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FI Component Short Description SAP AG

Financial Accounting

2 December 1999

Copyright

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SAP AG FI Component Short Description


December 1999 3

Icons

Icon Meaning

Caution

Example

Note

Recommendation

Syntax

Tip



4 December 1999

Contents

FI Component Short Description.......................................................................9Financial Accounting .................................................................................................................. 10FI General Ledger Accounting ................................................................................................... 11

Basic Functions ........................................................................................................................ 13G/L Account Master Records .............................................................................................. 14

Standard G/L Account Maintenance .............................................................................. 16Cross-Company G/L Account Maintenance................................................................... 17

G/L Account Postings.......................................................................................................... 18Planning............................................................................................................................... 19Schedule Manager .............................................................................................................. 21Open Item management ..................................................................................................... 22FI Closing and Reporting..................................................................................................... 23Interest Calculation.............................................................................................................. 24Special Functions ................................................................................................................ 25

External Documents....................................................................................................... 26Document Parking.......................................................................................................... 27

FI Business Area ...................................................................................................................... 28Foreign Currency Accounting................................................................................................... 30Preparation for Consolidation................................................................................................... 31

Assignments and Data Transfer.......................................................................................... 32Assignments................................................................................................................... 33Realtime Update ............................................................................................................ 34Rollup ............................................................................................................................. 35Periodic Extract .............................................................................................................. 36Transfer of Legacy Data................................................................................................. 37

Company Consolidation ...................................................................................................... 38Assignments................................................................................................................... 39Balance Reconciliation................................................................................................... 40Parallel Currencies......................................................................................................... 41Parallel Valuation ........................................................................................................... 42Planning ......................................................................................................................... 43

Business Area Consolidation .............................................................................................. 44Assignments................................................................................................................... 45Preparations in Financial Accounting............................................................................. 46Preparations in Asset Accounting .................................................................................. 47Preparations in Controlling............................................................................................. 48Preparations in Materials Management ......................................................................... 49Preparations in Sales ..................................................................................................... 50

Company Code Consolidation ............................................................................................ 51Information System ............................................................................................................. 52

Legal Consolidation .................................................................................................................. 53Basic Functions ................................................................................................................... 54



December 1999 5

Consolidation Procedures.............................................................................................. 55Master Data.................................................................................................................... 56Centralized Data Entry................................................................................................... 57

Online Data Entry...................................................................................................... 58Automatic Data Transfer........................................................................................... 59

Consolidation Management ........................................................................................... 60Data Transfer Monitor ............................................................................................... 61Consolidation Step Monitor....................................................................................... 62Validation Check ....................................................................................................... 63

Currency Translation...................................................................................................... 64Posting ........................................................................................................................... 65Intercompany Elimination............................................................................................... 66Elimination of IC Profit / Loss in Inventory ..................................................................... 67Elimination of IC Profit / Loss in Transferred Assets ..................................................... 68Consolidation of Investments......................................................................................... 69Other Consolidation Functions....................................................................................... 70

Reclassification ......................................................................................................... 71Bundling Consolidation Activities.............................................................................. 72

Services ......................................................................................................................... 73Balance Carryforward ............................................................................................... 74Copy Function........................................................................................................... 75

Remote Data Entry.............................................................................................................. 76Data Entry with MS Access............................................................................................ 77Data Entry with dBase.................................................................................................... 78Data Entry on Non-SAP Systems .................................................................................. 79

Information System ............................................................................................................. 80Master Data, Financial Data, Control Parameters ......................................................... 81Journal Entries ............................................................................................................... 82Standard Reports ........................................................................................................... 83

Totals Reports........................................................................................................... 84Report Writer / Report Painter .................................................................................. 85Interactive Reports.................................................................................................... 86Interactive Excel........................................................................................................ 87

Data Forwarding............................................................................................................. 88Data Forwarding for Step Consolidation................................................................... 89Data Forwarding for EIS ........................................................................................... 90

Accounts Payable..................................................................................................................... 91Basic Functions ................................................................................................................... 92

Master Data.................................................................................................................... 93Schedule Manager ......................................................................................................... 94Invoice Parking............................................................................................................... 95Invoices and Credit Memos ........................................................................................... 96Release for Payment...................................................................................................... 97Manual Payments .......................................................................................................... 98Down Payments ............................................................................................................. 99



6 December 1999

Bills of Exchange.......................................................................................................... 100Payment Transactions ................................................................................................. 101Dunning........................................................................................................................ 102Open Item Management .............................................................................................. 103Correspondence........................................................................................................... 104Interest Calculation ...................................................................................................... 105Closing Operations....................................................................................................... 106Special Functions......................................................................................................... 107

External documents ................................................................................................ 108EDI .......................................................................................................................... 109

Information System ........................................................................................................... 110Accounts Receivable .............................................................................................................. 111

Basic Functions ................................................................................................................. 112Master Data.................................................................................................................. 113Schedule Manager ....................................................................................................... 114Invoices and Credit Memos ......................................................................................... 115Manual Payments ........................................................................................................ 116

Basic Functions....................................................................................................... 117Payment Advice Notes (Incoming) ......................................................................... 118

Down Payments ........................................................................................................... 119Bill of Exchange ........................................................................................................... 120Payment Transactions ................................................................................................. 121Dunning........................................................................................................................ 122Open Item Management .............................................................................................. 123Correspondence........................................................................................................... 124Interest Calculation ...................................................................................................... 125Closing Operations....................................................................................................... 126Special Functions......................................................................................................... 127

External Documents................................................................................................ 128Preliminary Postings ............................................................................................... 129

Credit Management...................................................................................................... 130Information System ...................................................................................................... 131

Asset Accounting.................................................................................................................... 132Basic Functions ................................................................................................................. 133

Asset Maintenance....................................................................................................... 134Basic Valuation Functions............................................................................................ 135

Depreciation Areas ................................................................................................. 136Derived Depreciation Areas.................................................................................... 137Calculation of Interest ............................................................................................. 138Period Control ......................................................................................................... 139Group Assets .......................................................................................................... 140Valuation Methods .................................................................................................. 141

Fiscal Year Specifications............................................................................................ 142Alternative Fiscal Year Variants.............................................................................. 143Shortened Fiscal Year ............................................................................................ 144



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Half Months............................................................................................................. 145Period Weighting (4-4-5 Rule) ................................................................................ 146

Depreciation ................................................................................................................. 147Ordinary Depreciation............................................................................................. 148Special Depreciation ............................................................................................... 149Unplanned Depreciation ......................................................................................... 150Transferred Reserves ............................................................................................. 151Manual Depreciation ............................................................................................... 152Unit-of-Production Depreciation.............................................................................. 153

Transactions................................................................................................................. 154Acquisitions............................................................................................................. 155Down Payments...................................................................................................... 156Retirements............................................................................................................. 157Transfer Postings.................................................................................................... 158Settlement of Line Items for AUC ........................................................................... 159Manual Value Adjustment....................................................................................... 160Posting Depreciation to the General Ledger .......................................................... 161Validations .............................................................................................................. 162

Closing Operations....................................................................................................... 163Specific Valuations ............................................................................................................ 164

Reserve for Special Depreciation ................................................................................ 165Indexed Replacement Values ...................................................................................... 166Handling of Inflation ..................................................................................................... 167Investment Support ...................................................................................................... 168Net Worth Tax .............................................................................................................. 169Insurance ..................................................................................................................... 170

Leasing Processing ........................................................................................................... 171Group Requirements ......................................................................................................... 172

Historical Group Currency............................................................................................ 173Group Valuation ........................................................................................................... 174Intercompany Profit / Loss due to Asset Transfer........................................................ 175

Information System ........................................................................................................... 176Standard Reports ......................................................................................................... 177Individual Report Selection .......................................................................................... 178Report Links ................................................................................................................. 179Individual Asset History Sheet Versions ...................................................................... 180Conversion Methods for the Info System..................................................................... 181

FI - Special Purpose Ledger................................................................................................... 182Master Data....................................................................................................................... 184

Tables .......................................................................................................................... 185Ledger .......................................................................................................................... 186Code Combinations...................................................................................................... 187Sets .............................................................................................................................. 188Integrated Master Data ................................................................................................ 189

Table Definition and Installation ........................................................................................ 190



8 December 1999

Direct Data Entry ............................................................................................................... 191Planning............................................................................................................................. 192Assessment....................................................................................................................... 194Distribution ........................................................................................................................ 195Rollup ................................................................................................................................ 196Currency Translation ......................................................................................................... 197Balance Carryforward........................................................................................................ 198Data Transfer .................................................................................................................... 199Integration Interface .......................................................................................................... 200

Validation, Substitution and Rules.......................................................................................... 201Validation........................................................................................................................... 202Substitution........................................................................................................................ 203Rules ................................................................................................................................. 204

Information System................................................................................................................. 205Funds Management................................................................................................................ 206

Basic Data ......................................................................................................................... 207Budgeting and Availability Control .................................................................................... 209Postings............................................................................................................................. 211Recording Actual and Commitment Data.......................................................................... 213Additional Functions .......................................................................................................... 216

Closing operations ....................................................................................................... 217Revenues Increasing the Budget................................................................................. 219

Information System ........................................................................................................... 220



December 1999 9

FI Component Short Description



10 December 1999

Financial AccountingDefinitionThe “Financial Accounting” component meets the international demands of a company’s financialaccounting requirements using an open, integrated data flow and simplifies financial decisionmaking to a large extent.

All postings between the different applications in the R/3 system are made realtime. For example,if you post to the “Accounts payable” subledger, then the system automatically makes anoffsetting entry to the general ledger.

The R/3 Financial Accounting component is divided into the following areas:

• General Ledger Accounting

• Consolidation

• Accounts Payable

• Accounts Receivable

• Asset Accounting

• Special Purpose Ledger


FI General Ledger Accounting

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FI General Ledger AccountingPurposeThe central task of G/L accounting is to provide a comprehensive picture for external accountingand accounts. Recording all business transactions (primary postings as well as settlements frominternal accounting) in a software system that is fully integrated with all the other operationalareas of a company ensures that the accounting data is always complete and accurate.

Purchasing

Quantity Value

Assets

Fixedassets

Sales

P.O.Invoice

Vendor

D CAccountspayable X

Customer

D CAccountsreceivable X

HR

WagesSalaries

General-

ledger FI - GL

FeaturesThe SAP FI General Ledger has the following features:

• Free choice of level: corporate group or company

• Automatic and simultaneous posting of all sub-ledger items in the appropriate generalledger accounts (reconciliation accounts)

• Simultaneous updating of general ledger and cost accounting areas

• Real-time evaluation of and reporting on current accounting data, in the form of accountdisplays, financial statements with different financial statement versions and additionalanalyses.

Essentially, the general ledger serves as a complete record of all business transactions. It is thecentralized, up-to-date reference for the rendering of accounts. Actual individual transactions canbe checked at any time in realtime processing by displaying the original documents, line items,and transaction figures at various levels such as:


FI General Ledger Accounting

12 December 1999

• Account information

• Journals

• Totals/transaction figures

• Balance sheet/profit and loss evaluations


Basic Functions

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Basic FunctionsDefinitionIn "basic functions" you can select the basis functionalities for General Ledger accounting.


G/L Account Master Records

14 December 1999

G/L Account Master RecordsSpeziellen Ledger [Page 182]

DefinitionG/L account master records contain the data that is always needed by the general ledger todetermine the account's function. The G/L account master records control the posting ofaccounting transactions to G/L accounts and the processing of the posting data.

UseBefore you can make postings to a G/L account, you have to create a master record in thesystem for the account.

StructureG/L account master records are divided into two areas so that company codes with the samechart of accounts can use the same G/L accounts.

• Chart of accounts areaThe chart of accounts area contains the data that is valid for all company codes,such as the account number.

• Company code specific areaThe company code specific area contains data that may vary from one companycode to another, such as the currency in which the account may be posted.

Germany

Company code 1000

Currency DEM.......... ..........

Chart of accounts INTAccount number 100000Short text Petty cash.......... ..........

Great Britain

Company code 2000

Currency GBP.......... ..........

USA

Company code 3000

Currency USD.......... ..........

Chart of accounts area

Company code-specificarea


G/L Account Master Records

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IntegrationIn the standard system, all business transactions that are posted to G/L accounts are updated inthe general ledger. Additionally, you can define further ledgers to which data can also be posted.To do this, you must implement the Special Purpose Ledger.


Standard G/L Account Maintenance

16 December 1999

Standard G/L Account MaintenanceDefinition“Standard G/L account maintenance” contains all common transactions (create, delete, lock, etc.)which are related to G/L accounts.

G/L account maintenance is required for the initial setup of all accounts, as well as for thechanges which need to be made to G/L accounts during the course of normal businessoperations.


Cross-Company G/L Account Maintenance

December 1999 17

Cross-Company G/L Account MaintenanceDefinition“Cross-company G/L account maintenance is necessary if you work with multiple company codesand/or charts of accounts.

If you want to reuse charts of accounts and G/L accounts, you can copy the charts and createreference or sample accounts. You can create G/L accounts at the company code or chart ofaccounts level. This is necessary in cases where you use the same chart of accounts in multiplecompany codes, yet the accounts are set up differently at the company code level.


G/L Account Postings

18 December 1999

G/L Account PostingsDefinitionAccounting transactions which affect the General Ledger create “G/L account postings”.Postings to sub-ledger accounts (accounts payable/receivable, asset accounting) can cause G/Laccount postings to be generated, due to their integration in the FI system.

The line items contain information for each line, such as the posting key, account number andamount. Further information may also be required, based on the type of transaction beingposted.

There are other types of documents in the system besides the accounting documents described,such as sample documents and recurring documents. These documents serve to simplify thedata entry procedure.


Planning

December 1999 19

PlanningPurposeThe planning function in the General Ledger enables you to enter plan data based on yourfinancial statement versions. You can use a budgeted financial statement to compare plan datawith actual data.

Implementation ConsiderationsBefore you can create plan data and use it for various reports, you have to set up planning. Formore information, see Setting Up Planning [Ext.].

IntegrationYou can use plan data from the following application components in the SAP system for yourplanning in the General Ledger:

• Overhead Cost Controlling (CO-OM)

• Profitability Analysis (CO-PA)

For more information, see Copying Plan Data [Ext.].

Features• You enter the plan data per company code. Within a company code, you can plan for

accounts and/or a combination of both accounts and business areas.

You can plan as follows for each company code:

− Accounts only, without business areas

− Accounts and business areas

− Accounts and selected business areas

• In the planning function, you navigate within one of the financial statement versions that youhave already created. You use a financial statement version to define the format of thefinancial statements.

