GL: Natural Accounts Flexfield Qualifiers and Accounting Concepts

This is how the accounting works. Everything pertains to what an Organization owns, have and what it has to give. There is always a balance to what it owns and what it has to give.

This “balance” is converted into an equation, also called the Accounting Equation, which is:

ASSETS = LIABILITIES + OWNER’S EQUITY

though I’ve understood it this way:

OWNER’S EQUITY =  ASSETS – LIABILITIES

Let’s take a simple example to justify the above equation, say you have Rs.1,000 but you know that you have to pay a loan of Rs.400 that you borrowed from your friend.

So according to the equation Rs.1000 is your Asset, Rs.400 loan is your Liability and Rs.600 is the Equity that you own.

Every organization which is registered with Government is obliged to disclose the above mentioned balance in a document called Balance Sheet.

That’s all for the accounting equation.

Moving on after the accounting equation,

There is a

• Debit (Always on the Left Side, written as “DR” for shorthand) and
• Credit (Always on the Right Side, written as “CR” for shorthand)
• Debit Side should always be equal to Credit Side or
• Left Side should always be equal to Right Side or
• DR = CR

With the Debit and Credit comes in the

• Increase in balance or
• Decrease in balance

There are 5 natures of account. Every account can have any one nature and that’s why we can also call it natural account. These natures are:

1. Assets
2. Liabilities
3. Revenue
4. Expenses
5. Owner’s Equity

ASSET: Literally asset is any thing which is valuable to a person, organization or any entity. For example we say that “his quick learning ability is an asset to him” or “Her writing ability is her asset”. Why do we say that? Because quick learning skill or writing ability adds value to a person. A writer sells his writing skills to earn money, similarly in terms of business anything which is valuable to a business is the asset.

Say your organization is a pharmaceutical and manufactures Medicines, then all the chemicals used to manufacture medicine is your asset or in other words the Raw Material is your asset. The cash your organization own is an asset because it can be used to buy items or pay your employee who in turn are used to run your business. There are different types of assets, the broader categories of asset are Current Asset and Fixed, but let’s not discuss it here. For now it is enough to know that asset is anything which is valuable to your organization.

Asset INCREASES when it is Debited and DECREASES when Credited.

Any organization which is registered with the government and exists as Legal Entity is obligated to disclose its Assets on the balance sheet to the government and its Creditors. You might ask Who are creditors and Why is it that an organization is obligated to disclose asset to them? With Creditor comes in the liability.

LIABILITY: Comes from the word “Liable”. Literal meaning of Liable is “to be obligated” , “to be responsible” or “Legally responsible”. In terms of accounting you become liable, responsible to pay when you buy or purchase any thing from another entity. You are liable to compensate whatever you’ve bought. Generally an organization records its liability and pays it afterward. Again, there are different types of liabilities like Short Term Liability and Long Term Liability.

Liability INCREASES when it is Credited and DECREASES when Debited.

OWNER’S EQUITY: This is the share of owner in the business.

Equity INCREASES when it is Credited and DECREASES when Debited.

REVENUE: By definition it is the total gain before inducting any expense. It is mostly associated with the Asset. When any organization sell goods or renders its services, it records an increase in Asset and with this increase comes the gain it has made from selling the goods or services. This gain is called Revenue or Income.

Revenue INCREASES when it is Credited and DECREASES when Debited.

Revenue are not displayed in Balance Sheet. They are reflected in Owner’s Equity.

EXPENSE: By definition any payment made is an expense. How payments are made? Either by Cash or Credit which eventually means Cash. So redefining Expense “The outflow of cash to any person or organization for its supplied Goods or rendered Services”. We incur expenses daily, for example, taxi fare is an expense, dine-out payments are expenses. Expenses are associated with Liability. Whenever an organization books a liability, it is mostly against some expense. There are different type of expense

Expense INCREASES when it is Debited and DECREASES when Credited.

