What is Subledger Accounting?
Oracle has provided standard accounting derivation for all the possible events of different aspects of business. However, there could be requirements of deriving custom accounting on certain conditions or business events.
Subledger Accounting (SLA) is a rule-based accounting engine that centralizes accounting for Oracle Fusion products. Subledger Accounting is not a separate product in itself, rather it is Oracle’s engine catering to the accounting needs of both Oracle and external modules.
Together with the ledger support, Subledger Accounting enables support of multiple accounting requirements concurrently in a single instance. Different accounting regulations can be satisfied by maintaining and applying different sets of rules to different sets of transactions, or accounting for the same transaction with multiple methods. Subledger accounting options define how journal entries are generated from subledger transactions at the subledger application level.
Subledger accounting customizations comes in handy for such requirements. It has been first introduced in Oracle Applications e-business suite. Oracle fusion has leveraged the same functionality and extended it to a greater flexibility to derive accounting, descriptions, references and other components by using various conditions and even formulas which makes it even more flexible and result oriented.
The different components to achieve such complex accounting derivations are as given hereunder:
Mapping Sets
Account Rules
Journal Line Rules
Description Rules
Events
Subledger Journal Entry Rule Sets
Accounting Method
Ledger
Mapping Sets
Mapping sets provide an efficient way to define a segment or account combination value for one or more transaction or reference attribute values. Using such input and output mappings is simpler than using complex conditions on account rules.
Based on the value of the source input, a single segment or a full account is derived.
Account Rules
These are the rules that determine from where an accounting flexfield value is taken or how it is derived. Oracle does provide seeded rules, however one can create one’s own rules to derive accounting flexfield segment values. The following rule types are available:
- Account combination
- Segment
- Value Set
Journal Line Rules
These are the rules that determine whether a subledger journal line will be a debit or a credit line, whether lines with the same account should be merged and what the accounting class of the line is. The Link Journal Lines option determines whether the journal line rule is set up to establish a link between the accounting of transactions that are related both within the same application, and across applications. In the seeded definition, no link is established.
Description Rules
These are the rules that determine what appears on the subledger journal entry at the header and/or the line. The definition determines both the content and sequence in which the elements of the description appear.
Event
Events are used to process transactions, i.e. the transaction drives the accounting event. E.g. the SLA setup for the transaction Addition, e.g. is built under the event Addition and the event CIP Addition. There are also non-accountable events, like an amortized life change where no subledger journal entry is created from the event.
Subledger Journal Entry Rule Sets
The component rules (Account Rules, Journal Line Rules, Description Rules, and Supporting References) are now combined under the Subledger Journal Entry Rule Sets to form the complete set of rules per accounting event for the subledger.
This summary of the set of rules needs to be validated before it can be linked to the Accounting Methods for the subledger. The Subledger Journal Entry Rule Set can be assigned only to a Subledger Accounting Method with the same chart of accounts.
Accounting Method
The Accounting Method is the list of Subledger Journal Entry Rule Sets per subledger that can then be linked to the ledger. Only one Subledger Journal Entry Rule Set can be assigned to a Accounting Method with the same chart of accounts.
Ledger
The Ledger is what used to be called the General Ledger Set of Books. It consists of the currency, chart of accounts, accounting calendar, ledger processing options and subledger accounting method.
