Parallel accounting in sap erp account approachversus ledger approachin new general ledger accounting

Parallel Accounting in SAP ERP

Account Approach
versus
Ledger Approach

in New General Ledger Accounting

Solution Management Financials
August 2008

Structure of the Presentation

Aims of this presentation:
Provide a short introduction to how parallel accounting can be portrayed using
Classic General Ledger Accounting
New General Ledger Accounting
Cover the relevant topics in terms of other SAP ERP components.

Parallel accounting is discussed in detail for the following recommended
approaches:
Chart of accounts approach (or parallel G/L accounts – referred to here as the
account approach)
Ledger approach in new General Ledger Accounting

© SAP 2008 / Page 2


Portrayal of Parallel Accounting in SAP ERP

Components

Asset Accounting

Financial Accounting

Controlling

Material Management

Others

© SAP 2008 / Page 3



Components

Asset Accounting


Controlling

Material Management

Others

© SAP 2008 / Page 4

Alternatives - Parallel Management of Values
in SAP ERP General Ledger Accounting
Local Close SAP R/3 SAP ERP
(Classic GL) (New GL)
Parallel ledgers X

Parallel accounts X X

Parallel special purpose ledgers X X

Parallel company codes X X

Recommended approaches
Significantly improved integration of financial /
managerial accounting in new GL Accounting

In new General Ledger Accounting in SAP ERP, the approaches using parallel
ledgers or parallel accounts are equivalent in terms of the results produced.
Which approach is applied depends on each customer's situation.

Parallel accounts in SAP ERP prove just as powerful as parallel accounts in
classic General Ledger Accounting in SAP R/3.

Parallel ledgers in SAP ERP are much better than the combination of classic
General Ledger Accounting and Special Purpose Ledgers in SAP R/3.
© SAP 2008 / Page 5

Alternatives - Creating Charts of Accounts Using
Prefixes in the Account Approach (Layer Model)

Options for creating charts of accounts:
Prefix and account number or last digit of the account number
Prefix: Alphanumeric or Account Number Suffix -Generally
numeric already filled
A 1 0 xxxxxx Common 0 -Selection of
accounts "from" and "to"
B 2 1 xxxxxx IFRS accounts 1 numbers is more
difficult
C 3 2 xxxxxx Local accounts 2

Common accounts retain a 0, but all local valuation accounts have
Making entries to be created again and can be transferred manually (with the
here entails exception of FI-AA)
considerable
effort! A prefix is added to all account numbers. Chart of accounts is
converted using the chart of accounts conversion tool.

IFRS Reporting Local Reporting => Validation of the layer is
0 common accounts and 0 common accounts and useful for postings
1 IFRS accounts 2 local accounts using the same valuation
approach and values
© SAP 2008 / Page 6

Alternatives - Parallel Ledgers (One Ledger per
Valuation Approach Instead of Account Prefix)

No ledger is specified during document entry: Posting made to all defined GL ledgers

Transactions: incoming invoice, outgoing invoice, payment
(everything relating to open items)

BKPF
Ledger A Ledger B Ledger C
RLDNR = " "
(IFRS) (US GAAP) (local)

(leading
BSEG ledger)
© SAP 2008 / Page 7

Alternatives - Approach and Valuation Affect
Number of Postings Decisively (I)

1. Same approach and valuation
=> One posting to common accounts or in all ledgers

Incoming invoice for external activities
Expenses: Ext. Activities Payables Tax
One common
1160 1) 1) 160
1) 1000 posting

2. Same approach but different valuation
=> a separate posting to local and IFRS accounts or ledgers

Depreciation or reserves for pensions
Expenses: Pensions Accruals
Local Valuation Local Valuation
1000 2)
Two complete
2) 1000 postings, made
Expenses: Pensions
separately for
Accruals
IFRS IFRS each valuation
3) 500 500 3)

© SAP 2008 / Page 8

Alternatives - Approach and Valuation Affect
Number of Postings Decisively (II)

3. Different approaches
=> Only one posting to local or IFRS accounts or ledgers

Posting only relevant for IFRS: Financial Leasing

Financial Leasing Financial Leasing
Depreciation Only one
1) 1000 1000 1)
posting

Posting only relevant for local GAAP: Provisions for expenses

Expense Provision for Expenses
Only one
1) 2000 2000 1)
posting

© SAP 2008 / Page 9

Delta Postings or Complete Postings
(Example: Complete Posting)
Scenario: Two valuation approaches with IFRS as leading approach
FI-AA uses two depreciation areas:
01 contains IFRS
30 contains local valuation

For December 2003, the following depreciation is made:
01 IFRS EUR 1000
30 Local EUR 600

With a complete posting, the postings appear as follows:
Debit "IFRS Depreciation" 1000
Credit "IFRS Value Adjustment" 1000

Debit "Local Valuation: Depreciation" 600
Credit "Local Valuation: Value Adjustment" 600

© SAP 2008 / Page 10

Delta Postings or Complete Postings
(Example: Delta Posting)
With delta postings, the following postings are made:
Debit "IFRS Depreciation" 1000
Credit "IFRS Value Adjustment" 1000

Credit "Local Valuation: Depreciation" 400
Debit "Local Valuation: Value Adjustment" 400

In this case, the local posting corrects existing values.
The delta posting is only meaningful in combination with the
initial posting.
Posting data cannot be traced without additional information.
Should tax auditors also be able to see the IFRS values?
The SAP system can only make delta postings in FI-AA
The delta technique is not recommended.

© SAP 2008 / Page 11



Components

Asset Accounting


Controlling

Material Management

Others

© SAP 2008 / Page 12

FI-AA: Portrayal of Multiple Accounting
Principles - Ledger Approach in New GL (1)

The FI-AA application component can portray parallel accounting using depreciation
areas.

In Customizing, ledger groups are assigned to the depreciation areas. Consequently,
postings are made to separate ledgers in FI.
The leading ledger has to be assigned to depreciation area 01.
The following have to be defined for every other ledger (for the additional accounting
principles):
A depreciation area
A derived depreciation area (delta area)
The start date and end date of the fiscal year variant in the depreciation areas in Asset
Accounting need to correspond to the fiscal year variant of the leading ledger.
Nonleading ledgers can use a different fiscal year variant. (For restrictions on this, see SAP
Note 844029).

© SAP 2008 / Page 13

Principles - Ledger Approach in New GL (2)

The depreciation area settings specify whether
No postings are made
Asset balances and depreciation are posted
Only asset balances are posted
Only depreciation is posted
APC can be posted direct to the G/L account in all ledgers (periodic run of RAPERP2000 is
no longer necessary)
An identical G/L account number can be used in different ledgers. In this way, only one APC
account and only one VA account, for example, are required for all accounting principles of
an asset class. A reduced version of the chart of accounts can be used for easier reference.
Customizing: Different depreciation parameters (such as method and useful life) are defined
for each depreciation area in an asset or asset class.
"Post-Capitalization of Cash Discount to Assets" (prerequisite: document splitting is active!):
Cash discounts are capitalized with payments; periodic run of SAPF181 is no longer
necessary.

© SAP 2008 / Page 14

Principles Using the Account Approach

The FI-AA application component can portray parallel accounting using depreciation
areas.
Customizing: Different accounts can be defined in the depreciation areas / asset classes. In
this way, postings are made to separate G/L accounts.
One APC account and one VA account, for example, are required for each accounting
principle.
The start date and end date of the fiscal year variant in the depreciation areas in Asset
Accounting need to correspond to the fiscal year variant of the company code.
Customizing: Different depreciation parameters (such as method and useful life) are defined
for each depreciation area in an asset.
APC can be posted direct to the accounts of the parallel valuations or started periodically
using RAPERP2000.

© SAP 2008 / Page 15

FI-AA - Depreciation Areas Required for Ledger
Approach in New General Ledger Accounting

The portrayal of parallel valuation requires the depreciation areas listed below.
Delta postings are used.
The base value of the leading area is transferred to all ledgers, and a second
periodic APC posting corrects the base value in the parallel ledger.
The derived area (delta area) posts the difference between the leading area and
the nonleading area to the ledger assigned to the nonleading area.
The following examples assume:
The IFRS ledger is the leading ledger
The US GAAP ledger is the nonleading ledger
Posting of
Ledger Group Ledger Asset Periodic
B/S Value Depreciation
Depreciation area 01 0L IFRS X X
(leading)

Depreciation area 20 (calculation) 0L IFRS - X

Depreciation area 30 (nonleading) N1 US GAAP - X

Depreciation area 60 N1 US GAAP X (1) -
(delta area 30-01)

(1) Corrections from asset retirement can be posted direct or periodically (RAPERB2000)
© SAP 2008 / Page 16

FI-AA - Depreciation Areas Required for Ledger
Approach in New General Ledger Accounting
In Area 01
The leading ledger is assigned
Asset balance sheet values and depreciation are posted online; profit center and
segment are always included in the posting
In Area 20
Only cost-accounting depreciation is posted; another type of depreciation can be
specified, and the accounts specified need to be created as cost elements
In Area 30
Asset balance sheet values are posted
Where appropriate, depreciation is posted with a different base value.
In Area 60 (derived area)
Ledger group-specific documents are entered for postings with different APC values
(such as the capitalization of freight costs under US GAAP); such documents need to be
entered manually
Corrections for asset retirement postings are created automatically when the
depreciation posted in areas 01 and 30 differs (the VA account and the gain or loss from
asset retirement are corrected); this can be posted direct or posted periodically using
RAPERB2000.
© SAP 2008 / Page 17

Portrayal of Multiple Accounting Principles Using
the Ledger Approach in New GL: Asset Acquisition

Different APC values reflecting different accounting principles have to be posted to the
ledgers (for example, freight costs need to be capitalized for US GAAP).