Following table shows the Tabular form of the effect

Nature	DEBIT	CREDIT
Asset	Increase (+)	Decrease (-)
Liability	Decrease (-)	Increase (+)
Equity	Decrease (-)	Increase (+)
Revenue	Decrease (-)	Increase (+)
Expense	Increase (+)	Decrease (-)

In Oracle General Ledger, when we attach the “Natural Account” Flexfield Qualifier to a segment. System attaches the 5 nature on the Value form. When we add the Natural Account Value, we have to define the nature of the account as well.

When we define the natures of the account, the accounting rules of Debit and Credit works accordingly. Like in Payables, the line item is Debit side, so if you’ll give an expense or asset account, it will increase and vice versa.

It is necessary to understand the application accounting behavior in order to properly suggest and implement the accounting solution in an organization.

If you need any help on the application’s accounting behavior, feel free to contact me on Atif.Syd@gmail.com

That’s All.

GL: Allow Dynamic Inserts

If you read this statement “Allow Dynamic Inserts” without any context then it might only give you the literal meanings. In Oracle Apps this statement is used in context with Account Code Combinations.

What is dynamic insertion with account code combination? and what will system do if it is not allowed and the Allow Dynamic insert is disabled or unchecked?

Dynamic Insertion with account code combination means entering a “dynamic” code combination during transactions.

We know that the COA structure is made up of multiple segments, each segment has multiple and various values. If you disable dynamic insertion then you have to “statically” create the account code combinations separately from the screen GL Accounts.

Navigation: GL>Setups>Accounts>Combinations

On this form you can create the logical code combinations, so that no one can create illogical code combinations during transactions. In order to stop any kind of code combinations or dynamic code combinations entries you disable the Allow Dynamic Inserts options. When you disable this option, they system doesn’t allow combinations during transaction that are not created in GL Accounts.

NOTE: Combinations once made cannot be deleted, it can only be disabled.

Disabling Allow Dynamic Insert is a way of preventing the user from making mistake by entering the code combination which are not logical or correct.

That’s All :)

GL: Cross Validate Segments

Cross Validate Segment? What does it means?

It means to cross validate the Segment Account Code Combinations which is entered by user on the JV form, particularly.

It works great when you have enabled “Allow Dynamic Inserts” on the COA Structure form then you should also enable the “Cross Validate Segment”.

How does it work? and why with Allow Dynamic Inserts?

It works when you define certain rules. Rules are nothing but a valid or invalid combinations of all segment values in that particular chart of account. Allow Dynamic Insert lets you create any code combination you like but with the Cross Validation Rule you can only select the combination on the COA form but it will give you error message when you click OK.

You “Include” valid combinations and “Exclude” invalid combinations.

Navigation: GL>Setup>Financials>Flexfields>Key>Rules

1. Select the Application, Flexfield Title and Structure
2. Enter the Rule Name and optionally enter a Description
3. First think of the rule and what it says? Enter the Error message according to your rule. Example is given in later.
4. Error Segment means on which segment should the application bring the focus or the Cursor
5. Enter From and To date or the validity of the rule
6. Select Exclude or Include depending on the rule you are about to enforce.
7. Select the inclusive or exclusive Account Code Combination. Now this is the tricky part. So let’s take an example to grab the trick.

Example:

Consider a chart of account with segments Company-Branch-Department-Natural Account

Values Company: 01, 02, 03

Branch: 000,100,101, 102, 200, 201, 202, 300, 301, 302…

Department: 00,10, 11, 12, 13, 14, 20, 21, 22, 23…

Natural Account: 00000, 10000, 10100, 10101, 10102, 10103, 10104, 10105, 20000, 20101, 20102…

Now let’s say that Branch 101 has departments from 00 to 14. So we want that whenever branch 101 is selected the department 20 to 23 should not make a code combination as branch 101 don’t have those departments. The rule will be

Rule Name: Branch 101 and Departments

Error Message: You cannot select this department with Branch 101. Change the department or the Branch.

