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Chapter 1: General Ledger Setup

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CHAPTER 1: GENERAL LEDGER SETUP Objectives

The objectives are:

• Set up Currencies and Exchange Rates • Create Periods in a new fiscal year • Create Date intervals • Create, modify, and delete reason codes • Create a Dimension Value • Create a Dimension Focus • Set up allocation rules • Contrast the various allocation methods

Introduction A general ledger is a formal ledger that contains a company’s accounting records in Microsoft Dynamics® AX 2009, and includes the financial accounts and statements.

Use the General Ledger to set up currencies and exchange rates. Microsoft Dynamics AX 2009 offers extensive functionality with multicurrency handling so you can record transactions in various currencies and report in parallel currencies.

The General Ledger Setup course explains how to work with an infinite number of dimensions with various modules in Microsoft Dynamics AX 2009. You can use dimension focuses to track profits, cost centers, and other important financial information.

The General Ledger Setup course describes the various components of an allocation rule and the purpose of each allocation method.

Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement

Financials I in Microsoft Dynamics® AX 2009

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Currency and Exchange Rate Setup You can use currencies in Microsoft Dynamics AX 2009 to record transactions. If a company operates with multiple currencies because it trades with foreign entities, Microsoft Dynamics AX 2009 offers extensive functionality on multicurrency.

A default currency always must be set up for a company.

Use the Exchange rates form to set up currencies with corresponding exchange rates.

FIGURE 1.1 EXCHANGE RATES FORM



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Procedure: Create a Currency

Follow these steps to set up a currency.

1. To access the Exchange rates form, click General ledger, click Setup, and then click Exchange rates.

2. Press CTRL+N to create a new record. 3. Enter the currency code in the Currency field on the Overview tab.

This field can only contain up to three characters. Currency code examples include USD for U.S. dollar, EUR for Euro, and CAD for Canadian dollar.

4. Enter the currency name in the Name field. The currency name appears on printed checks and should be descriptive, such as U.S. dollars, Danish kroner, or Swiss francs.

5. Enter the ISO currency code in the ISO currency code field. The ISO currency code is provided by the International Organization for Standardization.

6. Enter a symbol for the currency in the Symbol field to add clarity to reports and inquiries. Because some currencies do not have a symbol, this field is not required.

Procedure: Select the Default Company Currency

Follow these steps to designate the company currencies.

1. To access the Company information form, click Basic, click Setup, and then click Company Information.

2. Click the Other tab. 3. Select the default company currency in the Currency field. 4. After you create an additional currency, you can select a secondary

reporting currency in the Secondary currency field. A company's business accounts can be kept in two parallel currencies for reporting. Microsoft Dynamics AX 2009 automatically converts all transactions into a secondary currency. In reports, results can be viewed in both the company currency and secondary currency.



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NOTE: Default currencies can be set up on many forms in Microsoft Dynamics AX 2009, for example, on vendors, customers, or journal names.

FIGURE 1.2 COMPANY INFORMATION FORM, OTHER TAB

Procedure: Select Exchange Rate Units

Follow these steps to set the number of units.

1. To access the General ledger parameters form, click General Ledger, click Setup, and then click Parameters.

2. From the Ledger tab, select the number of units the exchange rate system is based on in the Express exchange rate field. Typically the system is based on either one unit or 100 units. If the Express exchange rate field is set to 100 units, the exchange rate should specify the equivalent of 100 units of the foreign currency. For example, if the company currency is U.S. dollars and the foreign currency is Canadian dollars, the exchange rate should specify how many U.S. dollars equal 100 Canadian dollars.



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NOTE: In the Exchange rates form, the exchange rate for the company currency is changed automatically according to the Express exchange rate specified in the General Ledger parameters form.

FIGURE 1.3 GENERAL LEDGER PARAMETERS FORM

Procedure: Create Additional Currencies and Exchange Rates

If a company trades with multiple currencies, follow these steps to set up the additional currencies and their corresponding exchange rates.

1. From the Exchange rates form, create the additional currencies as described in the Procedure: Create a Currency topic.

2. Enter a start date in the Start date field, on the Exchange rate tab in the lower pane of the form. Because the same currency can have several rates, the posting date determines the rate applied.



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For example, an exchange rate is entered on January 1, and another exchange rate is entered on February 1. If a sales order is invoiced on January 15, the exchange rate from January 1 is used to calculate the invoice amount. If an exchange adjustment is run on February 2, however, the rate from February is used as an adjustment. The rate is based on the date that is entered in the Date of rate field when the exchange rate adjustment is run. If the Start date field is blank, the exchange rate does not have a start date and the original exchange rate is effective until another exchange rate is entered into the system. It is mandatory that the Start date be blank for the first exchange rate entered for a currency.

3. Enter the exchange rate of the foreign currency in the Exchange Rate field. Consider the value that was set in the Express currency rate field in the General ledger parameters form. For example if the Express currency rate field value is 100, you must specify how many foreign exchange units equal 100 units of the company currency. The relationship between the foreign currency and the company currency is displayed at the bottom of the Exchange rate form.

Procedure: Set Rounding Options

Follow these steps to set the Rounding options for each currency.

1. From the Exchange Rates form, select a currency. 2. Click the Round-off tab. 3. Round off the sums according to a fixed unit. For example, amounts

on transactions are rounded to the nearest unit to 0.01. Specify the general unit for rounding in the General round-off field. Different rounding options exist for Accounts Receivable (Round off order) and Accounts Payable (Round off purchase) modules, as well as prices (Rounding price). All posting amounts are rounded off to the nearest factor of the specified unit, regardless of whether they are calculated and posted automatically or entered manually by the user.