01 IFRS
30 US GAAP
60 30 - 01 FI-AA
…
FI-GL

IFRS (Leading)
Postings IFRS US
GAAP
US GAAP
Asset Acquisition 0L N1

Capitalization of Freight Costs (ledger -- N1
group-specific document with separate
transaction type)

© SAP 2008 / Page 18

Asset Acquisition

Assets can be valuated differently for different accounting principles (for example, freight costs have to be
capitalized for US GAAP).
Ledger approach in new General Ledger Accounting:
Customizing: As mentioned above, at least the following depreciation areas need to be set up accordingly:
Leading area
Nonleading area
Delta area
The base value of the leading area is transferred to all ledgers.
One-Step Method:
The derived area (delta area) posts the difference between the leading and nonleading area to the nonleading ledger:
using a ledger group-specific document that needs to be entered manually.

Account approach:
Customizing:
A new depreciation area is required for the new accounting principle
Separate accounts can be defined for the combination chart of depreciation – chart of accounts – account determination
– depreciation areas.
Account determination is assigned to the asset class.
Three-Step Method:
Manual adjustment document on the asset in the area affected
Periodic FI posting to asset portfolio (and to asset clearing account) using RAPERB2000 or direct posting
Manual transfer posting from asset clearing account to expenses (expenses adjustment account)

© SAP 2008 / Page 19

Portrayal of Multiple Accounting Principles Using the
Ledger Approach in New GL: Depreciation

The use of different depreciation parameters (such as method and useful life) for the
different accounting principles produces different depreciation values, which are posted to
the corresponding ledgers.

01 IFRS
30 US GAAP
60 30 - 01 FI-AA
…
FI-GL

IFRS (Leading)

US GAAP Postings IFRS US
GAAP
Straight-line depreciation over 0L --
5 years as per IFRS

Straight-line depreciation over 10 years as -- N1
per US GAAP

© SAP 2008 / Page 20

Depreciation

Assets are depreciated using different depreciation rules in accordance with different
accounting principles.
Customizing: As mentioned above, at least the following depreciation areas need to be set up
accordingly:
Leading area
Nonleading area
Delta area
For each accounting principle, the depreciation run posts documents to the respective ledger.

Account approach:
Customizing:
Separate accounts can be defined for the combination chart of depreciation – chart of
accounts – account determination – depreciation areas.
For each accounting principle, the depreciation run posts documents to the accounts defined.

© SAP 2008 / Page 21

Ledger Approach in New GL: Asset Retirement

Due to the different net book values, the accounting principles can produce different losses/gains
that need to be posted to the respective ledgers.
(Assumption: gains are achieved when IFRS is the leading accounting principle, whereas US GAAP
produces losses)

01 IFRS
30 US GAAP
60 30 - 01 FI-AA
…
FI-GL

IFRS (Leading) Postings IFRS US
GAAP

US GAAP Asset sale with gains 0L N1

Adjustment of gains under IFRS, -- N1
adjustment of accumulated depreciation
under US GAAP, and posting of losses
under US GAAP (1)

(1)
Performed direct or performed periodically using RAPERB2000

© SAP 2008 / Page 22

Asset Retirement

When assets are sold, the net book value can be different in the different accounting principles,
which means that different values need to be posted.
Leading area
Nonleading area
Delta area
The base value of the leading accounting principle is posted to both ledgers.
The derived area (delta area) posts the difference between the leading and nonleading areas to the
additional ledger. This posting can be made direct or periodically using RAPERB2000.

Account approach:
Customizing:
Separate accounts can be defined for the combination chart of depreciation – chart of accounts –
account determination – depreciation areas.
The document in the nonleading area is posted periodically using RAPERB2000 or posted direct.

© SAP 2008 / Page 23

Scrapping

Scrapping is a special type of asset retirement, producing a revenue of zero.

The same applies as with asset retirement.

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Ledger Approach in New GL: Asset Under Construction

For assets under construction, the following distinction is made:

Without investment measure:
Such assets are treated as regular asset acquisition.

As investment measure:
Costs are collected on a WBS element or an internal order (capitalization key in the master
record).
The costs are collected and capitalized/settled to the asset. They are assigned to the
depreciation area on the basis of the combination of capitalization key and capitalization
version. In this way, different percentages of capitalization can be applied.
Additional external invoices that need to be handled differently depending on each accounting
principle have to be entered as an adjustment document after the asset has been capitalized
(as a regular asset acquisition).

© SAP 2008 / Page 25

Multiple Acctg Principles - Ledger Approach in New
GL: Asset Under Construction (Investment Measure)

The expenses are collected on an internal order and settled to the asset under construction. Different APC values have to
be capitalized using different accounting principles.
(Assumption: 100% of expenses are capitalized under leading accounting principle IFRS, whereas only 80% of expenses
are capitalized under US GAAP. The percentage applied is defined in the capitalization key of the asset under
construction.)

01 IFRS
30 US GAAP
60 30 - 01 FI-AA
…
FI-GL

IFRS (Leading)
Postings IFRS US
US GAAP GAAP
Settlement of internal order to asset under 0L N1
construction with 100%

Reset by 20% of expenses(1) -- N1

(1)
Performed direct or performed periodically using RAPERB2000

© SAP 2008 / Page 26

Asset Under Construction (Investment Measure)

Different APC values have to be capitalized using different accounting principles.
Leading area
Nonleading area
Delta area
The base value of the leading area is transferred to all ledgers.
The derived area (delta area) posts the difference between the leading and nonleading area to the
nonleading ledger; this difference is posted automatically during settlement.

Account approach:
Customizing:
Separate accounts can be defined for the combination chart of depreciation – chart of accounts –
account determination – depreciation areas.
The total amount and the difference are posted automatically during settlement to the respective areas.

© SAP 2008 / Page 27

Ledger Approach in New GL: Depreciation of Low-Value
Assets

The limits for low-value assets differ depending on the accounting principle applied.

01 IFRS
30 US GAAP
60 30 - 01 FI-AA
…
FI-GL

IFRS (Leading)

US GAAP Postings IFRS US
GAAP
Straight-line depreciation over 0L --
3 years as per IFRS

Immediate depreciation as per US GAAP -- N1

© SAP 2008 / Page 28

Low-Value Assets (1)

Low-value assets have different limits due to the different accounting principles applied.
The maximum low-value asset amount is defined in the country data (OA08)
(the country key has been assigned to the company code).
Leading area
Nonleading area
Delta area
All assets with APC that are smaller or equal to the smallest LVA value of all accounting principles are capitalized in an asset
class and depreciated immediately.
All assets that are greater than the smallest LVA value of all accounting principles are created in a second asset class.
Whereas in one area immediate depreciation occurs at 100%, depreciation is performed in another area corresponding to the
useful life. Changes to the respective depreciation key and the useful life need to be made manually in the asset master
record for each depreciation area.
From 2008: A special transaction type needs to be created for retirement because the German tax law requires assets with
an APC of between 150 EUR and 1000 EUR to be depreciated over five years (see SAP Note 1082378)
For each accounting principle, the depreciation run posts documents to the respective ledger.

© SAP 2008 / Page 29

Low-Value Assets (2)

Account approach:
Customizing:
Separate accounts can be defined for the combination chart of depreciation – chart of
accounts – account determination – depreciation areas.
All assets with APC that are smaller or equal to the smallest LVA value of all accounting
principles are capitalized in an asset class and depreciated immediately.
All assets that are greater than the smallest LVA value of all accounting principles are created
in a second asset class. Whereas in one area immediate depreciation occurs at 100%,
depreciation is performed in another area corresponding to the useful life. Changes to the
respective depreciation key and the useful life need to be made manually in the asset master
record for each depreciation area.
From 2008: A special transaction type needs to be created for retirement because the
German tax law requires assets with an APC of between 150 EUR and 1000 EUR to be
depreciated over five years (see SAP Note 1082378)
For each accounting principle, the depreciation run posts documents to the accounts defined.

© SAP 2008 / Page 30

Ledger Approach in New GL: Integration with Controlling

Scenario 1:
Depreciation area 01 does not post to Controlling
This is the leading depreciation area
It posts to the leading ledger
It uses the same accounts as depreciation areas 30 and 60

Depreciation area 20 posts to Controlling
It posts to Controlling
Accounts are created as cost elements
The accounts used are different to those used in depreciation areas 01, 30, and 60

In Controlling, the cost-accounting approach portrayed differs from that in the leading valuation.

Posting of
Depreciation area 01 0L IFRS X X
(leading)

Depreciation area 20 (calculation) 0L IFRS - X (CO)


Depreciation area 60 N1 US GAAP X -
(delta area 30-01)

© SAP 2008 / Page 31


Scenario 2:
This is the leading depreciation area
It uses the same accounts as depreciation areas 30 and 60

Depreciation area 20 is not used.

In Controlling, the leading valuation is portrayed as the cost-accounting approach.

Posting of
Depreciation area 01 0L IFRS X X (CO)
(leading)


(delta area 30-01)

© SAP 2008 / Page 32


Scenario 3:
Depreciation area 01 does not post to Controlling
This is the "leading" depreciation area
Some of the (P&L) accounts it uses are different to those used by depreciation areas 30 and 60
In Germany and Austria, the current trend is to portray the German Commercial Code (HGB) in area 01

Depreciation area 20 is not used.
It does not post to the leading ledger
Some of the (P&L) accounts used are different to those used in depreciation area 01

In Controlling, group accounting is portrayed as the leading valuation without the group approach being portrayed in area 01. It may be possible to reduce the effort
required for a conversion project.
The BAdi FCOM_EXT_LEDGER has to be used (see SAP Note 804753).

