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Overview of the New Financial Architecture in

Oracle E-Business Suite Release 12
Mary Burns
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.
Agenda
What We Set Out To Address
Release Twelve: The Global Release
Global Architecture
MultiOrg Access Control
Subledger Accounting
Ledgers and Ledger Sets
Ledger Considerations
Global Business Functions
Legal Entities
Accounting Set Up Manager
E-Business Tax
Advanced Intercompany
Banking Model

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What we set out to
address
National and International Laws & Regulations
Actions by Competitors
Changing Customer Requirements
Industry Standards and Regulations
Tax Codes
Changing Workforce Attitudes
International Reporting Standards
Language and Cultural Differences




1
Doing Business Globally is Complex
Top Drivers of Complexity
2
3
4
5
6
7
8
Direct impact on Finance
Source: PWC, 9
th
Annual Global CEO Survey
Globalization is unstoppable.
Regardless of geography, industry or
income, companies are globalizing to
gain new customers and access new
markets. Is this a good thing? Nearly
two-thirds of the CEOs we surveyed
are positive about the impact that
globalization will have on their
organizations over the next three
years.
Source: 9
th
Annual Global CEO Survey
Globalization and Complexity; PwC 2006
Make it Simpler to do your job
Control Costs by Managing Complexity
50%
Senior
executives say
simplification
is driving the
Finance
agenda
Major Focus
Standardizing operating practices and
controls
69%
Standardizing policies and business
rules
66%
Standardizing and integrating finance
systems
59%
Adopting best practices 58%
Optimizing the finance organization and
its reporting structure
52%
Reducing reliance on spreadsheets 33%
Source: PWC Management Barometer
Make it Easier to do Your Job
Transactional Activities
Control Activities
Decision Support, Performance Mgmt
50%
Improve processes or
rationalize technologies
60%
Standardize policies, rules,
and processes across the
entire enterprise
73%
Implement a shared services
model *
80%
Adopt best practices or
simplify processes across the
entire enterprise
47%
26%
27%
The Agile CFO, IBM Business Consulting Services, 2005
* Deloitte Consulting, 2006
How Finance Spends its Time % Yet To
Controlled
Transaction
Entry
Comprehensive
and compliant
processing
Transparent
Audit,
Reconciliation
& Drilldown
Easy Reporting
Analytics
Customers:
Centralize, Simplify, Standardize
Work Globally,
to be more competitive
Think Globally,
to make the right decisions
Manage Globally,
to lower cost and increase performance
Financial
Data for
Management
- and
Compliant
National Compliance
Local Regulation
National COA
Local Calendar
Corp. Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
$
Joint Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
A$+$

Parent Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
+$
+
WORK GLOBALLY
To Be More Competitive
THINK GLOBALLY
To Make the Right Decisions
MANAGE GLOBALLY
To Lower Cost & Increase
Performance
How Financials Release 12 Can Help
The Global Business Release
Financial Control &
Reporting
Credit-to-Cash
Procure-to-Pay
Treasury & Tax
Performance Management
Profitability Management
Business Intelligence
Integration
Data Management
Reporting
Governance, Risk &
Compliance
Asset Management
Travel & Expense
Global:
1. Of, relating to, or involving the entire earth;
worldwide: global peace; global monetary
policies, etc.
2. Comprehensive; total: a... global, generalized
sense of well-being
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Release Twelve
The Global Business Release:
A New Financial Architecture