4. In the General ledger parameters form on the Ledger tab: o Specify the maximum rounding amount for a voucher in the

default currency, in the Maximum penny difference field. o Set up the rounding for secondary currencies in the Maximum

penny-rounding in secondary currency field.



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NOTE: The value in the General round-off field affects all values in all modules.

NOTE: To print the Currency report, which lists all company currencies and related exchange rates, click General Ledger, click Reports, click Base Data, and then click Currency.

Procedure: Enable a Currency for Currency Conversion

In Microsoft Dynamics® AX 2009, the currency converter makes it possible to display transactions and balances in another currency on reports and in forms.

Follow these steps to convert to another currency.

1. To open the Exchange rates form, click General Ledger, click Setup, and then click Exchange Rates.

2. Select a currency. 3. Click the Currency converter tab. 4. Select the Conversion check box to enable a currency for

conversion. 5. Specify the currency's symbol before or after an amount, in the

Prefix or Suffix fields.

HINT: Enter a space before the currency symbol to separate the currency amount and the symbol.

Procedure: Change the Display Currency

After a currency has been enabled for currency conversion, follow these steps to display financial information in a currency other than the default company currency.

1. On the status bar, click the Currency field to open the Currency converter form.

2. Select any of the currencies that have been set up for conversion in the Currency converter form.

3. Enter the date used for the conversion in the Date of rate field. 4. Click a currency to select the new currency.

The Currency converter form automatically closes, and the Currency field on the status bar displays the new currency. All the screens, inquiries, and reports that originally showed amounts in the company's currency display the new currency.



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Follow these steps to return to the default company currency.

1. Open the Currency converter form. 2. Click the Reset button to return to the default company currency.

NOTE: When you change the display currency, the default currency of a company does not change. Also, this is not a global change; it does not affect any other users in the company, nor does it change the original transaction.

Test Your Knowledge

Task: Simon, the System Implementer at Contoso Entertainment USA (CEU), is helping Phyllis, the Accounting Manager, with the implementation of Microsoft Dynamics AX 2009. CEU conducts business primarily in the United States and also in Canada. As of April 1, 2008, 1 Canadian Dollar (CAD) equals 0.97 US Dollars (USD). Help Phyllis and Simon determine the correct steps to set up multicurrency for CEU.

Step _____ : Create the CAD Currency in the Exchange rates form

Step _____ : Set the exchange rate value for CAD as of no date to 0.97

Step _____ : In the General ledger parameters form, enter 1 in the Express exchange rate field

Step _____ : In the Company information form, select USD in the Currency field

Step _____ : Set the exchange rate value for CAD as of April 1, 2008 to 0.97

Step _____ : Create the USD Currency in the Exchange rates form

What effect does the value in the General round-off field have on the values in Microsoft Dynamics AX 2009?



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When you change the display currency, it affects all users.

( ) True ( ) False



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Lab 1.1- Enter a Currency and Print the Currencies Scenario

Ken is the Controller for Contoso Entertainment USA (CEU). CEU uses US dollars as the company's default currency. CEU recently gained a new customer that is located in South Africa and uses the South African Rand (ZAR). Transactions for this currency should be tracked to two decimal places. As of April 1, 2008, 12.35 USD equals 100 ZAR.

After some research, Ken has found that the following posting accounts should be set for the new currency.

Field Value Realized Loss 801300

Realized Profit 801500

Unrealized Loss 801400

Unrealized Profit 801600

Challenge Yourself!

• Set up the South African Rand (ZAR) as a currency and specify the posting accounts and rounding options.

• Set up the exchange rate. • Make ZAR available for currency conversion. • Print a copy of the currency rates that are set up in the system.

Need a Little Help?

1. To set up the currency and specify the posting accounts and rounding options, follow these steps: a. Open the Exchange Rates form to set up the South African Rand

(ZAR) currency. b. Click the Posting tab to enter the posting accounts. c. Click the Round-off tab to enter the rounding option

2. Set up the exchange rate. Every currency requires one exchange rate

entry with a blank date. 3. To set up ZAR for currency conversion, click the Currency

converter tab. 4. Print a report with the exchange rates for the Controller.



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Step by Step

First, set up the currency and specify the posting accounts and rounding options.

1. Click General ledger, click Setup, and then click Exchange rates. 2. Press CTRL+N to add a line in the Overview tab. 3. In the Currency field, enter ZAR. 4. In the Name field, enter South African Rand. 5. In the ISO Currency Code, enter ZAR. 6. Click the Posting tab. 7. In the Realized loss field, enter 801300. 8. In the Realized profit field, enter 801500. 9. In the Unrealized loss field, enter 801400. 10. In the Unrealized profit field, enter 801600. 11. Click the Round-off tab. 12. In the General round-off field, enter .01

Next set up the exchange rate. Every currency requires one exchange rate entry with a blank date.

1. On the Exchange rate form, click in the Exchange rate field on the line.

2. In the Exchange rate field, enter 12.35. 3. Press CTRL+N to create a new exchange rate. 4. In the Start Date field, click the calendar icon. 5. Select 04/01/08. 6. In the Exchange rate field, enter 12.35

Then, set up ZAR for currency conversion.

1. Click the Currency converter tab. 2. Select the Conversion check box.

Finally, print a report for the Controller with the exchange rates.