Posting of
Depreciation area 01 0L IFRS or HGB X X
(leading)

Depreciation area 30 (nonleading) N1 US GAAP - X (CO)

(delta area 30-01)

© SAP 2008 / Page 33



Components

Asset Accounting

Financial Accounting -Foreign Currency Valuation
-Individual Value Adjustment
-Sorting Open Items
Controlling -Down Payments
-Provisions Created Automatically
-Provisions Created Manually
-Accruals/Deferrals
Material Management
-Balance Carryforward

Others

© SAP 2008 / Page 34

Parallel Accounting in Financial Accounting

Depiction of parallel accounting is required for the following topics:

Value adjustments
List of terms / Reclassifications
Foreign currency valuation
Securities (CFM)
Provisions
Accruals

© SAP 2008 / Page 35

Foreign Currency Valuation
(FAGL_FC_VALUATION)

Receivables / Payables / foreign currency balance sheet accounts may be valuated
differently on the basis of different accounting principles.

Customizing: Determination of the ledger group using the assignment of the valuation area to
a valuation method and to an accounting principle.
The program is run for each valuation area.

Account approach:
Customizing: Assignment of different accounts on the basis of the valuation area (for each
chart of accounts)

© SAP 2008 / Page 36

Foreign Currency Valuation in FI-CA

In the FI-CA application component, open items that are posted in a foreign currency
may be valuated using different accounting views.

Customizing in FI-CA: Assignment of the valuation area to a ledger group

Account approach:
Customizing in FI-CA: Assignment of the adjustment accounts to a valuation area

© SAP 2008 / Page 37

Valuations in Treasury and Risk Management (TR-
TM)

In the Treasury application component, financial instruments (such as fixed-term
deposits, securities, or foreign exchange) may be valuated from different accounting
views.

Customizing: Assignment of the valuation area to the accounting principle (to the ledger group
in new General Ledger Accounting)
The program is run for each accounting principle.

Account approach:
Customizing (TR-TM): Assignment of the valuation area to the valuation accounts.

© SAP 2008 / Page 38

Translation (FAGL_FC_TRANSLATION)

Receivables/Payables

FAS 52 requires that the valuation result in the functional currency be translated into
the reporting currency.

Customizing: Assignment of valuation area to accounting principle to ledger group

Account approach:
Customizing: Definition of different accounts depending on the valuation area.

© SAP 2008 / Page 39

Flat-Rate Individual Value Adjustment
(SAPF107)

Receivables (and, where applicable, payables) can be valuated differently by number
of days overdue and risk classes in accordance with different accounting principles.

Customizing: Assignment of ledger group using valuation areas

Account approach:
Customizing: Assignment of different accounts (for each chart of accounts) using valuation
areas.

© SAP 2008 / Page 40

Individual Value Adjustment of Receivables
(Manual Posting, Special G/L Transaction)

Receivables can be transferred as doubtful receivables (special G/L transaction)

Ledger approach in new General Ledger Accounting: Not available

Account approach: The special G/L transaction represents a type of account
approach.

© SAP 2008 / Page 41

Sorting Open Items by Remaining Term
(FAGL_CL_REGROUP)

Receivables (and, where applicable, payables) can be portrayed by remaining term
on different balance sheet items in accordance with different accounting principles
(transfer posting).

Customizing: Assignment of ledger group using valuation areas

Account approach:
Customizing: Assignment of different accounts (for each chart of accounts) using valuation
areas.

© SAP 2008 / Page 42

Down Payments Made

In the results analysis, different results analysis versions can be used to view down
payments differently. For example, down payments that have already been made can
be considered revenue in results analysis and thereby reduce the revenue in excess
of billings. This is achieved in transaction OKG3 by setting the "Commitments"
indicator (methods G-K).

With the "G" indicator, two results analysis categories are calculated and updated:
category ANKB (down payments reduce revenue in excess of billings) and category
ANUS (down payment surplus). When down payments reduce revenue in excess of
billings, the amount of the down payment cannot exceed the amount of revenue in
excess of billings. The portion of the down payment amount exceeding the revenue in
excess of billings is transferred as down payment surplus. In both cases, postings
can be made to FI during the settlement of the order/project.

-> With account assignments, the postings can be made to different ledgers or
accounts.

