Oracle Fusion Financials Overview

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Copyright © 2011, Oracle and/or its affiliates. All rights reserved. Oracle Proprietary and Confidential.

Purpose:

This document provides an overview of features and enhancements included in Oracle Fusion Applications 11gR1 Release 11.1.1.5.0
and applicable updates. It is intended solely to help you assess the business benefits of upgrading your existing Oracle Products to
this release, or implementing completely new Oracle developed products, and planning your I.T. Projects.

Disclaimer:

This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your
access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service
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herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without Oracle’s prior written consent. This
document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its
subsidiaries or affiliates.
This document is intended to outline our general product direction. It is intended for informational purposes only and solely to assist you
in planning for the implementation and upgrade of the product features described. Release information contained in this document
is not a firm development plan. Release information published here should not be used as the basis for customer delivery
commitments, as part of marketing efforts, or during contract negotiations. This 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
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time and is always at Oracle’s sole discretion. This document is not considered part of the applicable program documentation.
Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without
risking significant destabilization of the code.

2


Agenda
1. Overview
2. Key Features
•

Financial Reporting Structures
• Charts of accounts
• Calendars
• Currencies

1. Additional Resources

4


Overview
Financial Enterprise Structures

• Financial enterprise structures are the entities that define
the reporting, legal and business aspects of your
enterprise

* Covered in a separate implementation training: Oracle Fusion Financials Enterprise Structures Implementation and
Configuration Considerations – Part 2

5


Overview
Key Features

• Financial reporting structures
• Charts of accounts
•
•
•
•
•

Value Sets
Chart of accounts structures
Chart of accounts structure instances
Account hierarchies
Cross validation rules

• Calendars
• Accounting calendars
• Transaction calendars
• Currencies
• Currencies
• Conversion rate types and daily rates

6


Financial reporting structures

Charts of accounts

7


Feature Summary (1/2)
Financial reporting structures – Charts of accounts

Create your charts of accounts to organize and track your
Create your charts of accounts to organize and track your
financial transactions and reporting
financial transactions and reporting

• Define your chart of accounts structure, segments,
segment labels and value sets
• Reuse the same chart of accounts structure to create
different chart of accounts structure instances that fit
your enterprise needs
• Create and publish date-effective hierarchies to reflect
parent/child relationships between your segment values

8


Feature Summary (2/2)

• Define segment value security rules against your value
sets to control access to parent and detail values across
any chart of accounts segment
• Define cross-validation rules to prevent creating
account combinations when certain values across
segments are combined

9


Key Decisions (1/2)

10


Key Decisions (2/2)

11


Implementation Concepts (1/9)

Chart of accounts structure

12

Chart of accounts structure instance



• Chart of accounts structure
• Building block of your chart of accounts implementation, geared
towards flexibility and minimizing setup efforts
• Defines the number of segments, segment sequence, labels and
default value set for each segment

• Chart of accounts structure instance
• Also referred to as chart of accounts
• Multiple charts of accounts can share the same structure, but
each may be customized differently to fit your transactional and
reporting requirements:
• Value set
• Account hierarchy
• Dynamic combination creation

13



• Example: Chart of accounts structures and instances
1

Primary
Primary
balancing
balancing
segment
segment

2

Second
Second
balancing
balancing
segment
segment

Dynamic account
Dynamic account
creation disabled
creation disabled

14


3

Dynamic account
Dynamic account
creation enabled
creation enabled

Natural
Natural
account
account
segment
segment


• Segment labels (qualifiers)
• Segment labels assign special functionality to certain segments
in your chart of accounts structure
• You may use up to 3 balancing segments to allow for more
granular transaction tracking and financial reporting
Segment label
Primary balancing segment

Required – ensures that all journals are balanced for each primary
balancing segment value

Natural account segment

Required – mapped to an account type, a financial category and other key
transactional attributes

Second balancing segment

Optional

Third balancing segment

Optional

Intercompany segment

Optional – used in intercompany balancing. If this is a new chart of
accounts implementation, you should enable the intercompany segment.

Cost center segment

Only required if accounting for certain transactions in Fusion Financials. It
is recommended that you enable the cost center segment for your chart of
accounts.

