New General Ledger
The New General Ledger offers many new features (also see the below diagram)
The primary task of the general ledger (G/L) accounting has been to provide a comprehensive picture for external
accounting and accounts by recording all business transactions; this ensures that the account data is always complete,
accurate and traceable. Due to changes in accountancy companies now need to perform the following
Satisfy a wide range of reporting requirements and accounting standards (local and international)
Possess improved functionality in a single interface handling both financial and management accounting
Use a robust and scalable application
What SAP has done is taken the R/3 system and improved it so that you don't have to have several applications to meet
the requirements above, for example is R/3 you might need to deploy the Special-Purpose Ledger (FI-SL) in SAP to
meet certain reporting requirements, such as having totals in additional table fields, also there was no automatic
reconciliation between applications and the G/L, the closing activities could take several weeks or months, parallel
accounting is unheard of, and you had to employ yet another set of analytical tools to analyze, plan and forecast.
The new G/L was built to overcome the shortfalls of the classic G/L, however tables such as BSEG (document), BSIS
(open items) and BSAS (cleared items) will continue to be a part of the new G/L. The new G/L will handle the totals,
stores ledger-specific line items and provides year-end-closing valuations in parallel ledgers, using tables described in
the next sections.
The new totals table FAGLFLEXT contains new standard fields for storing totals, this can then be used for segment
reporting, profit-center updating, cost-of-sales accounting, cost-center updating, preparation for consolidation and
business-area updating. It is possible to add additional fields to the totals table but this may degrade performance, if
possible try and use the standard SAP table.
The ledger-specific line item tables, FAGLFLEXA and FAGLFLEXP are used to store ledger specific line items (actual
or planned) containing additional information for use in the document entry view. Using these tables you can update
different characteristics and document splitting information, period shifts and currencies in specific ledgers for
individual documents, so as to perform reporting tasks for specific dimensions at the line-item level.
The table for storing valuations for year-end closing in selected parallel ledgers (BSEG_ADD) stores documents
posted in connection with year-end closing valuations for the selected parallel ledgers, these documents are irrelevant
if you do not use parallel accounting.
There are many new features in the new G/L which I have already mentioned; it is easier to group functional area
segments and profit dimensions along with the G/L in a single data record, which supports simultaneous
implementation of company-specific and industry-specific reporting requirements. The below picture displays the new
features and there interaction with the new G/L
The new G/L uses a ledger or ledger group concept to portray one or more valuation views. SAP has defined two types
Denoted as 0L in the standard system, all company codes in a client are to be assigned to this ledger, it is used to portray the
group-valuation view. You can also assign one or two additional local currencies that can serve as the parallel currencies apart from
the first local currency or global-company currency. You have to assign the book depreciation area (01) of asset accounting to the
leading ledger, besides integrating the Controlling (CO) as well (only the values from the leading ledger are sent to CO).
These are additional ledgers that you can define in addition to the leading ledger. Defined for each company code, you can assign
different characteristics values and fiscal-year definitions to these ledgers and use them for different purposes, such as parallel
accounting and management reporting. You can use one or more currencies of the leading ledger as the currency of the additional
ledgers. For example lets say you used USD for the first currency and Euro, INR as the second and third currencies you would not be
allowed to use GBP for your non-leading ledgers, basically the currency for a non-leading ledger must be defined in the leading
Because the leading ledger exists in all company codes (across clients), all primary postings related to daily operations
(invoices, payments, etc) are normally updated in all ledgers assigned to a company code. However if you only specify
a ledger or ledger group then postings will only be posted to these specified ledgers. Typically you select a ledger or
ledger group for posting most of the secondary transactions such as allocations, valuation postings and period-end
adjustments postings, both the primary and secondary transactions can be split on-line during document entry itself.
