How do I define my Legal Entities?

In the real world a Legal Entity (LE) can enter into contracts, own cash (bank accounts), employ people, pay taxes, be sued and simlar. In Oracle Financials Release 12, a whole new product; Legal Entity Configurator, was created to manage them. We allow you to define your real world Legal Entities and then map them to the E-Business Suite objects and structures. Transactions are stamped with an owning (first party) Legal Entity and that will be used to drive tax, accounting, intercompany and Legal Reporting.

So let’s look at the relationships LE have to other E-Business suite objects.

1- Accounting Structures

In the General Ledger Set Up a Legal Entity can be mapped to

  • A Single Ledger
  • One or more Balancing Segment Values (aka Company Code) within a ledger.

2 – Operating Unit

There is no explicit mapping of Legal Entity to an OU, the relationship is derived from the ledger assigned to the OU and the Legal Entity mappings to ledgers as detailed above.

So how might you set up your LE in relation to your other set up in financials? There are two implementation models

1:Many

  • LE are mapped to the Balancing Segment Value (BSV, aka Company code) within a Ledger, so multiple LE are accounted for in a ledger.
  • An OU will have one Ledger assigned so transactions for many LE are processed and accounted in a single OU

1:1:1

  • A single LE is mapped to a Ledger
  • An OU will have one Ledger assigned
  • Therefore an OU only has one LE (that meas it is easy to derive the LE given the OU)

So what model should you use?

That depends where the LE are registered.

The 1:M model is recommended and preferred in the US, the 1:1:1 model is recommended for most non US regions.

related post: Can I assign an Operating Unit to Multiple Legal Entities ?

84 Responses

  1. Useful information regarding legal entities in R12, need a bit more clarfication regarding the Operating Unit defining and assigning it to legal entity/ledger[i.e. whether it OU has to be defined from the form based application through HRMS (or) the WEB BASED application through ASM]

    Regards
    Kumar

    Like

  2. The Accounting Setup Manager (ASM) will allow you to ‘quick create’ a Legal Entity and then map it to your ledger and/or BSVs

    The operating Units are still defined in the HRMS forms.

    You may also look at the GL data access sets that could imit the bsv that can be used in an OU

    Like

  3. Hi
    .
    .
    Such a peacefull information have putted here .
    now i got in R12 wats LE

    Thanks

    Like

  4. [...] Can I assign an Operating Unit to 2 Legal Entities? Posted on December 11, 2007 by davidhaimes The short answer is sort of. Which is not much help to anyone, hopefully you will have a few moments to read on and I can explain myself. This post assumed that you understand the relationship between Legal Entities and Ledgers which I discussed in an earlier post. [...]

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  5. [...] There is a similar list to this on the Ebizsig blog based on hits, I gave bonus points to my posts for links to on comments on and the top 5 look like this: 1) How do I define my Legal Entities [...]

    Like

  6. why oracle has multi-org structure ? what is the importance of it ? how is it related to set of books and other areas of e-business suite ?

    Like

  7. Hi,

    We have taken the plunge with R12 Financials, GL in particular and your blog is like what the doctor ordered. This post is sort-of related to Intercompany but not quite so I apologize but I am really troubled.

    We have 3 ledgers in our GL module –US, Canada and Consolidation. US and Canada are transaction ledgers and Consolidation will be used for consolidating US and Canada for period end reporting. All three ledgers use the same Chart of Accounts and Calendar. US and Consolidation have the ledger currency as USD. Canada has the ledger currency as CAD.

    As per the Oracle translation methodology, the Balance Sheet items will be translated at period end rates (except for those with historical rates) and Revenue and expense items will be translated at period average rate if the ‘GL: Income Statement Accounts Revaluation Rule’ is set to PTD (required for FASB-52 reporting) .

    As per GAAP, the cash flow statement of Entities which have their base Currency different (Canada) from the consolidating currency (Consolidated) some of the items have to be stated differently from the way they are put up in the consolidated balance sheet. For e.g. the net fixed assets acquired during the period have to be shown at the acquisition rate and the net of the current assets have to be shown at period average rate and not period end rates as done by translation for FASB- 52 requirements. The company needs to generate the consolidated Balance Sheet and Profit and Loss account with the US and Canada transactions as per FASB -52 requirements and the Cash Flow as per GAAP.