Error Segment: Department

Exclude: 01-101-20-00000 to 01-101-23-99999

Now there is another scenario with the same COA that the department 21 to 23 can only work with natural accounts from 20000 to 29999. so the rule for this scenario will be

Rule Name: Dept 21 to 23 and Natural Accounts

Error Message: You can only select natural accounts 20000 to 29999 with this department. Change the Department or the Natural Account.

Error Segment: Natural Account

Include: 01-000-21-20000 to 01-999-29999

You can include and exclude as many accounts and account ranges you like. And remember this is not same as Security on account segments, cross validation rules are different from security. Security hides the segment values, whereas, Cross Validation Rules don’t hide the value, it stops you from making illogical code combinations.

Happy Ruling.

That’s all :)

P2P and O2C: Procure to Pay and Order to Cash Cycles

Oracle has developed this ERP solution which truly covers these both cycles as well as many others. Oracle EBS comprises of the Standard Core Business Management applications like General Ledger, Payables, Receivables, Purchasing, Order Management, Inventory, Discrete Manufacturing, Process Manufacturing , HRMS and many more. The application I’ve mentioned are so integrated that it handles the beginning to end of both Assets and Liabilities. When I say Assets I am referring to applications like Order Management and Receivables, and when I say Liabilities I am referring to Purchasing and Payables and both of these Assets and Liabilities are finally pushed and calculated in Oracle General Ledger.

The base or the heart of Oracle EBS is Oracle General Ledger. Let me call GL an intrinsic.

Procure to Pay:

First let’s see what the heading itself means? Procure to Pay means Procuring Raw Materials required to manufacture the final or finished Goods to Paying the Supplier from whom the material was purchased. But this is not just two steps. It involves many steps. Let’s see the steps and Oracle Application involved in performing those steps.

1. Oracle Purchasing: You enter Suppliers of different materials and products you want to purchase to manufacture a finished good that your organization plans to sell.
2. Oracle Purchasing: You prepare a Request for Quotation (RFQ) and send it to different suppliers to get the best and/or economical price for the product.
3. Oracle Purchasing: Suppliers sends their quotations and you upload those quotations in Oracle Purchasing to get the best three quotes and further to get the one best quote.
4. Oracle Purchasing: You prepare a Purchase Order(PO) against the best RFQ to buy the goods from the supplier who quoted the suitable price and sends the PO to that supplier
5. Oracle Purchasing: The supplier receives the confirmation of purchase from PO and ships the ordered goods. You receive the goods enter a Goods Received Note (GRN) in Oracle Purchasing.
6. Oracle Inventory / Oracle Assets: It’s up to you whether you want to receive the goods at your head office or you Inventory directly. In either case you move the received goods to your different Raw Material Inventory from Oracle Purchasing to Oracle Inventory and the Item Count increases. If the item is Asset Type then it will move to Oracle Assets at the time of Invoice creation in Oracle Payables.
7. Oracle General Ledger: Once you move the goods to Oracle Inventory, it sends the Material Accounting to Oracle General Ledger.
8. Oracle Payables: After this the supplier sends you the invoice for the purchased goods and you Enter or Match the invoice against the PO from Oracle Purchasing in Oracle Payables. As said before, if the item is Asset in nature then it will move to Oracle Asset.
9. Oracle General Ledger: When you enter the invoice it means that you have created a Liability against that supplier and also you have recorded the expense incurred or asset purchased. Oracle Payables sends the invoice accounting to Oracle General Ledger.
10. Oracle Payables: You pay the invoice and settle the Liability.
11. Oracle General Ledger: The liability is settled and your cash movement account is updated.
12. Oracle Cash Management: As you pay the invoice Oracle Payables sends the payment information to Oracle Cash Management for Bank Reconciliation. Once reconciled, Oracle Cash Management sends the updated Bank/Cash accounting entry to Oracle General Ledger.
13. Oracle General Ledger: Your cash at bank is updated with actual balance.
14. Oracle Process Manufacturing(OPM) / Oracle Discrete Manufacturing(ODM): You start the manufacturing of your final product. Both OPM or ODM requests the different raw materials from you inventory organizations and manufactures a finished good.
15. Oracle Inventory: As the raw materials are issued to OPM and ODM the inventory sends the issuing material accounting to General Ledger and decreases the Item Count from the Raw Material Store. As the finished good is prepared, Oracle Inventory receives the finished good in Finished Good Store and increase the Item Count.

