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SAP FI Lease Accounting
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SAP FI Lease Accounting




In SAP the component is FI-LA (also unknown as FI-AA-LM), lease accounting can process leases and will enable automatic asset related postings in FI-AA and contract-related accrual postings in FI-G/L, as well as the required one-time lease postings. The lease accounting engine (FI-LAE)you can use FI-LA to process the leases in the SAP CRM system using the quotations and contracts functionality and price them using IPC (Internet Pricing and Configuration) and FIMA(Financial Mathematics in Leasing).



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SAP FI Lease Accounting SAP FI Lease Accounting Document Transcript

  • SAP FINANCIALS LEASE ACCOUNTING SAP KNOWLEDGE SHARING DOCUMENTS SAP IDES DEMO SOLUTION – ERP6 EHP5 Pramila Nagaraj SAP Certified Candidate @ Source One Management Services Pvt. Ltd Bangalore 2014 Copy Rights © SourceOne Management Services Pvt. Ltd Bangalore
  • Lease Accounting There are two types of lease accounting capital lease and operating lease, unlike capital lease operating lease is shown on the balance sheet of the lessor (one who owns the asset that is leased to someone else) in all operating leases. in the case of the capital lease , whether the leased asset will be on the balance sheet of lessor or lessee (one who makes use of the asset but is not the owner) is determined by several factors that will differ whether the lease is with or without purchasing options for the lessee. In SAP the component is FI-LA (also unknown as FI-AA-LM), lease accounting can process leases and will enable automatic asset related postings in FI-AA and contract-related accrual postings in FI-G/L, as well as the required one- time lease postings. The lease accounting engine (FI-LAE)you can use FI-LA to process the leases in the SAP CRM system using the quotations and contracts functionality and price them using IPC (Internet Pricing and Configuration) and FIMA(Financial Mathematics in Leasing). The FI-LA works by finalizing a lease contract, CRM billing generates the Billing Requirement Items (BRI) and using the CRM application Transaction Tax Engine (CRM TTE) that can be integrated with third-party tax solutions like Vertex and you can then calculate the lease taxes on the leases. You can use contract A/R and A/P to handle lease receivables and cash, then you can use reporting tools to obtain the information about the leases. We will cover the following in this section  Lease accounting engine (FI-LAE)  Basic settings  Value determination  Production setup  Reports Lease Accounting Engine (FI-LAE) The Lease Accounting Engine (FI-LAE) is integrated with SAP CRM to control and manage the entire transactions postings in FI-LA, at the center of lease accounting the LAE picks up the contract values automatically from the CRM contract when a new lease is created or if there has been a contract change in the CRM system, and then classifies the lease as a operating lease or a capital lease with or without Bargain Purchase Option (BPO). The necessary postings are then made in FI-AA for the asset creation and capitalization on the basis of customization settings, when you have defined and assigned the accounting principle to the company code for parallel accounting, the LAE can support valuation lease assets for both book depreciation and taxation purposes, when changes are made the LAE updates the FI-AA with the details on lease terminations, lease extensions, etc. With the valuation rules defined, the LAE performs accrual postings automatically in FI-G/L, it also posts one-time accounting entries such as inventory relief. Basic Settings We need to define and assign a few basic settings to configure lease accounting, we will start with assigning the account principle to the company code using transaction 0FILA006_1, remember we have already defined the accounting principle to be used for parallel accounting in section Financial Global Settings and Company Code Parameters, to facilitate parallel valuation of lease assets we need to associate each participating company code to at least one accounting principle, select FILA as the leasing component on the initial screen,
  • You need to set the appropriate application component of FI-AA using transaction 0FILACOMPSET, we set this to FILA Next we create the company code grouping key using transaction code 0FILA008G_1, you create the group key to represent all the company codes in the same country or geography Next we assign the company codes to the company groups using transaction code 0FILA008_1, The next step we assign the interest calculation method to company code, you can use the interest calculation method (360E/360, 360E/365, Act/366, etc) which determines the number of days between two calendar dates and effective interest method (such as linear or US method for use in FIMA) to be used per company code per accounting principle, the example I used above 360E/360 means that this is the European market, 360 indicates that a year contains 360 days on the basis of 30 days per month. The assignment of the interest calculation method together with the effective interest method helps FiMa calculate the annuity and present values. We will use transaction code 0FILAIRCM_1, Now we will specify the dates for posting, you can specify how the various dates (installation date, contract start date, contract end date, etc) of a lease are revenant for posting (asset value date for example) are to be transferred from leases to accounting, we can use transaction code 0FILA009F_1,
  • Value Determination The value determination decides the values that need to be transferred from CRM contracts to FI and it occurs through the value ID's, which carry the information about the origin of a value ((from a contract item, material master record, customer master record, condition types, etc) and its functions (such as amount financial and residual value) to LAE, the lease LAE then determines the values from the CRM contract and forwards them to FI. We first create the value ID's using transaction 0FILA003_13, SAP supplies a number of values ID's which you can use (prefix will be $), you can also create your own if necessary Next we transfer the values from the contract item and master records (material or customer), we will use transaction code 0FILA009V_1, You can also transfer values from the material master or customer master to the value ID's for further processing in FI-LA  0FILA009V_2 - transfer values from material master records  0FILA009V_4 - transfer values from customer master records Now we will transfer the values from the condition types using transaction code 0FILA007_1, the amount identifier will determine if the transferred value is something like interest amount or repayment, the flow category distinguishes the value flow such as an interim payment (like a down payment) from regular periodic repayment.  cnty - condition types  flowc - flow category  value id - the value ID  pp - periodic payment indicator  ID - amount identifier To determine the present value (PV) of a leased contract you need to maintain the interest rate and a base value, we can use transaction code 0FILA003_3, the use column either can determine the base value (use = 1) or interest rate (use =2)
  • You can also use a formula to create new value IDs for example by adding two values ID's, however the value ID's in question have to be either both numeric or alphanumeric, the system will perform 10 iterations before it throws an error, you can use transaction code 0FILA003_1, You can also use substitution to determine the value, you can determine a range of comparison or calculation operations to determine values, you first define a base structure, substitution rule and settings for value transfer for base structure Mandatory Settings When you complete the mandatory settings the system will automatically create value IDs with the prefix $ and transaction types for automatically generated asset transactions, based on the customizing settings in the previous steps, you must do this otherwise you will not be able to post automatically, we will use transaction code 0FILAALOG_01, once you have confirmed all the details you select F8 to generate the log, then you can complete the production setup by double-clicking complete on the resulting screen, the system will then generate the additional value IDs and the asset transaction types automatically. Reports There are a number of reports that you can use  S_XB7_96000248 - calculated (accrual engine display calculated accruals)  S_XB7_96000249 - posted leased accruals (accrual engine display calculated) You can enhance the reports by adding /changing the nodes in the logical database FILA using transaction code 0FILASTRUC_LDB_ITEMS, you can assign value ID's to fields of the logical database using transaction code 0FILALDB000_002. Declaration: This is related to my Practice in Demo System ERP6 EHP5 since after my SAP Certification. I have taken guidance from SAP Expert of UK who had given me full instructions on how to go about with certain configurations in Financials. I have successfully completed one Configuration Cycle.