    I have raised an SR with Oracle wherein they have mentioned that there is no standard way of catering to this requirement. If you have any insights, would appreciate it if you could share with me.

    Thanks,

    Manish

    Like

    • Manish,

      If you dont want the system to translate your current assets have to be shown at period average rate and not period end rates as done by translation for FASB- 52 requirements then consider historical rate
      for specific GL account you can enter the rate that you want in your case is Period end rate.
      Let me know if you have any more questions

      Like

  8. At a very high level, Multi Org is a way to separate your transactions and set up into buckets called Operating Units (OU).

    You can use different set ups for different OU and give different users access to different OU as per your requirements for transaction processing.

    Transactions in an OU must be accounted for in the same GL set of books (in R12 called a ledger) so as part of the set up you define that ledger.

    I’d suggest checking out the resources at the link below to get more insight into this.

    http://davidhaimes.wordpress.com/2008/01/05/useful-oracle-financials-resources/

    Like

  9. Manish,

    I’ll give it some thought and discuss with some other people and get back to you as soon as I can, but it might take a few days

    Like

  10. David,

    Thanks for replying to my question. I can forward you the SR number also if you need it.

    Your insight/feedback is very much appreciated.

    Thanks,

    Manish

    Like

  11. [...] David has a good posting on his blog on How to define Legal Entities. [...]

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  12. Manish

    The suggestion I got from some GL folks is use a separate account for the asset’s historical value vs. current activity, and then you define an historical rate for the historical value. In this case, GL translation will use this historical rate to keep the historical balance at the correct level, and translate the current activity at the current rates.

    Like

  13. [...] got a comment from Manish, customer who before explaining the problem he was facing wrote: We have taken the [...]

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  14. Hi David,
    I will appreciate your help with the following:

    I have a existing Oracle applicttions and need to bring one of the new business on it. The new business will use GL, AP and FA. We will use existing COA. This business will have 3 sets of books (1- tax book, from April to March; 2- Primary book, from July to June; 3- Reporting book, from July to June); All books will have same currency; HOW DO I TRANSFER DATA FROM PRIMARY BOOK INTO TAX AND REPORTING BOOKS EVERY MONTH? IS THERE ANY STANDARD ORACLE PROCESS WHICH CAN BE SCHEDULED?
    THE REPORTING BOOK WILL HAVE DIFFERENT DEPRECIATION METHOD SO HOW DO I NOT TRANSFER DEPRECIATION FROM PRIMARY TO REPORTING BOOK AND DO SEPERATE DEPRECIATION IN REPORTING BOOK FOR THE SAME ASSET THAT IS ALSO IN PRIMARY AND TAX BOOK?.
    HOW DO I APPRACH ON SETTING THESE NEW SETS OF BOOKS?
    Thank you in advance for your help.
    Nilesh

    Like

  15. Hi Nilesh

    Are you on R12 or 11i?

    On R12 you can have one primary ledger and then create as many secondary ledgers as required so you can get all the accounting representations you require. The secondary ledgers can be at different levels, you can either just have balance levels or you cna have each transactions accounted in the secondary ledger with a completely dedicated set of rules.

    This will not require you to do any data transfer Oracle maintains those secondary ledgers for you and events are posted to all ledgers.

    Thanks,
    David

    Like

  16. Hi David,
    I am on 11i.
    How it can be done in 11i?

    Thank You!
    Nlesh

    Like

  17. For your tax book – the only difference is the calendar?

    For your Asset Book – I think you need to define a different asset book in Fixed Assests and not a different set of books in GL – I am not an expert in Fixed Assests

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  18. Yes, for the tax book, the only difference is the calendar, it is different from primary book. Reporting book has same calendar as primary book but the depreciation method is different in reporting book.

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  19. For a secondary ledger in 11i – you could use a consolidation ledger. You can post either the balances or the journal level detail to the consolidation ledger and use an account mapping to determine what accounts it gets posted to in the consolidation ledger.

    Like

  20. Nilesh a word of warning – when you upgrade to R12 that consolidation ledger would not get upgraded to a secondary ledger, which is probably what you would want – you’d have some consulting work to do there to fix that after the upgrade.

