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SAP FI Closing |


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SAP FI Closing |

  1. 1. Chapter 27 Closing <ul><li>Closing is the periodic process of reviewing system reports and executing system programs in preparing the legal financial statements of the organization. </li></ul><ul><li>Chapter Objectives </li></ul><ul><ul><li>Provide an understanding of the closing process as it is supported by the system. </li></ul></ul><ul><ul><li>Provide an understanding of the system and business requirements involved in period-end and year-end closing. </li></ul></ul><ul><ul><li>Explain the purpose of executing the various reports and programs used to support the closing process. </li></ul></ul>
  2. 2. System Requirements for Closing <ul><li>Close Prior Posting Period </li></ul><ul><li>Open New Posting Period </li></ul>
  3. 3. Period Closing Where do I start???? <ul><li>Pre-closing activities </li></ul><ul><li>Financial closing </li></ul><ul><li>Managerial closing </li></ul>
  4. 4. Pre-Closing Activities <ul><li>Post journal entries to record recurring entries and accruals. </li></ul><ul><li>Make sure all entries have been included from the entire system (depreciation, material valuations, salaries, invoicing complete, etc.) </li></ul><ul><li>Make sure all external programs affecting the trial balance have been interfaced. </li></ul>
  5. 5. Financial Closing <ul><li>Foreign Currency Valuation </li></ul><ul><li>Execute the Financial Accounting Comparative Analysis. </li></ul><ul><li>Create financial statements for review and analysis. </li></ul><ul><li>Post final adjustment entries </li></ul>
  6. 6. Foreign Currency Valuation <ul><li>Types </li></ul><ul><ul><li>Receivables & Payables (when clearing) </li></ul></ul><ul><ul><li>Balance Sheet Accounts Maintained in Foreign Currency (RFSBEWOO) </li></ul></ul><ul><ul><li>Open Item Accounts (SAPF100) </li></ul></ul>
  7. 7. Clearing a Receivable / Payable with an Exchange Rate Difference Amount in BRR - 4,800 Amount in USD - 5,000 Step 1 - Invoice Amount in BRR - 4,800 Amount in USD - 5,200 Step 2 - Payment 200 USD Exchange Rate Difference <ul><li>Automatic Posting To Gain / Loss Accounts Configured as Realized Exch. Rate Differences </li></ul>
  8. 8. Revaluing Balance Sheet Accounts Managed in Foreign Currency Posting 1 100 FC Exchange Rate .80 Month End Exchange Rate .70 200 FC = 140 LC FC Account Posting 2 100 FC Exchange Rate .75 100 FC 80 LC 100 FC 75 LC 200 FC 155 LC Loss from Exchange Rate Difference 15LC
  9. 9. <ul><li>Used when running automated valuation programs </li></ul>Valuation Method <ul><li>Combines Specifications </li></ul><ul><ul><li>Exchange Rate Type </li></ul></ul><ul><li>Document Types </li></ul>
  10. 10. Valuation of Open Items US-GAAP Discounting Valuation Process Local GAAP Management (Political) Custom Algorithm Foreign Currencies Flat-rate individual value adjustment Valuations Receivables and Payables Receivables
  11. 11. Foreign Currency Valuation of Open Items A / R A / P End of Period Different Exchange Rate Valuation POSTING <ul><li>Automatic (SAPFIOO) </li></ul><ul><li>Posted to Adjustment Account </li></ul><ul><li>Offset to Gain / Loss Account </li></ul>
  12. 12. Flat-Rate Value Adjustment 1st step: Check if account has debit balance 2nd step: Clear total of all credit memo items to the oldest receivable item (baseline date) 100 - 110 = -10 Item 100: No revaluation 3rd step: Clear difference of 2nd step to the amount of next oldest item 80 -10 = 70 -> 70 * 10 % = 7 -> revaluation amount: 63 (= 70 -7) 4th step: Next younger item: 60 * 10% = 6 -> revaluation amount: 54 (= 60 - 6) Customer account 100 (01.01.00) 80 (02.01.00) 60 (03.01.00) Baseline dates 60 50 Receivables Credit memos Adjustment for: 30 days overdue: 10% 90 days overdue: 20% Current Date: 04.01.00