Now the final product is ready to be sold in the market and from here the O2C cycle starts.

Order to Cash Cycle:

Order to Cash means Customer’s Order Placing to Vendor’s Cash Receiving. When your final product is ready to be sold, you market it. The customer gets fascinated with the marketing campaign and decides to buy your product and from here starts the O2C cycle.

1. Oracle Order Management: Customer places the order.
2. Oracle Order Management: You enter the customer order
3. Oracle Inventory: Check the available unit and the quantity ordered by the customer.
4. Oracle Order Management: You ship the product to customer site and decreases the Finished Goods inventory.
5. Oracle Receivables: The customer receives the product and you invoice the customer.
6. Oracle General Ledger: You record your revenue and receivables.
7. Oracle Receivables: The customer pays and you receive the cash/check.
8. Oracle Cash Management: Oracle Receivables sends the customer receipt for Bank Reconciliation. After reconciliation, Oracle Cash Management send the actual bank balance or Oracle General Ledger.
9. Oracle General Ledger: You have the actual bank balance.

This is how the P2P and O2C cycle works, but this is not the only way, obviously there are many other applications with different cycles. This is one of them.

That’s All :)

GL: MassAllocation

The basic concept of Mass Allocation is dividing a cost on some factors.

If we take a simple example then consider 3 departments X, Y and Z using a single landline telephone. Each department has 2, 3 and 6 employees respectively. The bill for month of June-09 of landlines comes out to be Rs.1700. If you have to calculate the telephone usage for department Y. How will you do that? Is it Rs.1700? No. Is it 1700/3 (total divided by total number of employees in dept-Y)? No, because there were 8 more person using the same landline connection. The answer is that you will allocate the total cost into each department based on the number of employee it has. So in this case the allocation will be 1700*3/11 and you’ll get Rs.463.

Here is the department wise total of the telephone bill:

Department X: Rs.309.09 (2 employees usage of 1700)

Department Y: Rs.463.63 (3 employees usage of 1700)

Department Z: Rs.927.27 (6 employees usage of 1700)

This is the formula for MassAllocation A*B/C where,

A = Total Cost

B = Factor (Number of Employee of particular department)

C = Total Factor (Total Employees)

So the Allocation formula for Department Y will be

A = 1700 (Total Landline Bill for a particular month)

B = 3 (Total Number of Employees in Department Y)

C = 11 (Total Number of Employee in all three departments)

In Oracle General Ledger this facility is given to divide or allocate your expenses or revenue income on your selected distributing criteria which can be your number of departments, branches, head count, covered area, etc. In my above example I used Head Count as the basis of allocation.

Steps for generating a Mass Allocation Journal:

1. Pass a Standard Journal – This will identify your “A”
2. Pass a STAT Journal – This will identify your “B” and “C”
3. Define Mass Allocation Formula Batch and Journal.
4. Validate the Formula.
5. Generate the formula for specific accounting period.

Let’s see how we can carry out the process of Mass Allocation in General Ledger.

First let me take a scenario. Consider an organization with 4 divisions or departments:

1. Enterprise Resource Planning (ERP)

2. Software Development (SD)

3. Software Support (SS)

4. Network Infrastructure (NI)

The COA Structure of this organization is Company-Branch-Department-Product-Account

The segment values of Department or the hierarchy of Department segment is

0000 – Common or No Department

1200- Information Technology (Parent) (Child Ranges: 1201 – 1299)

1201-ERP

1202-Software Development

1203-Software Support

1204-Network Infrastructure

Let’s allocate the telephone bill expense of Rs. 18950 for the month of June incurred at Karachi branch on the number of employee each department has. The allocation basis in this example is Head Count per Department.

The account code for Karachi branch is 101 and the natural Account for PTCL expense is 50201 and each department has 9, 11, 5, and 3 employees respectively. That is ERP has a head count of 9, SD has 11, SS has 5 and NI has a head count of 3.

Now the MassAllocation procedure steps starts.
STEP1: We will create a total cost or “A” of the formula. Pass a Standard JV in the period of JUNE with the following Lines

Line1: 1-101-0000-00-50201 18950(DR)

Line2: 1-101-0000-00-10122 18950(CR)

Line 1 Account Description: XYZ-Karachi-NoDeparment-NoProduct-PTCL Expense

Line 2 Account Description: XYZ-Karachi-NoDepartment-NoProduct-Bank

This journal entry is equivalent to paying your PTCL telephone bill. Ideally this expense entry should be coming from Oracle Payables. We are manually entering this actual journal so that we can created a Cost Pool “A” having an amount of Rs.18950.

STEP2: Now we will create the “B” and “C” or Usage Factor and “Total Usage”. Pass a STAT JV. STAT is short for Statistical and it can be used by changing the currency from PKR to STAT. The STAT journal doesn’t need to be balanced. But they do affect the account balances if we inquire on the currency type of TOTAL but let’s not get there, it is a different topic. Simply pass a STAT JV to create “B” and “C”. Remember the Period of the JV should be JUNE as the Standard JV.

The account code combination for the STAT journals in this scenario will be

Line1: 1-101-1201-00-50201 9(DR)

Account Description: XYZ-Karachi-ERP-NoProduct-PTCL Expense

Line2: 1-101-1202-00-50201 11(DR)

Line3: 1-101-1203-00-50201 5(DR)

Line4: 1-101-1204-00-50201 3(DR)

By passing or posting this STAT journal we are creating a basis for expense allocation. The line 1 tells that the XYZ organization has 9 employees at Karachi branch in ERP department incurring PTCL Expense. We can enable UOM on STAT journal by enabling the profile option JOURNAL:MIX STATISTICAL AND MONETARY to YES. Similarly so on and so forth. Now where are “B” and “C” in this journal? You can see 4 lines with changing Department codes, these four lines individually represent Usage Factor “B” which is 9, 11, 5 & 3 and collectively they represent Total Usage “C” which is equal to 9+11+5+3=28.

Now moving on with STEP3

Create a MassAllocation Batch and then a Journal. Name it Karachi PTCL Expense Formula.

When you open the formula entry form you will find the three constant of the Mass Allocation formula A, B, C and two other fields T and O. “T” stands for Target Account and “O” stands for Offset Account. I will explain these Accounts later. Let’s continue with the formula.

Now give the account of the “A” which is 1-101-0000-00-50201 having the value of Rs.18950. On the account entry form you will find that the system prompts or asks for Ledger, it is an optional field. This option of ledger set is used when we are allocating cost from multiple ledgers. And there is another LOV having the value as

C: Constant – The segment is constant and doesn’t need any Loop or Sum. And the balance should be picked against “A” as a constant

L: Looping – The segment needs to loop from first value to last value provided in STAT JV.

S: Summing – The segment needs to sum the value in provided in STAT JV.

Generally the account code in “A” doesn’t not need any kind of looping or summing. So every segment should be given the value of C. The value this account has for the particular period should be picked as a constant. Keep the currency as Entered.

Now move on to enter the code for “B”. The account code for Usage Factor in our example will be

1-101-1200-00-50201. Note that I have given the department code as 1200 which is parent of the departments we selected for allocation basis. Give every segment a Constant C but the segment of Department will be having the value as Looping L. Why? Because we need to pick the individual values of 9, 11, 5 and 3.

REMEMBER: looping is only done on Parent Value of the Segment. In this example 1200 is the Parent department which has the child departments 1201, 1202, 1203 and 1204.