    Like

  21. Hi David,
    For sending to the secondary ledger – Can I do it even though the GL calendar is not the same for Tax and Primary book?
    Also, What setup is required/what standard processes can be used to transfer data from primary to secondary books? Can you give me details?

    Thank you again for your help.
    Nilesh

    Like

  22. Nilesh

    – You use the consolidation functionality to post data to the consolidation ledger and it does not need to have the same Calendar – check the user docs step by step instructions – no point in me repeating that information here.

    Like

  23. Hi David,
    Thank you again.

    Nilesh

    Like

  24. I am a fresher in Oracle financial functional, I read your blogs regularly and they are so helpful to me. Can you explain me or send me sample doc. of BR100 and MD50 for AR,AP and GL. Your kind help is highly appreciated.

    Like

  25. Rajesh,

    Sorry I don’t think I could send these even if I had them as it could be Oracle property. If you are working for a consulting firm check with your employer and if they don’t have them, then somebody in the firm needs to create them

    Like

  26. We have a requirement to create balance sheets at different levels (banners) in the company. Right now balance sheet is created at the overall corporate level.

    We realize that we will have to prepare some FSG’s at the levels at which we want to report. However the complications are due to the fact that the balance sheet offset entries (impacting Payables, Receivables etc) are made at a corporate level and not at banners (cost center segment) at which we want to report.

    For example if we take AP the liability side for invoices is always booked to one cost center 70000 at the corporate level so the detail is not available for the banners.

    Any inputs to this problem will be of great help

    Like

  27. PS

    So is the cost center segment your balancing segment?

    I would have thought if you do the above then if the liability is at a different cost center you’ll always need to create a balancing set of entries to move that liability form 7000 to the other cost center on the journal. Then you can create balance sheets for each cost center.

    I think I might be either misunderstanding the question or oversimplifying the problem.

    Like

  28. Is there any relationship between operating unit and balancing segment? Should it be 1 to 1 relationship or I can have one OU and many BSVs?

    Like

  29. There is no specific relationship between OU and BSV defined in the system. Apart from the ‘transient’ relationship as described above.

    It is fine to have many BSV processed in a single OU. In the 1:Many case above that is common and very desirable, especially if I want to have shared service center processing where one OU will process transactions for many BSV/LE

    Like

  30. In 11i we have 1 SOB, 2 LE, 2 OU and 2 BG. Each OU operates as separate payables department and by separating the employees by BG secured each OU to only see and enter expense reports for their employees.
    For 12, we want to have one BG for the country, but I’m not clear on the relationship between the BG and OU. I think it’s only through the security profile. But how is that enforced is it becuase the employees assignment is assigned an OU. What if the employee had mutliple assignments for different OU, would that mean the employee could be paid through both OU, would that create two home sites in TCA/Suppliers.
    Thanks for your help.

    Like

  31. You are talking specifically about Expenses here I assume.

    BG and OU are only related via security group, but expenses does have some nuances and I’l need to check up on your specific question. I’ll drop you a mail

    Like

  32. Hi David

    Greta blog

    I still need to wrap my technical head around as to what an operating unit and legal entity is in terms of the application/business, correct me:

    1.legal entity is a classification of an organization, basically its the organization at which tax and reporting occurs?

    2.Operating unit is org id specific or ledger specific?
    So all organizations are assigned to an operating unit
    or operating unit is specific to ap, and another one for ar, another for cm, and anotehr for pa, etc??

    Thanks in advance David

    Like

  33. 1. No legal entity exists in the real world and is modeled in Oracle FInancials outside of the HR Organization Model

    2. An Operating Unit is just a specific classification of an Organization. You can use(and will want to use) the same OU for different modules, not s diff one for each module.

    Like

  34. David,

    Could you shed light on the Establishment – I know it is required in eBizTax and that it is automatically created when a LE is created and that 11i upgrades automatically create an establishment for each OU; but what is the deal with these? Are they like GRE/LE used to be or something like that where there is limited use now with more to come later?

    Like

  35. Hi David

    I am getting basic doubt in R12.

    If you see 11i Org Structure in Oracle it is as follows

    BG –> SOB –> Legal Entity –> OU –> INV ORG

    In R12 all demo and Oracle Presentation shows
    BG –> Legal Entity –> Ledger –> OU –> INV ORG

    Even if you go through Accounting set up Manager,
    first it is asking you to create Legal entity before setting the Ledger. In 11i We define SOB and then we attach to GRE: Legal Entity

    R12 Navigation Path: Accounting set up Manager –>
    Click on Create accounting set up it goes to Legal entity first before defining ledger.