1. Click the Print exchange rates button to open the Exchange rates form.

2. Click OK to print the Exchange rates report.



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Periods and Fiscal Year Setup The fiscal year in Microsoft Dynamics AX 2009 can be:

• Set to any length • Divided into any number of periods

Both fiscal year and periods can be set up by the following measurements of time:

• Years • Months • Days

Each period can be:

• Closed completely or stopped to block transaction postings • Set to enable selected users to continue an update of one or more

modules

The periods and fiscal year feature is very useful for the preparation and reconciliation of periodic and yearly accounts.

Set Up Periods and Fiscal Year

Before you post transactions in Microsoft Dynamics AX 2009, you must create a new fiscal year that is divided into periods because you cannot post transactions unless a period is created for the posting date. With the Periods form you can:

• Create a new fiscal year. • Define fiscal periods. • Modify fiscal periods in existing company accounts. • Recalculate period balances, if the periods of a fiscal year with

transactions are changed.

NOTE: Microsoft Dynamics AX 2009 posts transactions according to dates and not according to periods. Accounting periods are used for reporting. Closing of accounting periods lets the user close the sub-ledger to make sure that no additional transactions are recorded.



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Scenario

Before he closes a fiscal year, Ken, the Controller of Contoso Entertainment USA (CEU), sets up a new fiscal year with a 12-month period. Ken prepares monthly financial statements to measure the delivery of actual results against the budget, the operating result, financial position, and cash flow.

The monthly reporting is important so you can track budgets.

When you set up a new fiscal year, Microsoft Dynamics AX 2009 creates:

• a number of periods, with the status of Open • a closing period, with the status of Stopped • the opening period into the new fiscal year, with the status Closed

Procedure: Create Periods in a New Fiscal Year

Follow these steps to create periods in a new fiscal year.

1. Click General Ledger, click Setup, click Periods, click Periods, and then click Create New Fiscal Year.

2. Enter the date the fiscal year starts in the Enter start of fiscal year field.

3. Enter the date the fiscal year closes in the Enter close of fiscal year field.

4. Specify the length of each period in the Desired length of period field.



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5. Enter the unit of measurement for that length in the Unit list. For example, for each month in a year to be a period, the length of the periods is 1 and the unit is Month(s).

6. Click OK to create the period(s) and view the Periods form.

FIGURE 1.4 CREATE NEW FISCAL YEAR FORM

Review New Periods

Based on the values entered in the Create new fiscal year form, fiscal year information is displayed in the Periods form. Click General Ledger > Setup > Periods > Periods to access the form.

FIGURE 1.5 PERIODS FORM



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Microsoft Dynamics AX 2009 always creates two additional periods:

• An opening period to which to transfer the opening transactions from the year-end closing routine. The opening transactions result from the previous years’ balance accounts.

• A closing period to which to enter year-end close specific transactions.

The following information is displayed in the fields of the Periods form:

• Start - This field specifies the beginning date of the period. • Period code - This field is specified automatically by the system

based on the setup of periods. The possible values are: o Opening - Opening is the period used by the system to open

transactions from the year-end closing routine. o Normal - Normal is the period used to enter transactions. o Closing - Closing is the period used to enter year-end close

specific transactions.

• End - This indicates the end date of the current period. • Status - The four available statuses include:

o Stopped - The default period code is Closing. o Open - The default period code is Normal. The periods must be

set to open to enter transactions. o Closed - The default period code is Opening. o Year closed - This field is used to close the fiscal year.

NOTE: A stopped period can be opened. A closed period cannot be opened.

Procedure: Select Authorized Users

Follow these steps to select the users who are authorized to update the General Ledger module.

1. From the Periods form, click the Module status tab. 2. In the Module status lists, select the users authorized to update the

various modules. o All - All users are authorized to update in the General Ledger

module in the selected period.



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o None - No users are authorized to update in the General Ledger module in the selected period. For example, if a company wants to make some adjustments to a closed period, the modules that will not be adjusted are set to None.

o User group - Specific user groups are authorized to make General Ledger updates in the selected period.

3. In the Module user group area, specify the user group that can make changes, when the module status is set to User group. For example, after a period is stopped, limit access to the Ledger to only the user group that makes closing entries. This ensures no new entries are made during the financial closing process. You can select one group of users to enter the last postings in the old period and select other groups to continue working only in the new period.

Use Periods and Additional Options

When you work with the Fiscal Period Setup, additional functions are available from the Periods form.

• To divide an existing periods into two periods, click the Divide period button. Enter the start date of the new period, and then click OK to create the new period and return to the Periods form.

• To create a closing period for a fiscal period, click the Create Closing period button. The system automatically creates an opening and closing period for the fiscal year, but not for each individual period.

• To delete any period with an Open status or change the number of periods, click the Delete period button. The Delete Period button is not available if the selected fiscal period has a status of “Stopped” or “Closed.” No warning or error message appears when an open period with transaction history is deleted. The transactions are not deleted, and the end date of the period prior to the deleted period changes to coincide with the beginning date of the next period.

• To delete the fiscal year furthest into the future, click the Delete fiscal year button. As with the Delete Period button, no warning or error message appears when the fiscal year with transaction history is deleted. The transactions are not deleted and the year can be recreated.

• To make adjustments for a closer period and recalculate the balance for a specific period, select that period, and then click the Recalculate Period Balances button. Select whether to run the recalculation in batch or immediately.



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Test Your Knowledge

Is it possible to post activity that uses a date for which a period has not been created?

( ) Yes ( ) No



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Lab 1.2 - Create Periods in a New Fiscal Year Scenario

Ken, the Controller for Contoso Entertainment USA (CEU), must create a new fiscal year. CEU has a fiscal year that begins on July 1, and is divided into one-month periods.