© SAP 2008 / Page 43

Provisions from Controlling

For internal orders, sales orders, and projects carrying revenues, provisions can be created
by means of results analysis or WIP calculation.
Provisions are created for probable losses when the plan costs exceed the planned revenue.
In the subsequent periods, these provisions are automatically used until the complete
amount has been realized as a loss.
Provisions are created for uncovered costs when the calculated cost of sales exceeds the
actual costs (using results analysis) or when the credit amount exceeds the actual costs due
to goods receipts (WIP calculation). In the subsequent periods, these provisions are
automatically used whenever subsequent costs are incurred. The provisions are cancelled
upon order completion.
Provisions for complaints and commission are created on the basis of planned costs for
specific cost elements. In the subsequent periods, these provisions are automatically used
whenever costs are incurred for these cost elements.
For all of these provisions, postings are created automatically in FI during settlement
(managed in transaction OKG8). A results analysis version can be created for each
accounting principle. In this way, the different results analysis versions can be used to create
different amounts of provisions that can then be used or cancelled when the order attains
different statuses.
With IFRS, results analysis is also used to make revenue postings (revenues in excess of
billings) automatically on the basis of the percentage of completion. If the revenues that are
actually made exceed the revenues determined, the revenue surplus is calculated and
transferred to FI as a provision.
© SAP 2008 / Page 44

Manual Accruals/Deferrals (Transaction
ACACACT)

Accruals and deferrals need to be allocated to the relevant periods. The use of
parallel accounting may mean that different accrual/deferral postings need to be
made, depending on the accounting principle.

Customizing: Assignment of the accrual method to the accounting principle (determination of
the ledger group)
The program (periodic accrual run) is run for each accounting principle.

Account approach:
Customizing: Assignment of the accounts to a set of rules (such as accrual type)
The program is run for each accrual type.

© SAP 2008 / Page 45

Doubtful Receivables (SAPF103 and SAPF104 or
FAGL_DR_PROVISION (New G/L with EhP3)

Receivables sometimes need to be portrayed as doubtful receivables. SAPF103 selects the
overdue receivables and posts them as doubtful receivables across multiple ledgers (special
G/L transaction). SAPF104 or FAGL_DR_PROVISION (which replaces SAPF104 in New G/L
Accounting with EHP3) creates postings for doubtful receivables on provision accounts.

SAPF104 (account approach only)
Customizing: Assignment of accounts to transaction key (KTOSL)
The program is run for each provision method (period selection).

FAGL_DR_PROVISION
Ledger approach
Customizing: Assignment of accounts to valuation area and provision method
The program is run for each valuation area and provision method.
Account approach
Customizing: Assignment of account to provision method
The program is run for each valuation area and provision method.

© SAP 2008 / Page 46

Provisions (Manual Posting in Financial Accounting)

It may be necessary for specific transactions (such as legal costs or acquisition
costs) to be posted as provisions.

Customizing: Not available
With ERP 6.0 EHP3, manual processing of provisions (that is, manual posting and clearing)
for each ledger (only G/L accounts)

Account approach:
Manual posting of provision amounts on different provision accounts

© SAP 2008 / Page 47

Cost Accounting: Basic Principles (1)

Structuring Costs Structuring Costs
by Cost Element: by Functional Area:
FI Cost Element Accounting Personnel Costs Procurement
Material Costs Production
Costs for Services Sales
Cost Center Accounting … Administration
Structuring Costs …
by Origin: Structuring Costs
Primary by Imputability:
Secondary Direct Costs
Overhead Costs
Cost Object Controlling
Valuation of Products/Projects/Orders
•Collection of primary and secondary
costs by cost object
•Specification of amount of FI-relevant
costs (such as work in process)
FI
Period-End Closing:
WIP, asset under construction (multiple results analysis versions/capitalization versions)
Stocks (valuation using closing postings from the material ledger)

© SAP 2008 / Page 50

Basic Principles: Cost Accounting with
Cost Object Controlling

The use of cost object controlling requires a two-step procedure for the inclusion of costs in
FI. However, there are some gaps …
In the first step, Controlling collects the relevant costs and assigns them to the cost object
(order, sales order, project). Primary costs are taken from FI and secondary costs from CO.
During period-end closing, it is determined whether work in process or provisions need to be
created for the costs incurred. Then results analysis / WIP calculation is used to perform
different valuations; in the case of the percentage of completion method, for example, a
revenue (revenue in excess of billings) is calculated, whereas all costs are still considered
work in process according to the German Commercial Code (HGB). However, there is only
one valuation approach for the actual costs incurred.
In the second step, the posting is made in FI. At this point, the option of capitalization can
be considered (WIP) and an account assignment rule can be created (in the Customizing
settings for the posting logic). In this way, the results of different results analysis versions, for
example, can be combined with different ledgers and postings can be made to the relevant
ledgers.
A similar approach is applied to stocks: The material ledger calculates the values using the
settings in the valuation run (LIFO, FIFO, market prices for raw materials, plan/actual price
for services) and then performs a valuation run to make delta postings to revaluate the
stocks. With the account assignment rule, values can be posted to different accounts.
Caution: If the activity allocation changes the company code, the business area, or the
functional area, postings are made to FI using real-time integration!

© SAP 2008 / Page 51

Cost Accounting: Basic Principles (2)

Structuring Costs Structuring Costs
by Cost Element: by Functional Area:
Procurement
FI Cost Element Accounting Personnel Costs
Material Costs Production
Costs for Services Sales
Cost Center Accounting … Administration
…

Assessment of Costs Change to the Functional Area* by
within CCA Assessment :
When real-time integration is active
-> postings are made to the leading
Cost Object Controlling ledger in FI. Otherwise, subsequent
postings are made via the
reconciliation ledger. The clearing
Assessment of Costs account is determined on the basis
to Market Segments of the transaction and the object
class.