    But if we go through the Oracle Multi org user guide of R12 it shows
    BG–> Ledger –> Legal Entity –> OU –> INV ORG

    I am confused now. Which is correct in R12

    BG–> Ledger –> Legal Entity –> OU –> INV ORG? or

    BG –> Legal Entity –> Ledger –> OU –> INV ORG?

    According to me one Legal Entity cannot be attached to Multiple Ledger. Also by definition in Accounting set up Manager Legal entity comes first before defining Ledger. So I felt
    BG –> Legal Entity –> Ledger –> OU –> INV ORG
    is the right model

    What is your opinion?

    Please respond

    Regards
    Sivakumar

    Like

  36. Hi Sivakumar,

    Welcome to the blog. Don’t be in doubt, you seem to have a decent understanding if R12 but the main point to note is that there is no strict hierarchy of these objects.

    A Ledger may have one LE or many LE attached.
    An OU may also have one LE or many LE attached.
    A BSV may have one LE or many LE
    An LE may have many BSV
    An LE should be accounted in a single Primary Ledger (of course there may be a number of secondary Ledgers for the same LE).

    Don’t let the navigation order trick you into thinking there is a hard and fast hierarchical relationship that everything must follow.

    Hope this helps.

    Like

    • I think your second point here is very misleading:

      “An OU may also have one LE or many LE attached.”

      Correct me if I am wrong but in OU-specific sub-ledgers like PO, AP, and AR, you only see one Legal Entity, which is the default legal context for that Operating unit and you CANNOT select multiple LEs in sub-ledgers.

      Yes, you can theoretically use multiple LEs in AGIS by Transaction Type and Source, but typically, those would have the same in the same module in the same operating unit.

      Marian

      Like

  37. Bill

    Establishment is not like GRE/LE don’t let the upgrade fool you, they are very specific real world objects which we define.

    The term establishment is well known in parts of Europe, the word comes form France where it has a very specific meaning. In the US it is more akin to a branch, if I am a New York based company with a branch Sales office in California then I would create a California Establishment that is going to help eTax figure out what taxes I need to pay.

    An establishment is wholly owned by a Legal Entity.

    The main use of this is in eTax and some global reports use it too, as for more to come I couldn’t answer that :)

    Like

  38. David,
    Thanks for the wonderful job you are doing.

    I saw your update “….An OU may also have one LE or many LE attached…”

    ‘…’There is no explicit mapping of Legal Entity to an OU..”

    Does this relation ship occur ONLY through ledger??

    If the above statements are true, then what is the necessity to assign the legal entity context to OU while defining the OU either through the hrms form or accounting setup manager.Infact this is mandatory to my knowledge..Pls advise

    Like

  39. Durga,

    You should check out this post

    http://davidhaimes.wordpress.com/2007/12/11/can-i-assign-an-operating-unit-to-2-legal-entities/

    While setting up an OU you will define a Default Legal Context, the key here is default. This is not the only Legal Entity associated with the OU that can be used on transactions within that OU it is just the default one if the derivation rules cannot find a better match.

    Hope this helps
    David

    Like

  40. Thanks David…

    I have one more problem..I have a LE for which a BSV has been assigned..

    When I log into AR resp for the OU, then only the BSV attached to LE is visible. But this is not the same case with AP. When I am trying to enter a distribution account all the BSVs are visible.

    Pls note that both AR&AP are using the same OU,LE&ledger. I have done this experiment on client’s upgraded instance.

    Why is this so. I have raised an SR long way back and I am still to hear from oracle on this. Would appreciate any pointers on this.(Oracle confirmed that they are having the same behaviour in their instance, but things are at investigation)

    Thanks,Durga

    Like

  41. Durga,

    Send me an email. This could be a bug, or it could be some other set up.

    Like

  42. sent a mail..thanks

    Like

  43. Hi David,
    There is one problem which is unsolved since long, i.e. We have 10 SOBs and all use same Chart of Accounts. There are Six segments and in that two segments are to be SOBS specific they are Location and Analysis. But right now i am finding all the values of 10 SOBs and to select amont them is cumbersome. Please suggest soultion. Waiting for your reply.

