13 Use Cases for
Parallel Accounting
Every scenario where one organisation needs two sets of accounting records for the same transaction — and how Oracle Fusion's Secondary Ledger architecture resolves each one without manual journals, shadow systems, or spreadsheet reconciliation.
| # | Use Case | Category | Subledger | Headline KPI | |
|---|---|---|---|---|---|
| 01 | IFRS vs Local GAAP Statutory Reporting | Statutory | All | Close time −25–40% | Explore → |
| 02 | Fixed Asset Component vs Pooled Depreciation | Statutory | Fixed Assets | Manual entries −100% | Explore → |
| 03 | Standard vs Actual / Weighted-Average Costing | Costing | Cost Accounting | Recon time −60% | Explore → |
| 04 | AP/AR — Prepayments, Deferred Revenue & WHT | Costing | AP / AR | Error rate <0.5% | Explore → |
| 05 | Project Revenue — IFRS 15 vs Local GAAP POC | Costing | Projects | Manual adj −70% | Explore → |
| 06 | Intercompany Elimination vs Retention | Group | GL / AP / AR | IC exceptions −75% | Explore → |
| 07 | IFRS 16 vs Operating Lease (Local GAAP) | Statutory | Fixed Assets | Lease entries −100% | Explore → |
| 08 | Tax Ledger — Accelerated Depreciation & Deferred Tax | Statutory | Fixed Assets | DT calc time −40% | Explore → |
| 09 | Hyperinflationary Economy (IAS 29) | Statutory | GL | Restatement time −60% | Explore → |
| 10 | Joint Venture — Working Interest vs Gross | Group | Projects / GL | Gross-up effort −85% | Explore → |
| 11 | IFRS 9 — ECL vs Incurred Loss & Fair Value | Instruments | AR / GL | FV errors −70% | Explore → |
| 12 | Pre-Consolidation Staging (Adjustment-Only) | Group | GL (Adj Only) | Consol prep −30% | Explore → |
| 13 | Government Grants — IAS 20 vs Immediate Recognition | Statutory | AR / GL | Manual entries −80% | Explore → |
Statutory Reporting
A multinational company maintains corporate books under IFRS (primary ledger). Local statutory reporting requires accounting under local GAAP — different provisions, different asset lives, different revenue recognition timing, different treatment of financial instruments. One transaction, two mandatory sets of accounting records.
CoA mapping between corporate and statutory CoA was a manual spreadsheet maintained outside the system. SLA was available but under-configured — most implementations produced identical entries in both ledgers, defeating the purpose. Reconciliation was entirely offline.
Create Secondary Ledger
Accounting Configurations › Manage Accounting Configurations. Set conversion level to Subledger — required for transaction-level accounting differences between IFRS and local GAAP.
Setup & Maintenance › Manage Accounting ConfigurationsDefine CoA Mapping Set
Map each primary CoA segment to the statutory CoA segment. Define rollup rules for many-to-one relationships and account-level exceptions where IFRS and local stat accounts diverge.
Setup & Maintenance › Manage Chart of Accounts Mapping SetsCreate Dedicated SLAM
Create LOCAL_GAAP_SLAM. Assign to the secondary ledger in Accounting Configurations. This SLAM hosts all JLRs that produce different accounting in the statutory book.
Setup & Maintenance › Manage Subledger Accounting MethodsOpen Secondary Period & Activate Close Monitor
Open secondary ledger period before any transaction processing. Configure Close Monitor thresholds — target <0.1% unexplained inter-ledger variance for statutory use cases.
GL › Period Close › Close Monitor- Navigate: Setup and Maintenance › Manage Subledger Accounting Journal Line Rules
- Create JLR for each accounting line that differs — Provision Expense, Lease Liability, asset impairment
- Set Accounting Line Type (Debit/Credit) and assign local GAAP account via ADR
- Condition: Ledger = Secondary. Priority must be higher than default rule
- Navigate: Setup and Maintenance › Manage Subledger Accounting Account Rules
- Create ADRs deriving local statutory accounts based on Legal Entity, Business Unit, or Transaction Type
- Use Mapping Sets within ADRs to map corporate accounts to statutory accounts declaratively
- Accounts that are identical in both books require no ADR — default mapping set handles them
- Create dedicated SLAM: LOCAL_GAAP_SLAM
- Assign SLAM to secondary ledger in Accounting Configurations
- Use Priority and Conditions on JLRs to apply rules only when Ledger = Secondary
- Test: run Create Accounting in Draft mode — confirm secondary entries differ from primary before go-live
Example: Provision for Bad Debt — IFRS ECL model vs local GAAP incurred loss
| Ledger | Account | Debit/Credit | Amount | Basis |
|---|---|---|---|---|
| Primary (IFRS) | 6900 ECL Expense | Dr 150,000 | 12-month expected credit loss | |
| Primary (IFRS) | 1900 ECL Allowance | Cr 150,000 | ECL allowance account | |
| Secondary (Stat) | 7200 Specific Provision | Dr 40,000 | Incurred loss — identified debtor only | |
| Secondary (Stat) | 2800 Provision Account | Cr 40,000 | Local stat provision account |
The IFRS ECL amount (150k) and local GAAP incurred loss (40k) are genuinely different numbers requiring different journal entries. Without the secondary ledger, one of these is wrong — or both exist only in spreadsheets.
