The following is intended to outline our general product direction.

It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracles products remains at the sole discretion of Oracle.

E-Business Suite R12 Cost Accounting Integrated with SLA

Diane Streubel Schreiber Foods Cost Manager Douglas Volz OAUG Discrete Cost SIG Sub-Committee Herve Yu Oracle Costing Development

Costing Accounting Integrated with SLA

Agenda Oracle Process Costing MAC transitioning to SLA Oracle Discrete Costing SLA enhancements

Case example: Discrete Costing-Product Line Accounting

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Schreiber Foods
Diane Streubel Manager - Cost & System Development

Oracle Process Costing MAC transitioning to SLA

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
Converged inventory model Inventory Organizations that are Process will use Process Costing Process users are denied access to Discrete Costing forms
Process Enabled organizations can not setup costs in the Discrete Costing application

Sub Ledger Architecture (SLA) replaces MAC

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
11i OPM
GMI
(OPM Inventory)

Purchasing

Order Management

GMD, GME

Cost Setup

Calculate Cost

Store Costs

MAC

Oracle GL

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
R12 OPM
Oracle Inventory

Purchasing

Order Management

GMD, GME

Cost Setup

Calculate Cost

Store Costs

SLA

Oracle GL

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
Subledger accounting is an intermediate step between subledger products and the Oracle General Ledger Each transaction that requires accounting is represented by a complete and balanced subledger journal entry, stored in a common data model.

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
11i OPM
General Ledger

Subledger

GL Export

I n t e r f a c e

Journal Import

Journal Posting

For G/L integration, discrete costing works the same as OPM costing

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
R12 OPM
OPM

Payables

Oracle Subledger Accounting Receivables

Oracle General Ledger

Projects

For G/L integration, discrete costing works the same as OPM costing

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
OPM MAC
Completed material and/or resource transactions.

SLA
Completed material and/or resource transactions.

OPM Costing Engine generates costs.

OPM Costing Engine generates costs.

Cost Pre-processor will create accounting Events OPM Subledger process processes these transactions to create Journal entries SLA accounting program processes the events to create the journal entries

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA Setup Forms
OPM MAC
Fiscal Policy Event Fiscal Policy Source Event Sub-Event Account Titles Accounting Template Account Mapping Attributes Priorities and Account Mapping Test Mapping OPM Currency, OPM Ledger, OPM Exchange Rates Process Category Event Entity Event Class Journal Line Types (JLT) Application Accounting Definitions (AAD) (SLA) Sources Account Derivation Rules (ADR) Users can define their own AADs or modify seeded information SLA sources are used in ADRs More flexible. Mapping can be done at Accounting flexfield level as well as segment level

SLA

COMMENTS
Retained with few modifications Retained with few modifications

Test Accounting Builder (TAB) Use GL setups

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA - Reports
OPM MAC
Test and Actual Subledger Accounting
Subledger Program

SLA
Draft and Final Accounting

COMMENTS

Accounting Pre-Processor

Run Subledger for multiple valuation/cost methods for a ledger

Supports multiple valuation methods

In OPM there can only be one representation at a time. SLA supports multiple representations at the same time Flexible. User can have any number of categories. Assigned to one or more event classes Is retained and has been modified to use SLA repository

Run Subledger process for a functional area

Run Pre-Processor by Process Category

Detailed Subledger Report

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA
Most of the steps are automated using migration scripts All the Account Definitions would be migrated as ADRs Manual Steps to be completed are:
Assign Account Derivation Rules to Journal Line Definitions Validate Application Accounting Definition Assign User Subledger Accounting Method to Ledger

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA - Process
Update the Account Derivation Rule conditions. Ex: Add Item/Item Class/Organizations

Validate the Application Accounting Definition

Run OPM Accounting Pre-Processor Run OPM Accounting Pre-Processor

Run Create Accounting in Draft mode

Check Create Accounting report and Journal Entries report

Run Create Accounting in Final mode to create GL accounting entries

Costing Accounting Integrated with SLA

OPM MAC transitioning to SLA - Summary
NO LOSS of functionality by moving to SLA model A new sub-menu created under Cost Management for SLA forms. Fiscal Policy and Event Fiscal Policy screens retained with minor modifications. Most of the fields will be read-only. OPM Event model mapped to SLA event model.

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OAUG Discrete Cost SIG Sub-Committee

Douglas Volz Douglas Volz Consulting, Inc.