Challenge Yourself!

Create the fiscal year for 2011, which begins on July 1, 2010.

Need a Little Help?

1. In the Periods form, click the Create new fiscal year button to create the fiscal year for 2011.

2. Select the period length of one month. 3. Review the new fiscal year in the Periods form.

Step by Step

1. Click General ledger, click Setup, click Periods, and then click Periods.

2. Click the Create new fiscal year button. 3. In the Enter start of fiscal year field, enter 7/1/2010. 4. In the Enter close of fiscal year field, enter 6/30/2011. 5. In the Desired length of period field, enter 1. 6. In the Unit field, click the arrow to select Months. 7. Click OK to create the year. The fiscal year for 2011 is added to the

Periods form.



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Date Intervals Create and manage date intervals that can be used in financial statements and reports. Date intervals allow you to create dynamic dates. When you use date intervals, you can set up predefined periods when you run financial statements. Date intervals can also be used when setting up an allocation rule.

Scenario

Ken, the Controller at Contoso Entertainment USA (CEU), runs a dimension statement every month. Instead of entering the dates every time he runs the report, he selects a date interval.

The date interval automatically fills in the start date and the end date. Therefore, Ken does not have to specify the start date and the end date when he runs the dimension statement.

Procedure: Create Date Intervals

Follow these steps to create date intervals.

1. To access the Date intervals form, click General Ledger, click Setup, click Periods, and then click Date Intervals.

2. Press CTRL+N to create a new record. 3. Enter a date interval code in the Date interval code field. Use a code

that is easy to identify when you set up date intervals on statements and reports, such as CP for the Current period.



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4. Enter a short description of the date interval, in the Description field.

5. Enter the period for the date interval in the From date and To date fields.

FIGURE 1.6 DATE INTERVALS FORM

Procedure: Create Date Intervals - Start/End

Follow these steps to further define the date interval start and end dates.

1. From the Date intervals form, click the General tab. 2. Select thetime unitthat is the basis of the calculation in the Before

list. 3. Specify the starting point of the interval in the Start/End field. This

data is used with the value in the Before list to set the starting point of the date interval.



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The following examples are for Before and Start/End fields:

Field Value Before Fiscal year

Start/End Start

Calculation date

3/13/2008

Starting point 1/1/2008

Field Value Before Quarter

Start/End End

Calculation date

3/13/2008




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NOTE: The Calculation date field is equal to the system date. By changing the system date, (Microsoft Dynamics AX > Tools > Session Date), all the values in the Date calculation area of the form will be changed accordingly.

FIGURE 1.7 DATE INTERVALS FORM, GENERAL TAB

Procedure: Create Date Intervals - Future or Past

Follow these steps to set whether a date interval moves into the future or the past.

1. From the Date intervals form, click the General tab. 2. Indicate whether the interval should move into the future or into the

past, by selecting + for future or - for past in the +/- field. The +/- field is based on the Before field.The number is multiplied by the time units in the Days, months, years or periods field.

3. Select the unit for change of start date in the interval in the Days, Months, Years or periods field. The number of units is displayed in the +/- field. The choices are reflected in the After adjustments field.



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The following examples are of the +/- field and the Days, months, years and period fields:

Field Value Before Year

Start/End Start

+/- 1

Days, months, years and periods Years

Calculation date 3/13/2008


After adjustment 1/1/2009

Field Value Before Year

Start/End Start

+/- - 1

Days, months, years and periods Years

Calculation date 3/13/2008


After adjustment 1/1/2007

NOTE: If the +/- field and Days, Months, Years or periods field are empty, the After adjustments field equals the starting point value.

Procedure: Create Date Intervals - After

Follow these steps to select the basis for adjustment of the date in the After adjustments field.

1. From the Date intervals form, click the General tab. 2. Select a time unit used to determine the start date or the end date of

the From date field in the After field. The From date fieldis based on the value in the After adjustments field. The From date is used as the basis of calculation in financial statement columns, and can be the start or the end date of a time unit selected in the After field



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3. Select whether the time unit in the After field should be set in the beginning or the end of the time unit in the Start/End field. The following examples are of the After field and the Start/End field.

Field Value After adjustments

4/17/2008

After Fiscal year

Start/End Start

From date 1/1/2008

Field Value After adjustments

4/17/2008

After Quarter

Start/End End

From date 6/30/2008

Procedure: Create Date Intervals - Locked Start

Follow these steps to use a specific date.

1. From the Date intervals form, click the General tab. 2. Enter a fixed start date, in the Locked start field. All other values

are overwritten, and the value is transferred to the From date field.

Reason Codes Reason codes are standardized codes that can be used in various transaction types or changes to field values to provide background data about the transaction. For example, auditors or managers frequently want to see reasons recorded for various transactions.



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When you use standard reason codes instead of transaction text, you have guidelines for which codes to select from. Standard reason codes also allow management and auditors to analyze transaction history by specific reason. Reason codes can be used with:

• Fixed assets • General ledger • Accounts payable • Accounts receivable • Bank

NOTE: For more information about using reason codes with Fixed assets, refer to the Fixed assets collection.

Procedure: Create a Reason Code

A reason code can be selected in the following General ledger forms:

• General journal • Process allocation request • Elimination proposal • Consolidation, Online periodic

Follow these steps to create a General ledger reason code.