vs Pooled Depreciation (IAS 16)
A company maintains IFRS-compliant fixed asset books with component-level accounting under IAS 16 (primary ledger: separate depreciation for Structure, Roof, Mechanical). Local statutory reporting does not require component-level accounting — one pooled depreciation charge per asset class is sufficient and required.
Two separate asset books had to be manually reconciled at period end. Component assets in IFRS book had no automatic link to the pooled local stat book. Manual bridge journal volume per period was significant.
Create STAT_BOOK Asset Book
Create a separate FA asset book assigned to the secondary ledger. Set book type to tax/statutory. Configure pooled depreciation methods (straight-line, declining balance) per asset category — no component split required.
Fixed Assets › Asset Books › CreateConfigure Asset Category Mapping
Map IFRS asset categories (BUILDING-STRUCTURE, BUILDING-ROOF, BUILDING-MECH) to consolidated statutory category (BUILDING). Depreciation in STAT_BOOK uses the pooled useful life and method.
Assign SLA Method to STAT_BOOK
Assign STAT_GAAP_SLAM to the STAT_BOOK asset book. This ensures FA depreciation run produces different journal entries in the secondary ledger from the primary IFRS component entries.
- Create separate JLRs for each component: Structure Depreciation, Roof Depreciation, Mechanical Depreciation
- Primary: IFRS component accounts using COMPONENT_TYPE attribute for account derivation
- Condition: Book = CORP_BOOK (IFRS book). Ensures component rules fire only in primary
- Single pooled depreciation JLR — local stat does not require component-level P&L split
- Condition: Book = STAT_BOOK. ADR derives local statutory depreciation expense account
- Amount derivation: statutory depreciation amount from STAT_BOOK, not IFRS component amount
- Primary (IFRS): recognize gain/loss net of component carrying amounts — separate ADR per component
- Secondary (Stat): recognize based on single asset net book value, different account code
- Create separate Disposal JLRs with Book condition to route correctly to each ledger
Example: Annual depreciation — building asset, IFRS component vs local stat pooled
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS) | 7100 Structure Depr | Dr 80,000 | 50yr useful life, component |
| Primary (IFRS) | 7110 Roof Depr | Dr 30,000 | 20yr useful life, component |
| Primary (IFRS) | 7120 Mechanical Depr | Dr 40,000 | 15yr useful life, component |
| Primary (IFRS) | 0200 Accum Depr | Cr 150,000 | Total IFRS depreciation |
| Secondary (Stat) | 7200 Building Depr | Dr 120,000 | 25yr pooled life (stat) |
| Secondary (Stat) | 0210 Accum Depr Stat | Cr 120,000 | Statutory accumulated depreciation |
vs Actual / Weighted-Average Costing (Statutory)
A manufacturing company uses Standard Costing in its primary ledger for corporate reporting and Actual/Weighted-Average Costing in the secondary ledger for local statutory compliance. Inventory valuation, PPV, and WIP accounting diverge materially between the two methods — requiring genuinely different journal entries for every inventory transaction.
Separate costing organisations or manual parallel cost runs in Excel. No automated link between the standard-cost primary book and the actual-cost statutory book. Reconciliation consumed days per period; PPV accuracy was poor.
Create Two Cost Books
CORP_BOOK (Standard Cost) assigned to primary ledger. STAT_BOOK (Actual/FIFO) assigned to secondary ledger. Assign appropriate cost method to each book in Cost Accounting configuration.
Cost Accounting › Manage Cost BooksAssign SLAMs to Each Cost Book
CORP_SLAM for CORP_BOOK handles standard cost accounting including PPV. STAT_SLAM for STAT_BOOK handles actual cost — no PPV JLR exists in STAT_SLAM.
Configure Item Cost Profiles
Assign items to the correct cost book via Cost Profile. Items manufactured in primary at standard; same items costed in secondary at actual accumulated cost. Both flow from the same inventory transaction.
