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| Re: what is set of books? [message #216762 is a reply to message #216747] |
Tue, 30 January 2007 05:10   |
David.K.Dickson
Messages: 413
Registered: October 2005
Location: Surrey, England
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Senior Member |
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Let's start with Functional Currency. This is the Currency in which your business funtions, i.e. the currency in which it raises (most if) its invoices, pays (most of) its bills and produces its accounts. It is the day-to-day currency of the business. In most cases, this will be the currency of the country in which it is based. However most oil companies have their functional currency as USD regardless of which country they are based in; this is because the oil industry works in USD and there is a lot less exposure to currency risks for oil companies if they function in the same currency as the rest of the market.
The Accounting Calendar reflects your business's financial year. A lot of businesses have their financial year end at the same time as their country's tax year end, because it makes the accounting for taxes a lot easier. Some businesses have their financial year equal to the calender year, i.e. the financial year ends on 31st December. Most businesses produce internal management accounts every calendar month, or 12 times a year. Some businesses produce internal management accounts every four weeks, or 13 times a year. Some businesses use 4-4-5 (4 weeks, 4 weeks and 5 weeks). The Accounting Calendar allows you to define the number of periods and their start and finish dates. In addition to "normal" periods, you can have adjustment periods, which are often used for year-end accounting adjustments that do not belong in a specific accounting period.
You also need to be aware of the Chart of Accounts, which defines the segments of your account number, what they mean, what size they are and what values (and combinations) are allowed.
If all parts of your business can share the same Currency, Calendar and Chart of Accounts (the three C's), then they can share the same Set of Books. If any parts of you business function in a different currency, then they will need to have their own Set of Books, but you can have the system translate their accounts into your Functional Currency for consolidation.
For more information on all of the above, please refer to the Oracle General Ledger User’s Guide. If you don't have a copy of the Oracle General Ledger User’s Guide, it can be downloaded, with all of the other Applications Documentation from http://www.oracle.com/technology/documentation/applications.html
 HTH
David
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