Oracle Fusion General Ledger supports up to three balancing segments.
Best practices recommend that one of these segments represents your legal entity to ease your requirement to account for your operations to regulatory agencies, tax authorities, and investors.
Accounting for your operations means you must produce a balanced trial balance sheet by legal entity.
If you account for many legal entities in a single ledger, you must:
- Identify the legal entities within the ledger.
- Balance transactions that cross legal entity boundaries through intercompany transactions.
- Decide which balancing segments correspond to each legal entity and assign them in Oracle Fusion General Ledger Accounting Configuration Manager. Once you assign one balancing segment value in a ledger, then all your balancing segment values must be assigned. This recommended best practice facilitates reporting on assets, liabilities, and income by legal entity.
You may represent it by two or three balancing segment values if more granular reporting is required.
For example, if your legal entity operates in multiple jurisdictions in Europe, you might define balancing segment values and map them to legal reporting units.
You can represent a legal entity by more than one balancing segment value, do not use a single balancing segment value to represent more than one legal entity.