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SAP Financials New GL

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This Document relates to Theory of New GL Features like Document splitting,Parallel accounting, Segment reporting, Fast closing and its Architecture.

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SAP Financials New GL

  1. 1. SAP FINANCIALS NEW GENERAL LEDGER SAP KNOWLEDGE SHARING DOCUMENTS SAP Certified Candidate @ Source One Management Services Pvt. Ltd Bangalore 2014 Copy Rights © SourceOne Management Services Pvt. Ltd Bangalore
  2. 2. New General Ledger The New General Ledger offers many new features (also see the below diagram)  document splitting  parallel accounting  segment reporting  fast closing 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. Architecture 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. New Features 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
  3. 3. The new G/L uses a ledger or ledger group concept to portray one or more valuation views. SAP has defined two types of ledgers Leading Ledger 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). Non-Leading Ledger 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 ledger. 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 Entry View This is the regular document entry view that was used in the classic G/L G/L View 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
  4. 4.  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, segment level)  the CO-relevant valuation postings (expense from exchange rate differences) can be transferred to CO in split form 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 Document Creation 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). Accounting Interface 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.
  5. 5.  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 prone) 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- AA This feature enables two types of postings  Postings for asset acquisition (Acquisition and Production costs - APC) values  Depreciation postings 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. Integration with Consolidation 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- CS Consolidation 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 table (GLPCT) 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.

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