Management segment

15

Usage

Do not use – planned for a future release



• Account hierarchies
• Create account hierarchies (trees) to identify managerial, legal or
geographical relationships between your value set values
• Define date-effective tree versions to reflect organizational
changes within each hierarchy over time
• Publish multiple hierarchies to balances cubes to allow for
financial reporting and analysis of past, present or future data
1

2

16



• Segment value security
• Define security rules against your value sets to control access to
parent or detail segment values
• Securing a value set denies access to all values by default.
Create conditions and assign them to specific data roles to
control access to your segment values
•In this example, you enable
security on both the Cost
Center and Account value
sets that are associated with
your chart of accounts.
•Users assigned the
“General Accountant –
InFusion USA” data role will
have access to cost center
‘Accounting’ and account
‘US Revenue’.
•All other users will be
denied access to all cost
center and account value set
values.

17



• Segment value security (cont’d)
• You may use any of the following operators in your conditions to
secure your segment values:
Operator
Equal to

Secures a specific detail value. You cannot use this operator to secure a parent
value.

Not equal to

Secures all detail values except one that you specify. You cannot use this
operator to secure a parent value.

Between

Secures a range of detail values.

Is descendent of

Secures the parent value itself and all of its descendents, including mid-level
parents and detail values. To use this tree operator, you must specify an account
hierarchy (tree) and a tree version. However, the security rules apply across all
tree versions of the specified hierarchy, as well as all hierarchies associated with
the value set.

Is last descendent of

18

Usage

Secures the last descendents (i.e. the detail values) of a parent value. To use
this tree operator, you must specify an account hierarchy (tree) and a tree
version. However, the security rules apply across all tree versions of the specified
hierarchy, as well as all hierarchies associated with the value set.



• Segment value security (cont’d)
Security rule based on hierarchical operator
Your cost center segment has 2 account hierarchies: a management and a geographical hierarchy. You originally
secure (using the “Is descendent of” operator) the cost center “100” in the 2010 version of your management hierarchy,
but a change in the cost center responsibilities requires you to create a 2011 version to highlight the new parent/child
relationships. For data security purposes, the 2011 version of the management hierarchy is the currently active version.

Management hierarchy
Management hierarchy
2010 version
2010 version

2011 version
2011 version

Geographical hierarchy
Geographical hierarchy
2010 version
2010 version

Legend

Access granted

Access denied

19



• Cross-validation rules
• Determine what segment values may be combined with other
values across different segments of your chart of accounts
• Prevent the creation of new account combinations only, in case
the underlying segment values violate the validation rules
• Defined in terms of a condition filter and a validation filter
• Condition filter - event under which the rule will be evaluated
• Validation filter - condition that the account combination must
satisfy before it can be created
Your enterprise has determined that the “Operations” company value cannot
use the “Marketing” department. Create the following cross-validation rule to
prevent creating new account combinations that violate this requirement:

20


Deltas with EBS

R12 EBS

Added benefits

No chart of
accounts structures

Chart of accounts
structures, chart of
accounts structure
instances

The chart of accounts structure is the building
block of your setup, geared towards flexibility
and minimizing implementation efforts. Create
multiple charts of accounts (structure
instances) that share the same structure, but
customize each differently to fit your enterprise
needs.

One balancing
segment, secondary
tracking segment

Up to 3 balancing
segments

Create your chart of accounts based on up to 3
balancing segments, thus allowing more
granular transaction tracking and financial
reporting.

Segment Qualifier

Segment Label

N/A – nomenclature change.

Compile Accounting
Flexfield

21

Fusion

Deploy Accounting
Flexfield

N/A – nomenclature change.


Best Practices (1/11)

• To streamline your chart of accounts implementation,
follow the steps below:
1. Create your value sets with no values
2. Create your chart of accounts structure and specify your
segment labels
3. Create your chart of accounts (structure instance)
4. Create your value set values and specify mandatory attributes
5. (Optional) Create and publish your account hierarchies
6. (Optional) Define segment value security rules
7. (Optional) Define cross validation rules

22



• General implementation considerations
Implementation question
How do I design the
structure of my chart of
accounts?

•Design the structure of your chart of accounts carefully, including
the number of segments and their sequence.
•Plan ahead and anticipate the growth of your enterprise by defining
one or more “future” segments. Assign those segments a default value
to streamline data entry in your Flexfield components.
•After you complete your accounting configuration and begin your
transaction cycle, making changes to the segments is neither
recommended nor supported.

Can I start using my
chart of accounts
immediately after
creating or updating it?