1. To access the Reasons form, click General Ledger, click Setup, and then click Ledger reasons.

2. Press CTRL+N to create a new reason. 3. Enter a unique Reason Code as identification.



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4. Enter a Default Comment for the reason code. The comment entered here is displayed as the default comment when you select this reason in transactions. You can change the default reason comment.

FIGURE 1.8 LEDGER REASONS FORM

NOTE: Use the Reasons form from Basic to create reason codes for many financial modules. You also can open the Reasons form from a specific module. The Reasons form in Basic provides extra fields to assign the reason code to any of five account types, but in each of the other modules, reason codes by default are assigned to the account type that is related to that module. For example, if the Reasons form opens from Accounts payable, the Vendor check box is selected and the reason codes created can be used only with vendor transactions unless the Vendor check box is unmarked.

Procedure: Modify a Reason Code

Reason codes can be modified at any time. The Default comment and Account types can be changed.

Follow these steps to modify a reason code.


2. Select the Reason Code to modify. 3. Modify the Default Comment for the reason code. 4. Clear the Ledger check box. As soon as the Ledger check box is

cleared, the reason code is no longer displayed in the General ledger transaction entry forms, and is unable to be used.



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Procedure: Delete a Reason Code

Follow these steps to delete a reason code.


2. Select the Reason Code to be deleted. 3. Clear the Ledger check box. You can delete a Reason code only if

no account types are associated with it. If the Reason code has been selected for use from another module, clear the other Account type check boxes or view the Reasons form from Basic to clear all Account type check boxes.

4. Click the delete icon. 5. Click Yes in the Confirm deletion dialog box.

Test Your Knowledge

What are reason codes?

Dimensions Dimensions have the following characteristics:

• Provide a more detailed description of a transaction. • Simplify the accounting process when you enable detailed analysis

without the creation of a detailed Chart of Accounts. • Resemble separate accounts for:

o Departments o Cost centers o Purposes



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• Are defined to analyze and classify financial transactions as follows: o Financial transactions usually are organized according to

voucher and account number. o Additional grouping and classification options are available

when you assign several dimensions to transactions.

• Enable you to view the data file from different perspectives to improve the effectiveness in tracking figures across accounts.

• Can be used throughout the system. • Add dimensions to base data such as:

o Ledger accounts o Customers o Vendors

• Are copied to transactions automatically.

Default Dimension Settings

Three default dimension settings exist:

• Department • Cost center • Purpose

NOTE: Use the Financial Dimension Wizard to create extra dimensions in Microsoft DynamicsAX 2009. It requires a MorphX license to add extra dimensions in the application. To access the wizard, click Microsoft Dynamics AX, click Tools, click Development Tools, click Wizards, and then click Financial Dimension Wizard. The number of financial dimensions is finite, however, the number of dimension values within a financial dimension is infinite.

NOTE: These dimensions are financial dimensions. Microsoft Dynamics AX 2009 also has Inventory dimensions, which are different from financial dimensions.

Scenario

Ken, the Controller at Contoso Entertainment USA, must analyze company figures from a perspective other than only ledger accounts. Ken wants to make reports and sales statistics inquiries based on cost centers and departments. Therefore, he decides to set up dimensions as a supplement to voucher and account numbers.



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Procedure: Create a Dimension Value

Follow these steps to create a new dimension value.

1. To access the Dimensions form, click General ledger, and then click Dimensions.

2. Select the relevant dimension in the Dimension list. 3. Press CTRL+N to create a new line. The value in the Dimension

field is populated based on the selection in step 2. 4. Enter a unique identifier for the dimension value in the Number

field. 5. Enter a name for the dimension value in the Description field. 6. Select an employee responsible for this dimension, in the Employee

drop-down list. This field is optional.

FIGURE 1.9 DIMENSIONS FORM

After dimension values are set up, you can assign them to the following:

• Ledger accounts • General ledger transactions • Accounts Receivable transactions • Customers • Accounts Payable transactions • Vendors

For example, in the Customers form on the Dimensions tab, set up department and cost center dimensions for customer 4037. When a sales order is created for customer 4037, the defined dimensions are populated on the sales order automatically, but the values can be changed.



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Throughout Microsoft Dynamics AX 2009, you can separate data in different ways when you use dimensions. For example, you can attach a department number to each transaction and then run a query that shows balances by department code.

Procedure: Select Dimension Validation Options

Validation options for dimension values can be assigned to specific account numbers. Follow these steps to specify a dimension validation option for an account.

1. To open the Chart of Accounts form, click General Ledger and then click Chart of Account Details.

2. Select the account number, and then click the Dimension tab. 3. Select a validation option value from the Mandatory Dimensions

lists, which include the following value options: o Optional - Entry of a dimension value is optional; a value is not

checked when you post. o To be filled in - Microsoft Dynamics AX 2009 verifies that a

dimension value is entered, but the specific value is not checked. The Dimension field must contain data, however, the data does not have to be a valid dimension in the Dimension table.

o Table - Microsoft Dynamics AX 2009 verifies that a Dimension value is entered, and that the value matches the value specified in the ledger account.

o List - Microsoft Dynamics AX 2009 verifies that a Dimension value is entered. The value must be a valid dimension in the Dimension table.

o Fixed - The dimension selected on the ledger account always is used when you post and replaces any other dimension value that may have been entered.

o Default - For all transactions without any value set, the value stated on the ledger account is used. The default dimension value can be changed before you post.

HINT: For accounts that have a List validation option selected, you must define the Dimension table values in the Validate dimension form. To access the Validate dimension form, click General ledger, click Chart of Accounts, select the account number, click the Validation list button, and then click Dimension.



