In the previous article, we learnt how a GL Accounting Flexfield can be designed in the Fusion Financials. That article can be read from this link. In this article, we will see how the different account values in the Natural Account Segment can be classified as either of type Expense, or Revenue, or Asset or Liability or Owners Equity. The steps for configuring this are simple in Fusion Financials, and those will be explained, but it is good to touch base on why this config is required in the first place.

What are the account types that can be attached to the Natural Account Segment ?

These are

1. Asset

2. Liability

3. Expense

4. Owners Equity

5. Revenue

The others are related to Budget allocation, that we will keep out of this specific article so to keep things simple from accounting perspective.

Firstly, why do we need to perform this classification of Account Segment Value Set?

As stated in previous article, the senior management at any point in time might wish to know how much asset or liability does the company have at any point in time. They would like to know how much are different line of businesses or cost centres spending and on what type of expenses i.e. hardware, train, flights etc. For printing the companies balance sheet and income statement in GL, the system should know which accounts fit into Asset or Liability or Income. The Fusion General Ledger will not be able to produce reports unless the accounting transactions have been flagged as expense transactions or liability transactions etc.

Also let us go back to the equation of accounting that uses 5 Account Types

Assets = Owners Equity + Liabilities + Revenue - Expenses

It means, Oracle Fusion general ledger system should be able to flag any Journal Line into one of these buckets. This happens by attaching Natural Account Segment Value set values to one of these five account types.

Now let us see how how this gets implemented in the Fusion Financials.

Go to the task that allows you to manage the Chart of Account Value Set Values

Search for the Accounting Segment value set, as we defined in the prior articles.

Now, edit each value one by one.

Attach the account type from one of the permissible Account Types in Fusion Financials.

Now repeat the steps for all other account types.

Anil Passi

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