23

Recommendations and best practices

You must deploy (compile) the Accounting Flexfield every time you
create new or make structural changes to your chart of accounts and
account hierarchies, to ensure that the new changes take effect across
all applicable flows in Fusion Financials. This includes:
•Creating a new chart of accounts structure, or modifying its key
attributes, or the attributes of its segments
•Creating a new chart of accounts (structure instance), or modifying its
key attributes, or the attributes of its segments
•Associating an account hierarchy to a chart of accounts segment
•Enabling or disabling segment value security on a value set



• Value sets
What validation type
should I use?

Only “Independent” and “Table” validations are supported. The
“Dependent” validation type is planned for a future release.

What value data type and
subtype should I use?

Use the “Character” data type and the “Text” subtype, which
are typical in natural account segment values. We recommend
restricting values to uppercase only and numeric values to be
zero-filled by default.

What should be the
maximum length of my
value set?

The maximum length of your value set must be limited to 25
characters due to a constraint in the account combinations
table in Fusion General Ledger. Set the maximum length to
correspond to the width of the chart of accounts segment to
which it is assigned.

Should I start defining
values immediately after
creating my value set?

24


Associate your value set to a chart of accounts before defining
your value set values. This ensures that the key attributes of
your values (e.g. “Allow Posting”, “Account Type”, etc.) can be
specified.



• Chart of accounts structure
When should I create my
chart of accounts
structure?

You must create your chart of accounts structure after
creating your value sets because the structure must be
assigned a default value set.

How should I define my
segment labels?

25


•All segment labels can only be assigned once throughout
the chart of accounts structure.
•The following segment labels are mandatory: “Primary
Balancing Segment” and “Natural Account Segment”. Each
must be assigned to only segment, and the assigned segment
cannot be qualified with any other segment label.
•The Intercompany segment is optional; however, for new
implementations, you should use this segment and assign the
same values to both the primary balancing and intercompany
value sets to enable clear visibility of the due to and due from
relationships inherent in intercompany accounting.
•The second/third balancing segments are optional, and
may be co-assigned with the cost center segment.
•Do not use the management segment label. It is planned
for a future release.



• Chart of accounts structure (cont’d)
How do I choose my
segment display width?

We recommend that you set the display width of each of your
segments to correspond to the maximum length of the value
set to which it is assigned.

Must the segment
sequence be gapless?

26


The chart of accounts structure defines the number of
segments and the segment sequence for your chart of
accounts. You must use sequential numbering (beginning with
number 1) and avoid any gaps in the display order of your
segments.



• Chart of accounts

How do I define my
chart of accounts
structure instances?

The chart of accounts (structure instance) definition is based on
the chart of accounts structure it is associated with. If your
enterprise needs identical structures for different charts of
accounts, consider creating one structure and customize your
charts of accounts accordingly to fit your enterprise needs.

Should I turn on
dynamic combination
creation?

We recommend turning on the setting for dynamic combination
creation until all setup-related activities are finalized. Turn off
dynamic creation to prevent creating new account combinations
throughout the Fusion Financials pages and processes, and
only limit it to the Account Combinations UI.

How do I associate an
account hierarchy to
my segments?

27


For each segment, you may assign an account hierarchy (“Tree
Code” attribute) that will be used for general ledger processing,
as well as allocations and financial reporting.



• Chart of accounts (cont’d)


How do I choose my
segment attributes?

All chart of accounts segment attributes are inherited from the
chart of accounts structure. Additionally, you must ensure that
all segments be required and displayed in your chart of
accounts by turning on the “Required” and “Displayed” attribute.
For segments that you expect to have a large number of
distinct values, you must perform the following steps:
•In the chart of accounts definition, mark the segment “Query
Required” option as “Selectively required”. When performing
search in a transactional page, you will have to specify the
segment as a mandatory search criteria.
•You must create indexes in the GL_CODE_COMBINATIONS table
for segments that are selectively required.

28



• Value set values
Should I start defining
values immediately after
creating my value set?

We recommend defining your value set values after creating
your chart of accounts. This ensures that the key attributes
(e.g. “Allow Posting”, “Account Type”) are displayed and can
be specified.

How should I set the
Summary attribute?

You must set the Summary flag to “No” for a detail value, and
to “Yes” for a parent value. Changing the summary flag
attribute after completing your accounting configuration (ledger
setup) is neither recommended nor supported.

Allow Posting attribute?

You must this attribute to “Yes” for a detail value, and to “No”
for a parent value. An exception to this rule is the natural
account value for the net income account in Fusion General
Ledger, for which you must set this flag to “No”.

Allow Budgeting
attribute?

This flag is not used directly in this release, but we
recommend setting it to “No” for detail values, and to “Yes” for
parent values.

