In Oracle E-Business Suite Release 12, Instance Home a concept introduces for a top-level directory for an Oracle E-Business Suite instance. This directory is referred to as the Instance Home, and denoted by the environment variable $INST_TOP. A key benefit of moving to the new Instance Home model is that as AutoConfig no longer writes to the APPL_TOP or ORACLE_HOME directories, both of these can be made into read-only file systems if required. All configuration files created by AutoConfig are stored under the Instance Home. An illustration of Instance Home looks like the following.
Using an Instance Home provides the ability to share application and technology stack code among multiple instances, for example a development instance and a test instance. Other benefits include support for read-only file systems and centralization of log files because of this feature log files can be stored centrally for an instance, and therefore managed more easily. Directory structure used for log files in Release 12, with some of the subdirectories used to categorize the log files: The below picture shows how the log files have been arranged in Instance Home for your understanding.
The basic structure of the instance home is: < APPS_BASE >/inst/apps/< context_name >, where APPS_BASE (which does not have or need a corresponding environment variable) is the top level of the Oracle E-Business Suite installation, and < context_name > is the highest level at which the applications context exists. For example, the setting of $INST_TOP might be < diskresource >/applmgr/inst/apps/testsys2, where testsys2 is the context name.