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WHAT IS ACCOUNTING CONVENTION, WHY WILL WE USE IT
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Answer / svijay.sure
Accounting is done based on accounting standards and
policies set by their country. If we do not use the same
there would not be any comparision. One country's
accounting convention may not be useful for others so this
is the other 'C' added in R12.
| Is This Answer Correct ? | 5 Yes | 0 No |
Answer / narendaroracleapps
In R12 the Set of Books concept was replaced with Ledgers;
i.e. the 3 “C’s” became the 4 “C’s”:
Set OF Books Ledger
1. Chart Of accounts 1. Chart Of Accounts
2. Functonal Currency 2.Functional Currency
3. Calendar 3. Calendar
4.Accounting Conventions
The Accounting Convention aspect of a Ledger is enabled by
Oracle’s introduction of sub-ledger
accounting, which facilitated multiple accounting
representations of a single transaction. (This very
fundamental point is absolutely key to understanding SLA:
the transaction entered has now been separated from the
accounting entry created from it).
Ledgers reflect accounting conventions. The balance on
your "revenue" account has meaning only insofar as it
reflects your definition of revenue
We make it easy to construct meaningful balances by posting
to the accounts according to easily articulated and
controlled rules that are applied to each subledger
transaction. The rules are set up in Oracle Subledger
Accounting and are assigned to individual ledgers. Groups
of rules can be managed in sets that we call "Accounting
Methods". For those situations where you must comply with
both local regulation and a parent GAAP, the rules engine
allows you to account for a business transaction using
different conventions. This support can be tailored to the
complexity of the situation, from automatic adjusting
entries in the same ledger through completely populated
secondary ledgers.
For example, by using two ledgers with the appropriate
conventions, a French firm with a subsidiary in the United
States (US), can automatically create local bookkeeping in
accordance with US principles (in the US primary ledger),
but also simultaneously
maintain accounting for the same transactions in accordance
with French regulations (in a French secondary ledger).
******
Thanks
Narender Chintam
Oracle Functional Consultant .
| Is This Answer Correct ? | 3 Yes | 2 No |
Answer / arjun
Accounting Convention method is nothing but a accounting
method it is a new feature in the R12, based on this method
the accounting will be derived for subledger transactios.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / seshasai
Accounting Convention which is nothing but subledger
accounting. It is the additional feature introduced in R12
For Eg. If the company in India is primary company and it
has branch at US which we can treat as secondary or subsidary,
1) In us its functional currency is USD which differs with
Primary country functional currency,
2) In US Calander is from 01-jan to 31-dec and in Primary
company Calander is 01-APR TO 31-MAR
3)BASED ON PRIMARY COMPANY REQUIREMENT ACCOUNTS ARE CREATED
AND SAME WAY SECONDARY COMPANY ALSO HAVING ITS OWN ACCOUNTS
KEY FLEXI FIELDS
In the above three conditions also we can make a
consolidated Trial Balance
In Oracle Terminology 4Cs in R12 so, we are using it. This
is my understanding, if there is any difference please let
me know.
| Is This Answer Correct ? | 3 Yes | 6 No |
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