ParallelAccounting SAP ERP

Parallel Accounting in SAP ERP
Account Approach
versus
Ledger Approach
in SAP New General Ledger
Product Management Financials

January, 2014
Structure of the Presentation
Aims of this presentation:

Provide a short introduction to how parallel accounting can be portrayed using
Classic General Ledger Accounting
New General Ledger Accounting
Cover the relevant topics in terms of other SAP ERP components.
Parallel
accounting is discussed in detail for the following recommended
approaches:
Chart of accounts approach (or parallel G/L accounts referred to here as the
account approach)
Ledger approach in new General Ledger Accounting
2014 SAP AG or an SAP affiliate company. All rights reserved. Public 2

Parallel Accounting in SAP ERP
Portrayal of Parallel Accounting in SAP ERP
Components
Financial Acounting
Asset Accounting
Controlling
Material Management
Others

Alternatives of implementing parallel accounting
Local Close SAP R/3 SAP ERP

(Classic GL) (New GL)
Parallel ledgers X
Parallel accounts X X
Parallel special purpose ledgers X X
Parallel company codes X X
Recommended approaches

Alternatives of implementing parallel accounting
In new General Ledger Accounting in SAP ERP, the approaches using parallel
ledgers or parallel accounts are equivalent in terms of the results produced. Which
approach is applied depends on each customer's situation.
Parallel accounts in SAP ERP prove just as powerful as parallel accounts in classic
General Ledger Accounting in SAP R/3.
Parallel ledgers in SAP ERP are much better than the combination of classic
General Ledger Accounting and Special Purpose Ledgers in SAP R/3.

Parallel GL Accounts
Pure
Pure IFRS Local GAAP
Accounts Accounts
Common
Accounts
Items with significant valuation differences are posted to different accounts. Each valuation
has its own set of pure accounts.
Common accounts are used where no material valuation differences occur.
It is advisable to have clearly discernable account number ranges or distinguishing digits or

letters to distinguish among sets of accounts.
Since each set must be in balance, extra care must be taken to ensure correct account
determination: establish an accounting guideline!

Parallel G/L-Accounts
Options for creating charts of accounts:

Prefix and account number or last digit of the account number
Prefix: Alphanumeric or Account Number Suffix
numeric
A 1 0 xxxxxx Common 0
accounts
B 2 1 xxxxxx IFRS accounts 1
C 3 2 xxxxxx Local accounts 2
Common accounts retain a 0, but all local valuation accounts have

to be created again and can be transferred manually (with the
exception of FI-AA)
A prefix is added to all account numbers. Chart of accounts is

converted using the chart of accounts conversion tool.
IFRS Reporting Local Reporting => Validation of the layer is

0 common accounts and 0 common accounts and useful for postings
1 IFRS accounts 2 local accounts using the same valuation
approach and values
Parallel G/L-Accounts
Local GAAP Common Accounts IFRS

Customer Vendor
Fixed Asssets Other Provisions Fixed Assets Other Provisions
B/S
(Receivable) (Payable)
FC Losses Sales FC Losses FC Gains

FC Gains Electricity
P/L
Clearing Account Fix Asset Revenue Fix Asset Clearing Account Fix Asset
Retirement Retirement Retirement
Balance Balance Balance

Carryforward Carryforward Carryforward
Local Accounts Common Accounts IFRS Accounts
2 ... 0 ... 1...

Parallel Ledgers
International accounting principle for example IFRS is primary valuation

represented by the leading ledger.
Local GAAP books are maintained in an additional non-leading ledger
Non-leading ledgers can use a different fiscal year variant. (For restrictions on
this, see SAP Note 844029).
Same Accounts are used for all ledgers
Example:
Leading Ledger Non-Leading Non-Leading

(IFRS) Ledger 1 Ledger 2
(Local (Tax)
GAAP)

Parallel Ledgers
Operative postings updating all G/L ledgers
If no ledger group is specified during document entry: Posting is done to all defined GL ledgers
Typical Transactions: incoming invoice, outgoing invoice, payment
Ledger A
Entry View Ledger B Ledger C
(IFRS)
BKPF / BSEG (Local GAAP) (Tax)
(leading ledger)
Parallel Ledgers
Operative postings updating all G/L ledgers
Specifying a ledger group during document entry: Posting is done to specific ledgers
Typical Transactions: Accrual, provision, foreign currency valuation
Ledger A
Entry View Ledger B Ledger C
(IFRS)
BKPF / BSEG (Local GAAP) (Tax)
(leading ledger)
Approach and Valuation effect on number of postings
Same approach and valuation
1. Same approach and valuation
=> One posting to common accounts or in all ledgers
Example: Incoming invoice for external activities
Expenses: Ext. Activities Payables Tax

One common
1160 (1) (1) 160
(1) 1000 posting

Same approach but different valuation
2. Same approach but different valuation
=> Separate postings to local and IFRS accounts or ledgers respectively
Example: Depreciation or reserves for pensions
Expenses: Pensions Accruals

Local GAAP Local GAAP
1000 (2)
Two complete
(2) 1000 postings, made
separately for
Expenses: Pensions Accruals
IFRS IFRS each valuation
(3) 500 500 (3)