You can enter plan data for:

− The entire financial statement version

− Particular sections of the version

• You can define different plan versions. You can use these for entering plan data for differentfinancial statement versions, for example.

• Planning is always made for a year, which means you cannot plan for more than one fiscalyear.

• You enter your plan data by entering plan totals and distributing them to the individual planperiods by means of a distribution key. You can also enter plan data for the individual planperiods, and have the system total these amounts.

• You can enter the plan data either in local currency or in transaction currency.


Planning

20 December 1999

• When entering the plan data, you can also display the actual data of the previous year.

• You can use report program RFBILA00 to create a budgeted financial statement. Thebudgeted financial statement contains the actual data from the financial statements and alsothe plan data, for comparison purposes. For more information, see Creating BudgetedFinancial Statements [Ext.].

For information on how to enter plan data, see Entering Plan Data [Ext.].


Schedule Manager

December 1999 21

Schedule ManagerThe Schedule Manager enables or facilitates (by extensive automation) definition, scheduling,execution and control of periodic, iterative tasks, such as period-end closing.

There are four independent components:

• Flow Definition [Ext.]

• Scheduler [Ext.]

• Monitor [Ext.]

• Worklist [Ext.]


Open Item management

22 December 1999

Open Item managementDefinitionItems belonging to an account with open item management are designated as open or cleared.The balance of such an account is always derived from the balance of its open items. G/Laccounts are maintained with open item management if you want to bee able to check whetherrequisite offsetting entries have already been made for an accounting transaction.


FI Closing and Reporting

December 1999 23

FI Closing and Reporting


Interest Calculation

24 December 1999

Interest CalculationDefinitionInterest on accounts receivable can be determined by either calculating interest on the balanceor calculating interest on the arrears.

Interest calculation is controlled by the following specifications:

• Data entered in the master record of the account, such as the interest indicator to beused and information for determining the calculation period for the account.

• Settings made under the interest indicator, for example, interest rates.

• Options set at the time of interest calculation, including selection criteria, for example,which limit the number of accounts included in the interest calculation.


Special Functions

December 1999 25

Special FunctionsDefinitionThe following General Ledger-related special functions are also available:

• external documents

• document parking

Selection criteriaYou need these components if you want to work with either external documents or documentparking.


External Documents

26 December 1999

External DocumentsDefinitionThis procedure enables the accounting department to create documents for an external SAPinstallation, to process these documents further and to store them in an operating system file.This file is transported to the external system via e-mail or disk, where it is imported into theproper database.

After examining and, if necessary, further processing these documents, users can select themand then post them using an internal batch input mode in the external system.

Selection criteriaYou only need this component if you interchange documents with external SAP installations andpost them via batch input.


Document Parking

December 1999 27

Document ParkingDefinitionWhen you save a parked document, no transaction figures, asset values or control totals areupdated in the General Ledger. No automatic postings are generated and account balancechecks are not carried out. However, the balance is displayed in the document overview under“parked documents”.

The system issues a document number. Document number assignment proceeds as it does fordocument entry. The parked document can then be updated at a later date, pending approval orexamination.


FI Business Area

28 December 1999

FI Business AreaPurposeBusiness areas are primarily used to facilitate external segment reporting across companycodes, covering the company's main areas of operation (product lines, branches).

You can assign all balance sheet items, such as fixed assets, receivables, payables and materialstock, as well as the entire P&L statement directly to business areas. You can only assign banks,equity, and taxes manually to business areas if you do this indirectly. For this reason, it is notpossible to create the legally-required financial statements and tax reports at business area level.Financial statements at business area level are therefore only suitable for use in internalreporting.

FeaturesTo be able to create a balance sheet and/or P&L statement, the data has to be updated in thegeneral ledger transaction figures for each business area. There are two different procedures fordoing this:

• When posting the original document, the system supplies the business area with the correctinformation.

You create a customer invoice. You can assign the sales revenue to exactly onebusiness area. The same business area is also assigned to the receivable.

Account Business Area Amount

Customer/receivable 0001 200.00

Revenue 0001 200.00-

• The business area used in the original posting (particularly when the initial value is notentered) is changed to the correct value in a second step, using an adjustment posting in thegeneral ledger. This may sometimes distribute the posting to several business areas.

You create a customer invoice. The sales revenue must be assigned to severalbusiness areas. The receivable is posted without a business area, and a transferposting is made in a second step.


Customer/receivable 700.00

Revenue 0001 300.00-

Revenue 0002 400.00-



FI Business Area

December 1999 29

Receivable 700.00-

Receivable 0001 300.00

Receivable 0002 400.00

The following documentation explains how you set the business area in accounting documentscreated by accounting transactions from individual SAP applications. In addition, it shows thesteps necessary for creating a business area balance sheet and/or P/L statement.


Foreign Currency Accounting

30 December 1999

Foreign Currency AccountingDefinition“Currency Accounting” allows you to manage accounts in multiple currencies.

Transaction and local currencies are maintained for each posting:

Transaction currency Currency in which each document is posted

Local currency Currency in which financial statements are generated

You also have the option of using two additional parallel currencies in accounting transactions.You can select two of the following currency types:

Hard currency Parallel currency for generating the balance sheet and profit andloss statement (i.e., for countries with hyperinflation)

Index currency Parallel currency for generating the balance sheet and profit andloss statement (i.e., for countries with hyperinflation)

Group currency Currency in which the consolidated financial statements aregenerated

Global company currency Currency of the company to which the company code belongs


Preparation for Consolidation

December 1999 31

Preparation for Consolidation


Assignments and Data Transfer

32 December 1999

Assignments and Data TransferDefinitionThis component covers general specifications as part of the preparation for consolidation, as wellas various methods for the integrated transfer of individual financial statement data into theConsolidation system.

Selection criteriaThis component must always be selected for the preparation for consolidation.

Please note the following when selecting the data transfer component (next hierarchy level):Ensure that you choose a uniform data transfer method for all of the company codes set up in thesender system. Any exceptions to the rule can be portrayed on a company code basis usingtools found in the FI-SL application (Special Purpose Ledger).

Assuming the situation in your system permits all data transfer methods, you should compare theadvantages and disadvantages of each method.


Assignments

December 1999 33

AssignmentsDefinitionAssignments determine the receiving consolidation system and defines the consolidationfunctions in respect to its scope, type of consolidation, and so on.

Selection criteriaThis component is mandatory for the preparation for consolidation.


Realtime Update

34 December 1999

Realtime UpdateDefinitionA data transfer method by which every individual business transaction relevant to the generalledger is updated in the totals records of the consolidation processing ledger immediately afterposting.

General ledger accounts in FI General Ledger Accounting and FS items in Consolidation arelinked through the corporate chart of accounts, whose accounts correspond with the items. Byassigning general ledger accounts to accounts in the corporate chart, you reassign the generalledger account as an item and enable the Consolidation processing ledger to be updated.

With this component you set up realtime update and make the necessary settings for accountreassignment.

Selection criteriaA precondition for realtime update is that the sender and receiver of data work in the same R/3system and client (central scenario).


Rollup

December 1999 35

RollupDefinitionA data transfer method which selects balances from a specified ledger. Normal reassignment oforganizational units and accounts is made possible by predefined standard exits within the fieldgrouping code for the rollup processor. You need to enhance the field grouping code inCustomizing for customer-specific additional account assignments.

With this component you set up the rollup and make the necessary settings for accountreassignment.

Selection criteriaThis procedure is possible both in a central scenario and also across systems and clients.

A rollup is particularly suitable for transferring individual financial statement data if you entercustomer-specific additional account assignments in General Ledger Accounting and want toduplicate these in the consolidation processing ledger.


Periodic Extract

36 December 1999

Periodic ExtractDefinitionA data transfer method which updates every individual business transaction relevant to thegeneral ledger in the totals records of the consolidation staging ledger. Data is selectedperiodically in an extract and imported into the consolidation processing ledger.

General ledger accounts in FI General Ledger Accounting and FS items in Consolidation arelinked through the group financial statement version. This version must correspond with theConsolidation FS chart of accounts, enabling general ledger accounts to be reclassified as itemswhen the extract is imported into the consolidation processing ledger.

With this component you set up periodic extract and make the necessary settings for accountreassignment

Selection criteriaThis procedure is possible both in a central scenario and also across systems and clients.


Transfer of Legacy Data

December 1999 37

Transfer of Legacy DataDefinitionTransfer of the data set from a previous system.

This component allows you to create and initial data set in the consolidation staging ledger or theconsolidation processing ledger, and to modify the data set if the additional account assignmentsrequired for consolidation are missing. Furthermore, this component allows you to compare theconsolidation staging ledger and processing ledger with the general ledger and to delete testdata.

Selection criteriaIt is recommended that this component always be selected for the preparation for consolidation.


Company Consolidation

38 December 1999

Company ConsolidationDefinitionCompany consolidation is used to draw up consolidated financial statements based on legallyindependent companies. In operational SAP systems, it is usually the company codes whichpass on their individual financial statement data to the Consolidation system.

Selection criteriaThis component should be selected for company consolidation and also if you select the“business area consolidation” component. The assignments which need to be made for thecompany consolidation should also be made for business area consolidation.


Assignments

December 1999 39

AssignmentsDefinitionThis component allows you to assign master data which is used for the automatic accountassignment of trading partners when posting intercompany business transactions.

You can assign the following:

• A company ID in the customer/vendor master record. Internal trading partners arerepresented in customer/vendor master records.

• A company ID in the general ledger (G/L) account master record. If businessrelationships with other internal trading partners are not represented in customer/vendormaster records but instead in G/L accounts specifically set up for this purpose, you enterthe company ID directly into the G/L account master record.

Selection criteriaThis component is mandatory for preparations for consolidation.


Balance Reconciliation

40 December 1999

Balance ReconciliationDefinitionBalance reconciliation is a procedure for comparing and clarifying differences when handlingpostings for partner-related activities in the individual financial statements of internal tradingpartners.

The main purpose of balance reconciliation is to recognize any differences early on inconsolidation.

As of Release 3.0E, a balance reconciliation program with various assignment procedures isavailable.


Parallel Currencies

December 1999 41

Parallel CurrenciesDefinitionParallel currencies are required for consolidation if transactions are to be transferred to theconsolidated financial statements after being translated using the spot exchange rate, and you donot want to retranslate using periodic, average or current exchange rates.

Two further currencies, such as group currency, can be managed in parallel with the localcurrency. You can specify whether a parallel currency will be managed for a company code(company), and if so which.

With this component you make the necessary settings for parallel currencies in operationalapplications.

Selection criteriaChoose this component when implementing parallel currencies.


Parallel Valuation

42 December 1999

Parallel ValuationDefinitionThe Consolidation module distinguishes between local valuation (individual financial statements)and corporate valuation. In operational SAP applications, it is often possible to manage data inparallel according to both local and corporate valuations.

With this component you make the necessary settings for parallel valuation in operationalapplications.

Selection criteriaChoose this component when implementing parallel currencies.


Planning

December 1999 43

PlanningDefinitionA budgeted balance sheet and income statement from FI General Ledger Accounting can (likeactual data) be prepared locally and transferred to Consolidation.

The entry of plan data in FI with additional account assignments such as trading partner ortransaction type is currently only possible using the FI-SL (Special Purpose Ledger) application,and by transferring data to Consolidation in a rollup.

Selection criteriaIf you want to transfer plan data to Consolidation in a rollup, you need to select the “Rollup”component.


Business Area Consolidation

44 December 1999

Business Area ConsolidationDefinitionConsolidation on the basis of consolidation units, which are combinations of one company andone consolidation business area.

In the individual financial statements, business areas can also be specified as additional accountassignments in posting transactions. Balance sheets can be prepared for business areas. TheSAP Consolidation system (FI-LC) can generate consolidated financial statements for businessareas by performing eliminations between business areas.

Selection criteriaIf you select this component, you also need to select the “Business area consolidation”component, since the settings for business area consolidation are a prerequisite for businessarea consolidation.


Assignments

December 1999 45

AssignmentsDefinitionWith this component you can form consolidation units for business area consolidation.

Selection criteriaThis component is mandatory for preparations for business area consolidation.


Preparations in Financial Accounting

46 December 1999

Preparations in Financial AccountingDefinitionThis component allows you to modify the settings in Financial Accounting to match therequirements of business area consolidation.

You need to set up account assignment procedures in Financial Accounting so that one businessarea must be specified for each entry posted. Accordingly, you must maintain the field statusdefinitions for the general ledger entries and create accounts for the subsequent debiting ofbusiness areas.

Selection criteriaThis component is mandatory for preparations for business area consolidation.


Preparations in Asset Accounting

December 1999 47

Preparations in Asset AccountingDefinitionThis component allows you to modify the settings in Asset Accounting to match the requirementsof business area consolidation.

In Asset Accounting, you can assign an asset to the appropriate business area in the assetmaster records. Asset postings then “inherit” the assigned business area and, where applicable,the trading partner business area.

Selection criteriaYou should only select this component if the FI-AA (Financial Accounting) application isimplemented.


Preparations in Controlling

48 December 1999

Preparations in ControllingDefinitionThis component allows you to modify the settings in Controlling to match the requirements ofbusiness area consolidation.

You can make assignments to business areas in the CO account assignment objects such ascost center, order, or project.

You can use this component to make settings related to inter-business area eliminations forreconciliation postings between Controlling and Financial Accounting.

Selection criteriaYou should only select this component if the CO (Controlling) application is implemented.


Preparations in Materials Management

December 1999 49

Preparations in Materials ManagementDefinitionThis component allows you to modify the settings in Materials Management to match therequirements of business area consolidation.

You need to make the following master data assignments in order to automatically derive thebusiness area:

• The combination of division and valuation area should be assigned to a business area.

• In the material master records, the relevant division should be entered for articles,products and services.

Selection criteriaYou should only select this component if the MM (Materials Management) application isimplemented.


Preparations in Sales

50 December 1999

Preparations in SalesDefinitionThis component allows you to modify the settings in Sales and Distribution to match therequirements of business area consolidation.

You need to select one of the following alternative rules in order to automatically derive thebusiness area:

• Assignment of a business area by plant and division.

• Assignment of a business area by sales area

Selection criteriaYou should only select this component if the SD (Sales and Distribution) application isimplemented.


Company Code Consolidation

December 1999 51

Company Code ConsolidationDefinitionConsolidation using the General Ledger.

You can create consolidated financial statements via G/L accounts in cases involving a smallnumber of company codes.