- Event Class: Inventory Transactions
- JLR: Inventory Valuation — Primary. ADR derives standard cost account from CORP_BOOK mapping set
- JLR: Inventory Valuation — Secondary. ADR derives actual cost account from STAT_BOOK mapping set
- Condition: Cost Book attribute routes each JLR to the correct ledger SLAM
- JLR for PPV applicable only to CORP_BOOK (standard cost book). Condition: Cost Book = CORP_BOOK
- No PPV entry in secondary — actual cost absorbs actuals directly. No variance account needed
- This is the most important design distinction: PPV is a standard-cost artefact that does not exist under actual costing
- Primary SLAM: WIP at standard. Variance accounts capture efficiency and rate variances
- Secondary SLAM: WIP at actual accumulated cost. No variance accounts — actual costs flow through directly
- Separate WIP JLRs per SLAM with Cost Book condition to ensure correct routing
Example: Material receipt — standard cost 100, actual cost 112
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (Corp) | 1300 Inventory | Dr 100 | Standard cost |
| Primary (Corp) | 2100 AP Clearing | Cr 112 | Invoice amount |
| Primary (Corp) | 5100 PPV | Dr 12 | Price variance (unfav) |
| Secondary (Stat) | 1310 Inventory (Actual) | Dr 112 | Actual cost — no PPV |
| Secondary (Stat) | 2100 AP Clearing | Cr 112 | Invoice amount (same) |
& Withholding Tax (Local Statutory)
AP and AR transactions must be accounted differently in the secondary ledger to reflect local statutory treatment — prepayment recognition, deferred revenue timing, and withholding tax accounts that differ from IFRS treatment in the primary ledger. Subscription revenue recognised on delivery locally vs IFRS 15 performance obligations.
AP/AR secondary ledger differences required manual journal entries every period. Withholding tax differences often were not reconciled at all — discovered only at year-end audit or tax filing.
Configure AP Invoice Options — Secondary
In secondary ledger AP configuration, define prepayment accounts specific to local statutory requirements. Map prepayment asset account to local stat account 3100 (vs IFRS account 1200).
Payables › Manage Payables OptionsConfigure AR Transaction Types — Secondary
Define transaction type mapping for deferred revenue scenarios. SUBSCRIPTION transaction type triggers deferred revenue treatment in secondary; IFRS 15 performance obligation treatment in primary.
Receivables › Manage Transaction TypesConfigure Withholding Tax — Secondary
Define WHT tax codes for secondary ledger with local statutory account codes. Supplier classification (WITHHOLDING_ELIGIBLE) drives WHT JLR condition in SLA.
Tax › Manage Tax Codes- Event Class: Prepayments. Event Type: Prepayment Applied
- JLR: Prepayment Expense — Secondary. Condition: Ledger = Secondary. ADR: local stat prepayment expense account
- Priority: Secondary-specific rules must have higher priority than default rules when Ledger = Secondary
- JLR: Deferred Revenue — Secondary. Condition: Ledger = Secondary AND Transaction Type = SUBSCRIPTION
- ADR: secondary deferred revenue account (2500 local stat) instead of revenue (4000 IFRS)
- JLR: Revenue Release — Secondary. Triggered on receipt or delivery milestone event
- Condition: Supplier Type = WITHHOLDING_ELIGIBLE AND Ledger = Secondary
- JLR for WHT liability using local stat account code, distinct from primary WHT account
- No WHT entry in primary ledger for same transaction (IFRS treatment differs)
Example: Subscription revenue receipt — IFRS 15 deferred vs local immediate
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS) | 1000 AR | Dr 12,000 | Annual subscription invoice |
| Primary (IFRS) | 2500 Deferred Revenue | Cr 12,000 | Recognised over 12 months |
| Secondary (Stat) | 1000 AR | Dr 12,000 | Same invoice |
| Secondary (Stat) | 4000 Revenue | Cr 12,000 | Recognised on receipt (local stat) |
IFRS 15 (Primary) vs Local GAAP POC (Secondary)
A professional services firm recognises project revenue under IFRS 15 performance obligation framework in the primary ledger. Local statutory reporting requires percentage-of-completion (POC) method. Development costs are capitalised as intangible assets under IAS 38 in primary but expensed immediately under local GAAP in the secondary ledger.
Projects integration to secondary ledger for unbilled receivables and deferred revenue was not automated. Finance teams maintained parallel project tracking in spreadsheets. Reconciliation to GL was never fully clean.
Configure Project Type for Dual Recognition
Set PROJECT_TYPE attribute on IFRS 15 contracts. This attribute is used as SLA condition to route revenue recognition differently between primary and secondary ledger SLAMs.