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Test Your Knowledge

Which of the following is one of the default dimension settings? (Select all that apply.)

( ) Department ( ) Vendor ( ) Cost center ( ) Purpose



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Lab 1.3 - Assign Ledger Account Dimension Values Scenario

Phyllis, the Accounting Manager, at Contoso Entertainment USA (CEU) has been asked by Charlie, the President and CEO, for monthly financial reports by department, cost center, and purpose. Phyllis has determined that cleaning expenses for the building always should be recorded to the Building maintenance cost center.

Challenge Yourself!

Help Phyllis enter the necessary dimension validation options for account 605110.

Need a Little Help?

1. To guarantee the accuracy of the financial reports, make sure that transactions posted to the cleaning expense account (605110) always specify: o Cost center dimension 0101, Building maintenance

2. Specify these validation options in the Chart of Accounts form.

Step by Step

1. Click General ledger, and then click Chart of Account Details. 2. Select account 605110, Cleaning expense, and then click the

Dimension tab. 3. In the Cost center field, click the arrow to select 0101, Building

maintenance. 4. In the Validate cost center field, click the arrow to select Fixed.



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Dimension Focus Dimension focuses make it easy for you to create financial reports that are based on dimensions and ledger accounts transactions. They also define the order in which dimensions and ledger accounts should be printed.

A dimension focus combines dimensions and ledger accounts. For example, one focus can consists of:

• Ledger accounts • Department • Purpose

Another focus can consist of:

• Department • Ledger accounts

For example, you can use the dimension focuses to view balance statements based on multiple dimensions and ledger accounts.

Scenario

Sara, the Chief Financial Officer (CFO) at Contoso Entertainment USA (CEU), must:

• Analyze financial transactions based on dimensions and ledger accounts combined. For example, Sara views sales revenue for each department or country.

• Determine how financial transactions should be organized when users run reports and make inquiries.

To view the sales revenue for all departments in CEU, Sara decides to create a dimension focus that consists of ledger accounts and departments dimensions.

Procedure: Create a Dimension Focus

Follow these steps to create a dimension focus:

1. To access the Dimension focuses form, click General Ledger, click Setup, click Financial Statement, and then click Dimension Focuses.

2. Enter a unique identifier to name the new dimension focus in the Set field.

3. Enter a descriptive name in the Description field. 4. Click the Dimension tab.



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5. Select one or more dimensions in the Available dimensions pane that should be included in the dimension focus. Click the arrows to add the dimensions to the Selected dimensions pane. At least one dimension must be selected for each dimension focus. The dimension that is the primary row pattern (main focus) must be listed first, and the dimension shown within each primary row must be listed second (secondary focus). For example, to print a report that displays sales revenue per department, the department dimension should be selected first and ledger accounts selected second.

NOTE: The Dimension Entry check box cannot be edited. It identifies whether the dimension set is used with the dimension hierarchy feature. A dimension set that drives the entry of dimension automatically is considered a focus also, but must not be edited, modified or deleted from the Dimension focuses form. The dimension set can be edited only in the Dimension sets form, which you can access when you click General ledger > Setup > Dimensions > Dimension Set.

FIGURE 1.10 DIMENSION FOCUSES FORM



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Procedure: Select the Default Dimension Focus

After you complete the steps to create a dimension focus, you can use the dimension focus in various reports and statements. For example, use the dimension focus in financial or dimension statements.

A default dimension focus is selected automatically when various reports are printed. For example, the default dimension focus is selected when you open the Dimension Statement form when you click General ledger > Reports > Transactions > Dimension Statement.

Follow these steps to select the default dimension focus.

1. To open the General ledger parameters form, click General ledger, click Setup, and then click Parameters.

2. On the Ledger tab select the default dimension focus in the Default focus for dimension rendering list.



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Lab 1.4 - Create a Dimension Focus and Print the Dimension Statement

Scenario

In June 2008, Sara, the Chief Financial Officer (CFO) at Contoso Entertainment USA (CEU), advised staff that all entries made to income statement accounts must include a department dimension.

Challenge Yourself!

Run a report to verify that entries for the month of June include the department dimension.

Need a Little Help?

1. Create a new dimension focus for account - department. 2. View the results in the Dimension Statement report.

Step by Step

Follow these steps to create a new Dimension focus for Account-Department.

1. To access the Dimension focuses form, click General ledger, click Setup, click Financial statement, and then click Dimension focuses.

2. Press CTRL+N to create a new dimension focus. 3. In the Set field, enter Acc-Dept. 4. In the Description field, enter Account – Department. 5. Click the Dimension tab. 6. Drag the Ledger account field from Available dimensions to

Selected dimensions. 7. Drag the Department field from Available dimensions to Selected

dimensions. 8. Click the Overview tab. 9. Press CTRL+S to save the record. Microsoft Dynamics AX 2009

displays a confirmation message. 10. Click the Yes button. 11. Close the Dimension focuses form.

Next, follow these steps to run the Dimension statement report.

1. Click General ledger, click Reports, click Transactions, and then click Dimension statement.

2. In the Main focus field use the arrow to select Acc-Dept. 3. In the From date field, enter 6/1/2008.



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4. In the To date field, enter 6/30/2008. 5. Click the Select button to open the Inquiry form. 6. On the Range tab on the Ledger account row enter 400000..999999

in the Criteria column. 7. Click OK to close the Inquiry form. 8. Click OK to view the report. 9. Review the report to determine whether accounts that have entries

without departments are listed.



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Generated Allocations Allocation is the process of distributing monetary amounts to one or more accounts or account and dimension combinations.