Global Financial Architecture
Bank
Model
Tax
Engine
Inter
Company
General Ledger
Ledger & Ledger Sets
General Ledger
Ledger & Ledger Sets
Subledger Accounting (SLA)
Dr Cr
Projects Receivables Inventory
Work in Process Purchasing Payables
Multi-Org
Access
Control
6 Major Initiatives
1. Ledger and
Ledger Sets
2. Multi-Org
Access
Control
3. Subledger
Accounting
4. Tax Engine
5. Intercompany
6. Bank Model
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Multi-Org
Access Control
Think Work Manage
Responsibility Responsibility Responsibility
Holland
Legal Entity
Denmark
Legal Entity
Belgium
Legal Entity
Functional Tasks
Order Management
Dunning, Collections,
Billing
Requisition, Demand &
Purchase Orders
Receiving & Drop Ship
Invoice Receipt,
Disbursement
Customer Data
Management
Accounting Setup
Single Responsibility
Belgium
Operating Unit
Holland
Operating Unit
Denmark
Operating Unit
Perform multiple tasks across operating units
without changing responsibilities
MOAC: Multi-Org Access Control
Role based access to Operating Units
Purpose Built Cross OU Desks
Shared Services





Shared Service Product Reference
Order Management Order Management
Dunning, Collections, Billing Receivables
Requisition, Demand &
Purchase Orders
Procurement
Receiving & Drop Ship Supply Chain Management
Invoice Receipt, Disbursement Payables
Customer Data Management Trading Community Architecture
Accounting Setup Accounting Setup Manager


Multiple Organization Access Control
Summary of Changes
Security Profiles for data security
MO: Security Profile
List of operating units for a responsibility
Defined in HR
OU field on UI
all transactions
setup data specific to OU, like transaction type
Enhanced Multi-Org Reporting and Processing
Ledger/Ledger Set parameter on accounting reports and processes
OU parameter on other standard reports and processes
For example: submit the Payables Open Interface Import w/OU
param null to import all records across all OUs

Multi-Org Access Control
In practice
Classify
Organization
as operating
unit
Select
Operating Unit
classification
Select
Operating
Units
In daily use
Run Reports
Across
Operating
Units
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Subledger Accounting
Think Work Manage
Projects Receivables
Payables
3
rd
Party
Systems
Inventory
3
rd
Party
Systems
Centralized Accounting Policies
Greater Control, Transparency and Auditability
Internal control and
compliance with multiple
accounting policies through
user-defined accounting rules
Single source of truth for all
subsystem accounting
activity with a common data
model and repository
Accounting, reconciliation
and reporting facilitated by
centralized data model
Streamline closing process
with common posting engine
Auditable and transparent
entries accessible with full
drilldown
Centralized Accounting Model,
Rules, Engine and Repository
Dr Cr
General Ledger
General Ledger
Work in Process Purchasing
Subledger Accounting
Centralized Rules, Common Repository: Global Control
Payables Invoice
French Rules
Plan Comptable
French Calendar
EUR
Ledger
Subledger
Accounting
Dr Cr
Faster, Easier
Reconciliation
Corporate Rules =
Accounting
Standardization
Local Rules =
Improved Local
Compliance
Automate Apples to
Apples Adjustments
Improved Audit-
ability
Improved Internal
Control
Some Benefits
Accounting Rules
SarBox & 8
th
Dir.
User Editable
Subledger Daybooks
(Journals)
Subledger Balancing
Reports, inquiries, open
items, et cetera
Multiple
Representations
Common Posting to GL
Ledgers
Real time or Periodic
What it is
Subledger Accounting
Transaction Level Compliance
Event Class: Invoices
Event: Invoice Approved
Ledger: France (EUR)
GL Date: 20-Sep-2005
Description: Office supplies
Type Account Description Debit Credit