Information System

52 December 1999

Information SystemDefinitionThe G/L accounting information system enables you to evaluate information in the generalledger. Its primary database is the Financial Accounting application. This application is a centraldata pool, which collects all accounting data arising within an organization. The purpose of thefinancial information system is to evaluate this extensive database online and display theinformation in easily-readable form.

G/L account transaction figures and the financial statement versions are the primary sources ofdata for the G/L account information system. Balance sheet analyses and balance sheet ratioreports are the available report types. You can also generate your own user-specific reports.


Legal Consolidation

December 1999 53

Legal ConsolidationDefinitionInclusion of the individual financial statements of group companies in the consolidated financialstatements according to the “single legal entity” theory. This theory states that consolidatedfinancial statements should show the assets, financial position and income of a group as if thegroup were a single enterprise.

To achieve this, all effects on the consolidated financial statements arising from goods andservices and financial dependencies between the internal trading partners must be eliminated.

In the FI-LC Consolidation system you can consolidate business areas as well as companies.

Selection criteriaYou should select this component if you want to prepare consolidated financial statementsaccording to legal regulations, or periodic financial statements and plan consolidation forinformation purposes.


Basic Functions

54 December 1999

Basic FunctionsDefinitionThis component includes the individual consolidation activities.


Consolidation Procedures

December 1999 55

Consolidation ProceduresDefinitionThe R/3 application Consolidation supports two consolidation procedures:

• Simultaneous Consolidation

Simultaneous Consolidation takes into consideration all companies to be included in thecorporate group in a single process. A subgroup, which represents the corporate groupand includes all companies, is created in the Consolidation system. If you need toconsolidate further groups of companies, say, for reporting purposes, you must createadditional subgroups.

• Step Consolidation

In Step Consolidation, each company is consolidated "in steps" according to thehierarchy in the (multi-level) group. A subgroup is created for each hierarchy level. Theconsolidated subgroup statements flow into the consolidation for the next higherhierarchy level.

Each of the subgroup statements are generated according to the procedure SimultaneousConsolidation. Step Consolidation is the result of the step-by-step processing of the grouphierarchy.

Selection criteriaThis component is only intended to inform you about the two different consolidation procedures.The selection of this component has no effect on the Customizing activities or any activities in alive Consolidation application.


Master Data

56 December 1999

Master DataDefinitionThe master data of Consolidation essentially consists of companies, subgroups and financialstatement items. You can (simultaneously) implement any of the multiple FS charts of accountsincluded in the standard SAP system.

This component allows you to maintain master data.

Selection criteriaThis component is mandatory for Consolidation.


Centralized Data Entry

December 1999 57

Centralized Data EntryDefinitionCentral data entry provides you with (a) the capability of entering input individual financialstatement data into the R/3 Consolidation system using data entry forms (online data entry), and(b) an integrated automatic transfer of individual financial statement data from other SAPsystems.


Online Data Entry

58 December 1999

Online Data EntryDefinitionOnline data entry is available in the Consolidation menu via data entry forms and financialreporting tables. The data from the companies is input via data entry forms. Certain financialdata tables also accept company data which is needed for performing the individual consolidationsteps.

Selection criteriaIt is recommended that the component always be selected for Consolidation in order to enable acentral input of data into the R/3 Consolidation system.


Automatic Data Transfer

December 1999 59

Automatic Data TransferDefinitionThe following options are available for the integrated transfer of individual financial statementdata from other R/3 systems into Consolidation:

• Periodic extract

A data transfer method, in which the totals records in the consolidation staging ledger areupdated with each G/L-related business transaction and are imported into theConsolidation ledger in periodic intervals.

• Realtime update

This data transfer method posts each G/L-related business transaction directly to thetotals records of the consolidation ledger. This method is only available in centralscenarios (in which the sender and receiver applications are both located in the samesystem and the same client).

• Rollup

This data transfer method selects the data from any ledger.

• Upload from R/2

You can use an upload to retrieve consolidation data from R/2 systems.

This component allows you to customize the settings required for importing data into theConsolidation system.

The setting of the data transfer method in the operational systems is part of the preparation forconsolidation.

Selection criteriaIf this component is selected, you must also select the component "Preparation forConsolidation" (in the application FI/General Ledger) in the respective operational systems.


Consolidation Management

60 December 1999

Consolidation ManagementDefinitionInvolves the execution, management and reconciliation of each of the consolidation activities.The consolidation status shows which activities have been performed. A certain sequence mustbe adhered to in order to ensure that consolidation is performed in an orderly fashion.


Data Transfer Monitor

December 1999 61

Data Transfer MonitorDefinitionMonitors the transfers of individual financial statement data into the Consolidation system. Thedata monitor has essentially the following functions:

• displays the import procedure for each company

• displays the import status of each company

• executes the import of data for a single company or a bundle of multiple companies



Consolidation Step Monitor

62 December 1999

Consolidation Step MonitorDefinitionMonitors the consolidation steps. Consolidation entries must be posted at pre-determinedintervals within the consolidation sequence and is therefore controlled by status management inorder to ensure that consolidation is executed in an orderly fashion. Status management isbroken down into the areas of data entry, currency translation and subgroups.



Validation Check

December 1999 63

Validation CheckDefinitionEnsures the integrity of the consolidation data at the following intervals:

• after data entry has occurred

• after data entry and the standardizing entries have occurred

• after the eliminating and consolidation entries have occurred

The validation results are evaluated in consolidation status management.

Selection criteriaThis component is mandatory for consolidation.


Currency Translation

64 December 1999

Currency TranslationDefinitionCurrency translation allows for individual translation of data for each company from its localcurrency (or even the transaction currency) into the group (reporting) currency. A translationmethod is assigned to the companies in each company master record. A translation methoddetermines which sets of financial statement items are translated and which exchange rate isused.

SAP provides predefined translation methods. This component also allows you to define yourown translation methods to meet your individual requirements.

Selection criteriaThe component must be selected under the following conditions:

• The individual financial statement data is to be translated into group currency.

• One or more companies are to be included in the consolidated financial statements on aproportional basis. The individual financial statement data is apportioned duringcurrency translation.


Posting

December 1999 65

PostingDefinitionThe Consolidation system allows four types of entries:

• standardizing entries

• consolidation entries in pairs

• subgroup-consolidating entries with trading partners within the group

• subgroup-consolidating entries with group-external trading partners

The component features the maintenance of document types, the maintenance of number ranges(for assigning document numbers) and the definition of entry validations.

Selection criteriaThis component is mandatory for consolidation.


Intercompany Elimination

66 December 1999

Intercompany EliminationDefinitionEliminates group-internal receivables and payables as well as group-internal revenue andexpenses.

IC elimination is based on partner-based input of financial statement items in the individualfinancial statement data. Elimination rules determine which FS items are cleared against eachother and how to treat any elimination differences that might occur.

SAP provides predefined elimination rules. The component also allows you to define your ownrules to accommodate your individual requirements.

Selection criteriaYou only gain access to the automatic functions of Intercompany Elimination when thiscomponent is selected. Otherwise, the elimination entries may have to be posted manually.


Elimination of IC Profit / Loss in Inventory

December 1999 67

Elimination of IC Profit / Loss in InventoryDefinitionEliminates the net income that is generated by group-internal sales and services.

This component interprets intercompany profit/loss as the difference between the group-internalprice of sale and the acquisition and production costs, seen from the group's point of view.

In addition to the individual financial statement data, the elimination of IC profit/loss also requiresthe input of additional data in the financial reporting tables, which the system needs to determinethe IC profit/loss to be eliminated.

Selection criteriaYou only gain access to the automatic functions of the Elimination of IC Profit/Loss when thiscomponent is selected. Otherwise, the elimination entries may have to be posted manually.


Elimination of IC Profit / Loss in Transferred Assets

68 December 1999

Elimination of IC Profit / Loss in Transferred AssetsDefinitionEliminates group-internal transfers of assets. According to the entity theory in corporateaccounting, the sale of fixed assets between companies within a consolidated group must betreated as if the asset merely was "shifted" from one plant to another.

As a result, the group needs to (a) eliminate any intercompany profit or loss that was generatedby the sale of the asset, and (b) continue the depreciation of the asset using the method andvaluation that originated at the retiring company.

In addition to the individual financial statement data, the elimination of IC profit/loss in transferredassets also requires the input of additional data in the financial reporting tables.

Selection criteriaYou only gain access to the automatic functions of the Elimination of IC Profit/Loss when thiscomponent is selected. Otherwise, the elimination entries may have to be posted manually.


Consolidation of Investments

December 1999 69

Consolidation of InvestmentsDefinitionEliminates the investments of parent companies against the proportional equity of thesubsidiaries, joint ventures and associated companies in the group; also processes minorityinterest.

The Consolidation system supports all conventional methods for the consolidation of investmentsincluding the various variants:

• purchase method using the book value or revaluation method

• pooling of interests using the book value method

• proportional consolidation using the book value or revaluation method

• equity valuation using the book value or proportion of equity method

In addition to the individual financial statement data, the consolidation of investments alsorequires the input of additional data in the financial reporting tables. The system uses this data torecognize the different business transactions, such as first consolidation, subsequentconsolidation, increase in capitalization or change in indirect investment. The generation ofautomatic consolidation entries is influenced by the transaction.

SAP provides predefined consolidation methods. The component also allows you to define yourown methods to accommodate your individual requirements.

Selection criteriaYou only gain access to the automatic functions of the Consolidation of Investments when thiscomponent is selected. Otherwise, the elimination entries may have to be posted manually.

Since, in this case, no consolidation of investments methods are maintained in the Consolidationsystem, Subgroup Maintenance does not provide an option for assigning methods to thecompanies. When processing the other consolidation activities, the system uses the purchasemethod.


Other Consolidation Functions

70 December 1999

Other Consolidation FunctionsDefinitionYou can select the functions reclassification and bundling of consolidation activities in addition tothe consolidation functions discussed previously.


Reclassification

December 1999 71

ReclassificationDefinitionThis component enables reclassifications between balance sheet and/or income statement items.You can post complete or partial reclassifications.

Reclassifications require reclassification rules. You can define these rules according to yourindividual requirements.

Selection criteriaYou only gain access to the automatic functions of Reclassifications when this component isselected. Otherwise, the entries may have to be posted manually.


Bundling Consolidation Activities

72 December 1999

Bundling Consolidation ActivitiesDefinitionYou can execute consolidation activities in so-called "bundles". Consolidation activity groupsmust be defined, to which the bundled activities are allocated. The consolidation activity groupsare then assigned to the subgroups.

Selection criteriaSelect the component if you wish to use the bundling function.


Services

December 1999 73

ServicesDefinitionThis component includes additional functions that enable you to automatically transfer the datainto a new fiscal year or into another version.


Balance Carryforward

74 December 1999

Balance CarryforwardDefinitionAutomatically carries forward the data into the new fiscal year. The data includes:

• the local values and the balances of the standardizing and consolidation entries for allbalance sheet items, of which the statistical items are optional, and – in certain cases –for individual income statement items

• certain control tables

Selection criteriaIt is recommended that the component always be selected for Consolidation.


Copy Function

December 1999 75

Copy FunctionDefinitionEnables you to copy company data. This can be helpful if you wish to test in a new version or ifyou wish to copy a company to another ledger because it belongs to a subgroup which uses adifferent group currency.

The following copying options are available:

• from one ledger to another ledger

• within one ledger, from one version to another version

• within one ledger and one version, to another year or another period in a year

Selection criteriaSelect this component if you intend to use the copy function.


Remote Data Entry

76 December 1999

Remote Data EntryDefinitionPC data entry programs based on MS ACCESS 2.0 and dBase, and interfaces for transferringdata from non-SAP systems are available for the remote entry of individual financial statementdata of subsidiaries and its transfer into the Consolidation system

The component encompasses all settings necessary for remote data entry in the Consolidationsystem.

Selection criteriaSelect this component if your group includes companies which maintain their financial statementdata locally (decentralized) in PC applications or other non-SAP systems, and intend to transferthe data to the Consolidation system using the interfaces provided.

When deciding which PC data entry program to use, MS ACCESS or dBase, you should weightheir advantages and disadvantages. You should especially take the following into consideration:

• The MS ACCESS-based data entry program is a WINDOWS application, whereas thedBase-based program runs under MS DOS.

• Your PC must be equipped with MS ACCESS 2.0 in order to run the MS ACCESS-baseddata entry program.

• When using dBase-based data entry, the master data maintenance in the Consolidationsystem is limited in regards to the assignment of keys for companies and financialstatement items.

• MS ACCESS-based data entry has the following advantages:

− An interface to MS EXCEL exists, which can be used to (a) automatically import datafrom MS EXCEL into the data entry program and (b) transfer the data from the dataentry program into MS EXCEL for editing and reporting purposes.

− As of Release 3.0D the MS ACCESS-based data entry includes user-definedadditional fields for Consolidation.

− MS ACCESS-based data entry provides remote reporting capability.


Data Entry with MS Access

December 1999 77

Data Entry with MS AccessDefinitionOne option for locally entering individual financial statement data is to use a PC data entryprogram with MS Access 2.0. Data for the subsidiary can be entered locally on a PC andimported into the R/3 Consolidation system after validation.

This component allows you to define the relevant data entry forms and validations in theConsolidation system, and to assign them to companies whose data will be entered

Selection criteriaThe following technical requirements must be fulfilled by the company entering data:

• As hardware, a 486 processor with 8 MB of main memory is a minimum.

• The following software must be installed:

− MS Windows or MS Windows NT

− MS Access 2.0

− MS Excel 5.0 (if the interface is used)

If the group headquarters uses MS Access 2.0 with a runtime version then it may not benecessary to install MS Access 2.0 in all the reporting companies.


Data Entry with dBase

78 December 1999

Data Entry with dBaseDefinitionOne option for locally entering individual financial statement data is to use a PC data entryprogram with dBase. Data for the subsidiary can be entered locally on a PC and imported intothe R/3 Consolidation system after validation.

This component allows you to define the relevant data entry forms and validations in theConsolidation system, and to assign them to companies whose data will be entered decentrallyusing dBase.

Selection criteriaThe only technical requirements for each company is a PC running under MS-DOS. Theinstallation of the dBase program is not required.


Data Entry on Non-SAP Systems

December 1999 79

Data Entry on Non-SAP SystemsDefinitionA flexible interface, as well as a number of interfaces with pre-defined data formats are availablefor transferring data from non-SAP systems. You would need to use them in the following cases:

• Where consolidation takes place at the parent company using the FI-LC system and thesubsidiaries use other systems. The necessary data sets from the subsidiaries must beimported into the FI-LC system.