Profitability Analysis
* Also applies for company code, business area,
segment, profit center, fund, and grant

© SAP 2008 / Page 52

Basic Principles: Cost Accounting Using
Assessment

With assessment, costs are apportioned from a sender (such as a marketing cost center) to a
receiver (such as other cost centers or a region in CO-PA). In classic General Ledger
Accounting, this type of assessment only affected FI whenever more than one functional area
(or similar) was involved. The reconciliation ledger was used to manage such postings and to
transfer them to FI at a specified time (period-end closing).
In new General Ledger Accounting, postings can be made to FI using real-time integration when
the segment, profit center, functional area, and so on, is changed by an allocation in CO.
However, CO only knows the actual version 0 and not the ledgers. This means that
assessments from CO are always updated in the leading ledger.
If the assessment is restricted to FI dimensions, assessment can be performed using
transaction FAGLGA15. This type of assessment is performed in FI without the involvement of
CO. When the FIN_CCA scenario is used, an assessment can be made from one cost center to
another in General Ledger Accounting, without making any postings in CO.
Current research is looking into whether it is possible to consider more dimensions in CO and
whether an FI assessment without the involvement of CO suffices for many simple scenarios.

© SAP 2008 / Page 53



Components

Asset Accounting


Controlling

Material Management - Valuation of Materials
- GR/IR Clearing Account

Others

© SAP 2008 / Page 54

Raw Materials and Manufacturing Supplies
(Without Material Ledger)

Parallel accounting is not possible in the Materials Management (MM) application
component. Valuation in MM makes a distinction between the standard price and the
moving average price. On the balance sheet date, valuations such as FIFO valuation
(first in, first out), lowest value principle, and LIFO valuation (last in, first out) are
performed in MM and transferred to FI.

Account determination using the valuation class – no means of connecting to parallel ledger
groups
Workaround: Make ledger-specific postings manually

Account approach:
Account determination using the valuation class – no parallel accounts
Workaround: Make manual postings to parallel accounts.

© SAP 2008 / Page 55

Raw Materials and Manufacturing Supplies
(with Material Ledger)

If parallel accounting is desired for material stocks, the material ledger has to be used. When
the material ledger is activated, additional valuation fields are created for each material. A
periodic unit price is calculated using the value flows for the period. With alternative valuation
runs, parallel values for each material and procurement alternatives can be determined and
posted in different posting runs to different ledgers or accounts in FI.
In the alternative valuation run (transaction CKMLCPAVR), the account assignment rule applied appears on
the "Settings" tab page. This is linked to the ledger group.
Account grouping for alternative valuation is always different to that for operational valuation. This means
that a ledger approach in the strict sense is not possible.

Account approach:
Account grouping for alternative valuation is always different to that for operational valuation (BSD instead
of BSX). This means that adjustment postings cannot always be identified as such.

© SAP 2008 / Page 56

Work in Process (Products and Services)

In Controlling, costs are generally collected for each order or project as expenses on a cost
object. During period-end closing, either work in process (such as production orders, product
cost collector, or process orders) is determined or results analysis is performed (projects,
sales orders, and internal orders), which uses the percentage of completion to determine the
work in process or the cost of sales. In both cases, multiple valuation methods (combined in
a results analysis version) can be applied in Controlling. During settlement, postings are
made for the work in process or for the cost of sales, using the posting rules in FI. WIP
postings can be made using multiple results analysis versions.
Posting rules contain an account assignment rule that is coupled with a ledger group (see transaction
OKG8)

Account approach:
Posting rules can also be used to make postings to different accounts (transaction OKG8)

With IFRS, results analysis is also used to make revenue postings (revenues in excess of
billings) automatically on the basis of the percentage of completion and to transfer these
postings to FI.

© SAP 2008 / Page 57

Finished Goods and Merchandise
(Without Material Ledger)

Parallel accounting is not possible in the Materials Management (MM) application
component. SAP recommends performing valuation with standard prices that are
calculation using a standard cost estimate. On the balance sheet data, inventory
costing is performed and the results achieved are used to perform revaluations.

Account determination using the valuation class – no means of connecting to parallel ledger
groups

Account approach:
Account determination using the valuation class – no parallel accounts

Workaround -> Recommend using material ledger for parallel valuation

© SAP 2008 / Page 58

Finished Goods and Merchandise
(with Material Ledger)

If parallel accounting is desired for material stocks, the material ledger has to be used. Actual
costing uses value flows to determine the multilevel costs of finished goods for each period and
can perform stock revaluation for closed periods. With alternative valuation runs, parallel values
for each product can be determined and posted to FI in separate posting runs.

