FUSION ACCOUNTING HUB OVERVIEW

Oracle Fusion Financial Application

Overview and Improvements in Fusion Subledger Accounting

Introduction :

This training document will provide users the basic setup steps that are part of Subledger Accounting Method (SLAM) in Oracle Fusion Applications with a brief description of Fusion Accounting Hub (FAH). In the later part of this document we will also learn what are the new changes/improvements done by Oracle in Fusion SLA in comparison to EBS R12 SLA with regards to processes and report.

Recap :

The purpose of SLA is to separate transaction from the accounting which further helps to create accounting from any conditions or regulation. Secondary Ledger in R12 helps to  achieve different representation of same transaction and fulfills accounting needs of a specific country.

As we know accounting data is stored in many different table and layout in 11i for AP, AR, FA, Payment etc. There has not been consistent mechanism to store accounting data in 11i. In R12 real accounting is stored in XLA table and act as single source of truth. Each Ledger creates accounting separately in respective ledgers, Accounting Method Builder is the only option to determine create accounting in SLA.

When we complete any transaction in AP or AR the suggested accounting (code combination) is created in these subledger module and actual accounting is created on the basis of SLA rules. This accounting in SLA can be different from the suggested accounting created in subledgers.

Overview of Subledger Accounting in Fusion:

Fusion Subledger Accounting is part of the Fusion Accounting Hub and enhancement of Oracle EBS, R12 Subledger Accounting. Broadly speaking Fusion SLA is less complex and offers simple User Interface compare to EBS SLA with easy setup steps and navigation.

All setup tasks in Oracle Fusion Applications are performed in the Functional Setup Manager (FSM).

What is Subledger Accounting (SLA)?

Subledger Accounting (SLA) is a rule-based accounting engine that centralizes accounting for Oracle Fusion products. Subledger Accounting caters to the accounting needs for 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.

Below is brief explanation of various component of Fusion SLA-

Account Rules (AR) :

These are oracle provided seeded rules or Users created rules to derive and determine accounting flexfield values for a particular segment/s. One can create different rule types to fetch Account combination, Segment, and Value Set.

Journal Line Rules (JLR) :

In order to determine debit or credit line for a subledger,  Journal Line Rules are used. Users can also determine if they wants to merge lines with same account or not.

In case of same application, Link Journal Lines option helps to establish a link between the accounting of transactions that are related to each other as well as also across applications.  But this feature is not available in case of using seeded definitions.

Description Rules (DR) :

How subledger journal entry at the header or the line will appears, is determined by Description Rules . This also helps to determines content and sequence description appearance.

Event :

An event is the recording of a change of status in the transaction life cycle, i.e., invoice approved, payment received, period close, etc. These are defined for each SLAM used. Event classes and event types are used to process transactions, i.e. the transaction drives the accounting event. 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 (SJERS) :

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 an Accounting Method with the same chart of accounts.

Ledger

Ledger consists of the currency, chart of accounts, accounting calendar, ledger processing options and subledger accounting method. Application Accounting Definition (part of R12 SLA) is obsolete in Fusion SLA. Now Subledger Journal Entry Rule Sets (SJERS) directly links Account Rule, Description Rules and Journal Line Rules to the Accounting Method which further is linked to the Ledger.

All setup tasks in Oracle Fusion Applications are performed in the Functional Setup Manager (FSM). Fusion SLA simplifies this flow by providing a single user interface 'Journal Entry Rule Set' (JERS) which replaces both 'Application Accounting Definition' and 'Journal Line Definition' screens in R12. Journal Entry Rule Set (JERS) helps to define and generate a complete journal entry for a specific accounting event containing following rules-

1. Journal Line Rule to define debits and credits.
2. Account Combination Rule to define account combinations, segments and mapping sets.
3. Description Rule to enter description.

See below diagram-

What is Fusion Accounting Hub (FAH)?

