required Components: Optional Components:

Batch name Elimination company
Description Track Elimination Status
Elimination journals Effective From and To dates
Currency Balancing options
Amount type
Source Account
Type Account
 Source and Target Account Examples
If Source Is mapped to The outcome is
Account Target Account

Null Null Source accounts 100, 200, 300, and 400

eliminate into individual target
accounts 100, 200, 300, and 400

Null 100 Source accounts 100, 200, 300, and 400

eliminate into target account 100

200 Null Source account 200 eliminates into

target account 200

999 Null Source accounts 100, 200, and 300 Parent Cost Center 999
(children of 999) eliminate into
individual target accounts 100, 200, and
300

200 100 Source account 200 eliminates into

target account 100

999 100 Source accounts 100, 200, and 300

(children of 999) eliminate into target 100 200 300 400
account 100 Child Accounts
 Balancing Options for Eliminations

Balancing Option Outcome

Allow out of Balance Allows out of balance journal entries
Journal to be created. Journal review required.

Balance with Net Difference in out of balance journals are

Differences Account posted to net difference accounts you
specify for debits and credits. Threshold
rules can be applied.

Balance with Net If the difference < threshold, a balanced

_
Differences Account journal entry is created with the
with threshold rules difference posted to the net difference
account.
If difference > threshold, an out of
balance journal entry is produced for
your review.
Allow Out of Balance Journal

Elimination Journal Entry

DR CR
I/C AR 100
I/C Sales 87
Out of Balance 13

Review and analyze difference

 Balance with Net Difference
Elimination Journal Entry
Balance with Net Difference
Account Threshold = 5
Review and
DR CR analyze
I/C AR 205 difference

I/C Sales 199

Out of Balance 6
Elimination Journal Entry
Balance with Net Difference
Account Threshold = 15
DR CR
I/C AR 205
I/C Sales 199
Net Difference Account 6
 Consolidated Balances Inquiry

From your consolidated parent ledger, you can view

consolidated balances, journals, subsidiary details, and
subledger details

Total Consolidated Sales

Total Sales Company A

Sales Account 1 Sales Account 2

A/R A/R
Subledger Subledger
 Performing Consolidated
Balances Inquiry

Balances

Consolidation

Subsidiary
Source Account

Display Display Switch

translated original amount
currency currency type
 Running Consolidation Reports

You can generate standard consolidation reports from the

State Controller or Submit Request window
Consolidation Audit Report
Consolidation Exceptions Reports:
Unmapped Subsidiary Report
Disabled Parent Accounts Report
Consolidations Rules Report
Consolidations Journals Report
 Creating Custom Consolidation Reports

To define customized consolidation reports, use Web

Applications Desktop Integrator (Web ADI), or Financial
Statement Generator (FSG)
 Summary

In this lesson, you should have learned how to:

Identify how the consolidation process is positioned
within the Oracle General Ledger business flow
Identify the key implementation issues regarding
consolidations
Identify the features and functionality of Global
Consolidation System (GCS)
Describe the elements of the Consolidation Workbench
Create eliminating entries
Identify reports and inquiry options available for
consolidations