When do I use a
Financial Category?

29


If you plan to use OTBI reporting, you must specify a financial
category for your natural account values.



• Value set values (cont’d)


I completed my
accounting
configuration. Is it OK to
create new or modify
existing value set
values?

If you create new value set values after your accounting
configuration (ledger setup) is complete, you must manually
run the following processes:
•Maintain Value Sets – updates value set values in Fusion
General Ledger tables.
•Publish Chart of Accounts Dimension Members –
publishes chart of accounts dimension member changes to
balances cubes associated with the value set’s chart(s) of
accounts.
If you modify your segment value attributes (e.g. “Start Date”,
“End Date”, “Allow Posting”, “Account Type”, etc.), and want
the associated account combinations to inherit them, you
must manually run the Inherit Segment Value Attributes
process .

30



• Account hierarchies
Implementation
question
How do I create a new
account hierarchy?

•You must implement all your account hierarchies (trees) based on the
seeded “Accounting Flexfield Hierarchy” tree structure.
•When specifying the data source for your hierarchy, you must specify
the same value set code for both parent and detail values.
•You must save your data source parameters before proceeding to the
next screen in your account hierarchy definition.

How do I define tree
versions for my
hierarchy?

•Define date-effective tree versions for your account hierarchies to
reflect organizational changes over time. The effective dates for your tree
versions must not overlap.
•Before using your tree version, you must perform an online audit to
validate your version for any structural or functional errors.
•To activate your tree version and ready it for use, set its status to
“Active”. You can only transact with and report on active versions.

Do I need to publish my
account hierarchies?

31


You must publish your account hierarchies to cubes if you plan to use
them for allocations and financial reporting. Otherwise, they will only be
available for transactional flows. If you have not finalized your accounting
configuration, you can mark your hierarchies for publishing and they will
be picked up when your ledger setup is complete.



• Account hierarchies (cont’d)

How do I ensure that
new hierarchies or
updates to existing
ones go into effect?

When you create new account hierarchies, or make changes to
existing hierarchies, you must manually run the following
processes:
•Column Flattening and Row Flattening – run these online
processes on a specific tree version to flatten the parent/detail
value relationships in your tree version and ready it for your
transactional and reporting flows.
•Maintain Value Sets – updates value set values in Fusion
General Ledger tables.
•Maintain Chart of Accounts Hierarchies – updates chart of
accounts hierarchies in Fusion General Ledger tables.
•Publish Chart of Accounts Dimension Members – publishes
chart of accounts dimension member and hierarchy changes to
balances cubes associated with the value set’s chart(s) of
accounts.

Can I delete an account
hierarchy?

32


You must decommission (“unpublish”) a tree version from your
balances cubes before deleting it (or deleting its associated
hierarchy), otherwise you will no longer be able to remove it from
your cube outlines.


Relevant Setup Tasks

(1) Covered in the Oracle Fusion General Ledger Implementation and Configuration Considerations implementation training
(2) Navigate to this task to run the Inherit Segment Value Attributes process

33



Calendars

34


Feature Summary
Financial reporting structures – Calendars

Create your calendars to record and track your transactions by
Create your calendars to record and track your transactions by
accounting periods and business days
accounting periods and business days

• Create your accounting calendars to record your
transactions into accounting periods and monitor the
close cycle across your entire enterprise
• Create your transaction calendars to track your
business and non-business days for average balance
processing

35



• Accounting Calendars
• Generate your accounting periods automatically by specifying
your calendar attributes from a pool of commonly used
standard/adjusting period frequencies, and other key parameters
Period frequency

Adjusting period frequency

Weekly

None

4/4/5

1 year end

4/5/4

1 year beginning and 1 year end

5/4/4

1 mid year and 1 year end

4 Week

2 year end

Monthly

1 mid year and 2 year end

Quarterly

Quarterly

Yearly

Other

Other

• If your organization uses a custom type of calendar that does not
fit any of the seeded frequencies, then you must use the “Other”
period frequency, and manually define the period start/end dates
36



• Accounting Calendars (cont’d)
• Creating the calendar initially generates 1 year worth of periods
• If needed, customize the generated period names/dates while abiding
by the basic validation rules:
•
•
•
•
•

The period names must be unique
The period numbers must be unique within a year
The standard period dates must not overlap
There must be no gaps between the standard period dates or numbers
An adjusting period date range must overlap with that of a standard period

• Generate additional years using the same parameters that you
initially specified to create your calendar