  13. 13. Flat Rate Value Adjustment Base Amounts Explanation: Flat rate value adjustment (method 3) uses the result of the foreign currency valuation (method 1). Example: 1. Open item : 100 For. Curr. 170 Loc. Curr. 2. For. curr. val. result: 160 3. Flat rate val. adj. result: 160 - 10% = 144 Adjustment = 10% Method Base amount 3 1 Example 1 Example 2 Method Base amount Explanation: Any valuation method (2,3,98,99) uses local currency amount of the documents. Example: 1. Open item : 100 For. Curr. 170 Loc. Curr. 2. Flat rate val. adj. result: 170 - 10% = 153
  14. 14. Discounting 1st step: Check if account has debit balance 2nd step: Clear total of all credit memo items to the oldest receivable item 3rd step: Determine if any items are due beyond the discount date 4th step: Discount Items at 10%per year Item 2: $75.49, Item 3: $56.15 Customer account 100 (9.01.00) 80 (11.01.00) 60 (12.01.00) Due dates Receivables Interest Rate: 10% per year Discount Date: 10/01/00 Current Date: 04.01.00
  15. 15. Discounting and Flat Rate Value Adjustment - Steps Customizing Maintain parameters : Key date, reval. method, postings, doc type Valuat. Adj. key AB Adjmt. Account (B/S) G/L Acct 1 Target account (P&L) G/L Acct 2 Etc... Customer Master Documents No.:13000543 No.:19300534 Dispatch: Start time, start date, immediately Edit valuation run: Valuation transfer: Forward (line item update), (sample) posting, log display Line item update/posting No.:13000543 No.:19300534 Change valuations, display log, value list, delete Honda Ford
  16. 16. GR/IR Account Allocation GR/IR Clearing Account 2000 2000 3 4 GR/IR Account 1000 3000 2 1 Asset Account 3000 1 Vendor 1000 2 Goods Delivered but Not Invoiced 2000 2000 4 3 A Single Balance Sheet Item Target Account
  17. 17. Financial Accounting Comparative Analysis Customers Vendors G/L Accounts Totals from: Customers Vendors G/L Accounts Totals from: Customers Vendors G/L Accounts Transaction figures Indexes Documents Program SAPF190 compares totals contained in the indexes and documents (customers, vendors, G/L accounts) with the corresponding account balances. Program SAPF190
  18. 18. End of Period Reporting <ul><li>Balance Sheet / Profit and Loss Statement </li></ul><ul><li>General Ledger Account Information System </li></ul><ul><ul><li>Financial Statement Versions </li></ul></ul><ul><ul><li>Key Figure / Ratio Reports </li></ul></ul><ul><li>Special Purpose Ledger - for reports with more customized format. </li></ul>
  19. 19. Year-End Closing Account Carry Forward: Customer / Vendor Balance Carried Forward General Ledger Account Balance Carried Forward
  20. 20. Automatic Line Items Balance Carried Forward
  21. 21. Managerial Closing <ul><li>Preliminary close of controlling accounting period. </li></ul><ul><li>Reallocation and settlement of costs throughout the entire organization. </li></ul><ul><li>Review and analysis of internal reports. </li></ul><ul><li>Re-opening of the controlling accounting period to correct and adjust accounting data. </li></ul><ul><li>Run FI-CO Reconciliation ledger </li></ul><ul><li>Execute readjustment programs to ensure Business Areas and Profit Centers are in balance </li></ul>
  22. 22. Closing Chapter Summary <ul><li>Key Terms: </li></ul><ul><ul><li>Closing </li></ul></ul><ul><ul><li>Valuation </li></ul></ul><ul><ul><li>Valuation Method </li></ul></ul><ul><ul><li>Flat Rate Adjustments </li></ul></ul><ul><ul><li>Discounting </li></ul></ul><ul><ul><li>GR/IR Account </li></ul></ul><ul><ul><li>Balance Carry Forward </li></ul></ul>