Oracle Fusion Accounting Hub (FAH) is a single source for managing all financial requirement as well as Reporting requirements against transaction and provides complete set of accounting tools and access to financial data. FAH receives data from multiple third party transactional system and applies rules to meet accounting requirements. Oracle Fusion Accounting Hub is integrated with Oracle Hyperion Financial Management (HFM) as the latter is a powerful consolidation solution to collect other non-financial information. Oracle acquired Hyperion and started using benefits of Hyperion for consolidation, allocation and reporting in Fusion. Hyperion has been leader in financial domain for years together.

Fusion Accounting Hub (FAH) acts as integration platform for centralized accounting and its ability to generate multiple accounting representations (e.g., IFRS, local GAAP, industry, regulatory) for a single subledger transaction. FAH is a Next-Generation Financial Analysis for Centralized Reporting. Configurable accounting rules helps to capture transaction information used to create accounting. This feature of Fusion is highly configurable to satisfy capturing of transactions and to create different representation requirement for a company.

Fusion Accounting Hub (FAH) consists of Fusion Subledger Accounting (SLA) and Fusion General Ledger (GL). SLA provides a centralized, user-definable, rule-based accounting engine that creates accurate actual accounting representations for any Subledger, which is then transferred to Fusion GL. Within Fusion GL the data will reside in a GL Balances table and the Essbase Cube (Stores balances from multiple source for easy financial reporting and real time analysis).

The Oracle Fusion Accounting Hub process uses financial data from any or all of the following:

• Non-Oracle external applications including transaction and reference information
• Oracle Fusion subledgers including subledger journals
• Oracle E-Business Suite, Oracle PeopleSoft, and Oracle JD Edwards General Ledgers including account balances

The Accounting Hub process ends with complete reporting and analysis solutions.

Fusion Subledger Accounting Processes :

Let us have a look on Processes/Report changes in Fusion SLA vs EBS R12

R12 process/Report	Fusion SLA  process/Report	Description
Validate Application Accounting Definitions	Activate Subledger Journal Entry Rule Set Assignments	This validates and activates accounting setups for a subledger application and accounting method.
Create and Assign Sources	Create and Assign subledger Sources	Creates and assigns sources for a subledger application and event class based on the transaction and reference objects defined for the event class of the subledger application. This will check for any existing application where the transaction or reference objects were changed.
Update Subledger Accounting Options	Update Subledger Application Options	Updates the ledger level subledger accounting options when a new subledger is defined. This process runs automatically when a new ledger is created. It updates and synchronizes the subledger accounting options for application. This process needs to be run manually when a new application is defined in SLA and if that application is going to be used with existing ledgers
Corresponding R12 EBS process -None	Provide Online Transaction Engine Functionality	Online Accounting Engine job
Create Accounting	Create Accounting	Creates subledger journal entries producing an Output and Log
Subledger Multiperiod Accounting and Accrual Reversal Report	Create Accrual Reversal Accounting	Reverses accrual entries booked in prior periods
SLA Secondary/ALC Ledger Historic Upgrade	Create Journal Entries for New Reporting Currency or Secondary Ledger	Creates historic journal entries for a new reporting currency or secondary ledger that is activated after subledger entries have been posted on a primary ledger
Subledger Accounting Balances Update	Update Subledger Accounting Balances	Updates subledger supporting reference balances and third party balances
Purge Transaction Objects Diagnostics	Purge Accounting Event Diagnostic Data	Purges the accounting event diagnostics data collected by the Create Accounting program for accounted transactions
Transaction Objects Diagnostics	Accounting Event Diagnostic Report	To shows the transaction data used in accounting after setting the profile option SLA: Enable Diagnostics and the Create Accounting program is run

Obsolete EBS R12 Reports and Process not available in Fusion

Import Application Accounting Definitions

This is no longer used in Fusion and this process is replaced by Fusion Setup Migration, which can be used to export/import customer setups between environments.