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Oracle Exam 1Z0-1054-23 Topic 1 Question 6 Discussion

Actual exam question for Oracle's 1Z0-1054-23 exam
Question #: 6
Topic #: 1
[All 1Z0-1054-23 Questions]

A subsidiary company is about to configure their General Ledger in a highly regulated country where there is a legal requirement to produce fiscal reports under local GAAP. Subledgers transferring to General Ledger must use the local currency, and there is a requirement to report to the parent company (not local currency) using International Financial Reporting Standards (IFRS).

Which two ledger types should be configured to fulfill this reporting requirement?

Show Suggested Answer Hide Answer
Suggested Answer: C, E

A primary ledger is the main ledger for a legal entity or business unit that records all accounting transactions and maintains the accounting balances. A secondary ledger is an optional ledger that is associated with a primary ledger and maintains accounting balances in a different accounting representation. A reporting currency is an optional currency that is associated with a primary ledger and maintains accounting balances in a different currency. In this scenario, the subsidiary company needs to produce fiscal reports under local GAAP and local currency, as well as report to the parent company using IFRS and not local currency. Therefore, the subsidiary company should configure a primary ledger with the local accounting convention and local currency, and a secondary ledger with the IFRS accounting convention and not local currency. A reporting currency with the local accounting convention or the IFRS accounting convention would not meet the requirement, as it would only maintain balances in a different currency, not a different accounting representation. A primary ledger with the IFRS accounting convention would not meet the requirement, as it would not comply with the local GAAP.Reference:

Oracle Financials Cloud Implementing Enterprise Structures and General Ledger, Chapter 2: Ledgers, Primary Ledgers, Secondary Ledgers, and Reporting Currencies

Oracle Financials Cloud Using General Ledger, Chapter 1: Introduction, Ledgers and Subledgers, Primary Ledgers, Secondary Ledgers, and Reporting Currencies


Contribute your Thoughts:

William
6 months ago
I see your point, Lai. Having a secondary ledger with the IFRS accounting convention could provide a backup option for reporting under IFRS.
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Lai
6 months ago
Wouldn't it be redundant to have both a reporting currency with the IFRS accounting convention and a primary ledger with the IFRS accounting convention? I think options B and C could also work well together.
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Armanda
6 months ago
I agree, having a reporting currency with the IFRS accounting convention and a primary ledger with the IFRS accounting convention would ensure compliance with both local and international reporting requirements.
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Melina
7 months ago
That's true, but using a separate ledger for IFRS reporting can provide more accurate financial statements for the parent company.
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Emeline
7 months ago
I think options B and D are the best choices for this scenario.
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Terrilyn
7 months ago
But wouldn't using option A) Reporting currency with the local accounting convention be simpler and more efficient?
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Slyvia
7 months ago
I agree with Using a secondary ledger with IFRS accounting convention would ensure compliance with international standards.
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Melina
7 months ago
I think option C) Secondary ledger with the IFRS accounting convention would be needed.
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