Projects › Manage Project TypesDefine Revenue Method for Secondary (POC)
Assign LOCAL_GAAP_POC revenue method to secondary ledger project profile. Revenue recognised based on completion percentage rather than performance obligation satisfaction.
Projects › Manage Revenue MethodsUnbilled Receivables — Schedule Manual Review
IFRS 15 and local GAAP POC unbilled AR accounts diverge. Schedule manual reconciliation review for first three periods post go-live. Build a dedicated reconciliation report for ongoing monitoring.
- Primary SLAM: IFRS 15 performance obligation satisfaction drives revenue recognition timing
- Secondary SLAM: Condition on Revenue Method = LOCAL_GAAP_POC. ADR: derive local stat revenue account
- Use PROJECT_TYPE attribute as condition to apply rules only to project-type contracts
- Primary: Condition on Expenditure Type = DEVELOPMENT → Capitalise to Intangible Asset (IAS 38)
- Secondary: Same condition → route to Development Expense (local GAAP expenses development costs)
- ADR condition: Expenditure Type = DEVELOPMENT AND Ledger = Secondary → Expense Account 6800
- Primary: Unbilled AR account 1250 (IFRS)
- Secondary: Unbilled AR account 3300 (local stat). ADR conditioned on Ledger = Secondary
- Both accounts need to be reconciled — close monitor threshold set tighter for this use case
Example: Month-end revenue — IFRS 15 milestone vs local POC (60% complete, 1M contract)
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS) | 1250 Unbilled AR | Dr 0 | No milestone reached this month |
| Primary (IFRS) | 4000 Revenue | Cr 0 | No performance obligation met |
| Secondary (Stat) | 3300 Unbilled AR | Dr 50,000 | POC: 60% → 65% = 5% of 1M |
| Secondary (Stat) | 4100 Project Revenue | Cr 50,000 | Local GAAP completion-based |
vs Retention (Secondary / Statutory)
A multinational group must eliminate intercompany balances at the consolidated group level (primary ledger — IFRS group accounts). The statutory secondary ledger must retain those same IC balances as genuine trading balances — the local statutory entity is required to show its full IC receivables and payables on its statutory balance sheet.
IC eliminations in the primary conflicted with statutory retention requirements. Many implementations ran IC eliminations entirely outside Fusion in Hyperion/FCCS, with manual feeds back to statutory reporting. Reconciliation exceptions were numerous and audit-intensive.
Configure Intercompany Balancing — Primary
Set up IC elimination accounts in primary ledger CoA (IC Receivable Elimination 1990, IC Revenue Elimination 4990). These elimination accounts are used only in primary SLAM JLRs, never in secondary.
Configure IC Retention — Secondary
Secondary ledger retains full IC balances using standard AR/AP accounts (1850 IC Receivable, 5900 IC Revenue). No elimination JLR fires for secondary — IC transactions pass through at full value.
Set IC Balance Mismatch Threshold
Configure Close Monitor IC reconciliation threshold at <0.5%. Any IC balance mismatch between entities must be resolved before close. Target: all IC exceptions are policy-explainable.
GL › Period Close › Close Monitor- Event Class: Intercompany. Event Type: IC Invoice / IC Journal
- JLR: IC Elimination — Primary. Condition: Ledger = Primary AND IC Transaction Type IN (TRADING, LOAN, MGMT_CHARGE)
- ADR: derive elimination account (IC Receivable Elimination 1990, IC Revenue Elimination 4990)
- JLR: IC Receivable — Secondary. Condition: Ledger = Secondary. ADR: retain full IC receivable account (1850 local stat)
- JLR: IC Revenue — Secondary. ADR: retain IC revenue account (5900 local stat) — no elimination
- Primary: eliminate IC interest income/expense (offset accounts)
- Secondary: retain both IC interest income (entity A) and IC interest expense (entity B) — both appear on statutory P&L
- Separate JLRs with Ledger condition for each treatment
Example: IC trading sale — Entity A sells to Entity B, 500,000
| Ledger | Account | Debit/Credit | Treatment |
|---|---|---|---|
| Primary (Group) | 1990 IC Recv Elim | Dr 500,000 | Eliminate IC receivable |
| Primary (Group) | 4990 IC Rev Elim | Cr 500,000 | Eliminate IC revenue |
| Secondary (Stat) | 1850 IC Receivable | Dr 500,000 | Retain — statutory balance sheet |
| Secondary (Stat) | 5900 IC Revenue | Cr 500,000 | Retain — statutory P&L |
vs Operating Lease Expense (Secondary / Local GAAP)
IFRS 16 requires recognition of a Right-of-Use (ROU) asset and lease liability for virtually all leases in the primary ledger. Local statutory GAAP has not adopted IFRS 16 — leases are still classified as operating leases with straight-line rental expense. The same lease payment must produce ROU/liability accounting in primary and straight-line rental expense in secondary.