The system will automatically pick the allocation basis by matching the natural account and the looping segment.

REMEMBER: The currency for “B” and “C” should be STAT.

Now give the account code for the Total Usage “C”. The account code will remain the same as “B” with 1200 as the department code. The only difference this time is that instead of Looping we will give the Department segment the value of Summing S. so that we can have the sum of head count which is 28.

It’s time to give the “T” account. No, it’s not the T Account as we see in Ledger. It is the Target Account of the cost pool or these are the Debit Accounts which should hold the allocated expense. In our example these account are the accounts we gave in “B”. Yes the account code combination 1-101-1200-00-50201 with 1200 as Looping. IN FACT, usually the accounts given in “B” are repeated in “T” and account given in “A” is repeated in “O”

Let’s proceed further by entering the “O” or the Offset account. This account is same as the account we gave in “A”. This is the credit account. The account code combination given here will 1-101-0000-00-50201 with every segment as Constant.

With this step we have completed our allocation formula. The final Journal generated with this formula should be

Line 1	1-101-1201-00-50201	6091.071
Line2	1-101-1202-00-50201	7444.643
Line3	1-101-1203-00-50201	3383.929
Line4	1-101-1204-00-50201	2030.357
Line5	1-101-0000-00-50201		18950

If you enable the Full Cost Pool Allocation option then the system will post the rounding difference to the account with highest value. In this case the all the rounding will be given to line2 account. The first four accounts are the accounts we mentioned in Target field and the last account is the one we mentioned in Offset field. The accounting done here is that the PTCL Expense posted on a Common department was credited and distributed to four other departments on the basis we defined in STAT journal in Step 2.

If the concurrent request ends with an error then check the Output and Log file for error details.

That’s All:)

GL: Currency

Currency in General Ledger is one of the 4C’s.

In R12 there is an additional feature given that if you have a separate Reporting Currency then you don’t need to create a separate ledger. You only need to define a Reporting Currency ledger in your Accounting Setup Manager.

There are two types of Currency in Oracle

1. Functional Currency: Currency thatis attached to Primary Ledger or in other terms the Local Currency. For example functional currency for Pakistan is PKR. Any organization operating in Pakistan will have a functional currency as PKR.
2. Entered Currency: Currency attached to primary ledger other than the functional/local currency and is used while entering the transaction. For example if any multinational organization is operational in Pakistan and it uses any other currency than the local currency of Pakistan then that currency will be termed as entered currency. Entered currency is always converted to Local Currency when it is posted in the final accounts.

Currency Conversions

1. Conversion: Foriegn Exchange (Forex) rates of the functional and entered currency. The rates are defined in the table. This rate is used to convert the entered currency into the functional currency. The naviagation to Rates in GL is Setup>Currencies>Rates>Dialy or Historical
2. Revaluation: It is a program that revaluates the entered currency into the current forex rate. This program is run immediately before period closing.
3. Translation: Used when consolidation is needed and transactions are done in multiple currency.

That’s All :)

Oracle EBS: Key Flexfield Segment Value Set

The basic definition of a Value Set (VS) is the “Validation of values” for a particular segment. Now if I further simplify Validation it means the type of value a segment can have.

For Example: Take an example of Multinational Company (MNC) say SydWerkz International having multiple branches in different countries. Now if SydWerkz decides to implement Oracle EBS Financials then the COA structure would definately have a Branch Segment. The heirarchy of the branches decided by SydWerkz International was

• Continent(1)
  • Country(2)
    • City(3)
      • Branch(2)

The number written in front of each branch category is the character length. For example Country has a character length of 2, which means there can be 100 countries or at least 99 countries. The total charachter length of Branch segment will be 8 and code of the branch segment will be 10000000.