If a ledger group contains the leading ledger then that leading ledger becomes the representative ledger for that ledger
group. If there is no leading ledger in the ledger group you can denote one of the non-leading ledgers as the
representative ledger as shown in the below diagram
During postings the period check is always performed for the leading or representative ledger, in this way the system
makes sure that postings are made only if the period of the leading or representative ledger allow it. The system does
not validate any other fiscal year definitions that exist in other ledgers of the ledger group, the software updates the
other ledgers in every case which does not prevent completion of the posting.
There are now two views for daily postings
This is the regular document entry view that was used in the classic G/L
This new view which is specific to a ledger where postings made here are to a specific ledger or ledgers.
The new G/L allows you to directly perform postings that previously required several different components and to
transfer posting between profit centers or other characteristics that were previously stored in the special-purpose
ledger, you can now use a G/L account posting that specifies the corresponding profit center, this is because the data is
stored in the same table, the system always reconciles the profit centers and G/L accounts instantaneously.
The system still uses document numbers by document type based on the number range object from the G/L software in
SAP (RF_BELEG), in cases where a posting to a ledger with a different fiscal year than that of the leading ledger, the
system issues document numbers from a different number range object (FAGL_DOCNR).
The diagram below shows the difference between parallel accounting in the old classic G/L and the new G/L, with the
new G/L you can take two different approaches, if you take the account approach (parallel accounts) then you need to
work with the leading ledger, if you take the parallel approach then you have to work with the additional ledgers
besides the leading ledger, however the parallel approach is better but may result in more data volume.
So what are the advantages of using parallel ledgers
Parallel valuation for different accounting standards of fiscal year variants
Manageable number of G/L accounts
Separate ledgers for each accounting principle
Posting with single or multiple ledgers
Period-closing activities separately and exclusively for parallel ledgers
Standard reporting for leading and non-leading ledgers (parallel ledgers)
So an example of a setup would be that your leading ledger (I) would correspond to IFRS, then you may define two
additional parallel ledgers - non-leading ledgers (L) to take care of the local accounting/reporting and non-leading
ledger (U) to reflect US-GAAP.
For asset accounting (FI-AA) you need to use the depreciation areas to model the parallel accounting
assign leading ledger to depreciation area 01
assign each non-leading ledger to a depreciation area other than 01 and also to a derived depreciation area.
Document splitting enhanced features in ECC 6.0 are as follows
supports additional functions from SAPF181 (standard SAP report) such as post-capitalization of assets and the
splitting of follow-up costs (discount, currency differences, etc)
the split information is also available for the closing activity in FI (foreign currency valuation, regrouping,
the CO-relevant valuation postings (expense from exchange rate differences) can be transferred to CO in split
With the new G/L when processing a customers invoice you will be able to assign profit centers to expense accounts
manually or derive the assignment automatically or you can even do the assignment using a substitute cost center, by
doing this you make the system assign the correct profit centers in the payables accounts for the invoice document.
Bear in mind that you can still make the account assignments outside the document splitting at the component
application itself in SAP where postings from SD or MM result in the pre-determined account assignments (such as
expenses or revenues).
Document splitting can happen at two points
an example would be based in the document creation is the clearing transaction, cash discount and (the realized) exchange rate
differences are split according to the source (proportionate to the account assignments in the expense and revenue lines of the
original document, such as an invoice).
the splitting is limited to G/L assignments, without any transfer to CO functions, there are two variations
Account Assignment Projection - resulting from customized settings, the account assignments are projected from the
base rows to the target rows, you can use the preconfigured method in SAP which is Method 12 - the settings support most
of the standard processes (invoice, payment, etc).
Inheritance by subsequent processes of Business Transactions - applicable in cases such as clearing of vendor and
customer invoices, this solution offers transfers from the original account assignment of the invoice to the clearing lines,
after the clearing transaction, the original item (such as the payables or receivables line) and the clearing item for the
respective account assignment are balanced to zero, this variant is a fixed feature in the program and cannot be altered.
Document splitting removes the complex data entry at a later date and results in transparent postings. It also enables
creation of additional balance sheets at the segment and profit-center level.