IFRS 16 and operating lease accounting required entirely separate manual journal processes. Many implementations ran IFRS 16 in a completely separate Oracle Lease Management module with no automated feed to the secondary statutory ledger. Month-end reconciliation of ROU values to local stat balance sheet was entirely manual.
Configure Lease Accounting — Primary (IFRS 16)
Oracle Lease Management module assigned to primary ledger. ROU asset recognised at commencement. Lease liability amortised using effective interest method. All standard IFRS 16 journal classes fire in primary SLAM only.
Fixed Assets › Leases › Manage LeasesConfigure Secondary Ledger for Operating Lease
Secondary SLAM suppresses ROU and liability entries via Null JLR. Separate JLR produces straight-line rental expense from payment schedule. Amount derivation: total lease payments ÷ lease term (months).
- Event Class: Lease Commencement. Event Type: Initial Recognition
- Create a Null JLR for secondary: when Ledger = Secondary AND Event Type = Initial_Recognition → produce no journal
- This prevents ROU Asset debit and Lease Liability credit from appearing in the secondary ledger
- Event Class: Lease Payment. Event Type: Periodic Payment
- JLR: Lease Rental Expense — Secondary. Condition: Ledger = Secondary. ADR: Lease Rental Expense 7300
- Amount derivation: straight-line amount (total lease payments ÷ lease term), not the IFRS 16 split of principal + interest
- Primary: remeasure ROU asset and liability per IFRS 16
- Secondary: recalculate straight-line rental and adjust prospectively
- Create JLR for Lease Modification events with separate primary and secondary treatment and Ledger condition
Example: Monthly lease payment — 5yr lease, 12,000/month payment, IFRS 16 vs operating
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS 16) | 3100 Lease Liability | Dr 10,500 | Principal repayment |
| Primary (IFRS 16) | 7400 Interest Expense | Dr 1,500 | Effective interest on liability |
| Primary (IFRS 16) | 1050 Cash / AP | Cr 12,000 | Actual payment |
| Secondary (Stat) | 7300 Rental Expense | Dr 12,000 | Straight-line operating lease |
| Secondary (Stat) | 1050 Cash / AP | Cr 12,000 | Same cash payment |
& Deferred Tax Calculation Support
A company requires a dedicated tax book as a secondary ledger to maintain tax-basis asset values and track temporary differences for deferred tax calculation. Primary ledger carries accounting depreciation (straight-line per IFRS). Tax ledger carries accelerated tax depreciation (declining balance per tax code). The difference creates deferred tax liabilities/assets that must be calculated accurately each period.
Tax asset book reconciliation to GL was entirely manual. Deferred tax workpapers were built in Excel from FA register data — not from GL balances. Tax provision accuracy was poor and audit-intensive.
Create TAX_BOOK Asset Book
Create tax FA book assigned to secondary ledger. Configure accelerated depreciation methods (declining balance, bonus depreciation) per asset category and jurisdiction. Assign TAX_SLAM.
Fixed Assets › Asset Books › CreateConfigure Deferred Tax Memo Entries
Create JLRs to book the temporary difference as memo entries in the tax ledger. Deferred Tax Liability when tax depreciation exceeds accounting. Deferred Tax Asset when accounting expense exceeds tax-deductible amount (e.g., warranty provisions).
- Event Class: Asset Transactions. Event Type: Depreciation
- JLR: Tax Depreciation Expense — Secondary. ADR: Tax Depreciation Expense account 7500 (tax ledger)
- Amount derivation: use tax book depreciation amount (accelerated), not accounting amount from primary
- Condition: Book = TAX_BOOK ensures rules fire only in secondary
- Create JLRs to book the temporary difference as a memo entry in the tax ledger
- Deferred Tax Liability: when tax depreciation > accounting depreciation. Credit DTL account in secondary
- Deferred Tax Asset: when accounting expense > tax-deductible amount. Debit DTA account in secondary
- Tax ledger maintains tax net book value (cost less accumulated tax depreciation) as actual GL balances
- This provides the tax base of each asset class directly from GL — no manual lookup required
- Tax provision team reads deferred tax directly from secondary ledger balances
Example: Annual depreciation — asset cost 500,000, IFRS SL 10yr vs tax DB 25%
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS) | 7100 Depr Expense | Dr 50,000 | Straight-line, 10yr |
| Primary (IFRS) | 0200 Accum Depr | Cr 50,000 | Accounting NBV |
| Tax Ledger | 7500 Tax Depr | Dr 125,000 | Declining balance 25% (yr1) |
| Tax Ledger | 0210 Tax Accum Depr | Cr 125,000 | Tax NBV = 375,000 |
| Tax Ledger | 6900 DTL Expense | Dr 18,750 | Temp diff 75,000 × 25% tax rate |
| Tax Ledger | 3800 DTL Liability | Cr 18,750 | Deferred tax liability |
IAS 29 Restatement (Primary) vs Historical Cost (Secondary)
An entity operating in a hyperinflationary economy (Argentina, Turkey, Zimbabwe) must restate its financial statements in current purchasing power units under IAS 29 in the primary ledger. The secondary ledger maintains historical cost accounting as required by local statutory reporting — restatement entries must not appear in the statutory book.