Asset purchase 01.9100010.100 Paris: furniture 10,000
Misc expense 01.9100020.100 Paris: supplies 400
Misc expense 01.9100020.200 Nantes: supplies 100
Misc expense 01.9100020.300 Nice: supplies 300
VAT 01.3100060.000 VAT@17% 1,836
Accounts Payable 01.7000010.000 ABC Supplies 12,636
12,636 12,636
National Daily Journal Requirements
Internal Control: Central Definitions, Eliminate overrides
Policy Enforcement in Volume Processing
Transparent Accounting Rules
Debits & Credit at the point of the event
Automate Foreign Operation adjustments
Reconciliation
Platform
In accordance
with the
Underlying
Records
Opening
Balance Debit Credit
Closing
Balance
SUBLEDGER ACCOUNTING
Receivables
Customer One 250,000 150,000 400,000 -
Customer Two 350,000 250,000 450,000 150,000
Customer Three 100,000 1,500,000 1,400,000 200,000
Customer Four 100,000 800,000 750,000 150,000
Customer Five 200,000 300,000 500,000 -
Total 1,000,000 3,000,000 3,500,000 500,000
Payables
Vendor I (250,000) 1,000,000 900,000 (150,000)
Vendor II (100,000) 75,000 50,000 (75,000)
Vendor III (150,000) 725,000 775,000 (200,000)
Vendor IX (250,000) 1,000,000 975,000 (225,000)
Total (750,000) 2,800,000 2,700,000 (650,000)
Opening
Balance Debit Credit
Closing
Balance
GENERAL LEDGER
Cash 100 3,500,000 2,750,000 750,100
Receivables 1,000,000 3,000,000 3,500,000 500,000
Inventory 500,000 1,200,000 1,500,000 200,000
Assets 100,000 100,000
Prepayments 1,000 1,000
Payables (750,000) 2,800,000 2,700,000 (650,000)
Accruals (250,000) 50,000 (300,000)
Shares (100,000) (100,000)
Previous Results (501,100) (501,100)
Balance Sheet - 10,500,000 10,500,000 -
Sales 3,000,000 (3,000,000)
COGS 1,500,000 1,500,000
R&D 300,000 300,000
S&M 300,000 300,000
G&A-Fin 300,000 300,000
G&A-IT 150,000 150,000
G&A-HR 150,000 150,000
Period Income 300,000 300,000
Income Statement - 24,000,000 24,000,000 -
Ticked & Tied
General Ledger
SLA Detail
SLA Controls that
GL Balances and
SLA Balances tie,
and that both tie
to the document
(invoice, payment, etc.)
sources
US GAAP
US COA
US Calendar
EUR
Ledger B
French Rules
Plan Comptable
French Calendar
EUR
Ledger A
Multiple Accounting Representations
Global Compliance Statutory and Stock Market
Subledger
Accounting
Single subledger
transaction
can create multiple
accounting
representations
and in multiple
currencies
Dr Cr
Payables Invoice
Chose to use an
alternative Ledger -
or just an Adjustment
Ledger or segment
or
Multiple Ledgers
SLA keeps the Subledgers & GL tied out
Keep the auditors happy!
GL
Journal
Entries
and
Balances
Transactions
(& adjustments)
Subledger
Applications
Accounting
Events
Reconciled:
Docs, SLA, GL in synch
Accounting
Configurations
Journal Entry
Setup
Accounting
Program
Subledger
Journal
Entries
Subledger
Balances
Subledger Accounting
Service
General
Ledger
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Ledgers and Ledger Sets
Think Work Manage
Ledger
One Repository of Financial Truth