    Like

  44. Hi David,

    In R12 oracle has introduced ‘E-Business Tax’ as a separate module. If i am upgrading 11i instance to R12 do i need to implement this module in separate.
    Client is using GL, AP, AR, FA, CM & PO and their business is spread in different countries (single instance).

    If you can share some information regarding ‘E-Business Tax’ id could be great.

    Thanks in Advance
    Ranjeet

    Like

  45. David,

    A small comment to your 1:Many (us) and 1:1:1 (others)

    In Europe I see several constructions used :
    – For multinationals 1:1:1 (for a AX country )
    – For multinationals 1:1:1 (if country has a specific currency)
    – For Multinationals within non AX-countries with EUR as
    currency we implement
    one Ledger : several (LE) : one OU per (LE)

    Like

  46. Albert,

    Thanks for the information, I understand why companies would want to take your third option where possible.

    Do you hear of having many LE in the same OU in Europe?

    Like

  47. Hi David,

    I have been looking at your postings which are quite interesting dealing with various scenarios in Oracle applications.I’m fairly new to Oracle applications and have been trying to find some documentation which can give clear step-by-step setup details in Oracle applications e.g where and which option do we select to create OU/INV ORG?

    Thanks in advance
    Anil

    Like

  48. Hi Anil,

    These step by step instructions are not what this blog is really about. There are a number of blogs and sites that do lists of set up steps and there are also a number of excellent Oracle Apps training classes that would cover these things.

    I hope you’ll still stick around and contribute to the discussions.

    Thanks
    David

    Like

  49. Sure.Thanks for your response.

    Anil

    Like

  50. Hi David,

    I have been recently assigned the task of revising our intercompany reconciliation procedure. We have peoplesoft 8.4 and a manual reconciliation procedure whereby subsidiary financials are sent to corporate, intercompany balances are analyzed and any major differences brought up to the subs to reconcile. Any suggestions or input would be appreciated.

    Like

  51. Hey David,

    Currently am working with US Federal Financials. You have any stuff that could explain its functionality in a higher level?

    Regards,
    Naresh

    Like

  52. hi david
    i need ur help in how to setuo intercompany in R12 . i want more description for legal entity and operating unit.
    regards
    Mokhtar

    Like

  53. Hi David,
    My first post – so let me first say how helpful this blog is – great work and keep it up.

    Your comment:
    “The 1:M model is recommended and preferred in the US, the 1:1:1 model is recommended for most non US regions.”
    Why? What functionality is impacted?

    If I have multiple (say 20) LEs within a non-US country, what is driving the recommendation to setup a separate OU & Ledger per LE. Straight away I can see a maintenance issue for AP supplier sites.

    Cheers,
    Dabo

    Like

  54. For cases where there is a US Ledger with multiple BSVs and One German and One French Ledger with only one LE and one OU each, must all the BSVs (all three share a BSV Value Set) be “assigned” to the ledgers of each so that I/C can work properly allowing the partner’s BSV to populate the I/C segment?

    Like

  55. Hi David, my question is actually the same as Dabo’s but I do not see your reply so I apologize but asking it again.

    Also, this is a great blog!!!

    Here was the question —

    Your comment:
    “The 1:M model is recommended and preferred in the US, the 1:1:1 model is recommended for most non US regions.”
    Why? What functionality is impacted?

    Like

  56. We have to create 3 sets of books (SOB) for 3 branches and we will consolidate to another SOB representing the legal entity (the functional currency is EUR).
    Actually, the 3 SOB’s haven’t the same functional currency (1 =EUR, 2=GBP, 3=EUR).
    It means we have to translate in EUR first and then run the conso into the legal entity.
    Is it the best way to do? Who can we manage the reconciliation (Legal entity = branch1 & 3 in EUR + branch 2 in GBP ) ?
    Does it exist another way to avoid the translation phase by another approach?

    Thanks

    Red1

    Like

  57. Perhaps you could have another MRC SOB for each SOB, where needed, that is in EUR. Then the MRC SOBs will automatically be in EUR and the consolidation process will all be EUR from the MRC SOBs.