IAS 29 restatement was handled entirely outside the GL in most implementations. Finance teams ran restatement calculations in spreadsheets and posted massive manual journals. Comparative period restatement was a multi-week manual exercise.
Teams sometimes incorrectly run the IAS 29 restatement process against both primary and secondary ledger. The secondary (historical cost) ledger must never receive restatement entries. Use Ledger = Primary condition on all IAS 29 JLRs explicitly.
Enable IAS 29 Processing — Primary Only
Configure IAS 29 restatement in the primary ledger's period close workflow. Secondary ledger has no IAS 29 configuration. Restatement process must be explicitly prevented from running against secondary period.
Configure Purchasing Power Gain/Loss Accounts
Primary CoA: PPG account 4980 (gain), PPL account 7980 (loss). These accounts do not exist in secondary CoA mapping — secondary retains original monetary and non-monetary balances at historical rates.
- Event Class: Period-End Restatement. Event Type: IAS29_Restatement
- JLR: IAS 29 Restatement Adjustment — Primary. Condition: Ledger = Primary AND Event Type = IAS29_Restatement
- No corresponding JLR for secondary — restatement entries must not flow to historical cost ledger
- JLR: PPG/L Recognition — Primary. Event Type: Monetary_Position_Gain_Loss
- ADR: derive PPG account 4980 (gain) or PPL account 7980 (loss) in primary
- Condition: Ledger = Primary explicitly. Secondary ledger has no PPG/L entry — not applicable under historical cost
- Fixed asset restatement entries (restated cost, restated accumulated depreciation) flow only to primary via separate FA JLRs
- Secondary retains original cost and original accumulated depreciation per local statutory requirement
Example: Year-end IAS 29 restatement — 40% cumulative inflation index adjustment
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IAS 29) | 0100 PP&E (Restated) | Dr 200,000 | Restatement uplift at CPI index |
| Primary (IAS 29) | 3500 Restatement Reserve | Cr 200,000 | Equity restatement reserve |
| Primary (IAS 29) | 4980 PPG | Cr 85,000 | Purchasing power gain on liabilities |
| Primary (IAS 29) | 8000 Monetary Position | Dr 85,000 | Net monetary position offset |
| Secondary (Historical) | No entries — historical cost retained as-is | ||
Working Interest Net (Primary) vs Gross (Secondary)
An oil & gas or mining operator manages joint venture (JV) interests. The primary ledger records the entity's net working interest share (e.g., 40% WI) per IFRS. The secondary ledger records gross 100% costs and revenues for PSA government reporting and partner billing. Partner receivables for their WI share are generated from secondary ledger data.
Gross JV accounting required entirely separate modules or manual gross-up calculations. Partner billing was generated from spreadsheets derived from sub-ledger data, not from the GL. PSA government reporting compliance was difficult to audit.
Configure JV Project Attributes
Define JV_OPERATED project type. Set working interest % at project level. Cost distribution rules derive WI% automatically for primary ledger entries. Full cost flows to secondary via Gross Cost JLR.
Projects › Manage Project TypesConfigure Secondary Ledger CoA for Gross Reporting
Secondary CoA includes gross JV cost accounts (separate from WI net accounts in primary). Partner billing module reads secondary ledger gross balances to generate cash calls and billing statements.