Segment reporting provides a breakdown of data in financial statements by individual enterprise areas such as
divisions, geographical areas, etc, this makes the profit and risk situation of the individual enterprise area's (segments)
transparent. Segment reporting supports both requirements of IAS/IFRS and US GAAP using the segment dimension,
you must enable the segment reporting scenario in the new G/L. There is no dependency upon any structure or
relationship of company codes or controlling areas, you can define segments such as business areas, in one client and
use the same across all company codes within that client. There are several ways to to maintain segment information
You can assign segments to relevant profit centers (once the new G/L has been activated the segment field
appears in the profit-center master data automatically) so that all postings to the profit centers are then
automatically updated in the corresponding segment.
For postings without profit center, you can update the segment information with a constant (default) value or by
using the business add-in (BAdl) FAGL_DERIVE_SEGMENT
You can enter the segment information manually during the document posting (not recommended as this is error
The document splitting procedure is the prerequisite for creating financial statements at any time for the segment
dimension, you need to setup a zero balance setting for the segment characteristics, you can use the segment dimension
to represent the segment levels, if you want to represent in two dimension (primary and secondary segmentation), you
can do this as follows: use the segment dimension for the primary segmentation and represent the secondary segment
by including a customer field.
The new G/L is tightly integrated with FI-AA, CO and consolidation, including enterprise-controlling (EC-CS)
consolidation, aimed at faster closing through reduced reconciliation activity, it helps to perform audits as well as
improves transparency in transactions and reporting.
Integration with FI-
This feature enables two types of postings
Postings for asset acquisition (Acquisition and Production costs - APC) values
the asset transactions (updating the depreciation areas in real time) first update all ledgers in new G/L, you can assign via
customizing a delta depreciation area - which is the difference between leading valuation of fixed assets and parallel
valuation to each of the real parallel depreciation (including parallel currency areas). If differences arise between the
leading and non-leading ledgers views during posting of APC values, the system will post the values to the corresponding
ledger group using the delta depreciation area. The depreciation postings are made to the corresponding ledger group as
complete postings for specific depreciation areas.
Integration with CO
enables transfers of cross-entity controlling postings to new G/L in real-time, allowing continuous reconciliation of cost
elements and expense accounts and thereby removing subsequent reconciliation runs to accelerate period-end closings.
Financial consolidation refers to the aggregation of financial statements of a group company as consolidated financial
statements. For example if one company owns another company financial statements can be consolidated where all
subsidiaries report under the umbrella of the parent company.
the new G/L by default contains all the fields (including fields for partner-company, partner-profit center and
consolidation transaction type) - required for company consolidation or profit-center consolidation.
Integration with EC-
you can update the consolidation-preparation ledger alongside the new G/L during an interim phase and use the report
RFBILA00 to transfer data to the consolidation area, which would normally be unavailable. This is only an interim solution
because the extract can be created only by using the format of the standard totals table (GLT3). You can perform a roll-up
via the following methods
from the totals table (FAGLFLEXT to the receiver table (ECMCT) using transfer rules and exists
from the new G/L using standard exits for the conversion of data from profit-center accounting software EC-CS,
provided you use the same data elements for the relevant fields in the G/L that you did in the profit-center totals
Fast closing is now a series of repeatable process steps and managing those steps in accordance with best practices
and a tightly controlled schedule. Fast closing helps you create a non-consolidated balance sheet at characteristics-
level at any time, so you don't need to run additional programs to split the characteristics. The new G/L removes the
need for additional reconciliation runs between CO and FI because the cross-entity CO postings (such as transfer
postings for costs from one cost center or profit center to another, either manually or with allocations) are updated in
real-time, keeping FI and CO synchronized. However remember that because open items cannot be stored by ledger,
you will not be able to allocate reconciliation accounts and G/L accounts that are managed on an open-item basis. You
can also use transaction FB50L to make ledger-specific G/L account postings relevant for closing or corrections
relating to a particular accounting principle.