    Does this sound like something that might work>

    Like

  58. There is quite a bit of documentation – if you have never heard of MRC or read about it, I suggest you start witht the use guide, then look on Metalink for existing white papers, etc. or OneWorld documentation if you have access to that. I would join a user group in your area or by email contact. This is a big subject with decision trees and each choice brings with it different consequences. Not the sort of thing I can just hand over to you and you will understand after one sitting.

    Like

  59. If I am using autolockbox API to create receipts in R12, how do I derive operating unit for given Receipt? Remittance Bank account for given receipt is known.

    Thanks in advance.

    Like

  60. David,
    Thanks for the incredibly useful blog.
    We are currently on 11i10, going to R12.
    Australian government portfolio (group of departments); one BSV per agency, however some agencies may have to submit separate tax reporting (VAT style transaction reporting).
    Currently 1 SoB / Ledger and 1 OU
    We are proposing assigning BSV’s to LE’s within the 1 Ledger; 1 LE per tax report requirement.
    HOWEVER I understand your post (http://www.orafaq.com/forum/t/70130/2/ on 15 January 2008) to indicate that it would be better to have separate OU’s.
    You wrote:
    ” If [these 5 companies] are [outside the US] and you want to use the VAT reporting provided by development you should give each LE it’s own OU and it’s own sob, otherwise you are right you will have problems with some of the reporting.”
    This is in line with our testoutcomes and concerns – hence would appreciate your confirmation.
    We have noticed for example that the LE on the invoice header defaults from the OU (?), so even if the distribution goes to the BSV of a different LE, presumably AP reporting will attribute this invoice to the default LE? I also cannot figure out how to override this default.
    Plus do you know if eBus Tax reporting works off the LE stamped on the invoice header or the BSV of the tax distribution? If the former is the case we would definitely want to go for separate OU’s
    Once again thank you for so generously sharing your knowledge and time

    Like

  61. Great post! Nice!

    Like

  62. [...] The busiest day of the year was February 10th with 352 views. The most popular post that day was How do I define my Legal Entities?. [...]

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    • Hi David
      We have ONE US legal entity which is spread across 4 different countries. The US operations has US as its operating currency as USD . It has a French, Italian and a Indian operation. French operation will be using USD as its “functional” currency , Italian will be using EUR, and Indian operation INR currency.
      Since there are 3 currencies , I understand that I will have to define three ledgers,
      But the problem is that if I make USD as the primary ledger and EUR , and INR as secondary ledgers …. my transactions happening in US Operating unit is getting replicated in my EUR and INR secondary ledgers as well. To see the US operations in Secondary ledger is very annoying and it is junk data as far as internal controllers are concerned.
      Am I missing something here???
      It seems quite fundamental that one LE will be spread across different countries having different currencies. It would seem to me that Ledger should have had currency removed.
      But back to my basic question is that secondary ledgers of currency EUR and INR are showing transactions of US and French Operating Unit, and vice versa is not something which we want. Is it the intended functionality?
      Thanks
      Datta

      Like

      • It is very unusual that one Legal Entity operates across 4 countries in three different currencies (in fact I have never heard of such a case)
        It is usual that each country has it’s own Legal Entity that could be a wholly owned subsidiary of the US Legal Entity.

        Your set up is not the recommended way of doing things. You should set each of these countries up as a primary ledger with the functional currency as the ledger currency. If required for the parent to see everything in USD, then add a USD reporting currency for the EUR and the INR primary ledgers.

        Like

  63. Hi David,

    The article is very informative and had covered the core aspects of Ledger and its associated entities.

    Have a Question: Once you assign a BSV to a LE, can I remove the association and move the BSV to another LE, given that there are no transactions generated on the BSV, that are stamped with LE.

    Like

  64. One ledger for EMEA or one ledger for each country
    Hi David,
    We are on 11i and re-implementing R12 (not an upgrade). First segment of COA is LE. Corp HQ is in US with many subsidiaries in Europe. Although COA, calendar and curreny (Euro) is same, each country in EMEA currently has its own SOB. This is due to unique doc sequencing needs. With R12, we are considering using just one Ledger for all of EMEA – with each country subsidiary setup as an LE and also as an OU, within this one ledger; however the main questions we are facing are:
    Q1: Would localizations work with the one ledger for EMEA model?
    Q2: Would doc sequencing work with the one ledger for EMEA model?
    Q3: What would be the pros and cons of using one ledger for EMEA versus one ledger for each country? Usually I’ve heard that 1:1:1 model is suggested for countries in EMEA, rather than the 1:M. What is the reason for this?