- Event Class: Cost Distribution. Condition: Project Type = JV_OPERATED
- JLR: WI Cost — Primary. Amount: cost × working interest %. ADR: operator cost account in primary CoA
- JLR: Gross Cost — Secondary. Amount: 100% full cost. ADR: gross JV cost account in secondary CoA
- JLR: WI Revenue — Primary. Amount: revenue × working interest %. ADR: operator revenue account
- JLR: Gross Revenue — Secondary. Amount: 100% gross production revenue. ADR: gross JV revenue account
- AFE (Authority for Expenditure) amounts recorded gross in secondary — 100% of joint operation capital
- Primary records net (WI%) capital via standard FA integration
- Partner receivables for their share generated from secondary ledger AFE data via partner billing
Example: Drilling cost 1,000,000 — operator 40% WI, partners 60% WI
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (WI Net) | 0500 Drilling Costs | Dr 400,000 | 40% working interest share |
| Primary (WI Net) | 2000 AP / Accrual | Cr 400,000 | Operator's liability only |
| Secondary (Gross) | 0510 Gross Drilling | Dr 1,000,000 | 100% JV cost for PSA reporting |
| Secondary (Gross) | 1800 Partner Recv | Cr 600,000 | Partners' 60% share receivable |
| Secondary (Gross) | 2000 AP / Accrual | Cr 400,000 | Operator's own liability |
ECL & Fair Value (Primary) vs Incurred Loss (Secondary)
A financial institution or corporate treasury applies IFRS 9 in the primary ledger: Expected Credit Loss provisioning, Fair Value Through P&L (FVTPL), and Fair Value Through OCI (FVOCI) classifications. The secondary ledger applies local statutory rules: incurred loss provisioning (no forward-looking ECL), instruments at amortised cost (no fair value adjustments).
IFRS 9 accounting was largely manual — ECL calculations in Excel, fair value journals posted manually. Reconciliation to statutory incurred loss provisions was an entirely separate workpaper process. Regulatory reporting was at high risk of error.
Configure IFRS 9 Classification in Primary
Set instrument Classification attribute (FVTPL, FVOCI, AMORTISED_COST) at instrument or portfolio level. This attribute is used as SLA condition to route fair value and ECL entries correctly to primary only.
Configure Incurred Loss Provisioning — Secondary
Secondary ledger uses specific provision accounts (Specific Provision 2800, Provision Expense 6800). ECL allowance accounts (1900, 6900) exist only in primary CoA or are mapped to zero-balance accounts in secondary CoA mapping.
- Event Class: Credit Loss. Event Type: Provision Creation
- JLR: ECL Provision — Primary. Condition: Ledger = Primary. ADR: ECL Allowance 1900, ECL Expense 6900
- JLR: Incurred Loss Provision — Secondary. Condition: Ledger = Secondary. ADR: Specific Provision 2800, Provision Expense 6800
- Amount may differ significantly between ledgers in early-stage provisioning — this difference is expected and must be explained in recon
- Event Class: Revaluation. Condition: Classification = FVTPL AND Ledger = Primary
- JLR: FV Gain/Loss — Primary. ADR: FV through P&L account 4500 (gain) / 7500 (loss)
- No corresponding entry in secondary — instrument carried at amortised cost in statutory ledger
- Primary: FV change to OCI reserve (3900). Recycled to P&L on disposal
- Secondary: no FV adjustment. Instrument carried at amortised cost. Dispose at cost with simple gain/loss
- Separate OCI JLR with Ledger = Primary condition ensures OCI entries never appear in statutory book
Example: Credit loss provision — IFRS 9 ECL 150k vs local incurred loss 40k
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IFRS 9) | 6900 ECL Expense | Dr 150,000 | 12-month ECL on loan portfolio |
| Primary (IFRS 9) | 1900 ECL Allowance | Cr 150,000 | Forward-looking expected loss |
| Secondary (Stat) | 6800 Provision Expense | Dr 40,000 | Incurred loss — specific debtor |
| Secondary (Stat) | 2800 Specific Provision | Cr 40,000 | Local regulatory provision |
Adjustment-Only Secondary Ledger
A group finance team needs to stage pre-consolidation adjustments — goodwill amortisation (required under local GAAP but prohibited under IFRS), acquisition accounting fair value adjustments, intercompany mark-ups in inventory. These adjustments must be applied before data loads into FCCS or HFM, and must not contaminate the statutory primary ledger.
Pre-consolidation adjustments were managed entirely outside Fusion — in consolidation tools or spreadsheets. No systematic way to maintain them in the GL, test them against actuals, or carry them forward between periods automatically.
For this use case, the adjustment-only ledger must be closed before the FCCS/HFM data load. Leaving it open means unapproved adjustment entries can be added after the data load, invalidating group consolidation figures.
Create Adjustment-Only Secondary Ledger
Set conversion level to Adjustment Only — this ledger receives no subledger accounting at all. All entries are manual journal entries or FA-driven. This is the key configuration distinction from all other secondary ledger use cases.
