Accounting periods (or called GL Periods in Oracle Applications) is one of the most important aspects in a General Ledger. It defines how the transactions will be grouped together based on dates (usually their actual transaction dates) and also defines the accounting calendar. This concept applies to both Oracle Fusion and Oracle E-Business Suite. Below is a simple diagram depicting GL Period Cycles:
A quick sample is below:
Period
Month
|
Period Status
|
Remarks
|
May 2018
|
Permanent Close
|
Can never be re-opened and Posting not allowed
|
June
2018
|
Soft Close
|
Can still be re-opened in case of
Omission/Incorrect Data.
Need to have Financial Statements
re-stated.
|
July
2018
|
Open Period
|
Allows transactions, Receiving and
Posting
|
August
2018
|
Future Enterable Period
|
Allows transactions and Receiving but
no Posting
|
September
2018
|
Never Opened
|
No transactions and receiving allowed
|
Below is a quick checklist to follow when closing periods from a GL Perspective:
- Import data into the Interface from other sources (Subledgers, Third-Party Applications, etc.)
- Transfer transactions from the Interface into the General Ledger
- Verify that all Journals are already Posted
- Perform Allocations
- Perform Revaluation for Trade Accounts containing foreign currency transactions
- Reconcile Account Balances
- Translation of Balances to the Parent Currency
- Consolidation of Subledgers to the Corporate Ledgers
- Run Analytics and Financial Analysis
- Close the Period and Open the Next Period
Some companies never do a permanent close in case they need to do some corrections.
What they sometimes do is they only close out the all the periods of a certain calendar year when the external auditors are satisfied and provide a clean audit report for the said year.
It all depends on your accounting policies and strategies that fit your legislation and accounting methods.
Below is a quick demo on Opening and Closing Periods in Oracle Fusion Applications:
More details on Opening and Closing Accounting Periods posted on the Oracle Documentation.
No comments:
Post a Comment