• Where old data is to be transferred once only into the FI-LC system from the previouslyused Consolidation system.

This component encompasses the definition of the flexible interface according to the layout of thetransferred data, and the allocation of the interface to the corresponding companies.

Selection criteriaSelect this component for Consolidation if you intend to transfer data from non-SAP systems.


Information System

80 December 1999

Information SystemDefinitionThe Information System within Consolidation allows you to prepare the data in the Consolidationsystem and to generate reports thereon.


Master Data, Financial Data, Control Parameters

December 1999 81

Master Data, Financial Data, Control ParametersDefinitionFor your reference, you can display and print Consolidation-related master data, financialreporting data and control parameters. Numerous print programs are available.

Selection criteriaIt is recommended that this component always be selected for Consolidation.


Journal Entries

82 December 1999

Journal EntriesDefinitionAs part of the creation of consolidated financial statements, value adjustments must be made tothe individual financial statement data using posting documents. Posting documents are createdfor adjustment entries, company-pair elimination entries and subgroup-dependent entries.

You can print journal entry reports to evaluate these entries using sort sequences andsummarizations of your own choice.

The user can interactively modify the layout of the journal entry report. A number of standardsettings are delivered and available. Furthermore, you can define additional reports toaccommodate your specific requirements.



Standard Reports

December 1999 83

Standard ReportsDefinitionBecause of the multitude of variants, one of the most complex tasks in the Consolidation systemis the preparation and presentation of the group and company data. You can generate reportsfor various purposes and audiences.


Totals Reports

84 December 1999

Totals ReportsDefinitionThe reporting functionality of the FI Consolidation application includes the preparation andpresentation of group and company data. You can generate reports with totals record data forvarious purposes and audiences.

Pre-defined totals reports are available. Furthermore, this component enables the user to definecustom reports according to user-specific requirements.

Selection criteriaIt is recommended that this component always be selected for Consolidation so that at least thestandard reports may be used.


Report Writer / Report Painter

December 1999 85

Report Writer / Report PainterDefinitionThe Report Writer and the Report Painter can be used to generate reports with Consolidationdata and data of other SAP applications.

You can create reports that meet the specific requirements for reporting.

The functions of the Report Painter are similar to that of the Report Writer. Most of the ReportWriter functionality has been implemented in the Report Painter. However, in order to operatethe Report Painter, you no longer need to learn the Report Writer concepts, such as sets.

Selection criteriaYou should select this component if you require additional reports that exceed the functionality ofthe totals reports in Consolidation. Both the Report Writer and Report Painter allow you to createany type of report, accessing all of the fields in the database. For instance, you can report ondocument types and additional fields, which is not possible in the totals reports.


Interactive Reports

86 December 1999

Interactive ReportsDefinitionAn screen-based, user-interactive querying program which accesses reporting data. The query'sinitial screen usually accesses global information. From there, the user can interactively requestmore detailed information.

The advantage of interactive group reports, as opposed to printed reports, is that they focus onquerying of information. Conventional lists can be voluminous, and therefore confusing,depending on how detailed the FS chart of accounts is and how company ownership is brokendown.



Interactive Excel

December 1999 87

Interactive ExcelDefinitionIs a part of the integration of the R/3 application Consolidation with Microsoft Office products.Interactive Excel offers you the capability of enhancing your corporate reporting.

Interactive Excel allows you to directly read Consolidation data from the R/3 system while usingMS Excel. You can then use the spreadsheet functions of MS Excel to further process the data.This gives you additional capabilities for calculating, formatting and printing your data. Asopposed to downloading the data and using the XXL list viewer, with Interactive Excel you needto format the reports only once. When Consolidation data changes in the R/3 system, your Exceltables are automatically updated.

Selection criteriaPrerequisites for using Interactive Excel is a PC with MS Excel 5.0 and access to the R/3 system.


Data Forwarding

88 December 1999

Data ForwardingDefinitionYou can create extract files with Consolidation data and forward these to other systems.Particularly, you can forward data to another corporate group as a part of Step Consolidation, orto the Executive Information System, SAP-EIS.


Data Forwarding for Step Consolidation

December 1999 89

Data Forwarding for Step ConsolidationDefinitionIn Step Consolidation, it is necessary to forward the consolidated subgroup data to higher-levelsubgroups. This is accomplished with data extract files.

Selection criteriaSelect this component for Consolidation if you intend to forward the data.


Data Forwarding for EIS

90 December 1999

Data Forwarding for EISDefinitionIn order to supplement the reporting in the application EC (Enterprise Controlling), you cantransfer Consolidation data to the Executive Information System SAP-EIS. The data is thenevaluated using EIS-specific reports.

Selection criteriaSelect this component for Consolidation if you intend to forward the data to SAP-EIS.


Accounts Payable

December 1999 91

Accounts PayableDefinitionSubledger accounting that represents the business transactions with vendors.

Accounts payable accounting records and manages the accounting data for all vendors. It is alsoan integral component of the purchasing system; deliveries and invoices are recorded for eachvendor. The system automatically posts data in response to these operating transactions.Furthermore, the Cash Management component is supplied with values from these invoices inorder to optimize liquidity planning.


Basic Functions

92 December 1999

Basic FunctionsDefinitionThese components enable you to choose the basic functions required for accounts receivableaccounting.


Master Data

December 1999 93

Master DataDefinitionBusiness transactions are posted to accounts and managed using those accounts. You mustcreate a master record for each account that you require. The master record containsinformation controlling how business transactions are entered and processed in an account.


Schedule Manager

94 December 1999





• Monitor [Ext.]

• Worklist [Ext.]


Invoice Parking

December 1999 95

Invoice ParkingDefinitionYou can use invoice parking to enter and store (park) incomplete documents in the SAP systemwithout carrying out extensive entry checks. Parked invoices can be completed, checked andthen posted at a later date - even by a different data entry clerk.

The advantage of parking documents is that you can evaluate the data in the documents onlinefor reporting purposes from the moment they are parked rather than having to wait until theyhave been completed and posted. In this way, for example, you can use amounts from parkedinvoices for the advance return for tax on sales and purchases. Similarly, by using paymentrequests, parked invoices can be paid on time and with full cash discount.

Selection criteriaImplement this component if you want to be able to enter invoices with unresolved accountassignments into the SAP system.

If a special release approval should be made for documents in document parking before they areposted, you will have to define this procedure in the workflow for Financial Accounting. You willthen also have to implement SAP Workflow and the HR organizational elements.


Invoices and Credit Memos

96 December 1999

Invoices and Credit MemosDefinitionAn invoice is a notice sent to the buyer of goods or services that contains the followinginformation:

• the name of the goods or services

• the quantity sent, and

• the remuneration due.

A credit memo is a posting that decreases the balance of receivables or payables withoutpayment for a specific value and reason.


Release for Payment

December 1999 97

Release for PaymentDefinitionIn the “release for payment” component, you can block the payment of line items in a postingdocument long enough to have the items successfully complete a payment release procedureand receive approval for payment.

Selection criteriaTo implement payment release, you must also choose the components for SAP Workflow andthe HR organizational elements. In both components and in Financial Accounting, you will haveto make settings for the payment release procedure.


Manual Payments

98 December 1999

Manual PaymentsDefinitionIn contrast to the payment program, which automatically makes all payments in one payment run,this component enables users to process each payment manually.

Settings must be made for the tolerance groups and for open item processing.


Down Payments

December 1999 99

Down PaymentsDefinitionPayment for goods or services not yet produced or rendered. Down payments are shownseparately from other receivables and payables on the balance sheet. A distinction is madebetween down payments made (displayed under fixed and current assets) and down paymentsreceived (displayed under payables).

In the FI system, you post down payments as special G/L transactions. When you post a downpayment to a customer account, the system posts the down payment to a reconciliation accountother than the standard reconciliation account.


Bills of Exchange

100 December 1999

Bills of ExchangeDefinitionPromise to pay in the form of an abstract payment paper.

Bills of exchange are treated as special G/L transactions in the FI System. They are managed inthe subledger separately from other transactions and are posted automatically to specialreconciliation accounts in the general ledger. As a result, you can display an overview of billreceivables and bill payables at any time. Generally speaking, you do not need to transfer anyspecial G/L postings when you prepare the balance sheet.

The following bill of exchange types can be posted in the FI System:

• bills of exchange receivable

• bills of exchange payable

• incoming and outgoing checks/bills of exchange

Selection criteriaThis component allows you to, for example,

• keep an automatic bill of exchange list

• generate a bill of exchange charges statement for the customer automatically, and

• use automatic form printing for discounting bills of exchange.

You should only select this component if you have to process more than five incoming bills ofexchange per month.


Payment Transactions

December 1999 101

Payment TransactionsDefinitionThe processing of outgoing and incoming payments of an organization.

In this section, you choose the functions for the automatic payment program. The paymentprogram is designed so that both outgoing and incoming payments can be processed. Thesefunctions are supported in the same way for both vendors and customers. All the usual paymentmethods are set up in the standard system or can be set up within customizing.


Dunning

102 December 1999

DunningDefinitionA defined procedure specifying how customers or vendors are dunned. The number of dunninglevels, the dunning frequency and the text for the dunning notices are specified for eachprocedure.

Dunning is carried out automatically using the dunning program. The program determines theaccounts and items to be dunned, the dunning level of the account, and the dunning noticebased on the dunning level. You print the dunning notices using the print program. The dunningdata determined is saved in the items and in the accounts.


Open Item Management

December 1999 103

Open Item ManagementDefinitionSelecting and activating open items are a part of processing open items. This is the last stepmade before a clearing document is posted. When clearing documents are posted, the systemchecks the tolerances set up for acceptable payment differences. Depending on theconfiguration of your system, it will post minor differences between the debit and credit items toan account for unearned deductions.


Correspondence

104 December 1999

CorrespondenceDefinitionA company’s printed correspondence with vendors.

It includes all evaluations that are sent to vendors by post.

• balance confirmations

• account statements and open item lists in letter format

• individual and form letters

• documents

• internal evaluations



December 1999 105

Interest CalculationDefinitionInterest on accounts payable can be determined by either calculating interest on the balance orcalculating interest on the arrears.

Interest calculation is controlled by the following specifications:

• Data entered in the master record of the account, such as the interest indicator to beused and information for determining the calculation period for the account.

• Settings made under the interest indicator, for example, interest rates.

• Options set at the time of interest calculation, including selection criteria, for example,which limit the number of accounts included in the interest calculation.


Closing Operations

106 December 1999

Closing OperationsDefinitionPreparation and execution of all procedures that are necessary for:

• day-end closing

• month-end closing

• year-end closing


Special Functions

December 1999 107

Special FunctionsDefinitionThe following special functions are also available in accounts payable accounting.

• External documents

• EDI

Selection criteriaYou need these components if you want to use either external documents or EDI.


External documents

108 December 1999

External documentsDefinitionThis process allows accounting departments to enter and process documents for an externalSAP installation, and to store them in an operating system file. This file is then transported toexternal systems (via E-mail or diskette) where it is imported to the appropriate database.

After processing and viewing a document, it can be selected and posted in an external systemusing a batch input session.

Selection criteriaYou only need these components if you exchange documents with external SAP systems andpost using batch input.


EDI

December 1999 109

EDIDefinitionIn EDI, users can transmit standardized data electronically and further process it automatically.

Selection criteriaTo use this component, you have to select the SAP EDI component. You need this componentonly if you want to interchange data with other systems via EDI and have it automaticallyprocessed in your system.


Information System

110 December 1999

Information SystemDefinitionWith the accounts payable information system, you can perform analyses on specific businessaspects at any time and as often as you require. These analyses include, among other things,evaluations of the currency exposure with vendors or the maturity structure with vendors.

Selection criteriaSelect this component if you require other evaluations for the decision-making process, inaddition to the standard, legally required evaluations for accounts payable.


Accounts Receivable

December 1999 111

Accounts ReceivableDefinitionSubledger accounting that represents the business transactions with customers.

All postings in Accounts Receivable are also recorded directly in the General Ledger. Thesystem will post to different G/L accounts depending on the transaction involved (for example,receivables, down payments, bills of exchange). The system provides a range of tools which youcan use to monitor open items; for example, account analyses, alarm reports, due date lists anda flexible dunning program. The printed material linked to these components can be individuallyformulated by you to suit your requirements. This includes payment notices, balanceconfirmations, account statements and interest settlements.


Basic Functions

112 December 1999

Basic FunctionsDefinitionFunctions for processing manual payments, for tolerance groups and for open item processing.


Master Data

December 1999 113

Master DataDefinitionAll business transactions are posted to accounts and are managed using those accounts. Youmust create a master record for each account that you require. The master record informationcontrols how business transactions are entered and processed in an account.


Schedule Manager

114 December 1999





• Monitor [Ext.]

• Worklist [Ext.]


Invoices and Credit Memos

December 1999 115

Invoices and Credit MemosDefinitionAn invoice is a notice sent to the buyer of goods or services that contains the followinginformation:

• the name of the goods or services

• the quantity sent, and

• the remuneration due.

A credit memo is a posting that decreases the balance of receivables or payables withoutpayment for a specific value and reason.


Manual Payments

116 December 1999

Manual PaymentsDefinitionIn contrast to the payment program, which automatically makes all payments in one payment run,this component enables users to process each payment manually.


Basic Functions

December 1999 117

Basic FunctionsDefinitionThis “Basic Functions” component enables the user to select the main functions for working withspecial purpose ledgers.

Selection criteriaYou must select this component in order to define the basic FI-SL data structures and to work inthe Special Purpose Ledger system.


Payment Advice Notes (Incoming)

118 December 1999

Payment Advice Notes (Incoming)DefinitionPayment advice notes provide the payee with information on the current open items and on anychanges made to them. The standard system offers the following types of payment advice notes:

• payment advice from the lockbox

• payment advice from the bank statement

• payment advice that is created during a manual clearing procedure

• payment advice that is manually entered

• payment advice from a self-billing document

• payment advice from the customer (EDI)

These payment advice notes are fixed in the system. That is, you are not able to add other typesof payment advice notes.


Down Payments

December 1999 119

Down PaymentsDefinitionPayment for goods/services not yet produced. Down payments are shown separately from otherreceivables and payables on the balance sheet. A distinction is made between down paymentsmade (displayed under fixed and current assets) and down payments received (displayed underpayables).

You must report vendor down payments separately on the balance sheet as an asset. In the FIsystem, you post down payments as special G/L transactions. When you post a down payment toa vendor account, the system posts the down payment to a reconciliation account other than thestandard reconciliation account.


