The Subledger Accounting (SLA) was introduced in R12, this module sits between the Subledger and General Ledger Interface table, and provides the functionality of tweaking the standard accounting rules to produce the desired accounting data as per the business requirement.
Overview: In this blog, I will take you through one of the most important features of Oracle R12 - Subledger Accounting. The Subledger Accounting (SLA) has now become the most robust feature in R12. It provides the power to modify the accounting as per the business needs. This blog outlines the difference between the R12 Subledger Accounting and its earlier versions, along with some key features and components.
Prior to R12, the data was transferred from Subledger to the General Ledger Interface table and then imported into the General Ledger base tables. There was no scope of modification of accounting data at the subledger level. SLA was introduced in R12, this module sits between the Subledger and General Ledger Interface table, and provides the functionality of tweaking the standard accounting rules to produce the desired accounting data as per the business requirement.
As stated above the SLA provides the power to modify the accounting as needed; hence once the seeded rules are modified and validated there will be no need to further revise the data repeatedly in the tables. Every time create accounting is run from the Subledger it will produce the desired accounting results. In addition, you can define different rules for all the Subledgers.
The images below highlights the difference between 11i and R12 architecture:
- SLA forms and programs are embedded within the standard Oracle application responsibility. Separate responsibilities no longer required.
- Standard rules can be copied and modified.
- Generation and storage of detailed accounting entries.
- SLA maintains complete link between transactions and accounting entries and which makes auditing very easy.
- Drilldown from GL journal lines to the sub-ledger transactions and vice versa.
Understanding the components in SLA:
Event Class: Event Class classifies transaction types. An ‘Invoice’ and ‘Payment’ are examples of event classes in Payables Subledger.
Event Types: Event Types define possible actions on each event class with potential accounting significance. Validation/Cancellation are examples of an event type.
Journal Line Type (JLT): JLT’s are defined for a particular Event Class, and they must be assigned to a Journal Line definition. Basically it carries the Debit/Credit aspect of accounting.
Account Derivation Rules (ADR): ADR contains the rules to derive the GL code combination for a particular JLT. You can assign the seeded sources, custom sources or constant values.
Journal Line Definitions (JLD): JLD groups the Event Class, Event Type, JLT’s and ADR’s.
Application Accounting Definitions (AAD): AAD also groups the Event Class, Event Type, JLT’s and ADR’s. This is a repetitive step in R12. This is removed in the Oracle Fusion.
Subledger Accounting Method (SLAM): SLAM contains the AAD created above to form a method which is assigned to a Ledger.
Conclusion: With the introduction of SLA, the burden of manual interference have been zeroed. SLA has provided a mechanism to produce desired accounting results with minimal setup. In my next blog I will take you through the SLA setup. Meanwhile, if you have any questions on this one then click below. You can also leave a comment on the field below: