The following is intended to outline our general

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purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
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relied upon in making purchasing decisions.
The development, release, and timing of any
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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

<Insert Picture Here>

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 Order
Purchasing GMD, GME
(OPM Inventory) Management

Cost Setup Calculate Cost Store Costs MAC Oracle GL

 Costing Accounting Integrated with SLA
OPM MAC transitioning to SLA

R12 OPM

Oracle Order
Purchasing GMD, GME
Inventory Management

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
I
n
t
e
Subledger GL Export r Journal Import Journal Posting
f
a
c
e

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 Oracle General
Ledger

Receivables

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 SLA
Completed material Completed material
and/or resource and/or resource
transactions. transactions.

OPM Costing Engine OPM Costing Engine

generates costs. generates costs.

Cost Pre-processor
will create
accounting Events

OPM Subledger SLA accounting

process processes program processes
these transactions to the events to create
create Journal entries the journal entries
 Costing Accounting Integrated with SLA
OPM MAC transitioning to SLA – Setup Forms
OPM MAC SLA COMMENTS
Fiscal Policy Retained with few modifications
Event Fiscal Policy Retained with few modifications
Source Process Category
Event Event Entity
Sub-Event Event Class
Account Titles Journal Line Types (JLT)
Accounting Template Application Accounting Users can define their own AADs or
Definitions (AAD) modify seeded information
Account Mapping Attributes (SLA) Sources SLA sources are used in ADRs
Priorities and Account Account Derivation Rules (ADR) More flexible. Mapping can be done
Mapping at Accounting flexfield level as well
as segment level
Test Mapping Test Accounting Builder (TAB)
OPM Currency, OPM Use GL setups
Ledger, OPM Exchange
Rates
 Costing Accounting Integrated with SLA
OPM MAC transitioning to SLA - Reports
OPM MAC SLA COMMENTS

Test and Actual Subledger Draft and Final Accounting

Accounting

Subledger Program Accounting Pre-Processor

Run Subledger for multiple
valuation/cost methods for a
ledger
Run Subledger process for a
functional area
Detailed Subledger Report
Supports multiple valuation
methods
Run Pre-Processor by Process
Category
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
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.
<Insert Picture Here>

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

EVENT Logical grouping of events which

CLASS have similar kind of accounting

The most granular level of

EVENT business event which has
TYPE accounting impact
 Sub Ledger Accounting(SLA)
Setup and Process
PROCESS
JOURNAL ENTRY SETUPS

Enter Transaction(s)
Define/copy and modify
journal line types

Cost Manager
Define/copy and modify
account derivation rules

Create Accounting* Transfer Journal Entries to GL

Define/copy and modify

descriptions *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
Subledger
Transactions Journal Entries

GL
Accounting Journal Entries
Program and Balances

Accounting Events Subledger

Balances
Journal Entry Setup

Cost Management SLA

<Insert Picture Here>
Oracle Corporation - Discrete Costing
Development
Herve Yu
Senior Principal Engineer

Case Example: Discrete Costing-

Product 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
• Product Line mapping
Setup Stepsset capability:PPV by product Line

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
• Product mapping–set
Line Accounting capability:PPV
Descriptive flexfield by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• Product mapping–set
Line Accounting capability:PPV
Descriptive flexfield by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• Mapping set –mapping set capability:PPV
Account Derivation Rule by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• Mapping set –mapping set capability:PPV
Account Derivation Rule by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• SLA mapping
Journal Line setRule
/ Derivation capability:PPV by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• Associate mapping
Journal set capability:PPV
Lines Definition to the Event Class by product Line
 Costing Accounting Integrated with SLA

Cost/SLA
• Note the samemapping set for
ADR is usable capability:PPV by product Line
Standard Cost Update
 Costing Accounting Integrated with SLA
Cost/SLA
• Note mapping set capability:PPV by product Line
the same ADR is usable for Standard Cost Update
 Costing Accounting Integrated with SLA
Cost/SLA
• Associate mapping set capability:PPV by product Line
SLA Definition to the SLA Method/Ledger
 Costing Accounting Integrated with SLA
Cost/SLA
• Assign mapping set capability:PPV by product Line
product line code to the inventory item
 Costing Accounting Integrated with SLA

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

Inventory

Inventory

Receiving

Matl PPV
Overhead
Absorption
 Costing Accounting Integrated with SLA
Cost/SLA
• SLA mapping
Entries That Go to Yourset
G/Lcapability:PPV by product Line
 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