Setup & Maintenance › Manage Accounting ConfigurationsConfigure Journal Approval Rules
Create Journal Approval Rules for the adjustment ledger. All manual entries must be reviewed by the Group Finance controller. No unapproved journals may post. Configure auto-reversal for entries that reverse in the following period.
GL › Manage Journal Approval RulesConfigure FA for Goodwill Amortisation
Assign goodwill asset book to the adjustment ledger. FA depreciation run generates goodwill amortisation entries automatically: Dr Goodwill Amortisation Expense / Cr Accumulated Amortisation. Primary ledger receives no amortisation (IFRS — impairment only).
Since conversion level is Adjustment Only, no subledger accounting flows in. SLA rules are not required for subledger-driven entries — there are none. However, configure Journal Approval Rules for the adjustment ledger to ensure all manual entries are reviewed before they post.
- FA runs depreciation on the goodwill asset book assigned to the adjustment ledger
- Creates automated journal: Dr Goodwill Amortisation Expense / Cr Accumulated Amortisation
- Primary ledger receives no goodwill amortisation — IFRS impairment only
- Configure auto-reversal for certain pre-consolidation entries that reverse in the following period (e.g., intercompany mark-up in closing inventory)
- Prevents cumulative build-up of stale adjustments between periods
- Close adjustment-only ledger before FCCS/HFM data load — enforce via period close checklist
Example: Pre-consolidation adjustments — goodwill amortisation and IC inventory mark-up elimination
| Ledger | Account | Debit/Credit | Adjustment Type |
|---|---|---|---|
| Primary (Stat) | No entries — goodwill carried at cost under IFRS (impairment only) | ||
| Adj Ledger | 7900 Goodwill Amortn | Dr 25,000 | Local GAAP 40yr amortisation |
| Adj Ledger | 0900 Accum Amortn | Cr 25,000 | Accumulated amortisation |
| Adj Ledger | 5000 COGS | Dr 12,000 | IC mark-up elimination in inventory |
| Adj Ledger | 1300 Inventory | Cr 12,000 | Reduce inventory to group cost |
IAS 20 Deferred (Primary) vs Immediate Recognition (Secondary)
An entity receiving government grants (infrastructure funding, R&D grants, agricultural subsidies) accounts for them under IAS 20 in the primary ledger — deferred income recognised over the grant period or on a systematic basis. Local statutory reporting requires immediate income recognition on receipt. The same grant cash receipt produces two different accounting treatments.
Grant accounting was largely outside core GL. Deferred grant schedules were maintained in spreadsheets. Statutory immediate recognition was a manual journal. Both reconciliations to actual grant authority reporting were entirely manual.
Configure Grants Management Integration — Primary
Grants Management module drives deferred income schedule in primary ledger. Grant receipt posts to Deferred Grant Income (2600 liability). Periodic release JLR amortises to Grant Income Released (4800) over grant period.
Grants Management › Manage AwardsConfigure Immediate Recognition — Secondary
Secondary ledger has no deferral account. Grant receipt JLR posts full amount directly to Grant Income (5800). No periodic release schedule required in secondary. Asset deduction alternative also supported.
- Event Class: Grant Receipt. Event Type: Cash Receipt / Award
- JLR: Deferred Grant Income — Primary. Condition: Ledger = Primary. ADR: Deferred Grant Income 2600 (liability)
- JLR: Grant Income Release — Primary. Event Type: Periodic Release. ADR: Grant Income Released 4800 (P&L). Released over grant term
- JLR: Immediate Grant Income — Secondary. Condition: Ledger = Secondary. ADR: Grant Income 5800 (full amount on receipt)
- No deferral entry in secondary — full amount recognised immediately on cash receipt
- If primary uses asset deduction method: JLR credits Asset at gross, debits Grant Deduction contra account
- Secondary: no asset deduction — records full asset at gross cost, full grant as income
- Condition: Grant Type = ASSET_RELATED routes to asset deduction JLR in primary, income recognition in secondary
Example: Government R&D grant received 300,000 — IAS 20 deferred vs local immediate
| Ledger | Account | Debit/Credit | Basis |
|---|---|---|---|
| Primary (IAS 20) | 1000 Cash | Dr 300,000 | Grant received |
| Primary (IAS 20) | 2600 Deferred Grant | Cr 300,000 | Deferred over 3yr grant period |
| Primary (IAS 20) | 2600 Deferred Grant | Dr 100,000 | Year 1 release (1/3) |
| Primary (IAS 20) | 4800 Grant Income | Cr 100,000 | Recognised year 1 |
| Secondary (Stat) | 1000 Cash | Dr 300,000 | Grant received |
| Secondary (Stat) | 5800 Grant Income | Cr 300,000 | Full immediate recognition |