New to Microsoft Dynamics AX 2009 is the ability to use predefined allocation rules to perform generated allocations. Generated allocation is the distribution of posted or fixed amounts to combinations of destination accounts and dimensions at any time, which generate new journal entries.

Allocation rules have numerous calculation methods, including:

• Basis • Fixed percentage • Fixed weight • Spread even

Microsoft Dynamics AX 2009 also provides the ability to allocate across multiple companies, also known as Intercompany allocations.

Scenario

Phyllis, the Accounting Manager at Contoso Entertainment USA (CEU), creates a new Intercompany allocation rule for Electric Utilities to distribute overhead utility expense to each department based on fixed percentages. The rule is for the new fiscal year that begins on January 1, 2008. Because Phyllis does not want the new rule to be used until then, she enters 01/01/2008 as the start date for the rule. Because CEU typically reviews its allocation rules every fiscal year, Phyllis enters 12/31/2008 as the end date for the rule.

Phyllis enters detailed notes about the basis and reasons for the allocation rule. Phyllis then selects the Microsoft® Word template that was implemented when CEU experienced a SOX review to document the allocation rule completely. When Phyllis has finished writing the document, she attaches a copy of it to the rule. Anyone who wants additional information about the rule can open the document or print an Allocation rules definition report.

Allocation Rules

Allocation Rules allow you to define the results you want in the allocation business process.

Each allocation rule has four primary components:

• The General settings dictate which fields are available in the rule tabs.

• The Source data for the allocation is also known as the allocation pool.



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• The Destination defines how the results of the allocation calculation must be distributed to the destination distribution lines.

• Offset entries balance the destination distribution lines.

Procedure: Create an Allocation Rule

Follow these steps to create an allocation rule.

1. Click General ledger, click Setup, click Posting, and then click Ledger allocation rule.

2. Press CTRL+N to create a new rule. 3. Enter the Rule as identification. 4. Enter a Description of the rule. 5. Optionally select the Effective start date and Effective end date for

the rule. 6. Select the Active check box, if the allocation rule is available to be

processed.

FIGURE 1.11 LEDGER ALLOCATION RULE FORM



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Procedure: Create an Allocation Rule - General

Follow these steps to complete the setup of allocation rule general settings, which dictate what fields are available in the rule tabs.

1. From the Ledger allocation rule form, select the General tab. 2. Review or change settings from the Overview tab in the

Identification and Administration sections. 3. View the Date last run, which displays the date when a user last

processed the allocation rule and created distributions. 4. Select the Intercompany rule check box if the allocation rule

involves being processed among multiple companies. 5. Select the Allocation method:

o Basis: Defines how and in what proportion the source amounts are distributed to the various destination lines. For example, allocation based on revenue dollars, in which the cost of corporate advertising expense is shared across all departments, is based on each department's sales in proportion to total departmental sales.

o Fixed percentage: Takes criteria defined in the allocation source and uses a fixed percentage amount that the user entered, to determine the allocation amount for the destination.



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o Fixed weight: Takes criteria defined in the allocation source and uses a fixed weight amount that the user entered, to determine the allocation amount for the destination.

o Spread even: Takes criteria defined in the allocation source and disperses the amount evenly across the destination distribution lines.

FIGURE 1.12 LEDGER ALLOCATION RULE FORM, GENERAL TAB

6. In the Data source field, select the source of the amount to allocate:

o Ledger o Fixed value

7. If Fixed value is selected in the Data source field, enter a value in

the Fixed value field. 8. If Ledger is selected in the Data source field, select an arithmetic

operation to apply to the source value in the Mathematical operation field.

9. If Ledger is selected in the Data source field and either Multiply or Divide is selected in the Mathematical operation field, enter the Amount by which to multiply or divide the source value.

10. If Ledger is selected in the Data source field, select a date interval to determine the account periods used for the allocation rule source. If a date interval is not selected, all balanced for the chosen account or account-dimension combination will be selected for source allocation.

11. Select an allocation Journal name. The Description displays the allocation journal description.



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12. If the Spread even Allocation method is selected, select from the Keep account from list to use the source account.

13. If the Spread even Allocation method is selected, select from the Keep dimension form list to indicate if you want to use the source destination account and dimension or a user-specified destination account and dimension.

Procedure: Create an Allocation Rule - Source

Follow these steps to complete the setup of settings for the allocation rule source, also known as the allocation pool.

1. From the Ledger allocation rule form, select the Source button. 2. Press CTRL+N to create a new record. 3. From the Field setting list select to allocate from an Account or

account Dimension combination. 4. If Dimension is selected in the Field setting field, select a

Dimension. 5. In the Source criteria field enter the account or dimension

information from which to allocate. You can use wildcard characters to specify accounts or dimension codes. For example, if the selected Dimension is Department and the source criteria = Admin,“”, the system displays information that includes the department dimension equal to Admin or a department dimension has not been specified.

FIGURE 1.13 LEDGER ALLOCATION RULE SOURCE FORM



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Procedure: Create an Allocation Rule - Destination

Follow these steps to complete the setup of allocation rule destination settings, which define how the results of the allocation calculation must be distributed to the destination distribution lines.

1. From the Ledger allocation rule form, select the Destination button.

2. Press CTRL+N to create a new record. 3. The Company field displays the company in which the allocation

rule was created. If the allocation rule is an inter-company rule, users can change this field.

4. Select the account to allocate to in the To Account field. 5. Select the Department dimension to which to allocate. 6. Select the Cost center dimension to which to allocate. 7. Select the Purpose dimension to which to allocate. 8. If the Allocation method is Basis, select the Basis ID with which to

associate the destination line.