US GAAP
US COA
US Calendar
EUR
Ledger B
Reporting Currency
Implements the 4 Cs:
Accounting Method
Chart of Accounts
Calendar
Currency
The balance on Creditors (COA)
is 4.2M Eur (Currency)
on March 31, 2006 (Calendar)
according to IAS/IFRS definitions (Accounting Method)
Ledger Sets
Global Information At A Glance
US GAAP
US COA
US Calendar
EUR
Ledger B
French Rules
Plan Comptable
French Calendar
EUR
Ledger A
Reporting Currency
Ledger Sets
Global Information At A Glance
Ledger Set
Key benefits to many Ledgers in one set
Decision-driving business information always available
Simpler processing and General Ledger management
Data and definitions that can be shared and secured
US GAAP
US COA
US Calendar
USD
Ledger C
US GAAP
US COA
US Calendar
EUR
Ledger B
French Rules
Plan Comptable
French Calendar
EUR
Ledger A
Share:
Chart of Accounts
Calendar
Ledger D
Reporting Currency
US GAAP
US COA
US Calendar
AUD
Currency in Release 12
Transaction Currencies
Accounting Currency in Primary Ledger
Reporting Currency in Primary Ledger
More Accounting Currencies in Secondary Ledgers
For every transaction OR
For SLA Posting level / GL activity level
Balance level Translation or Remeasurement in
Ledgers within Ledger sets, run at one click
Balance & Activity level Translation or
Remeasurement in Financial Consolidation Hub
Enhanced Revaluation
[Functional Currency term dropped: conflicts with IAS 21 / FAS 52]
Data Access, Definition Access
Data Access Sets
Grant and tailor access to Ledgers and Balancing Segment
Values (i.e. Companies, Stores, Branches, etc.)
Accountant
Privileges
France Ledger
Canada Ledger
US Ledger
GL Manager
View Write
Definition Access Sets separate from data security
Share, restrict definitions; privileges to view, modify, etc.
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Ledger Considerations
Ledger Sets Work them your way
Corporate
Ledger Set
adjustments
eliminations
UK Ledger Set
US Ledger Set
Legal Ledger
UK1
Legal Ledger
UK2
Adj Ledger
Corporate
Adjustment
Ledger UK
Adjustment
Ledger US
Legal Ledger
US1
Legal Ledger
US3
Legal Ledger
US2
Management
Ledger Set
Automate GAAP / IAS
adjustments in an adjusting ledger
Eliminate within a Set with GCS
Consolidate Formally in FCH
Map from a non-conforming COA
with a GCS Ledger
Set of 26 Ledgers in one country
Euro Zone in One Ledger Set
My Corporate Set in US GAAP
Statutory Set for Country Y Subs
Division X Worldwide Ledger Set
When to use a Secondary Ledger, an
Adjusting Segment or an Adjusting Ledger?
Adjusting
Segment
Adjusting
Ledger
Secondary
Ledger
Corp. wants GL balances
per Parent GAAP
Corp. wants Just the
adjustments, thank you
Corp. wants a complete
Parent GAAP & Currency
edition of the Subs books
Subsidiary books are
pretty similar to parents
Mapping gets us most of
the way to Parent
Subsidiary books are quite
alien to parents
No inventory
Inventory is the big
difference
Inventory is one of the big
differences
National chart of accounts
is clearly related to IAS
IFRS or GAAP balances
Manageable series of
reclassifications
National chart of accounts
is radically different from
corporate
National Controllership
- Corp GAAP known
Regional Controllership
- Corp GAAP administered
Parent Controllership
Mexico plant, US parent
Balances are enough
(Full drill down available)
See theyve been properly
adjusted to our rules
Every petty cash slip
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Global Business
Functions
Think Work Manage
Legal Entity: Your Registered Companies
Legal Authorities
Countries, States, Local,
Agencies, Taxation,
Registrars, Regulators...
Legal Entities
Registered Companies,
Funds, Partnerships
Inc. LLC. Ltd. SA. GmBH. Etc.
exist in the outside world
Management Orgs
Divisions, LOBS, Plants,
Cost Centers, Whatever =
Decision Making Tags
Regulates
Managed & analyzed by
Public
Company
(ultimate parent)
Public
Company
Subsidiary
Company
(regional parent)
Subsidiary
Company
(business parent)
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Subsidiary
Company
Parent companies (LEs) own or
control subsidiaries (LEs)
No outside ring - must pick an LE
LEs create commercial
transactions
Complies
LEs: Why and What?

