Basics of New General Ledger

8/8/2019 Basics of New General Ledger

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New GLBasics of New General ledger

Manish Kumar

* Screenshots and all other information are based on mySAP ECC 5.0 version. The purpose of this ppt is to give a

basic understanding and the configuration settings required for new GL implementation.


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Contents

Why use the New GL??

Settings for new GL

New GL- An Users Perspective

Reporting


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Why use the New GL??

Business Requirement New GL functionality

* Reporting as per different

GAAP

Concept of multiple ledgers- Leading & Non

leading ledger

* Unified management & legal

reporting

Profit Centre integrated with GL

* Segmental reporting as per

US GAAP

Segment defined as an enterprise element

* Financial statement below

company code level

Document split functionality

* Reporting as per cost of sales

accounting

Functional areas included


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Settings for New GL-(i)

Organizational structure is created to map the

business structure of the organization in SAP.

Controlling Area- To provide a closed environment for costaccounting. Cross company code cost accounting.

Company Code- Legal entity for external reporting.

Compliance with local requirement as per the law of the land.

Chart of Accounts- Grouping of all GL accounts used.

Profit Centers -For internal management reporting as anindependent responsibility centre Companies with in the

company.


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Settings for new GL-(ii) Leading Ledger- Based on the same accounting principle as that ofconsolidated financial statement. Integrated with all non-leading ledger

& gets many of the parameters from the company code.

Non-leading Ledger- Based on local accounting principles =>

Assignment to alternate currencies & fiscal year variant that differ from

that of leading ledger.

Ledger group- Grouping of ledger created for the purpose of

applying the function of accounting to all ledgers. A representative

ledger defined with in the ledger group determines the posting period

for all the ledgers included in that ledger group.

Segments() FI account assignment object derived from the masterdata of Profit center. Used for segment reporting.

* Excerpt from IAS 14: reporting is required for a business or geographical segment when the majority of its revenues stemsfrom sales to external customers and segment revenues account for at least 10% of total internal and external revenues of all

segments, segment income accounts for at least 10% of all segment income, or segment assets account for at least 10% of theassets of all segments


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Settings for new GL-(iii)

Functional areas- For classifying the expenses of an organization byfunctions. Required for producing the financial statement as per cost of

sales approach.

Parallel Accounting (0L-Leading Ledger may use IFRS, Non leading

ledger group uses local accounting principle)- Different accounting

principle applied to different ledgers.

Scenarios- Define the field to be updated in ledgers when it receives

posting from other applications. Some std scenarios are assigned to

ledgers are

FIN_CONS- Update of consolidation transaction type & trading

partner field

FIN_PCA- Update of profit centre & partner PC field.

FIN_SEGM- Update of segment, PC and etc.


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Settings for new GL-(iv)

Document splitting- Line items are split along selected This ensurescreation of financial statements at level below company code.

The system identifies relevant GL accounts for split as per the

assigned item category in configuration.

Document split rules are decided based on the transaction, variant

assigned to the document type in configuration.

Profit Centre may be used as Characteristic for document split.

The standard document split method 0000000001( split of customer,

vendor & tax) line items.


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Settings for New GL-(v)Segment

Segment is a FI account assignment object and is derived from profit centre master data. The corresponding

segment is automatically updated for the relevant profit centers. The segment can be updated from BADI s also

(FAGL_DERIVE_SEGMENT).


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Settings for New GL-(vi)Segment

To post, analyze and display document segment in the new GL, thefollowing steps are required.

Define the segments in configuration.

Derive the segments- SAP supports derivation of segment from

profit centre master data.

Maintain the field status variant of the required FI accounts.

Assign the required scenario to relevant ledgers.


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Settings for New GL-(vii)Parallel Financial reporting

Parallel financial accounting means that financial statements have to

created in accordance with different accounting rules.

Business reason- Accounting in local view is no longer sufficient by itself

in the globalised world of business partners. Internationally recognized

accounting standard such as IFRS are the need of the hour.

New GL lets you use different ledgers as per different accountingprinciple.

In SAP system each client has one leading ledger & essentially more

than one non leading ledger.


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Settings for New GL-(viii)Parallel Financial reporting

The use of non leading ledger makes it possible to use a different fiscal yearvariant with in the same company code. In earlier versions of SAP it was not

possible to use different fiscal year with in the same company code.

Fiscal year variant for leading ledger derived from

Company Code .

Fiscal year variant for non leading ledger different

from leading ledger .


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Implications of using different fiscal year

In Asset accounting it is still not possible for depreciation areas to havefiscal year variants with different start & finish dates.

If a fiscal year variant is assigned to a depreciation area with different start

& finish dates, the system issues error message.

Possible solution- In the New GL in Asset Accounting, it is still not possible fordepreciation areas to have fiscal year variants with different start and finish dates. If

you try to assign a fiscal year variant to an area, whereby the fiscal year variant

infringes this restriction, the system issues error message AC 531.However, you can

assign a ledger group to this area for an inconsistent valuation, whose ledger has

different fiscal year variants to the valuation area in Asset Accounting. This is both

technically possible and a desired function..

SAP contends that this issue arises because of technical restrictions.

Refer SAP Notes No- 844029


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Cost of Sales Accounting

New GL has the ability to provide profit & loss statement of theorganization based on cost of sales accounting principle.

For this, all the expenses incurred are allocated to functional areas in SAP

system.


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New GL- User perspective-(i)

Different views of a FI document - Two views of any FI documentpossible in New GL, Entry View & Ledger View

Entry view- In the entry view a document contains the document line

items originally entered or transferred from the original component..

N GL U P ti (ii)


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New GL- User Perspective-(ii) In the general ledger view, a document contains the document line

items originally entered or transferred from the original component and

split line items generated by document splitting. Documents in thegeneral ledger view always apply to a specific ledger.

Additional line item created as a result of document split.

N GL R ti (i)


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New GL Reporting-(i)Reports in New GL

The standard RFBILA00( Financial Statements) is still available in NewGL.

The new feature includes the ability to run the report for non leading

ledgers.

N GL R ti (ii)


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New GL Reporting-(ii)Reports in New GL

New GL has the ability to give the financial statement as per the

requirement (either at company code level or organization level below it).

The dynamic selection button ( ) on the report screen gives the

flexibility to select additional entries such as profit centre, functional areaetc.

By navigating through the drill down reporting (S_PL0_86000028) it is

very easy to turn a company code report to a profit centre report.