37



• Transaction Calendars
• Implement transaction calendars only if your enterprise requires
ledgers with average balance processing
• Generate your transaction dates automatically by specifying the
business day schedule.
• Customize the generated dates to account for holidays or nonbusiness days specific to your enterprise

38


Deltas with EBS

R12 EBS

Added benefits

Manual definition
of accounting
periods

Automatic generation
of accounting periods

The implementation of accounting calendars
has been streamlined in Fusion Financials to
allow the system to automatically generate the
accounting periods for commonly used
standard/adjusting period frequencies. This
allows you to save the time and effort of
defining periods manually, and avoid erroneous
data entries. If your enterprise uses a custom
calendar, you must define the period details
manually.

Period type

39

Fusion

Not applicable

The EBS “Period Type” concept is no longer
exposed in the Fusion Financials screens. You
must create a new accounting calendar for
different period types (frequencies), and this
creation process has greatly been improved to
allow the automatic generation of accounting
periods.


Best Practices

• Accounting Calendars
What is the difference
between calendar year
and fiscal year formats?

This impacts what year to append when generating the period
names for your accounting calendar:
•Select the calendar year format to append the year of the period’s
start date to the period name.
•Select the fiscal year format to append the year associated with the
period, regardless of its date range, to the period name.

I plan to run the
translation process in
Fusion General Ledger.
How does this impact
my accounting calendar
implementation?

40


If you plan to run the translation process for any ledger associated
with your accounting calendar, keep in mind the following rule: You
cannot run translation for the first period of an accounting
calendar. In the current release of Fusion General Ledger, we do
not allow to create a calendar year with a fewer number of periods
than what the period frequency dictates. Therefore, we recommend
that you add a full extra year in your accounting calendar before the
first opened period of any ledger using this calendar. For example,
if you plan to start transacting in Jan-11, and intend to run
translation for that same Jan-11 period, start your calendar in Jan10 (2010 year), add the 2011 year to your calendar, and then
assign this calendar to your ledger with Jan-11 as the first opened
period.



41



Currencies

42


Feature Summary
Financial reporting structures – Currencies

Maintain your currencies and define daily rates to record and run
Maintain your currencies and define daily rates to record and run
cross-currency transactions and accounting processes
cross-currency transactions and accounting processes

• Enable predefined currencies or create new currencies
to use across your financial applications
• Maintain your conversion rate types to categorize the
relationships between your currencies and daily rates
• Define daily rates between your currencies to record
transactions or run processes involving multiple
currencies

43



• Currencies
• All ISO currencies are predefined; you must enable the
currencies you need for your financial transactions and
processes
• The “STAT” currency is also predefined and should be used for
statistical data entry
• If needed, you can define new currencies and customize them to
fit your enterprise transactional requirements

44



• Conversion rate types
• Categorize the relationships between your currencies and daily
rates using different conversion rate types
• The rate types below are predefined in Fusion General Ledger,
but you can define new rate types to fit your business needs
Rate Type

Description

Corporate

Generally used for standard market rates throughout your organization

Spot

Generally used to perform conversion based on the rate on a specific date

EMU Fixed

Used to define rates between the EUR currency and the national EMU currencies

User

The daily rates for the User rate type will be provided during data entry

• Enable cross rates if you want the system to automatically derive
the daily rates for each pair of currencies in a set consisting of a
pivot currency and one or more contra currencies
• Select a default conversion rate type to be used to derive the
default daily rate in a foreign currency transaction
45



• Daily Rates
• A daily rate defines the exchange rate relationship between 2
currencies, using a specific conversion rate type and on particular
conversion date

• Daily rates are shared across all ledgers in Fusion General Ledger
• Subledger applications share the same daily rates with the
general ledger, but different rate types provide each subledger the
ability to convert transactions at different rates
46


Best Practices

• Daily rates
How do I create daily
rates?

47

•Use the ADFdi spreadsheet to create, update or delete
daily rates. You may also use the user interface to update or
delete existing daily rates.
•Alternatively, your enterprise may decide to use its own
processing mechanism to upload rates directly to the daily
rates interface table. Run the “Import and Calculate Daily
Rates” process to import your rates into the daily rates table
and ready them for use.



48


Additional Resources
• Oracle Fusion Enterprise Structures Implementation and
Configuration Considerations
• Oracle Fusion Financials Enterprise Structures
Implementation and Configuration Considerations – Part 2
• Oracle Fusion General Ledger Implementation and
Configuration Considerations

49


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