Oracle SLA setup

Blog on Oracle Apps SLA.

Thursday, 16 January 2014

Oracle Apps R12 SLA setup with example

SLA Setup in R12 with a simple example for Payables

Subledger Accounting: 
SLA is a new concept in R12, where all the accounting information and rules are defined. Accounting
entries generated in Subledgers are first transferred to SLA and then interfaced to GL. Hence
reconciliation is already done in SLA before transferring to GL.

One big advantage in SLA is to configure rules to derive different accounting entries. Each and every
segment for different accounting events could be configured to suit different business requirements which
was not possible in 11i. 

Liability account in payables would be defaulted from supplier site on to the invoices in 11i. If individual
segments need to be different for different business, then custom programs were required. In SLA, we
can set different rules to derive different segments for the liability account.
We shall see how we can derive the liability account based on one business requirement(to derive cost
center based on invoice currency). We will be using the below functionalities to achieve the purpose.

Journal Line Type

Mapping Sets
Account Derivation Rules
Journal Lines Definition
Application Accounting Definition
Subledger Accounting Method

Then assigning the Subledger Accounting Method to the Ledger.

In our example we shall make use of the copy functionality provided by Oracle where ever available to
derive our own custom types.

For complete definition of SLA and its components please refer to Oracle SLA Implementation guide.
The chart of accounts considered in the below example has 5 segments. Company, Cost Center,
Account, Analysis, Others. Also automatic offset is enabled and set as 'Balancing' for the Operating Unit
considered

Journal Line Type:

Subledger Accounting Setup --> Accounting Methods Builder --> Journal Entry Setup --> Journal Line
Types
Journal types are defined for a particular event class(like invoices, credit memos..) and assigned to
journal line definition along with mapping sets, account derivation rules.
We shall use the Oracle seeded Journal Line Type ‘Liability with Automatic Offsets Balancing Segment’ to
make our custom line type.
Open the Journal Line Types window and query for ‘Liability with Automatic Offsets Balancing Segment’. 
Click on copy, give our custom name.
‘XX Liab with Automatic Offsets Balancing Segment’ 
Click on Conditions, it would be same as the seeded Oracle Journal Line Type 
The conditions are specified to create a Journal Entry based on this Journal Line Type when certain
conditions are met.
The conditions in the above screenshot mentions the Journal Line Type to be created when Automatic
Offset is set to ‘Balancing’ and for different invoice types.

Our requirement is to derive the cost center based on the invoice currency code. We shall see how we
can achieve this using Mapping Sets and Account Derivation Rules. 

Mapping Sets:
Subledger Accounting Setup --> Accounting Methods Builder --> Journal Entry Setup --> Mapping Sets
Mapping sets are used to get an output value for a particular segment or entire accounting flexfield based
on input value. 
Open mapping sets, click on New. Create new mapping set ‘XX Liability CC Map’. 
In the input region, we have specified AP_SRS_CURRENCY valueset which will restrict the input value to
valid currencies. In the output section we have selected the Chart of accounts and selected the segment
as ‘Cost Center’.
In the mapping set values we have selected input value as ‘EUR’ and the output cost center. 

Account Derivation Rules:

Subledger Accounting Setup --> Accounting Methods Builder --> Journal Entry Setup --> Account
Derivation Rules
Account derivation rules are used along with Mapping sets to derive the accounting flexfield or individual
segments.
Open ‘Account Derivation Rules’, click on ‘New’. Create Account derivation rule ‘XX LIABILITY CC ADR’ 
Select the Output Type as Segment and select ‘Cost Center’ segment. In priorities region, give the value
type as ‘Mapping Set’ and value as ‘XX Liability CC Map’ which was created earlier. Select the input
source as ‘Invoice Currency Code’

Journal Line Definition:

Subledger Accounting Setup --> Accounting Methods Builder --> Methods and Definition --> Journal Lines
Definition
Journal line definition is used to assign journal line types for an event class or event type. This is where
the Account Derivation rule is assigned to a journal line type.
Instead of creating an entirely new Journal Line Definitions, we shall make use of the copy definition
functionality provided by Oracle. 
Open the ‘Journal Lines Definition’. Query for event class ‘Invoices’, event type ‘All’ and definition code
‘ACCRUAL_INVOICES_ALL’.
Click on ‘Copy Definition’, give the definition code as ‘XX_ACCRUAL_INVOICES_ALL’, name as ‘XX
Accrual Invoices All’. Select transaction and accounting chart of accounts as ‘Accounting Flexfield‘. Click
on Done

In the ‘Line Assignments’ region disable ‘Liability with Automatic Offsets Balancing Segment‘ line type.
Add the Journal Line Type Created – ‘XX Liab with Automatic Offsets Balancing Segment’.
In the Account Derivation Rules tab, select ‘All Segments’ and assign the standard Account Derivation
Rule ‘Liability’. Select ‘Company’ segment and choose ‘Inherit’. Assign the Account Derivation rule
created ‘XX Liability CC ADR’ to the segment ‘Cost Center’. 
Application Accounting Definitions:
Subledger Accounting Setup --> Accounting Methods Builder --> Methods and Definition --> Application
Accounting Definitions
Application accounting definition is used for assigning Journal Line Definitions to event classes and types.
We shall use copy functionality provided by Oracle to copy the Application Accounting Definition and
make modifications.
Open ‘Application Accounting Definition’ and query for definition code ‘ACCRUAL’. 
Click on Copy. Give the definition code ‘XX ACCRUAL’ and definition name as ‘XX Accrual Basis’. Select
the transaction and accounting chart of accounts as ‘Accounting Flexfield’. Click on done. For the event
class ‘Invoices’, delete the default journal line definition assigned and assign the Line Definition created
earlier ‘XX Accrual Invoices All’. 
Click on validate and make sure it is validated. 

