ORACLE R12 FUNCTIONAL CONCEPTS
Business Group
The largest organization that you set up in Oracle HRMS to represent your organization as an employer. All the Human resource information i.e. employees information is stored at Business Group level.
A business group may correspond to a company or corporation, or in large enterprises to a 'Holding' or a parent company.
Ledger
The ledger contains the accounting representation of the company. Ledger balances assert that the balance:
a)has a specific value in a particular currency
b)on a given date
c)on an account
d)is properly calculated
We all know that unlike 11i, in which we had the concept of Set of Books, a Ledger consists of 4C's. Points A, B, C and D correspond to Currency, Calendar, Chart of Accounts, and Convention.
Convention refers to Sub ledger accounting which we will discuss later.
Legal Entity
Legal entity" in the Oracle system corresponds closely to "legal entity" or "Company" in the real world.
It is a juristic person which can:
a)enter into contracts
b)own assets
c)pay debts & file returns
It represents a legal company for which you prepare fiscal or tax reports
Accounts for themselves (balance sheet, income statement, specified reports)
Establishments
An individual legal entity can have exposure to several tax authorities, and be registered with each.
For example, a California-registered company might have "establishments" in California and in several other states.
Each legal entity is made up of at least one establishment.
Note: When you create a Legal entity in the 'Account setup manager' an establishment is created automatically created in the same name to fulfill registration requirements. The main establishment is always located in the country of legal entity.
Operating Unit
An Organization that uses Oracle sub ledgers, such as Oracle Purchasing, Oracle Receivables, Order management.
It may be a :
a) Sales Office
b) Department
c) Division
All the transactions happen via sub ledgers.Operating units are assigned to ledgers and default legal context.
Unlike 11i, operating units are no more connected to Legal entities. However they derive their relationship by 'Operating unit' and 'Legal entity' both being attached to a Ledger.
Inventory Organization
It represents an Organization for which you track Inventory transactions and Balances.
It only holds items with no transactions
These organizations may be manufacturing or distribution centers.
Inventory organizations are associated with Operating unit.
The Inventory Organization has a 'costing method', a 'workday calendar', and a 'list of items'.
Balancing Segment
Within a ledger, you can nominate a segment of your Chart of Accounts to be a balancing segment.
Balance segment are prepared for those for which you want to measure both Income and wealth.
- To prepare both Income statements and Balance sheets
- To measure ROI
E.g. Your divisions, plants for which you need to measure calculate balances, calculate ROI.
Connecting the .............
Maruti Suzuki India is the Business group which will have all the Human Resource (employee information) stored in it. It will be highest in the organization hierarchy.
Maruti Suzuki India limited (Legal Entity) will be liable for filing tax, preparation of fiscal report and compliance with all tax related authorities.
The showrooms of the company will be Operating units since they act as sales offices. Note that although legal entities are liable to tax, they do so with the help of operating units.
The factories/manufacturing units of the company will serve as Inventory organizations of the company.
Note: Business Group, Legal entity, Operating unit and Inventory organizations need not be separate organizations. There might be a single organization which would serve as all of them.
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