Now if we list down the above mentioned categories with the code, it will be

Regions:

1- Asia

2-Europe

Country:

01-Pakistan

01-Germany

02-India

City:

001-Karachi

001-Mumbai

Branch:

01-Branch A

02-Branch B

See the beauty of the heirarchy this code character will have:

10000000 – Asia

10100000 – Pakistan

10100100 – Karachi

10100102 – Branch B

20000000 – Europe

20100000 – Germany

So you see that the branch codes are the identifiers of Branch category. You can even identify which code is a parent and which one is the child. If the last two digits of the branch codes are 00 then the code is of City and it is a parent, if the last 5 codes are 0 then the code is of Country and it is a parent.

A branch value set in this case will have a “Char” format and “Numbers Only” Check Box enabled and the length of the Value Set will be 8.

The Button of Usage shows where the selected Value Set is used, in DFF or KFF in which Structure and in which Segment.

Validation can be done on the following attributes

• Type of segment list
  • List of Values: It displays Searching Criteria and Values. Useful if the quantity of value is from 50-500
  • Long List of Values: It only displays the searching criteria. Useful if the quantity of value is from 500 – 10000
  • Pop List: It is a dropdown for the value set. It is useful if the quantity of the value is from 1-15

• Type of Security that applies on that particular segment
  • Hierarchical Security: if applied to parent then child also has the same security rules. Likewise Non-Hierarchical security is applied only to that specific segment value has the security rule.
  • It for restricting segment values among Responsibilities. When you define security rules for any segment then you have to re-compile the COA Structure.
  • To define security you have to specify the segment, first include all the values then exclude the particular value. Save the rule. Assign the rule to particular responsibility.
• Format of the value set
  • Char is used for financial and other values.
  • Date & Time is specific to Purchasing & Order Management.
• Numbers Only: If this option is checked then the value set will only have numbers. To enable Alphabets keep this box uncheck.
• Upper Case Only: Only Capital letters will be allowed.
• Right Justify Zero fill: This option will automatically fill the zero on the right side. For Example if the character length of a value set is 4 and during entering a value, if “65” is entered, the system will automatically insert 0 on the right and code will become “0065”
• Maximum Size of the value set:The total length of a value.
• Minimum Value: The minimum side of the range.
• Maximum Value: The maximum size of the value. Like in the above example of the Branch Segment, the maximum size can set to 7999999. as there are only 7 continent and cannot exceed this value at the moment.
• Value Validation: This needs more explanation and it will be discussed later. For now the definition of this attribute is “if the value of this segment depends on another segment or the values should be picked from a Table” then this validation defined. Generally we use the following
  • Independent
  • Dependent
  • Table

That’s All :)

GL: Flexfield Qualifiers

The definition I inferred from the word flexfield qualifier is “which segment qualifies for which attribute“.

Each Segment can have one of the following Qualifying attributes attached to it. Some of them are mandatory others are optional.

• Cost Center: Usually assigned to Department Segment. This qualifying segment is used by Oracle Assets.
• Natural Account: This qualifier when attached to a segment enables the five nature of accounts Asset, Liability, Expense,Revenue, Owner’s Equity. It also assigns the option of Reconciliation account and Third Party Control.
• Balancing: This qualifier is usually assigned to the segment on which the Balance Sheet is required. System balances the Debit and Credit of the ledger on this segment.
• Intercompany: This qualifier is used to identify the transaction between two entities under one group. More on this in Intercompany.
• Management: This qualifier is used as an additional control on Data Access Set.
• Secondary Tracking: To be discussed

Flexfield Qualifiers determines the nature of the segment. If you define a COA structure as

Company-Department-Account

How will the system knows which segment is natural account? Which segment should be used to balance the accounting entries? which segment will be used as Cost Centre in Fixed Assets?

It is the qualifier through which the system assign particular attribute to the segment. If I attach Natural Account qualifier to Company Segment, the system will not validate anything against this assignment. It will simply enable the five natures of accounts and treat the Company segment as Natural Account.

So for particular segment, a particular qualifier is assigned. This is the one time activity and freezes as we freeze the COA Structure.

That’s All :)

If you have any queries, contact me on Atif.Syd@gmail.com