GL account type change

 GL account type change

 

I would like to know , what are the steps to be performed in order to change the account type in GL , from balance sheet type to balance sheet type and similarly in income statement type. i.e if i want to change the account type from liability to asset (and vice versa) or from income to expense (and vice versa) , what are the steps to be performed. There are steps mentioned in a metalink note about misclassified accounts (1050920.6) but no mention for asset to liab. / or income to exp. change. Also the explaination is confusing for the case mentioned.
Please follow the below steps.
1.If you have already identified the accounts which are tagged with worng account type in segment qualifier,then pull the code combinations(CCID) exists for those accounts. At this stage don't coorect the account types in segment qualifier.
2.Take those CCIDs and check in GL Balance table if any balance exists agaist the CCIDs for a fiscal year. If exists then find out the YTD balances as per below query

SELECT gb.set_of_books_id sobid
,gb.code_combination_id ccid
,gb.period_net_dr
,gb.period_net_cr
,gb.begin_balance_dr
,gb.begin_balance_cr
,gb.begin_balance_dr-gb.begin_balance_cr+gb.period_net_dr-
gb.period_net_cr YTD
FROM gl_balances gb
WHERE 1=1
AND gb.CODE_COMBINATION_ID IN (1234,5678)
AND period_name = '&period'
ORDER BY gb.CODE_COMBINATION_ID

You have to check fiscal year wise.
For example if the balances are started from 2006 FY and ended in 2008-05.The latest period balance is 2008-05.
So first you have to get the balances of 2006-12 and make the YTD balance zero passing either manual or ADI journal entries.You have to do it for each fiscal year starting from the oldest one.
When you create journal entires, create it for the last day of last period that means for 2006 it is 31-Dec-2006 and for 2008 it will be 31-May-2008.
Note: At this stage note down all the journal batches you have created to zeroise the balance as you have to reverse and post the same batches later on.
After posting check again the YTD balances for the CCIDs to make sure they got zero.
3. Once you will make the YTD balance zero.Then write a update script and update the account types of wrongly appeared account types in GL_CODE_COMBINATION table level.
Ex Script:
UPDATE gl_code_combinations
SET account_type = 'E'
WHERE segment1||'.'||
segment2||'.'||
segment3||'.'||
segment4||'.'||
segment5||'.'||
segment6 = 'BSV.CC.NAC.PP.SVC.XY'
AND account_type='R';
4.The update the account types in segment qualifier of the account value set.

5. Run a query to check if there are still any mismatch exists for the accounts. I mean compare the code combination account type and segment qualifier account type for all wrong accounts.

6. If everything looks fine then reverse and post the journal batches created at step 2.
Note: Care should be taken while reversing is, to reverse the journal batches to same period for which the journal batches are created and posted.

 

Many thanks for your reply Ansuman . Well i have one more doubt in this case. Since i wish to change the account type from liability to asset. And as per metalink note :1050920.6 - it is mentioned in the note as follows :
'Note that this is not necessary if the account type was classified as one balance sheet type (Asset, Liability, Equity) and should have been another balance sheet type or the wrong type of income statement(Revenue or Expense) and needs changing to another income statement type.It is only necessary if it was classified as balance sheet and needs to be income statement or vice versa.'

Hence i would like to confirm that whether the steps mentioned are to be followed or is there any other method for account type change.

Here the account type is to be changed from one B/S type to another B/S type (from liability to asset).

 

If you reread the note, it says if you have enabled Average Daily Balance(ADB) for your SOB then you need to reverse the balances of all the misclassified CCs for all the periods.(i.e,for a particular fiscal year say 2008: Jan-08,Feb-08,Mar-08 etc.) but this is not required incase of Standard Balance.
In Standard Balance you have to only zeroise the YTD balance for a whole fiscal year that means the YTD calcualted as of DEC-06,DEC-07 etc. not for each period of the fiscal year.
So
For ADB - Reverse the journals for each period.
For Standard- Zeroise the YTD of journals as of last period of the each fiscal year.
Actually the balances are calculated straight forward in case of Stadard Balancing than in a complex way for ADB.That is why Oracle says not to reverse the journals for each period in case standard balancing.
In a simple manner let me tell you why we need to zeroise the balance.
You must be known that, Revenue - Expense = Net Income/NetLoss.
Now think if any of the account will be Revenue instead of Expense then the Net Income will go up if that account has a balance in it.
So that is why we need to zeroise the balance.
In your case the accounts involve are only balance sheet type,even though we really don't need to zeroise balance still it is better to follow the process so that we will make sure that we are not doing anything wrong.

Asset,Liability and OE account balances carry forwarded to a new fiscal year but balance in retained earning account is result of calculation invoving revenue and expense account for which it is important to follow the reversal process in case of income statement misclassified accounts.

To know the activites in case of Average balance please refer note: 210558.1.

 

Please check the "Correcting Misclassified Account Types" in GL user guide under Maintenance Chapter.