Bill of Exchange

120 December 1999

Bill of ExchangeDefinitionPromise to pay in the form of an abstract payment paper.

Bills of exchange are treated as special G/L transactions in the FI System. They are managed inthe subledger separately from other transactions and are posted automatically to specialreconciliation accounts in the general ledger. As a result, you can display an overview of billreceivables and bill payables at any time. Generally speaking, you do not need to transfer anyspecial G/L postings when you prepare the balance sheet.

The following bill of exchange types can be posted in the FI System:

• bills of exchange receivable

• bills of exchange payable

• incoming and outgoing checks/bills of exchange


Payment Transactions

December 1999 121

Payment TransactionsDefinitionThe processing of the outgoing and incoming payments of an organization.

In this section, you choose the functions for the automatic payment program. The paymentprogram is designed so that both outgoing and incoming payments can be processed. Thesefunctions are supported in the same way for both vendors and customers. All the usual paymentmethods are set up in the standard system or can be set up within customizing.


Dunning

122 December 1999

DunningDefinitionA defined procedure specifying how customers or vendors are dunned. The number of dunninglevels, the dunning frequency and the text for the dunning notices are specified for eachprocedure.

Dunning is carried out automatically using the dunning program. The program determines thesubledger accounts and open items to be dunned, the dunning level of the account, and theappropriate dunning notice based on the dunning level. You print the dunning notices using theprint program. The dunning data determined by the program is saved in the items and accounts.


Open Item Management

December 1999 123

Open Item ManagementDefinitionSelecting and activating open items are a necessary part of processing open items. This is thelast step made before a clearing document is posted. When clearing documents are posted, thesystem checks the tolerances set up for acceptable payment differences. Depending on theconfiguration of your system, it will post minor differences between the debit and credit items toan account for unearned deductions.


Correspondence

124 December 1999

CorrespondenceDefinitionA company’s printed correspondence with customers.

It includes all evaluations that are sent to customers by post.

• payment confirmations

• account statements and open item lists in letter format

• individual and form letters

• balance confirmations

• documents

• settlements of fees for bills of exchange



December 1999 125

Interest CalculationDefinitionYou can calculate interest for G/L accounts managed with line item display using the accountbalance interest calculation procedure. This procedure can be used, for example, if you want toretroactively post an interest settlement from the bank into the accounting system.

When calculating interest for G/L accounts, a sorted list is created. The interest calculation runcan also be logged.

The following specifications control interest calculation:

• Data from the account master records. This includes, for example, the interest indicatorto be used, and data for determining account-specific interest calculation periods.

• Definitions made in regard to the interest indicator to be used including such specs asinterest rates.

• Specifications made for interest calculation. These include the fact that account balanceas well as item interest calculation are possible.


Closing Operations

126 December 1999

Closing OperationsDefinitionThe preparation and execution of all procedures required in conjunction with the individualfinancial closing process. These will affect the:

• day-end closing,

• month-end closing and

• year-end closing.


Special Functions

December 1999 127

Special FunctionsDefinitionThe following special functions are also available in accounts receivable accounting.

• External documents

• Invoice parking

Selection criteriaYou need these components if you want to use either external documents or invoice parking.


External Documents

128 December 1999

External DocumentsDefinitionThis procedure enables the accounting department to create documents for an external SAPinstallation, to process these documents further, and to store them in an operating system file.This file is transported to the external system via e-mail or disk, where it is imported into theproper database.

After examining and, if necessary, further processing these documents, users can select themand then post them using an internal batch input mode in the external system.

Selection criteriaYou only need this component if you interchange documents with external SAP installations andpost them via batch input.


Preliminary Postings

December 1999 129

Preliminary Postings


Credit Management

130 December 1999

Credit ManagementDefinitionWith the FI system you can set a credit limit for each customer. This limit is checked in theaccounting and sales departments every time a posting is made to that customer account. If theamount being posted exceeds this limit, the system issues a warning. You can obtain informationon the customer's credit control limit etc. at any time by using the evaluations in the system.

You can set credit limits for a customer in either a single credit control area or in several. A creditcontrol area consists of one or more company codes.

When you post a customer invoice with the FI Financial Accounting application, the systemincreases the following amounts (depending on the business transaction involved): the overallreceivables, receivables from sales and the special G/L transactions total. When you clear aninvoice item (after the incoming payment has been made), the system reduces the above figuresby the same amount.

Selection criteriaYou must select this component if you want to have the system check the credit limit for youcustomers. To use this component in Sales as well, you also have to select the creditmanagement component in that area. To make multiple credit limit checks, you must select theSAP Workflow component.


Information System

December 1999 131

Information SystemDefinitionWith the accounts receivable information system, you can perform analyses on specific businessaspects at any time and as often as you require. These analyses include, among other things,evaluations of the customer payment history or cash discount history.

Selection criteriaSelect this component if you want to use other evaluations for the decision-making processbesides the standard, legally required evaluations for accounts receivable.


Asset Accounting

132 December 1999

Asset AccountingDefinitionThe “Asset Accounting” component makes it possible to

• manage and update values for all fixed assets, and to

• monitor the accounting procedures affecting fixed assets

The “Treasury” component is available for financial assets.

Selection criteriaChoose this component, if you want detailed management of your fixed assets in a separatesubsidiary ledger.


Basic Functions

December 1999 133

Basic FunctionsDefinitionThese components enable you to choose the basic functions required for accounts payableaccounting.


Asset Maintenance

134 December 1999

Asset MaintenanceDefinitionThe component “asset maintenance” enables you to enter the master data for your fixed assetsin the form of individual assets. An asset, as defined here, is a part of the asset portfolio of theenterprise and can be identified at a closing key date as an individual economic good in the long-term service of the enterprise.

Selection criteriaThis component is an integral part of the component “Asset Accounting.”


Basic Valuation Functions

December 1999 135

Basic Valuation FunctionsDefinitionThe component “basic valuation functions” provides the functionality for determining the value ofall fixed assets at a given point in time according to legal regulations, and in addition, based onrules you define yourself.



Depreciation Areas

136 December 1999

Depreciation AreasDefinitionThe component “depreciation areas” makes it possible to calculate parallel values for an asset fordifferent purposes (for example, book depreciation, cost accounting depreciation, and so on).You can manage all necessary depreciation terms and values for each asset at the level of thedepreciation area. Since the system allows you to define an almost unlimited number ofdepreciation areas, the number of parallel valuations is also unlimited. You can post the assetbalance sheet values and the depreciation values of the individual depreciation areas to theirown accounts in Financial Accounting.

Selection criteriaThis component is an integral part of the component “Asset Accounting,” since at least onedepreciation area is required for legally stipulated depreciation.


Derived Depreciation Areas

December 1999 137

Derived Depreciation AreasDefinitionThe component “derived depreciation areas” provides for the valuation of fixed assets on thebasis of relationships between existing values established by mathematical formulas (such as,the difference between two areas). The system manages the values calculated in this way in aderived depreciation area.

Derived depreciation areas are treated the same as “real” areas in reports and in their value fielddisplay. You can also post the values of derived depreciation areas to Financial Accounting.

Selection criteriaChoose this component, if you need derived depreciation areas for evaluations or for the balancesheet. You can use derived depreciation areas, for example, for

• special reserves as the difference between book depreciation and tax depreciation

• the difference between different types of tax depreciation


Calculation of Interest

138 December 1999

Calculation of InterestDefinitionUsing the component “calculation of interest,” you can calculate the imputed interest on eachfixed asset, showing the interest lost on capital tied up in assets.

Selection criteriaChoose this component if you post imputed interest, and may also want account assignment ofthis interest to cost centers.


Period Control

December 1999 139

Period ControlDefinitionUsing the component “period control” the system determines the start of depreciation calculationwhen an asset is acquired, or the end of depreciation when the asset is being retired.

Particularly for acquisitions, there are specific regulations in many countries regarding thedetermination of the date when depreciation becomes effective (asset value date) based on theacquisition or retirement posting. SAP provides the most common rules, such as pro rata or thefirst year convention. You can define your own user-specific rules.



Group Assets

140 December 1999

Group AssetsDefinitionThe component “group assets” makes it possible to group together a number of fixed assets in adepreciation area for the purpose of common, summarized calculation of depreciation.

Selection criteriaIt may be useful to calculate depreciation at the group asset level for a number of assets for thefollowing reasons:

• In order to follow tax regulations (such as ADR in the US), depreciation has to becalculated at a level higher than that of the fixed asset (such as, all assets in a class andvintage year).

• From a Controlling perspective, it is sometimes useful to use a group of related assets(such as a production line) for cost accounting analysis, rather than the individual assetused for bookkeeping.


Valuation Methods

December 1999 141

Valuation MethodsDefinitionThe component “valuation methods” allows you to define your own methods for calculating assetvalues. These methods are not hard-coded in the system. Instead they are based on a flexiblesystem of keys. In this way, it is possible to represent your own depreciation needs usingappropriately defined calculation keys and control parameters.

The calculation keys and parameters for the most common depreciation methods are pre-definedin the system.



Fiscal Year Specifications

142 December 1999

Fiscal Year SpecificationsDefinitionThe component “fiscal year specifications” makes it possible to define the FI fiscal year withdifferent periods for calculating depreciation in Asset Accounting.

Selection criteriaChoose this component

• when you do not want your depreciation periods to be identical with the posting periodsin the general ledger

• when you are using or have used a shortened fiscal year

• when you work with half periods, or

• when depreciation posting should not be distributed evenly to the periods in the fiscalyear (but instead according to the 4-4-5 rule, for example)


Alternative Fiscal Year Variants

December 1999 143

Alternative Fiscal Year VariantsDefinitionUsing the component “alternative fiscal year variants,” it is possible to use a fiscal year version inAsset Accounting that is different from Financial Accounting. However, it is still essential that thestart and end date of the fiscal year versions are the same in the FI general ledger and in the FI-AA subsidiary ledger.

Selection criteriaA different fiscal year version may be necessary, primarily for the exact determination of thedepreciation start and end using the period controls of Asset Accounting. The reason is thatdepreciation calculation only works with full periods. For example, you want to calculate a halfyear’s depreciation for acquisitions after June 30, and the FI general ledger uses 13 ordinaryperiods. Then depreciation would have to be calculated for 6.5 periods. However, this type ofperiod definition is not possible in the period control of Asset Accounting. Therefore, you need touse a different fiscal year version in Asset Accounting, with 12 normal periods instead of the 13 inFI.


Shortened Fiscal Year

144 December 1999

Shortened Fiscal YearDefinitionThe component “shortened fiscal year” enables you to reflect shortened fiscal years, and thesubsequently changed depreciation, in Asset Accounting. A shortened fiscal year results whenthe end of the previous fiscal year is changed. The shortened fiscal year covers the time periodbetween the end of the last fiscal year according to the old format, and the beginning of the firstfiscal year according to the new format.

You can specify in which areas depreciation should be proportionally reduced for the shortenedfiscal year.

Selection criteriaChoose this component if you are currently using a shortened fiscal year; or if you used ashortened fiscal year in the past, and want the R/3 System to re-determine depreciation inconjunction with the takeover of data from your previous system.


Half Months

December 1999 145

Half MonthsDefinitionUsing the component “half-months,” you can double the number of periods for Asset Accounting,if the basic number of depreciation periods is 12. When you enter the calendar date on which thesecond half of the period begins (such as the 16th of the month), depreciation calculation canbegin and end in the middle of a period.

Selection criteriaChoose this component if you want to use half-periods in Asset Accounting.


Period Weighting (4-4-5 Rule)

146 December 1999

Period Weighting (4-4-5 Rule)Definition“Period weighting” enables you to enter a relative weight for the periods in a fiscal year version.You can then distribute the planned annual depreciation in different amounts to the individualposting periods. It is possible to distribute depreciation, for example, according to the number ofdays or weeks per period (for the 4-4-5 rule).

Selection criteriaChoose this component if you do not want to post planned annual depreciation equally to theindividual periods in your fiscal year.


Depreciation

December 1999 147

DepreciationDefinitionThe component “depreciation” allows you to manage the following types of depreciation in thesystem:

• ordinary depreciation

• special depreciation

• unplanned depreciation

• transfer of reserves/reductions to APC


Ordinary Depreciation

148 December 1999

Ordinary DepreciationDefinitionThe component “ordinary depreciation” makes possible the planned depreciation of your fixedassets using defined depreciation methods.

Selection criteriaChoose this component if you want to manage ordinary depreciation in your system.


Special Depreciation

December 1999 149

Special DepreciationDefinitionThe component “Special depreciation” enables you to use depreciation based on tax regulationsin addition to ordinary depreciation.

In general, this form of depreciation allows you to depreciate a percentage of the APC within atax concession period, without considering the actual wear and tear on the fixed asset. Taxdepreciation generally exceeds the usual book depreciation.

Selection criteriaChoose this component if you want to manage special depreciation in your system.


Unplanned Depreciation

150 December 1999

Unplanned DepreciationDefinitionThe component “unplanned depreciation” enables you to make an unplanned value adjustmentbased on a foreseeable permanent reduction in the value of an asset.

Ordinary depreciation reflects wear and tear due to the normal use of the asset. Unusualcircumstances, such as damage causing a permanent reduction in value, are reflected usingmanual, unplanned depreciation.

Selection criteriaChoose this component if you want to manage unplanned depreciation in your system.


Transferred Reserves

December 1999 151

Transferred ReservesDefinitionThe component “transferred reserves” allows you to transfer undisclosed reserves, whichresulted from gain on the sale of assets, to replacement assets. The gain on the sales reducesthe depreciation base of the newly acquired asset, or is shown as a special depreciation reserveon the liabilities side.

Selection criteriaChoose this component if you want to manage transferred reserves in your system.


Manual Depreciation

152 December 1999

Manual DepreciationDefinitionThis component enables you to manually forecast ordinary and special depreciation, in case it isnecessary to enter separate depreciation amounts. This component enhances the functions ofthe component for “unplanned depreciation.” It provides for making manual value corrections forthe otherwise automatically calculated depreciation types “ordinary depreciation” and “specialdepreciation.”

Selection criteriaChoose this component if you want to use manual depreciation in your system.


Unit-of-Production Depreciation

December 1999 153

Unit-of-Production DepreciationDefinitionThe component “unit-of-production depreciation” allows you to calculate depreciation based onunits of production. For unit-of-production depreciation, monthly depreciation amounts arecalculated from the ratio of the actual number of units produced in the period to the total numberof units for the asset. This depreciation method takes operating variations account.

Selection criteriaChoose this component if you want to manage unit-of-production depreciation in your system.