Oracle Discrete Costing SLA Enhancements

Costing Accounting Integrated with SLA

Increased Flexibility: Oracle Discrete Costing SLA
Release 11i account recognition pain points eliminated by SLA: SLA removes limitations for recording COGS and Revenue (still uses Cost Account Generator/workflow and A/R AutoAccounting) Recording inventory and WIP accounts with more flexibility Flexible variance account recognition for:
Invoice price variance Purchase price variance Average cost adjustment Standard cost adjustment Manufacturing variances Account aliases Freight charges And most other inventory, manufacturing and related account entries

Sub Ledger Accounting(SLA)

Key Concepts
Event Model: definition of the subledger transaction types and lifecycle Entity : Classification of source of transaction Event Class: Classifies transaction types for accounting rule purposes Event Type: for each transaction type, defines possible actions with accounting significance
ENTITY Material Transaction, Receiving or WIP or Write Off Logical grouping of events which have similar kind of accounting The most granular level of business event which has accounting impact

EVENT CLASS EVENT TYPE

Sub Ledger Accounting(SLA)

Setup and Process
JOURNAL ENTRY SETUPS Define/copy and modify journal line types PROCESS

Enter Transaction(s)

Cost Manager Define/copy and modify account derivation rules Create Accounting* Define/copy and modify descriptions Transfer Journal Entries to GL

*Run Create Accounting Cost Management concurrent request for accounting all transactions from the Cost Management SLA responsibility. Receiving Accounting can be generated in the Purchasing responsibilities using the Create Accounting Receiving concurrent request. These requests have an option to transfer the entries created to General Ledger. A separate process is also available.

Sub Ledger Accounting(SLA)

Setup and Process

Accounting Configurations Transactions Subledger Journal Entries GL Journal Entries and Balances Subledger Balances Journal Entry Setup

Accounting Program Accounting Events

Cost Management

SLA

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Oracle Corporation - Discrete Costing Development

Herve Yu Senior Principal Engineer

Case Example: Discrete CostingProduct Line Accounting

Costing Accounting Integrated with SLA

Case Example: Purchase Price Variance product Line
Example: Record Purchase Price Variance by Product Line We have two brands of cell phones, Samsung and Nokia We want to track variances by cell phone brands We are going to use 2 different ways to address this same requirement
Cost/SLA mapping set capability Category Accounting Cost/Global Accounting migrated to SLA in R12.1

A word for Inventory period close and Cost/SLA upgrade

Cost/SLA mapping set capability

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Product Line Setup Steps Set up your product line using SLA mapping set
1. Enter your SLA account derivation rule for Purchase Price Variance accounts

2. Associate the new account derivation rule to your Journal Line Type
3. Associate the Application Accounting Definition with Subledger Accounting Method

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Product Line Accounting Descriptive flexfield

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Product Line Accounting Descriptive flexfield

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Mapping set Account Derivation Rule

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Mapping set Account Derivation Rule

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
SLA Journal Line / Derivation Rule

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Associate Journal Lines Definition to the Event Class

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Note the same ADR is usable for Standard Cost Update

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Note the same ADR is usable for Standard Cost Update

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Associate SLA Definition to the SLA Method/Ledger

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
Assign product line code to the inventory item

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
The material subledger from 11i still exists

Inventory Inventory Receiving

Matl Overhead Absorption

PPV

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
SLA Entries That Go to Your G/L

Costing Accounting Integrated with SLA

Cost/SLA mapping set capability:PPV by product Line
For the Standard Cost Update That Go to Your G/L

Category Accounting Cost/Global Accounting migrated to SLA in R12.1

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Create a new structure under the key flexfield Item Category

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Create a new structure under the key flexfield Item Category Create category codes

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Create a new structure under the key flexfield Item Category Create category codes Create category set

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Create a new structure under the key flexfield Item Category Create category codes Create category set Assign Product Line Accounting functional area category set

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Product Line category account

Costing Accounting Integrated with SLA

Product Line Category Accounting:Global Accounting
Account Derivation Rule would have used a source directly

Costing Accounting Integrated with SLA

Case Example - Conclusion
Summary Notes
Product line accounting can be achieved in many ways without using Costing Hook. In R12 SLA is the Oracle R12 accounting platform and Costing supplies application sources from INV,WIP,RCV to build the accounting journals.

One caveat: Pre-Release 12 subledger accounting reports are reading data from Costing distribution layer (such as the Material Account Distribution Summary or Detail Reports). Those reports will not show SLA journals. SLA provides a set of new accounting reports (such as Journal Entries Report, Accounting Analysis Report) which can be modified as desire using BI Publisher.

Costing Accounting Integrated with SLA

Inventory Period Close and Upgrade
Inventory Period Close Process
Inventory interim G/L transfer has been replaced by SLA The Inventory Accounting Period close works just like it did before, however, SLA now sends accounting information to the general ledger

Upgrade Process
Customers have option of migrating the whole historical data to SLA or choose which periods data to be migrated. Customers get option to either upgrade in downtime when upgrading or anytime after the upgrade process. Default for Cost management is to migrate the present calendar year data to SLA.

Costing Accounting Integrated with SLA

Additional information are available:
R12 Oracle Subledger Accounting Implementation Guide
R12 Oracle Cost Management User Guide
R12 Oracle Process Manufacturing Cost Management - User Guide

THANK YOU