    Thanks for your help

    Like

  65. Dear All, I would like to know in R12 is there any way that I can create two balance sheet in one company (legal entity) and during year end closing the retained earning also be updated for both balance sheet. Please reply really appreciated for your feedback. Rgds, Kashif

    Like

    • Create more than one BSV – one for each of the Balance Sheets you want. Then be sure and account properly by each of the two BSV’s and you will have two Balance Sheets – one for each BSV within the one LE you say you have.

      Like

  66. reposting as there was no reply:
    Hi David,
    We are on 11i and re-implementing R12 (not an upgrade). First segment of COA is LE. Corp HQ is in US with many subsidiaries in Europe. Although COA, calendar and curreny (Euro) is same, each country in EMEA currently has its own SOB. This is due to unique doc sequencing needs. With R12, we are considering using just one Ledger for all of EMEA – with each country subsidiary setup as an LE and also as an OU, within this one ledger; however the main questions we are facing are:
    Q1: Would localizations work with the one ledger for EMEA model?
    Q2: Would doc sequencing work with the one ledger for EMEA model?
    Q3: What would be the pros and cons of using one ledger for EMEA versus one ledger for each country? Usually I’ve heard that 1:1:1 model is suggested for countries in EMEA, rather than the 1:M. What is the reason for this?

    Thanks for your help

    repo

    Like

  67. To add to my previous posting
    For local statutory reporting, each APAC/Non US country/LE would need its own secondary ledger.
    Q4: Is it better to have primary ledger as US GAAP and secondary as local statutory OR is it better to have primary ledger as local statutory and secondary as US GAAP. What are the pros and cons of both options?
    Thanks

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  68. [...] or to a set of books. For more information and a detailed example take a look at my blog post. How do I define my Legal Entities? There's more about LE in the blog too Reply With [...]

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  69. [...] Debemos saber que en la R12 NO hay una relación directa entre Legal Entity y Operating Unit, la relación se produce a través del Ledger y del balancing segment asignado. Así lo explica perfectamente David Haimes (Director de desarrollo de Oracle) en su blog. [...]

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  70. Hi Dave,
    read this blog. It will be more helpful, if you can put some example of real entity as well , while discussing LE, Ledger Sets.
    Like. Corporation ABC has office in US( with 2 local offices) , UK (with 3 Local Offices) with currencies as USD/GBP. So, out of this, which one will become LE, How ledger(SOB) be decided. How many operating units will be there. How they will be connected. I am asking this, as this becomes easy for person like me to understand with some example for new concept.
    Ashi

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  71. Very nice depth external link

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  72. Our company have acquired another. Both companies, parent and new are in the US but different locations. The parent company is on R12 and we’ll need to create a new OU for the acquired organization. I am trying to create a new Operating Unit for the new company under the same legal entity, but when defining the new org, the legal entity address from the parent company is defaulting. Do I need to define a new legal entity for the new company with the new address to accomplish this association?

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  73. Hi, I have a question about legal entities in relation to AGIS. We are currently working on R11 and are planning an upgrade to R12. We now have multiple OU’s and only one SoB and one LE. Is it advisory to change this number of LE’s from one LE to multiple (as many as our OU’s)? Does this have an impact to AGIS? Or is it just a matter of definitions (intra- versus intercompany)? And if we add more LE’s, is it advisory to add them in R11 already? Please advice.

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  74. As you change the name of the legal entity in Oracle if the company is already in production and records for 4 months?

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    • Hi Alexander – I’m not sure I understand this question.

      What you do need to be careful about is to check that this this is indeed a name change and not the formation of a new Legal Entity. How you treat it will differ for those two different situations.

      Like

  75. Preferred stockholders are made higher top priority to results payments and proceeds bought through liquidation quick cash loans Unlike most of other loans,
    poor credit status with borrowers isn’t considered as the cause discrimination by lenders

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  76. […] amassed 81,331 onsite view to date, which amazes me.  My second most popular post of all time is How do I define my Legal Entities? with 28,690 views and that post is also the most commented on post ever on my blog.  So I clearly […]

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