Transactions

154 December 1999

TransactionsDefinitionThe component “Transactions” allows you to carry out posting transactions during the life of afixed asset in an enterprise.


Acquisitions

December 1999 155

AcquisitionsDefinitionThe component “acquisitions” makes it possible to

• post acquisitions from suppliers while updating the appropriate general ledger accounts,integrated with the vendor posting

• post acquisitions from suppliers in conjunction with the ordering process in “MaterialsManagement”

• capitalize your in-house production costs

• carry out a check for the maximum amount for low value assets during the acquisitionposting



Down Payments

156 December 1999

Down PaymentsDefinitionThe component “down payments” allows you to capitalize down payments made to assets underconstruction, and to clear them with the closing invoice.

Selection criteriaChoose this component if you want to manage assets and down payments made for them inAsset Accounting.


Retirements

December 1999 157

RetirementsDefinitionThe component “retirements” enables you to

• post the sale and scrapping of assets, while updating the general ledger accounts.Posting of asset sales can be integrated with the customer posting

• carry out mass retirements

• specify the treatment of gain/loss from asset sales according to given bookkeepingmethods



Transfer Postings

158 December 1999

Transfer PostingsDefinitionThe component “transfers” allows for gross transfer (with historical APC and value adjustments)of the values of existing assets to other assets. These transfers can be within a company code,as well as across company codes.



Settlement of Line Items for AUC

December 1999 159

Settlement of Line Items for AUCDefinitionUsing the component “line item settlement of asset under construction” you can collect costs onan asset under construction and settle each line item to different receivers. You can collect costson an asset under construction as a technical measure, without considering the later creation ofassets. The individual acquisitions can be managed as open items over the course of severalfiscal years. They can be settled to various receivers when the asset under construction iscompleted.

Selection criteriaChoose this component if you want your assets under construction to be managed as collectiveassets with open item management.


Manual Value Adjustment

160 December 1999

Manual Value AdjustmentDefinitionThe component “manual value corrections” enables you to post write-ups and post-capitalization.You can post gross post-capitalization to a separate master record with a separate depreciationstart date.



Posting Depreciation to the General Ledger

December 1999 161

Posting Depreciation to the General LedgerDefinitionThe component “posting depreciation to the general ledger” makes it possible to postdepreciation amounts calculated in Asset Accounting to the corresponding balance sheetaccounts and profit and loss accounts in Financial Accounting.



Validations

162 December 1999

ValidationsDefinitionUsing the component “validation” you can create your own checks for asset posting, in addition tothe standard checks. When you enter a validation rule, it consists primarily of the following parts:

• condition, which determines when the check should be carried out (for example, if theasset class is for low value assets)

• validation rule, which cannot be violated (for example, the depreciation key must beGWG1 or GWG2)

• number of the error message, which should be output if the validation rule is violated

Selection criteriaChoose this component if you want to define additional checks for posting of given businesstransactions.


Closing Operations

December 1999 163

Closing OperationsDefinitionThe component “closing operations” allows you to

• carry out a fiscal year change at the start of a new fiscal year. This opens the new yearfor asset posting.

• close the old fiscal year and block it to further posting



Specific Valuations

164 December 1999

Specific ValuationsDefinitionThe component “special valuations” allows you to calculate asset values for special purposes(such as, insurance contracts).


Reserve for Special Depreciation

December 1999 165

Reserve for Special DepreciationDefinitionThe component “special reserves for special depreciation” enables you to identify the differencebetween valuation for tax depreciation and book depreciation in a derived depreciation area. Youcan use the values from this derived depreciation area to create a special reserve for the balancesheet.


• if you have special tax depreciation and

• you want to show book depreciation on the assets side of the balance sheet, whileshowing special tax depreciation as special reserves on the liabilities side of the balancesheet (or in an appendix to the balance sheet)


Indexed Replacement Values

166 December 1999

Indexed Replacement ValuesDefinitionThe component “indexed replacement values” enables you to calculate replacement values for allfixed assets, and to depreciate them based on these replacement values. The replacementvalues are determined using index series.

Selection criteriaChoose this component if

• you want to use depreciation from the replacement value in your cost accounting (forexample, as a basis for calculating prices)

• you want to determine or post the revaluation of assets resulting from the indexing


Handling of Inflation

December 1999 167

Handling of InflationDefinitionThe component “handling of inflation” makes it possible to carry out upward revaluation for thebalance sheet. This procedure reflects regulations in certain countries which require one-timerevaluation of all fixed assets in order to compensate for inflation.

Selection criteriaChoose this component if the tax laws in your country require you to revalue all assets at givenintervals.


Investment Support

168 December 1999

Investment SupportDefinitionThe component “investment support” is concerned with the handling of government subsidies forparticular fixed asset investments. The subsidy can be treated as a reduction of the acquisitionvalue of the asset, or as a value adjustment on the liabilities side. You can show the amount ofthe support separately from the actual acquisition and production costs of the asset.


• you receive investment subsidies and

• you do not have to treat the subsidies as revenue. Investment support measures thatare relevant to revenue can be handled directly in the general ledger. They do not haveto shown in Asset Accounting.


Net Worth Tax

December 1999 169

Net Worth TaxDefinitionThe component “net worth tax” makes it possible to calculate asset values in relation to net worthtax requirements. These values can be used when determining the amount of net worth tax.

Selection criteriaChoose this component if you are required to report net worth tax in your country, and thisrequires a separate depreciation area.


Insurance

170 December 1999

InsuranceDefinitionThe “insurance” component allows you to manage insurance master data and insurance values.You can manage the current insurance values in the asset master record, or in a separatedepreciation area. You can also increase or decrease the insurable value using index series.

Selection criteriaChoose this component if you need separate valuation of assets for insurance in a separatedepreciation area.


Leasing Processing

December 1999 171

Leasing ProcessingDefinitionThe “leasing processing” component is for capitalizing leased assets using the capital leaseprocedure. The system uses the present value of future lease payments as the acquisition value.


• if you have leased assets, and

• you have to capitalize these assets due to tax regulations in your country


Group Requirements

172 December 1999

Group RequirementsDefinitionThe component “preparations for consolidation” is for preparing for legal consolidation of assetson the basis of Asset Accounting data.


• if your firm belongs to a corporate group required to carry out legal consolidation, and

• the corporate group requires data prepared in Asset Accounting for this consolidation


Historical Group Currency

December 1999 173

Historical Group CurrencyDefinitionThe component “historical group currency” makes it possible to manage depreciation in anycurrency (such as, group currency) in Asset Accounting. These currencies may be needed forconsolidation or reporting requirements. In this way, you can have decentralized, historicalcurrency conversion.

Selection criteriaChoose this component if you want to manage values in Asset Accounting in foreign currencies,using historical rates of exchange.


Group Valuation

174 December 1999

Group ValuationDefinitionThe “parallel group valuation” component makes it possible not only to determine amounts inforeign currencies for group consolidation, but also to use bases for valuation (APC/depreciationterms) that are different from the local valuation.


• you have to provide Asset Accounting data for group consolidation, and

• your local requirements for valuation differ from those of the corporate group


Intercompany Profit / Loss due to Asset Transfer

December 1999 175

Intercompany Profit / Loss due to Asset TransferDefinitionThe “intercompany profit/loss due to asset transfer” component allows you to represent assettransfers (between subgroups) from the point of view of the corporate group. For this purpose, itis possible to

• represent the business transaction from the viewpoint of the subgroups as an acquisitionor retirement, but as a transfer from the viewpoint of the corporate group

• eliminate the gain/loss on the part of the selling subgroup from the viewpoint of thecorporate group


• if you have to provide data from Asset Accounting for the group consolidation

• you need to record asset transfers between subgroups


Information System

176 December 1999

Information SystemDefinitionThe component “Information system” contains a series of standard reports, along with functionsfor modifying the Asset Accounting information system to your individual requirements.


Standard Reports

December 1999 177

Standard ReportsDefinitionThe “standard reports” component contains a series of standard reports on fixed assets, whichcan be adapted to your individual needs.



Individual Report Selection

178 December 1999

Individual Report SelectionDefinitionThe component “user-specific report selection” is for representing the information system ofAsset Accounting in the form of the report selection tree. The report selection tree is a freely-definable hierarchical structure. The nodes of this tree are used to call up reports. Each usercan create his own user-specific report tree, containing only those reports the user can execute.



Report Links

December 1999 179

Report LinksDefinitionThe component “report links” makes it possible to jump to a different report from a report you arein. The system starts the second report using the same selection options used in the initialreport. When you started the second report on a totals line, you can break down the total in thenewly displayed report. For example, you can create the individual transaction list for an item inthe asset history sheet.

Selection criteriaChoose this component if you want to change the standard reports. This is particularly importantif you want integrate your own reports in the report links in the Asset Accounting informationsystem.


Individual Asset History Sheet Versions

180 December 1999

Individual Asset History Sheet VersionsDefinitionThe “user-specific asset history sheet version” allows you to freely define the lines and columnsof any number of asset history sheet versions. In addition, you can determine which assettransactions are shown in which asset history sheet items.



Conversion Methods for the Info System

December 1999 181

Conversion Methods for the Info SystemDefinition“Conversion methods for the Info system” make it possible to show asset values in standardreports in any foreign currency. The conversion takes place using a conversion method that canbe defined. The most important parameter in this calculation method is the point in time (forexample, the capitalization date or key date), which is used for determining the currencyexchange rate.


• you want to create asset reports in a foreign currency, and

• there is no depreciation area available for this purpose


FI - Special Purpose Ledger

182 December 1999

FI - Special Purpose LedgerPurposeIn the application component Special Purpose Ledger, you can define ledgers for reportingpurposes. You can keep these user-defined ledgers as general ledgers or subsidiary ledgers withvarious account assignment objects. Account assignment objects can either be SAP dimensionsfrom various applications (such as account, cost center, business area, profit center) orcustomer-defined dimensions (such as region).

The Special Purpose Ledger allows you to report at various levels using the values from thevarious application components. The modules in the Special Purpose Ledger allow you to collectinformation, combine information, and create totals. You can also modify, assess, and distributeactual and plan values that are transferred from other SAP applications or external systems tothe Special Purpose Ledger.

The use of the Special Purpose Ledger has no effect on the actual functions of other SAPapplications.

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Information system(Report Painter / Report Writer)

FeaturesThe use of the Special Purpose Ledger offers the following advantages:

• Flexible database structures with additional fieldsYou can create your own database tables and define non-standard dimensions (such asvaluation area) that meet your business needs. With this you are able to combine andtotal information for each account assignment combination at the desired level of detail.

• Selective data retrieval


FI - Special Purpose Ledger

December 1999 183

Data flow is flexible in the Special Purpose Ledger. With the assignment of transactionsto specific company code/ledger company/ledger combinations, you decide whichledgers are to be updated by the data created. You can further limit the number ofledgers that are updated by entering ledger selection criteria.

• Correction postingsIn the Special Purpose Ledger you can make adjustment and correction postings. Youare able, for example, to post data to various versions. Correction postings, for example,are useful for valuating currencies.

• Alternative charts of accountsYou can use various charts of accounts in the Special Purpose Ledger (operating, group,and country-specific charts of accounts).

• Alternative fiscal year with various fiscal year variantsIn the Special Purpose Ledger, you can define your own posting periods. Accountingperiod definitions determine the fiscal calendar, which defines the fiscal year and theposting periods within the fiscal year.

If you define your own posting periods, you could then create weekly or monthly reports.

• Specific modifications for data creationIf you want to ensure that only valid data is received by the Special Purpose Ledger, youcan use validations and substitutions to check and substitute data at the time it isentered.

• Totaled line items from other applicationsWith the broad function palette of the Special Purpose Ledger, you can total, modify,asses, or distribute actual and plan data from SAP and external applications.

• SAP reportingWith the Special Purpose Ledger, you can evaluate data from various SAP applicationsand organizational units and report on this information.

ConstraintsThe Special Purpose Ledger (FI-SL) is a receiver system to which data created in other SAPapplications is sent. It is not a sender system for other SAP applications.


Master Data

184 December 1999

Master DataDefinitionThe following master data is used in the Special Purpose Ledger system:

• Tables

• Ledgers

• Customer-defined characteristics

• Sets

• Integrated master data

Selection criteriaYou must select this component in order to work with the Special Purpose Ledger system, sincethe basic FI-SL data structures are created here. Before you set up your FI-SL system anddefine your master data, you must determine which reports you want to create using the FI-SLsystem. It is very important that you take the time to thoroughly plan the data structures yourequire. A carefully planned design leads to efficient running of your productive system andimproves system performance.

In general, it makes sense to select this component only in combination with the components“Table Definition and Installation” and “Integration Interface”.


Tables

December 1999 185

TablesDefinitionStructures for arranging data in table form. The Special Purpose Ledger system uses thefollowing types of database tables:

Object tables (for account assignment characteristics and transaction attributes)

Object tables enable the user to create tables with more than 16 user-defined dimensions.

In the object table for account assignment characteristics, the variable dimensions can be usedas object dimensions (receiver) and/or partner dimensions (sender).

Summary tablesThe business transactions entered in the FI-SL system are updated as totals in the summarytables.

Actual and plan line item tablesThe document lines of the business transactions entered in the FI-SL system and the planningchanges made are stored as line items in the actual and plan line item tables.

Selection criteriaYou must select this component to define your own data structures that form the basis forworking with the FI-SL system. At this level, you determine how and to what extent the data yourequire is to be accumulated and output.


Ledger

186 December 1999

LedgerDefinitionA ledger is based on any combination of the elements in the coding block. Totals as well asother figures are stored in a ledger for reporting purposes. Special purpose ledgers are definedaccording to specific business and organizational requirements. They contain the dimensionsspecified by the user.

When creating a special purpose ledger, the following criteria may be used:

• Time (years, quarters, months, weeks, days)

• Dimensions or combinations of dimensions

• Control parameters (local ledger, global ledger)

• Currency (transactions currency, second currency, third currency)

• Quantities and/or additional quantities

Via integration interfaces, all special purpose ledgers can use functions such as planning,allocation, rollups, currency translation, balance carry forward and data transfer, in addition to theactivity-oriented validation, derivation, and accumulation of data. Data can be posted to specialpurpose ledgers from other SAP applications, external systems as well as by direct entry into theSpecial Purpose Ledger system.

Selection criteriaYou have to select this component if you have created and installed your FI-SL database tablesand you want to define your special purpose ledgers. Each FI-SL database table is divided intoindividual logical units (special purpose ledgers).