LEs pay the taxes
- need tax registrations
Trade between LEs
needs intercompany
LEs own the money
and bank accounts
LEs file the accounts,
take care of accounting
LEs comply with
whatever needs
compliance: legal in LE
Why We Care

Addresses, Officers, etc.
Enabled First Party
stamp
Added Establishments:
map Registrations to
Authorities
GRE/LE not touched
Authorities as TCA
parties
LE Configurator
What weve done
Setup and maintain: Legal Entities, Establishments, Jurisdictions, Legal Authorities, Legal Addresses
Tabulate your Registered Companies
and other forms of LE
Where LE fits in
Transaction
Taxes -
Complies &
Files, Pays
Actual Registered
Companies, etc.
Et Cetera, 11i Maintains
its Subledger
Documents
in many OUs
Default Legal
Context (DLC)
Accounts
for itself
in a Ledger
or BSVs
Legal
Entity
Ledger
Business
Group
GRE/LE
Operating
Units
Registrations
with Authorities
Files
Files
Establishments
Registrations
with Authorities
Legal Entity:
Vehicle for compliance
Exists
Locally
Transaction
Taxes -
Complies &
Files, Pays
Actual Registered
Companies, etc.
Et Cetera, 11i Maintains
its Subledger
Documents
in many OUs
Default Legal
Context (DLC)
Accounts
for itself
in a Ledger
or BSVs
Legal
Entity
Ledger
Business
Group
GRE/LE
Operating
Units
Registrations
with Authorities
Files
Files
Establishments
Registrations
with Authorities
Exists
Locally
Legal Entity:
Vehicle for compliance
Get the LE Right
Compliance Falls Into Place
Lets put LEs to work
Isolate legal compliance from management needs
Track your registered companies
Make your compliance flow more easily

Accounting Setup Manager
Assign books, bookkeeping rules and currency management
to your registered companies
EBusiness Tax
Have your registered companies calculate, file, and pay the
transaction taxes they owe
Intercompany
Do business between and across your registered companies
with full legal documentation
Bank Model
Have your registered companies use their money to pay
their bills, et cetera
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Accounting Setup
Manager (ASM)
Think Work Manage
Define Multiple Ledgers
for Rules & Currencies
Define Legal Entities
& Associated Rules
One Place to manage
Your Global Accounting
Rules, Currencies,
Ledgers,
And Ledger Sets
Set Accounting Rules
for All EBS Apps
Ensure Complete
& Accurate
Setup via Online Checklist
Centralized Set-up
Accounting Setup Manager
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E-Business Tax
Think Work Manage
Automation
Tax content for certain countries
Vertex and Taxware integration for U.S.
Integrity checks during setup process
Constant Changes in
Tax Laws and
Regulations
Date effective setup
Tax rules flow for change or creating rules
Tax simulator for setup, rules, and transactions
Business Needs Solution

Local Compliance

Tax registrations and tax reporting codes
Tax lines determine applicable taxes
Configurable tax reporting templates
Centralized Global Tax
Less Complex Global Tax Compliance
Information Visibility
Single set up for all Oracle applications
Use of E-Business Suite components such as trading partner geography,
trading partner classification, legal entity, inventory item categorization,
and accounting event.
Tax
Transactions
Taxes,
Rules
Oracle E-Business Tax
Processing taxes for transactions and reporting
Determine
Regimes
Taxable
Basis
Calculate
Tax
Amount
Tax Status
& Rate
Applicable
Taxes
Single Interface for Transactions
Transparent Integration with Tax Partner Services
Parties