Subledger Accounting Method:

Subledger Accounting Setup --> Accounting Methods Builder --> Methods and Definition --> Subledger
Accounting Methods
Application Accounting Definitions defined are assigned to different applications in Subledger Accounting
Method. Subledger Accounting Method is then assigned to the ledger.
Open the Subledger Accounting Method. Click on New. Give the method code as
‘XX_STANDARD_ACCRUAL’ and method name as XX Standard Accrual. Select the transaction and
accounting chart of accounts as ‘Accounting Flexfield’. In the Application Accounting Definition
Assignment region assign ‘XX Accrual Basis’ for Payables.
The Subledger accounting method is attached to the ledger.

Create an invoice with currency code as ‘EUR’, validate and account the invoice. Check for the
accounting entries created. The liability account would be having the cost center segment as
‘000000000EUR’.

For Supporting References please refer the below link.

Oracle R12 SLA Supporting References

For SLA accounting tables refer below link

Oracle SLA accounting tables

For Intercompany Setup refer the below link.

Oracle Apps R12 Intercompany Setup 

I request you to provide your valuable comments.

Posted by udaya sankar at 05:42 

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Labels: Account Derivation Rule, ADR, Application Accounting Definition, Journal Line Definition, Journal Line
Type,Journals, Mapping Set, Oracle Apps, SLA, SLA example, Subledger Accounting Definition

16 comments:
1.

cecil Murugesan16 January 2014 at 04:18

 Hi Uday,

The post on R12 SLA setup is good. Explanation of the concept is good.
This helps me to understand, how to configure rules to derive different accounting entries. 

It would be more helpful, if you give the navigation for the above setup pages.
Expecting more posts on R12 AP concepts.

Best Wishes,
Cecil Murugesan.
Reply
Replies

1.
udaya sankar20 January 2014 at 03:46
Hi Cecil,
Thanks for your comment. I have added the navigation details.

Thanks
Udaya Sankar
Reply

2.

sanat kumar meher17 May 2014 at 17:31

This comment has been removed by the author.

Reply
3.

Anonymous27 May 2014 at 08:03

Plz give the navigation details in brief....

Reply
Replies

1.
udaya sankar29 May 2014 at 04:09
Hi,
Navigation details are already provided. If you require navigation for a specific
setup, pls let me know.

Regards
Udaya Sankar
Reply
4.

Anonymous11 December 2014 at 06:42

Can we have similar post on SLA Setup in R12 with a simple example for Receivable as well.
Reply
5.

udaya sankar13 December 2014 at 19:54

Yes, will start preparing for receivables as well.
Reply
6.

Anonymous19 December 2014 at 06:06

Hi Sankar, The article is very good. Wondering, what would be the liability account, if the invoice
is created in another currency as it seems, the exception is not handled anywhere. Thanks.
Jagath
Reply
7.

Anonymous31 December 2014 at 08:38

Hi Uday - This is very helpful. Can you give me a jump start on my requirement? We have an ap
internal bank account for one set of books that we want the cash clearing gl for CHECK ap to be
different from EFT ap.
Reply

8.

Kailash Gadasu19 January 2015 at 03:22

how to use the SLA

Reply

9.

srinivas peddi15 February 2015 at 12:37

Thanks for the details.Your explanation is very good.

Reply
10.

Anonymous10 March 2015 at 03:48

Navigation for last step: Subledger accounting method is attached to the ledger

General Ledger Responsibility > Setup > Financials > Accounting Setup Manager > Accounting
Setups
Reply

11.

Luis Saldaña30 December 2015 at 15:06

Hi,

Very ilustrative. But I have another requirement I have not been able to resolve. It is in the
 COGS Recognition process.
I need to have different Accounts for the COGS entries for every Material Cost Sub-element for
the item sold.
That is: If one item have just one Material Cost Subelement, it will have just one DR entry. But if
the item has 'n' material cost subelements, I need 'n' DR entries each one with a different
account depending on the Material Subelement.
Is there any way to achive this?
Any help is welcome.
Regards.
Reply

12.

Luis Saldaña30 December 2015 at 15:07

Hi,

Very ilustrative. But I have another requirement I have not been able to resolve. It is in the
COGS Recognition process.
I need to have different Accounts for the COGS entries for every Material Cost Sub-element for
the item sold.
That is: If one item have just one Material Cost Subelement, it will have just one DR entry. But if
the item has 'n' material cost subelements, I need 'n' DR entries each one with a different
account depending on the Material Subelement.
Is there any way to achive this?
Any help is welcome.
Regards.
Reply

13.

Rajkumar Reddy14 February 2016 at 02:27

Hello,

Very good article to understand the mapping sets. Do you have any experience regarding the
range of mapping sets.
Eg: Default AP Liability account is 800000, ie
100.000.80000.00000(Comp.CC.Account.Location) - GBP120 . My business having requirement
location code should be derive based on expense account. like expense account is
100.000.45687.MC030 - GBP 100 and tax line 100.000.81306.00000 - GBP 20(Debit lines).
After SLA Credit lines should be it should be derive 100.000.45687.MC279 - GBP 100 and
100.000.81306.MC049 - GBP 20. 

Here business given range based on expense accounts.

If Account range is 10000 - 499999 then liability combination 100.000.80000.MC279 and tax line
range is 81000 - 81999 then 100.000.81306.MC049.

Do you have solution for this requirement. 

Regards,
RK Reddy
Reply

14.

Venkat K Oracle Apps Consultant7 May 2016 at 11:13

 Very helpful
Reply

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