In the alternative valuation run (transaction CKMLCPAVR), the account assignment rule applied appears on
the "Settings" tab page. This is linked to the ledger group.
Account grouping for alternative valuation is always different to that for operational valuation. This means
that a ledger approach in the strict sense is not possible.

Account approach:
Account grouping for alternative valuation is always different to that for operational valuation (BSD instead
of BSX).

© SAP 2008 / Page 59

Analysis of the GR/IR Account (RFWERE00)

Valuation postings are made to the target accounts “Delivered / Not Invoiced” and
“Invoiced / Not Delivered”.

The program is run for each ledger.

Account approach:
Customizing: Target account determination for each GR/IR account
The program is run for GR/IR accounts.

© SAP 2008 / Page 60

Human Resource Management

Allocations for pension provisions and employee benefits/shares are generally
calculated outside of the SAP system. Manual postings can be made to post to the
SAP system the different valuations resulting from the different accounting principles.

Ledger-specific manual postings

Account approach:
Manual postings to the accounts relevant for each accounting principle

© SAP 2008 / Page 62

Authorization

Authorizations can be defined for the representative ledger of a ledger group.

Account approach:
Authorizations can be defined for G/L accounts.

Consequently, both approaches provide a comparable solution.

© SAP 2008 / Page 63

Integration with FI-CA

For more information, see SAP Service Marketplace at

http://service.sap.com/gl

-> Media Library

-> Presentations

-> New GL and Industry Solutions

© SAP 2008 / Page 64

Copyright 2004 SAP AG. All Rights Reserved

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG.
The information contained herein may be changed without prior notice.
Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.
Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation.
IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries,
zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM
Corporation in the United States and/or other countries.
Oracle is a registered trademark of Oracle Corporation.
UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.
Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix
Systems, Inc.
HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®, World Wide Web Consortium, Massachusetts Institute
of Technology.
Java is a registered trademark of Sun Microsystems, Inc.
JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by
Netscape.
MaxDB is a trademark of MySQL AB, Sweden.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver and other SAP products and services mentioned herein as well as their
respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All
other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves
informational purposes only. National product specifications may vary.
These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP
Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or
omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the
express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an
additional warranty.

© SAP 2008 / Page 65

Copyright 2004 SAP AG. Alle Rechte
vorbehalten

Weitergabe und Vervielfältigung dieser Publikation oder von Teilen daraus sind, zu welchem Zweck und in welcher Form auch immer,
ohne die ausdrückliche schriftliche Genehmigung durch SAP AG nicht gestattet. In dieser Publikation enthaltene Informationen können
ohne vorherige Ankündigung geändert werden.
Die von SAP AG oder deren Vertriebsfirmen angebotenen Softwareprodukte können Softwarekomponenten auch anderer
Softwarehersteller enthalten.
Microsoft, Windows, Outlook, und PowerPoint sind eingetragene Marken der Microsoft Corporation.
IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries,
zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, und Informix sind Marken oder eingetragene Marken der IBM
Corporation in den USA und/oder anderen Ländern.
Oracle ist eine eingetragene Marke der Oracle Corporation.
UNIX, X/Open, OSF/1, und Motif sind eingetragene Marken der Open Group.
Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, und MultiWin sind Marken oder eingetragene Marken von
Citrix Systems, Inc.
HTML, XML, XHTML und W3C sind Marken oder eingetragene Marken des W3C®, World Wide Web Consortium, Massachusetts Institute
of Technology.
Java ist eine eingetragene Marke von Sun Microsystems, Inc.
JavaScript ist eine eingetragene Marke der Sun Microsystems, Inc., verwendet unter der Lizenz der von Netscape entwickelten und
implementierten Technologie.
MaxDB ist eine Marke von MySQL AB, Schweden.
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver und weitere im Text erwähnte SAP-Produkte und -Dienstleistungen sowie
die entsprechenden Logos sind Marken oder eingetragene Marken der SAP AG in Deutschland und anderen Ländern weltweit. Alle
anderen Namen von Produkten und Dienstleistungen sind Marken der jeweiligen Firmen. Die Angaben im Text sind unverbindlich und
dienen lediglich zu Informationszwecken. Produkte können länderspezifische Unterschiede aufweisen.
In dieser Publikation enthaltene Informationen können ohne vorherige Ankündigung geändert werden. Die vorliegenden Angaben
werden von SAP AG und ihren Konzernunternehmen („SAP-Konzern“) bereitgestellt und dienen ausschließlich Informationszwecken.
Der SAP-Konzern übernimmt keinerlei Haftung oder Garantie für Fehler oder Unvollständigkeiten in dieser Publikation. Der SAP-
Konzern steht lediglich für Produkte und Dienstleistungen nach der Maßgabe ein, die in der Vereinbarung über die jeweiligen Produkte
und Dienstleistungen ausdrücklich geregelt ist. Aus den in dieser Publikation enthaltenen Informationen ergibt sich keine
weiterführende Haftung.

© SAP 2008 / Page 66

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