How to setup GL Accounting Calendar

Define Accounting Calendar to define an accounting year and the periods it contains.

Setup for defining Accounting Calendar:
Step1: Define Period Type
Navigation: General Ledger Super User > Setup > Financials > Calendars > Types

Note: There are 2 types of Year Type

1. Calendar
2. Fiscal

Question: What is the difference between Calendar Year Type and Fiscal Year Type?
Answer: The Year Type (Fiscal or Calendar), is used only to determine which two digits to append to the system generated period name.
   If Year Type = Calendar
       The last 2 digits of the 'From' date for the period are used.
   If Year Type = Fiscal
       The last 2 digits of the value in the 'Year' column are used.

=> Carefully consider the type of calendar you need for your organization, since it can be difficult to change your calendar (e.g., from a fiscal year to a calendar year) once you've used it to enter accounting data.

Question: Why 13 periods in above Calendar when we have only 12 months?
Answer: This 13th period is for Adjustment Period in which we put adjustment entries.
Adjustment Period is only visible in GL. You can NOT see adjustment period in subledgers like AR, AP.

Question: In which table this Period Type information is stored?
Answer:

select * from gl_period_types
where user_period_type = 'Tata PT';

Note: You can define any number of periods. For example, you could define a Week period type and specify 52 periods per year.

Step2: Define Accounting Calendar

Navigation: General Ledger Super User > Setup > Financials > Calendars > Accounting

Note:
1. Regardless of which Year Type is used, the 'Year' entered on the Calendar form must be the same for all periods whether it is a calendar year or a fiscal year.
Eg. For the above Calendar Year=2012 for 'Jan-13' period.
Logic is simple, If we want to calculate YTD balance of Jan period, if we give 2013, then it will calculate from 01-JAN-2013. But if we give 2012, according to the above calendar YTD gets calculated from 01-APR-2012, which is correct.
2. For adjusting period Adj, we have enabled 'Adjusting' checkbox.

Question: In which table this Accounting Calendar information is stored?
Answer:

select *FROM gl_periods
where period_set_name = 'Tata Calendar';

Save & Close the above calendar. Following Decision window pops up.

Click on "Current" to validate this Calendar only.
It launches Concurrent Program Other - Calendar Validation Report

Question: What Validation this Program checks?
Answer: It checks following Validations.

1. Periods have date gaps?
2. Periods overlap?
3. Period numbers are greater than the maximum period number for this period type?
4. Period numbers are missing?
5. Periods are not in sequential order by date?
6. Quarters are missing?
7. Quarters are not in sequential order by period?
8. Period's start or end dates are more than one year before or after its fiscal year?

Additional Info:

1. You can define multiple calendars and assign a different calendar to each Ledger.

Eg. You can use a monthly calendar for one Ledger, and a quarterly calendar for another.

2. We do have another type of Calendar. Which is Transaction Calendar.
(General Ledger Super User > Setup > Financials > Calendars > Transaction)
If business plan to use 'Average Balance Processing' then define a Transaction Calendar and valid business days for that calendar. This calendar is used to control transaction posting.