Code Combinations

December 1999 187

Code Combinations


Sets

188 December 1999

SetsDefinitionStructure in which specific values or value intervals are summarized under a set ID. Thesevalues refer to one or more dimensions in a database table. A dimension represents a specificcriterion in a business process. Sets are used throughout the entire Special Purpose Ledger (FI-SL) system.

Selection criteriaYou have to select this component if you want to work with the following modules in the SpecialPurpose Ledger system:

• Planning

• Allocation (assessment/distribution)

• Rollups

• Currency translation

• Reporting

• Boolean logic rules


Integrated Master Data

December 1999 189

Integrated Master DataDefinitionAll master data created for FI-SL dimensions and other SAP applications. Master data whosedimensions are affected by direct posting and other FI-SL functions must be validated. Whendata is transferred to the special purpose ledgers, a comprehensive check takes place in thesource system to ensure that the data is consistent in all systems. The master data parametersof the sender systems are used in the special purpose ledgers to extend the accountassignments (cost center, article, and so on).

Selection criteriaMaster data validation is only used in FI-SL internal activities (for example, when entering datadirectly in FI-SL, in planning, in assessment/distribution, during currency translation and for textsin reporting).


Table Definition and Installation

190 December 1999

Table Definition and InstallationDefinitionDefining FI-SL database tables involves determining which dimensions are to be included in thetables. It must also be determined how or to what extent the data is to be collected and output.To ensure that the database tables can be updated with data from the FI-SL programs, the tablesmust be activated and installed after they have been defined.

Selection criteriaYou must select this component to ensure that your database tables can be used as FI-SL tablesin the Special Purpose Ledger system. You should usually select this component in combinationwith the component “Master Data”.


Direct Data Entry

December 1999 191

Direct Data EntryDefinitionThis component enables data to be entered directly into the Special Purpose Ledger system.The majority of the data intended for the special purpose ledgers is usually posted from otherSAP systems (FI, CO, SD,...). It may be necessary, however, to enter data directly into the FI-SLsystem. This normally takes place for one of the following cases:

• Adjustment postings and standardizing entries

• External data transfer via batch input

• Posting documents whose balance does not equal zero

• Entering statistical information, which for example, is only relevant to quantities


Planning

192 December 1999

PlanningPurposeWith the Planning function in the Special Purpose Ledger [Ext.], you can enter and distribute plandata to create budgets, forecasts, and other reports.

You can quickly and easily enter large amounts of plan data. Generally, you can enter planamounts in the following ways:

• You can enter amounts as plan totals that are (automatically or manually) distributed to theplanning periods.

• You can enter amounts as period amounts that are automatically totaled.

• You can enter a combination of both totals and period amounts.

Entryof

plan totals

Distributionof

plan totals

Entryof

periodamounts

Summation of period amountsSummation of period amounts

For information on creating plan data, see Creating Plan Data [Ext.].

Implementation ConsiderationsBefore you can complete planning in the Special Purpose Ledger, you have to set up planning inCustomizing. For more information, see Setting Up Planning [Ext.].

IntegrationYou can transfer plan data from the following SAP components to complete planning:

• Overhead Cost Controlling (CO-OM)

• Profitability Analysis (CO-PA)

To transfer data, choose Accounting → Financial accounting → Special Purpose Ledger →Periodic processing → Data transfer → CO plan data object/document or CO-PA plan data.

CO plan data is only posted directly to FI-SL when a plan version is defined for theledger to which the CO data is to be posted. If you want to post planning data to a FI-SL ledger, you must maintain a plan version for the ledger in Customizing.Additionally, you have to activate plan integration in Controlling Customizing.

FeaturesThe following options are available in Special Purpose Ledger planning:


Planning

December 1999 193

• Your planning can be completed centrally or decentrally. When setting up planning, youprovide a framework for the individual planners and assign authorizations. You can alsoadapt the entry screen layout.

• You can use Microsoft Excel to enter the data. The individual planners can enter their plandata using Microsoft Excel. You can then import this plan data to the SAP System. See ExcelIntegration in Planning [Ext.].

• You can post plan data to a nearly unlimited number of forecast versions per year. Youdefine plan versions in Customizing under Accounting → Financial Accounting → SpecialPurpose Ledger → Planning → Plan Settings → Maintain Plan Versions [Ext.].

• You can use existing actual and/or plan data (for example, from previous years) as areference for a new plan. To do so, choose Accounting → Financial accounting → SpecialPurpose Ledger → Planning → Copy model plan → Local or Global. See Using a Model Plan[Ext.].

• You can compare actual and plan data

• You can display totals records of your plan data. Choose Accounting → Financial accounting→=Special Purpose Ledger →=Planning → Display totals. See Displaying Totals Records[Ext.].

• You can display individual plan documents. Choose Accounting → Financial accounting→=Special Purpose Ledger →=Planning → Display plan documents.=→= Local or global plandocuments. See Displaying Plan Documents [Ext.].

• With the allocation functions, you can assess or distribute plan data. To do so, chooseAccounting → Financial accounting → Special Purpose Ledger → Planning → Planned close→ Plan assessment or Plan distribution.

• With rollups [Ext.] you can summarize plan data.


Assessment

194 December 1999

AssessmentDefinitionBusiness activity used to allocate quantities and amounts (actual and plan values) from onesender object to one or more receiver objects. The assessment process posts the senderamounts to an assessment account. The system then allocates the amounts from theassessment account to the receiver(s), but does not allocate directly from the original senderaccount.

The quality of company-specific evaluations can be significantly improved through the flexibleassessment of values.

Selection criteriaIn assessment, you not only work with values and value intervals, but also with sets in order toallocate data from a sender to a receiver. You should therefore select this component incombination with the component “Sets”.


Distribution

December 1999 195

DistributionDefinitionBusiness activity used to allocate quantities and amounts (actual and plan values) from onesender object to one or more receiver object(s). The distribution process distributes thebalance(s) from the original sender(s) to the receivers. The original sender account is creditedand the original receiver account is debited with the allocation.

The quality of company-specific evaluations can be significantly improved using the flexibledistribution function.

Selection criteriaIn distribution, you not only work with values and value intervals, but also with sets in order todistribute data from a sender to a receiver. You should therefore select this component incombination with the component “Sets”.


Rollup

196 December 1999

RollupDefinitionSummarizations which define how data is summarized into a rollup ledger. Since the SpecialPurpose Ledger system uses many different types of ledger, it is possible to use ledgers thatcontain different levels of detail and/or different dimensions. For some high-level reports andspecific evaluations, a ledger may contain too much detailed information or may containdimensions that are not needed in a report. This information can be summarized into a rollupledger. By summarizing the data, the rollup helps the user attain improved processing times inreporting.

Selection criteriaSince rollups use sets for selecting the data that is to be summarized into the rollup ledger, youhave to select this component in combination with the component “Sets”.


Currency Translation

December 1999 197

Currency TranslationDefinitionBusiness activity for converting values that were posted to local and global ledgers in the SpecialPurpose Ledger system.

Currency translation can take place in the FI-SL system after the data has been updated. Ifrequired, amounts can be revaluated and translated after a posting has been made using criteriadefined by the user.

Selection criteriaSince currency translation uses sets to determine the values that should be translated, you haveto select this component in combination with the component “Sets”.


Balance Carryforward

198 December 1999

Balance CarryforwardDefinitionAs in the G/L Accounting, the balances of accounts (actual and planning values) can be carriedforward from the previous year to the opening balance of the current year.

You can carry forward:

• balance sheet account balances from the previous year to the current year

• the profit and loss account balance from the previous year to the retained earningsaccount of the current year


Data Transfer

December 1999 199

Data TransferDefinitionUsing “Data Transfer”, data can be transferred from the FI, CO, MM and SD systems and fromexternal systems into the Special Purpose Ledger. The FI-SL system uses standard programsfor transferring data from other systems.

Special purpose ledgers use a standard interface when updating data from external systems.The transfer of external data is required when external information is to be combined with SAPdata or when the Special Purpose Ledger system is to be set up independent of the other SAPapplications.


Integration Interface

200 December 1999

Integration InterfaceDefinitionThe totals that are updated in the special purpose ledger mainly result directly or indirectly frombusiness transactions that were entered in various areas of the company. Therefore, internaland external data can be combined in any way for the purpose of creating totals in specialpurpose ledgers.

Data can enter the FI-SL system in any of the three following ways:

• from other SAP applications (FI, AM, MM, CO and SD)

When data is updated from other SAP applications, the user defines which businesstransactions update the special purpose ledgers: postings from Financial Accounting,transactions in Materials Management, order settlements, and so on. In doing so, theuser decides how and which ledgers are to be updated by which activity. Based on therules and selection conditions that the user defines, the activities are validated, the datais summarized, and one or more ledgers is updated.

• by direct data entry (using the FI-SL document entry function for adjustment postings)

• from external systems (for the transfer of external data)

Selection criteriaYou have to select this component in order to set up a fully integrated FI-SL system. You shouldselect this component in combination with the components “Master Data” and “Table Definitionand Installation”.


Validation, Substitution and Rules

December 1999 201

Validation, Substitution and RulesDefinitionThe validation and substitution components enable data to be validated or substituted at theoriginal point of entry in either the Special Purpose Ledger system or other SAP applications.

The standard SAP system does not need to be changed in order to carry out validations orsubstitutions. When installing the system, the user can define exactly which validations andsubstitutions are necessary to ensure data consistency.


Validation

202 December 1999

ValidationDefinitionProcess of checking values and value combinations that are entered in the SAP System. Theentered values are checked against a logical statement (prerequisite) defined by the user. If thestatement is true, the values are checked against an additional Boolean statement (checkstatement). If the check statement is true, the data is posted. If the check statement is false, thesystem outputs a user-defined message. The message type determines whether the posting canbe made.

Since the validation takes place before the posting is made, only data that has been checked willenter the Special Purpose Ledger system.

Selection criteriaAlmost all data entering the SAP System can be validated and checked against tables andmaster data, regardless of whether the Special Purpose Ledger system is installed. However,many types of validations cannot be standardized. That is why it is only necessary to select thiscomponent if you want to define your own additional validations to check your data.


Substitution

December 1999 203

SubstitutionDefinitionThe process of replacing values that are entered in the SAP system, but for which a differentvalue or dimension should be used in the FI-SL system. The entered values are validatedagainst a logical statement (prerequisite) defined by the user. If the statement is true, theappropriate values are replaced.

Substitution takes place before the data is updated in the FI-SL summary tables.

Selection criteriaYou have to select this component if you also want to replace values with other values whenvalidating data. For example, you can replace a specific product with a product group.


Rules

204 December 1999

RulesDefinitionA Boolean statement to which other rules or statements can refer. Rules can be used in thefollowing areas:

• Validation

• Substitution

• Ledger selection

• Report Writer selection

• Rollups

Selection criteriaWhen you select this component, you can define complex Boolean statements as rules. Usingthe rule name, you can refer to frequently used Boolean statements.


Information System

December 1999 205

Information SystemDefinitionThe Special Purpose Ledger “Information System” enables the totals and lines items defined bythe user to be evaluated in the form of reports. Such reports are created according to thecompany-specific requirements. Using the information system, the user can report on data fromthe Special Purpose Ledger system and from other SAP applications.


Funds Management

206 December 1999

Funds ManagementPurposeThe functions in this component support you in creating budgets. The tasks of FundsManagement are to budget all revenues and expenditures for individual responsibility areas,monitor future funds movements in light of the budget available, and prevent budget overruns.You can adapt the budget to changes in conditions by entering releases, supplements, returns,and transfers.

IntegrationFunds Management is fully integrated with other components in the R/3 System. Whichcomponent is used in each case depends on the specific requirements of your organization. Abasic requirement for use of Funds Management is integration with the General LedgerAccounting (FI-GL) component.

Integration with Materials Management means that you can, for example, reproduce and monitorprocurement transactions from start to finish.

Integration also ensures that all the data you need to manager your budget is available as andwhen you need it.

For detailed information on which data from other components can be updated in FundsManagement, read Actual and Commitments Update [Page 213].

FeaturesFunds Management enables you to keep a precise check on:

• The revenues and expenditures or funds-relevant business transactions in your business

• Your budget, with the following questions in mind:

− What funds will the responsibility areas receive?

− Where do these funds come from (source of funds)?

− What are the funds used for? (Application of funds)

• The financial equilibrium of your business, by comparing commitment and actual values withthe current budget.

See also:System Settings for Funds Management [Ext.]

Supplemental Documentation [Ext.]


Basic Data

December 1999 207

Basic DataPurposeThis component offers all the functions for reproducing the budget structure of your organizationin Funds Management. The organization is split accounting to organizational and functionalviewpoints:

You must set up the following master data according to your individual requirements:

• Funds centers

Funds centers are used to represent organizational units (areas of responsibility,departments, projects) and are arranged in a hierarchy.

• Commitment items

Commitment items are used to represent functional aspects (expenditure and revenuestructures) in a hierarchy. They are used to split budgets according to contents andbusiness transactions affecting liquidity into revenue items and expenditure items.

You can use funds to subdivide budgets.

• Funds and applications of funds.

With funds enable you to create an exact proof of origin and application of funds. Youcan use funds to manage funds from secondary sources.

IntegrationLinks Between the Basic Data in Different ComponentsWith the SAP system, you can create a wide-ranging, flexible link between the basic data inFunds Management and the basic data in other components.

• Define a commitment item in the G/L account

• Assign the FM account assignment (commitment item, funds center, fund) toa CO account assignment (cost element, cost center, WBS element, order,profit center)

• Assign funds center or fund to HR master record

These links keep data entry work to a minimum. Entering an FM account assignment is optional.The system derives the FM account assignment from the relevant assignment. The posting datarelevant to Funds Management can be passed from the feeder systems to Funds Managementautomatically.

Cash Budget Management, Project Cash Management, and FundsManagement

Cash Budget Management and Project Cash Management use the samecommitment items as Funds Management. If you are using either of these two


Basic Data

208 December 1999

components as well as Funds Management, remember that changes made to thebasic data affect both components.

FeaturesMaintaining Master Data

• Commitment item hierarchy

The recording of posting data from the Funds Management feeder systems is controlledby means of the control parameters in the commitment item master records, as is howthey are displayed in reporting.

• Funds center hierarchy

• Funds and applications of funds

Status ManagementBy activating status management, you can control the commercial transactions in FundsManagement for:

• Individual combinations of commitment items, funds centers, and funds

• Individual objects, such as all commitment items or all funds centers

Class MaintenanceYou can use the Class System functions in Funds Management to manage a wide range ofinformation which you cannot define in the master records themselves.