FIGURE 1.13 LEDGER ALLOCATION RULE DESTINATION FORM



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Procedure: Create an Allocation Rule - Offset

Follow these steps to complete the setup of allocation rule Offset settings, which define the offset entries that balance the destination distribution lines.

1. From the Ledger allocation rule form, select the Offset tab. 2. In the Offset account from field, select where to find the offset

account. o Source: The allocation process will use the respective account

defined in source. o User specified: The allocation process will use the offset

account value specified.

3. If the Offset account from is set to User specified, select the Offset account.

4. In the Offset dimension from field, select where to find the offset account. o Source: The allocation process will use the respective dimension

value that was defined in source. o User specified: The allocation process will use the specified

offset dimension value.

5. If the Offset dimension from field is set to User specified, select the dimension to associate to the allocation rule.

FIGURE 1.14 LEDGER ALLOCATION RULE FORM, OFFSET TAB



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Scenario

Phyllis runs the Allocation rules definition report that details the allocation rules for the current year. The report contains details about each rule including the rule ID, description, From/To account number and dimension combinations, effective start and end dates, calculation method details, usage information, and other setup information.

Procedure: Print the Allocation Rules Definition Report

Follow these steps to print the Allocation Rules Definition report:

1. To access the Allocation Rules Definition report, click General Ledger, click Reports, click Base data, click Various, and then click Allocation rules definition.

2. Select criteria such as Ledger allocation rule. 3. Click OK to print.

FIGURE 1.15 ALLOCATION RULES DEFINITION REPORT

Scenario

Phyllis runs an allocation proposal without posting it to review the allocation results and the detailed distributions that will be created based on the allocation rule used. If the results are accurate, Phyllis posts the entry.



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Procedure: Process Allocation Request

As soon as an allocation rule has been created, you can process it and either preview or post an allocation journal. To set up an allocation journal, move to General ledger > Setup > Journals > Journal names.

Use the Process allocation request form to create an allocation journal.

1. Click General ledger, click Periodic, and then click Process allocation request.

2. Select an allocation rule. 3. Select the date to include ledger amounts for allocation in the As of

date field. This date corresponds with the Date interval on the allocation rule.

4. Select the date to post the allocation journal to the general ledger in the GL posting date field.

5. Select the action to occur if the allocation process generates a zero source amount. o Select Process to create destination distributions, where

applicable. o Select Stop to create an error that indicates when a zero source

amount is selected and stops the allocation process.

6. In the Proposal options field, select a posting preference. o Select Proposal only to review allocation results without

posting. o Select Post only to post the allocation results directly to the

general ledger.

7. Click OK.



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NOTE: The Date last run field displays the last date when a user processed an allocation rule and created distribution lines.

FIGURE 1.16 PROCESS ALLOCATION REQUEST FORM

Test Your Knowledge

What are the parts of an allocation rule? (Select all that apply.)

( ) General ( ) Source ( ) Destination ( ) Offset

Which allocation method defines how and in what proportion the source amounts are distributed to the various destination lines, by referring to balances in other account-dimensions?

( ) Basis ( ) Fixed percentage ( ) Fixed weight ( ) Spread even



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Summary The General ledger setup course describes the initial setup to start working with Microsoft Dynamics AX 2009 financials. The course provides basic introductions to set up:

• Currencies and exchange rates • Periods, fiscal year and date intervals • Dimensions and dimension focuses • Generated allocations



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Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter:

1.

2.

3.



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Solutions Currency and Exchange Rate Setup

Test Your Knowledge

Task: Simon, the System Implementer at Contoso Entertainment USA (CEU), is helping Phyllis, the Accounting Manager, with the implementation of Microsoft Dynamics AX 2009. CEU conducts business primarily in the United States and also in Canada. As of April 1, 2008, 1 Canadian Dollar (CAD) equals 0.97 US Dollars (USD). Help Phyllis and Simon determine the correct steps to set up multicurrency for CEU.

Step 4 : Create the CAD Currency in the Exchange rates form

Step 5 : Set the exchange rate value for CAD as of no date to 0.97

Step 3 : In the General ledger parameters form, enter 1 in the Express exchange rate field

Step 2 : In the Company information form, select USD in the Currency field

Step 6 : Set the exchange rate value for CAD as of April 1, 2008 to 0.97

Step 1 : Create the USD Currency in the Exchange rates form

What effect does the value in the General round-off field have on the values in Microsoft Dynamics AX 2009?

MODEL ANSWER - The value is used to round all amounts in all modules.

When you change the display currency, it affects all users.

( ) True (•) False

Periods and Fiscal Year Setup

Test Your Knowledge

Is it possible to post activity that uses a date for which a period has not been created?

( ) Yes (•) No



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Reason Codes

Test Your Knowledge

What are reason codes?

MODEL ANSWER - Reason codes are standardized codes that can be used

in various transaction types or changes to field values to provide background

data about the transaction.

Dimensions

Test Your Knowledge

Which of the following is one of the default dimension settings? (Select all that apply.)

(√) Department ( ) Vendor (√) Cost center (√) Purpose

Generated Allocations

Test Your Knowledge

What are the parts of an allocation rule? (Select all that apply.)

(√) General (√) Source (√) Destination (√) Offset

Which allocation method defines how and in what proportion the source amounts are distributed to the various destination lines, by referring to balances in other account-dimensions?

(•) Basis ( ) Fixed percentage ( ) Fixed weight ( ) Spread even



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