Places

Products

Processes

Payables
Receivables
Purchasing
Transactions
Sales Orders

Tax Reports
- PDF, HTML, RTF
- Security enabled
Extensible Service Oriented Architecture
Compliance, Assurance Efficiency, Global Visibility
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Advanced Intercompany
(AGIS)
Think Work Manage
Web UI
Open
Interfaces /
API
Excel
(Web ADI)
Advanced Global
Intercompany
System
Subledger
Invoices &
Documents
Generate subledger invoices
Control transaction entry with
Intercompany Calendar
Fully Configurable Approval Rules
Flexible Security Model
Centrally defined Intercompany
Accounts
Online
Reconciliation
Reporting
XML
Publisher
Reports
Advanced Global Intercompany System
Address the Top Barrier to a Fast Close
Subledger
Accounting
Dr Cr
General
Ledger Receivables Payables
Inter
Company
AGIS at Work
Rebilling a Corporate Cost from an USA HQ
California
Company
New York
Company
Illinois
Company
Italy
Company
France
Company
Subledger
Invoices &
Documents
General
Ledger Entries
GL Entries created for
US subsidiaries
AP and AR Invoices
created for France
and Italy
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Banking Model
Think Work Manage
Bank account is now
associated with LE entity
rather than Operating Unit
Single bank account
serves multiple Operating
Units
Any and all Operating
Units associated with a
ledger can be permitted to
use the bank account
Assets
Projects Receivables
Payables Purchasing
Projects Receivables
Payables
Inventory
Plus
Centralized Credit Card Model
Credit Card Encryption
Supplier & Customer Banks in TCA
Centralized Banking
Shared Services Disbursements
Work in
Process
LE
OU A OU B OU C
Bank Model: Example of What You Can Do
Pay invoices from different OUs with 1 instruction
OU A
OU B
OU C
Bank
Single
Payment
Instruction
Invoices
Payments
Sub Ledger
Accounting
New Payments Module
New Bank Model
New Bank & Credit Card
Features


Banks
Legal Entity
Operating Units
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Sharing Services
Think Work Manage

Shared Service
Infrastructure
(Serves Informal and Formal)
Organizational Access
Cross Org Processes
Banking Model
Inter Unit Accounting
All Together: Easier To Share Services
Central processing, Distributed impact
SSCs
(Formal)
SLAs & Tax
Inter-LE
Formal SSCs
At home or overseas
Call Centers, Outsourcing
Offshoring, SAS 70,
On Demand
Informal Service Sharing
Process Efficiency
Decentralized Depts.
Centralized Depts..
Normal Business
Practice

Ledgers & Ledger Sets
Ledgers with
Balancing Segments
MOAC across OUs
Intercompany
Bank Model
Tax
Ledger and Ledger Sets
Subledger Accounting
Intercompany, Tax Engine
MOAC across LEs, Bank
Internal Controls Manager
Work Globally
Global Order Desk
Global Procurement
Global Billing
Global Dunning
Think Globally
Global Ledger Sets
worldwide insight
Global Reporting
Manage Globally
Global Accounting
Rules
Global Set-up
Global Integration

What the Architecture Gets You
Release 12 Subsidiary LEs.
account for themselves in Ledgers,
and
Ledger Set
Company Company Company
Projects Receivables Inventory
Work in Process Purchasing Payables
Multi-Org
Access
Control
manage their subledger data in Operating Units
Share Services, maintain privacy
Exploit Cross-OU Processes
Yesterday: An LE Group in 1
SoB with 1 OU - no partitioning

R12: Introduce partitioning
without sacrificing processes
Assets
Projects Receivables
Payables Purchasing
Projects Receivables
Payables
Inventory
Work in
Process
Ledgers in
Ledger Sets,
New OUs
MOAC
Inventory
Work in
Process
Assets
Projects Receivables
Payables Purchasing
Projects Receivables
Payables
Inventory
Work in
Process
MOAC,
+300 Features
SLA,
Tax
Ledger Sets,
Ledgers
XML Publisher
Reporting
Profitability Mgr,
EPB
Subledger
Release 12: The Global Business Release
Work Globally,
to be more competitive
Think Globally,
to make the right decisions
Manage Globally,
to lower cost and increase performance
DBI, FCH
Intercompany,
Bank, Payments
General
Ledger
Transactions
OICM
TCA, LE
National Compliance
Local Regulation
National COA
Local Calendar
Corp. Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
$
Joint Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
A$+$

Parent Compliance
US GAAP / IAS-IFRS
Corp COA
Corp Calendar
+$
+
Q U E S T I O N S