ConstraintsThe system does not log changes to hierarchy relationships between commitment items andfunds centers in change documents. For this reason, you must not make any changes to thehierarchy once you have gone live with Funds Management.


Budgeting and Availability Control

December 1999 209

Budgeting and Availability ControlPurposeThis component supports with your functions the budget creation process and the monitoring ofavailable funds.

BudgetingThe budget is allocated according to a defined budget profile and various budget versions. Youcan allocate overall budgets or annual budgets. You can only allocate an overall budget if youare using a fund.

With the functions of this component, you can allocate your budget on the top-down principle orthe bottom-up principle. You define the basic rules for the budget allocation in the BudgetStructure [Ext.], a procedure which makes allocating budgets at central level or local level easy.The rules defined in the budget structure include which responsibility area (funds centers) mayuse the budget for which expenditure categories (commitment items) and how the budget may bedistributed within the budget hierarchy to the individual funds centers and commitment items.

You can adapt the budget to changes in conditions by entering releases, supplements, returns,and transfers.

Availability controlWithin the budget execution framework you can claim the assigned funds for expectedexpenditures via Earmarked Funds [Ext.] Postings in the Funds Management feeder systems,which refer to these earmarked funds, establish obligations (commitments such as a purchaseorder) and actual data (such as through invoices and payments) incurs. These forms of budgetusage are known collectively as assigned funds.

The funds management can use the information system to compare budget usage and fundscurrently available. In addition to the funds overview in the information system, which acts as a“passive” availability control, the component includes an “active” availability control facility whosefunctions prevent budget overruns.

IntegrationAvailability control influences the posting procedures in Funds Management - earmarked funds,funds transfers, budget transfers, supplements - as well as the posting procedures in thecomponents integrated with Funds Management. For further information on which componentsare integrated with Funds Management, see Actual and Commitment Updating [Page 213]

When you enter an activity, such as a purchase order, which is assigned to a funds center andcommitment item, the system checks whether the budget or released funds available aresufficient.

If you have Controlling [Ext.] integrated use with Funds Management, availabilitycontrol can be active both in Funds Management and in Controlling orders andprojects.

For performance reasons, you must decide in which component you want to activateit.


Budgeting and Availability Control

210 December 1999

FeaturesThis component offersA wide range of tools for maintaining budgets:

• Maintain different budget versions in the Payment Budget [Ext.] and CommitmentBudget [Ext.] .

• Maintain budget texts

• Use releases to control budget assignments

• Use supplements, returns and transfers to update budgets

• Displaying periodic budgets

Fine-tune budget monitoring:

• Execute availability control against releases

• Execute availability control against annual budget or overall budget

• Tolerance limits

The defining of tolerance limits allows for an individual definition for each commitmentitem, funds center, and fund for individual transaction groups (such as purchase order,actual posting).

• The degree of budget usage (percentage or absolute) from which the system reacts

• How the system reacts: With a warning, with a warning and a mail to the budgetmanager, with an error message which rejects the posting.


Postings

December 1999 211

PostingsPurposeThis component contains the functions needed to process business transactions in the budgetexecution.

The posting data is stored as totals and as line items.

Earmarked fundsUsing Earmarked Funds [Ext.]aspects of both revenues and expenditures of funds are handled.In doing so you can, on the one hand, take expected revenues into account and the incomingbudget funds linked to them. On the other hand, you can earmark the appropriate funds forexpected expenditures, for which the exact application of funds does not have to be known.

Using budget blocks you can completely block access to already allocated budget This budget isno longer available for other business transactions.

Funds transfersUsing funds transfers you can transfer assigned funds which are in a particular FundsManagement account assignment, to other Funds Management account assignments.

IntegrationIntegration with Other Components in the R/3 SystemWithin the framework of budget execution you can claim the earmarked budget funds both via thebusiness transactions in accounting and via purchasing. The earmarked funds are reduced byfinancial accounting documents or purchasing documents. In doing so, the budget is consumed.

Desired function Required components

Reducing earmarked funds with purchasingdocuments

Purchasing

Reducing with financial accounting documents G/L accounting, accounts payable accounting,accounts receivable accounting

Illustrating an approval process SAP Business Workflow

The graphic [Ext.] represents the options you have for reducing the earmarked funds by financialaccounting documents and purchasing documents.

With other Funds Management componentsDependent on the valid update profile, earmarked funds affect the budget. Earmarked funds takepart in the active available control(AAC) when they are created and reduced. The AAC checks ifthe available budget is still sufficient according to the defined tolerance limits. For moreinformation, see Availability Control Settings [Ext.].

Earmarked funds are displayed in the information system as commitments.

FeaturesExpenditures:The SAP system provides several ways of claiming budget for particular purposes:


Postings

212 December 1999

• Funds reservations

• Funds precommitments

• Funds commitments

Together with Workflow this allows you to differentiate assigned funds of the budget and tomonitor and control budget usage efficiently. For more information see Earmarking Budget forExpected expenditures [Ext.]

• Funds blocking

Revenues: Forecast of revenue

Transfers Funds transfers


Recording Actual and Commitment Data

December 1999 213

Recording Actual and Commitment DataPurposeFunds Management (FI-FM) uses data from various application components in the SAP System,particularly Financial Accounting (FI), Materials Management (MM), and Human Resources (HR),to reproduce certain business processes.

Posting data from the other components flows into Funds Management. There, it is recorded ascommitment or actual data and can be displayed in the information system. So, for example,posting an invoice receipt leads to the payment obligations being updated in Funds Management.

Funds Management differentiates the data according to how advanced processing is in thesystem. All data which is entered up until the point of invoice receipt or invoice issue iscommitment data, such as purchase orders and purchase requisitions. All other data is actualdata. Data is recorded on the basis of one of the update profiles [Ext.] we deliver with thesystem.

This component supports you when you integrate Funds Management with other R/3components in line with your own requirements.

ACTUAL

ObligoCommitment

Revenues

Personal-Human resources

accounting

ReisekostenTravel expenses

with purchasing

inte

rne

Inte

rnal

act iv

ities

BeschaffungProcurement

ohne Einkauf

wo.purchasing

FIFI

COCO

FIFI

FIFI

MMMMMM

HR

SDSDSD

TR-FI-FMFM

HRHRHR

FI-TV-

Procurement

FeaturesIntegration with Other Components in the R/3 System

Integration Requirement



214 December 1999

FinancialAccounting

G/L account postings General Ledger Accounting (FI-GL)

Accounts payable Accounts Payable (FI-AP)

Accounts receivable Accounts Receivable (FI-AR)

Asset postings Fixed Assets Management (FI-AA

Travel expenses • Travel Management (FI-TV orPA-TV)

• Personnel Administration (PA-PA)

Controlling

• Actual assessment

• Actual line item reposting

• Actual primary cost reposting

• Actual distribution

• Indirect activity allocation

• Order settlement

• Actual accrual calculation

• Actual activity allocation

Overhead Cost Controlling (CO-OM)

MaterialsManagement

• Purchase requisition

• Purchase orders

• Purchasing (MM-PUR)

• External Services (MM-SRV)

• Goods receipts

• Goods issues

Inventory Management (MM-IM)

Invoice receipts Invoice Verification (MM-IV)

PlantMaintenance

Plant maintenance orders Maintenance Processing (PM-WOC)

ProjectSystem

Networks Operative Structures (PS-ST-OPR)



December 1999 215

Sales andDistribution

Billing • Sales (SD-SLS)

• Shipping (SD-SHP)

• Billing (SD-BIL)

HumanResources

Payroll accounting • Payroll Accounting (PA-PY)

• Personnel Administration (PA-PA)

The postings which cause expenditures in the R/3 System or lead to a paymentcommitment cause a number of documents to be generated in Funds Management.To generate them, the system uses information from the financial accountingdocument which, for example, is generated when a purchase requisition or purchaseorder is generated. For postings in other components to be passed on to FundsManagement, you must have General Ledger Accounting (FI-GL) in use.

Integration with Other FI-FM ComponentsWhen you post documents in the Funds Management feeder systems, they are subject to activeAvailability Control [Ext.]

The Materials Management (MM) component is used for processing purchaseorders. Funds Management is fully integrated with MM. When you post a purchaseorder, availability control checks whether sufficient budget is available. If it is, theposting data is passed automatically to Funds Management and displayed in theinformation system [Page 220] as expenditures, under “Purchase orders”. If there isnot enough budget, the system rejects the purchase order.


Additional Functions

216 December 1999

Additional FunctionsPurposeThis component makes all the functions available which you require for fiscal year-changeoperations and revenues increasing the budget.

Features• Closing operations [Page 217]

• Revenues Increasing the Budget [Page 219]


Closing operations

December 1999 217

Closing operationsPurposeThis component allows you to prepare and execute all year-end closing operations. Theseinclude carrying forward of open commitments (commitments carryforward) and a differentiatedcarryforward of unused budgets (budget carryforward of residual budgets) from the old fiscal yearto the new. You use the closing operations to display budgets and assigned values by period.

Old Fiscal Year New Fiscal Year

Carryforward residualbudget from old fiscalyear

Open cmmtsbrought forward

Opencommitments

Residual bdgt

31.12.

Implementation ConsiderationsYou perform the closing operations in a series of steps which you must carry out in sequence.

The commitment carryforward always reflects the current state of the data in the FundsManagement feeder systems. However, there is no automatic link to the closing operations inother components. This means that changes made to documents in other components are notreflected in Funds Management after you have carried out the closing operations in FundsManagement. For this reason, we recommend you do not carry out Funds Management closingoperations until you have completed the closing operations in the other components.

There is no technical necessity for carrying out closing operations for the fiscal year change. Ifyou do not, budget already used remains in the old fiscal year and cannot be used in the newfiscal year. Open commitments are correctly reduced in the old fiscal year if you process themfurther in the new. (For example, a purchase order from 1997 can be reduced by an invoicearriving in 1998.)

The carryforward from commitments and budget is, in principle, dependent on the Update Profile[Ext.] chosen. Specified in the update profile is whether a carryforward is even possible and forwhich value types (e.g. purchase orders, earmarked funds, invoices) a carryforward may takeplace.


Closing operations

218 December 1999

FeaturesYou can simulate the tasks to be carried out at the fiscal year change and can schedule them fordifferent dates, regardless of when your fiscal year actually ends. A number of report programsare available for the commitment and budget carryforwards. For more information, readPrograms for Closing Operations [Ext.].

• Commitments carryforwardYou can apply various selection criteria, such as individual funds centers, particular FMAccount Assignments [Ext.] or individual documents. The definition of carryforwardparameters and carryforward rules allows you to exclude many Value Types [Ext.] or FMaccount assignments from a carryforward or to carry out account assignment changes.You can reverse the commitment carryforward for individual documents.

• Budget carryforward

− Budget for commitments

You can carry forward budget into the new fiscal year, which has become availabledue to a commitment carryforward into the new year.

− Residual budget

The defining of carryforward parameters and rules allows you to achieve individualcontrol of residual budget carryforward, thus ensuring that account is taken ofchanges to the organizational structure. In the new fiscal year, you can distribute theresidual budget to one or more receivers. It is possible to carry forward partialamounts.

• Balance carryforward in fundIf you work with funds and have allocated an overall budget across several fiscal years,the balances carryforward in funds will allow for an overview of the balances in the funds.Unlike the commitment carryforward, this involves summarizing and carrying forwardactual data.


Revenues Increasing the Budget

December 1999 219

Revenues Increasing the BudgetPurposeThis component comprises the functions with which you can increase existing expenditurebudget for particular functional areas due to Additional revenues [Ext.].

IntegrationIn order for revenue postings to function as budget-increasing, you must use the FinancialAccounting components G/L accounting and Accounts receivable accounting.

Features• Distribution rules [Ext.]

Rules which define which share of a revenue should function as budget-increasing forwhich expenditures FM account assignment(s) form the basis.

The rule also determines the FM account assignment, the so-called surplus FM accountassignment, into which residual revenues flow, which do not function as budget-increasing on the expenditure FM account assignments.

• Options for which event allows a budget increase

At the time of the customer invoice or not until the time of the incoming payment.

• You can choose to increase the budget automatically or manually

• Evaluations

• Comparing current budget - budget from revenues

• Budget deficit display

• Distribution rules list


Information System

220 December 1999

Information SystemPurposeYou can use the information system to analyze the business transactions relevant to FundsManagement. This means it is possible, for example, to generate overviews of the budgets (suchas approved and released budget), budget usage (actual and commitment values), and theresidual budget (that is, budget still available) in your organization.

You can carry out both recurring standard evaluations and also create reports for any specificquestions and tasks. You can analyze all data interactively directly after entering it into the R/3System and trace its origin up to document level. You can also run all reports available online inthe background. This is particularly useful with very comprehensive datasets.

IntegrationThe components you need depend on the type of evaluations which you want to carry out.

Components needed for the information system

For analyzing/using... ... you need the (FM) component

Master Data Indexes Basic Data

Totals Record Reports Budgeting and Availability control/Commitment and actual updating

Line item reports Budgeting and Availability control/Commitment and actual updating

Year-end closing Closing operations

Analyses Commitments and actual updating; possibly also FI and MM

Depending on the type of integration, you also need other components, such as CO if you areusing original data from CO for assessments.

FeaturesMaster Data IndexesYou generate master data indexes to:

• Obtain an overview of the master data created.

• Display the assignment of the Funds Management master data objects to master dataobjects from other components.

For more information, see: Master Data Indexes [Ext.].

Totals recordsYou generate totals records reports to provide an overview about the cumulated status of yourdata. You can look at the line items belonging to each totals record report.

For more information, see: Totals Record Reports [Ext.]

Line itemsYou generate line item reports to obtain a more detailed representation of the postings executed.You can display the respective original document directly from the list of line items found.


Information System

December 1999 221

Line items are generated for each posting. They contain information on the FM accountassignment, the amount posted, the posting date, and the user who made the posting.

Line item reports are usually represented in Funds Management with the ABAP List Viewer. Thisenables you to select both the selection criteria and the fields to be displayed in the listindividually.

For information on the standard line item reports in Funds Management, see: Line Item Reports[Ext.]. For information on the ABAP List Viewer, see: ABAP List Viewer [Ext.].

Year-end closingYou generate the report on year-end closing to obtain an overview of the closing operationscarried out when the fiscal year changes.

The reports on year-end closing display the commitments carried forward, the budget assigned tothese commitments and the other carryforward budget. You can branch from the commitmentscarried forward into the corresponding line items and the document display from the report onyear-end closing.

Analyses (matching)You can use these reports to compare documents from different counters and to specifydifferences if desired.