Different approaches
3. Different approaches
=> Only one posting to local or IFRS accounts or ledgers
Examples: (1) Posting only relevant for IFRS: Financial Leasing

(2) Posting only relevant for local GAAP: Provisions for expenses
Financial Leasing
Depreciation Financial Leasing
IFRS IFRS Only one
(1) 1000 1000 (1)
posting
Expense Provision for Expenses

Local GAAP Local GAAP Only one
(2) 2000 2000 (2)
posting

Delta Postings or Complete Postings
Example: Complete Posting
Scenario: Two valuation approaches with IFRS as leading approach

FI-AA uses two depreciation areas:
01 contains IFRS
30 contains local valuation
For December 2013, the following depreciation is made:

01 IFRS EUR 1000
30 Local EUR 600
With a complete posting, the postings appear as follows:

Debit "IFRS Depreciation" 1000
Credit "IFRS Value Adjustment" 1000
Debit "Local Valuation: Depreciation" 600

Credit "Local Valuation: Value Adjustment" 600

Delta Postings or Complete Postings
Example: Delta Posting
With delta postings, the following postings are made:

Debit "IFRS Depreciation" 1000
Credit "IFRS Value Adjustment" 1000
Credit "Local Valuation: Depreciation" 400

Debit "Local Valuation: Value Adjustment" 400
In this case, the local posting corrects existing values.

The delta posting is only meaningful in combination with the initial posting.
Posting data cannot be traced without additional information.
Should tax auditors also be able to see the IFRS values?
The delta technique is not recommended and not well supported by
automated procedures in SAP ERP.

Parallel Accounting in SAP ERP 6.17

Components
Financial Accounting Foreign Currency Valuation
Translation
Asset Accounting Individual Value Adjustment
Controlling Sorting Open Items
Down Payments
Material Management
Provisions Created Automatically
Others Provisions Created Manually
Accruals/Deferrals
Foreign Currency Valuation
(FAGL_FC_VALUATION)
Receivables, Payables, foreign currency balance sheet accounts may be valuated

differently on the basis of different accounting principles.
Account approach
A valuation area is assigned to certain target accounts that belong to the specific
accounting principle.
The valuation report (Classic G/L -> SAPF100, New G/L -> FAGL_FC_Valuation)
has to be run for each valuation area.
Ledger approach
Determination of the ledger group using the assignment of the
valuation area to an accounting principle that is assigned to a target ledger group.
N:1 N:1
Valuation area ----> Accounting principle ----> Ledger group
The valuation report (FAGL_FC_Valuation) has to be run for each valuation area.
Foreign Currency Valuation in FI-CA
In the FI-CA application component, open items that are posted in a foreign currency may
be valuated using different accounting views.
Account approach
Customizing in FI-CA: Assignment of the adjustment accounts to a valuation area
The valuation report has to be run for each valuation area.
Ledger approach
Customizing in FI-CA: Assignment of the adjustment accounts to a valuation area.
N:1
Valuation area ----> Ledger group
The valuation report has to be run for each valuation area.

Flat-Rate Individual Value Adjustment
(SAPF107)
Receivables (where applicable, payables) can be valuated differently by number of days

overdue and risk classes in accordance with different accounting principles.
Account approach:
Assignment of different accounts using valuation areas.
Run Transaction F107 for each valuation area.
Ledger approach:
Assignment of ledger group using valuation areas
N:1 N:1
Run Transaction F107 for each valuation area.

Translation
(FAGL_FC_TRANSLATION)
Receivables/Payables
FAS 52 requires that the valuation result in the functional currency be translated into the
reporting currency.
Account approach:
Assignment of different accounts depending on the valuation area.
The program is run for each valuation area.
Ledger approach in new General Ledger Accounting:
Assignment of valuation area to accounting principle to ledger group
N:1 N:1
The program is run for each valuation area.

Individual Value Adjustment of Receivables
Receivables can be transferred as doubtful receivables (special G/L transaction).
Transaction FAGLF101 in New G/L has to be run for each valuation area.
In Classic G/L transaction F103 has to be run for each provision method.
Account approach:
The special G/L transaction represents a type of account approach.
Ledger approach:
Provision methods can be defined by valuation area.
N:1 N:1

Parallel Accounting in FI - Sorting Open Items by Maturity
Receivables (where applicable, payables) can be portrayed by remaining term on

different balance sheet items in accordance with different accounting principles (transfer
posting).
Transaction FAGLF101 in New G/L has to be run for each valuation area.
In Classic G/L transaction F101 has to be run for each valuation area.
Account approach:
Assignment of different accounts using valuation areas.
Ledger approach
Assignment of ledger group using valuation areas

Down Payments Received
In the results analysis, different results analysis versions can be used to view down payments
differently. For example, down payments that have already been received can be considered
revenue in results analysis and thereby reduce the revenue in excess of billings. This is
achieved in transaction OKG3 by setting the "Commitments" indicator (methods G-K).
With the "G" indicator, two results analysis categories are calculated and updated: category
ANKB (down payments reduce revenue in excess of billings) and category ANUS (down
payment surplus). When down payments reduce revenue in excess of billings, the amount of
the down payment cannot exceed the amount of revenue in excess of billings. The portion of the
down payment amount exceeding the revenue in excess of billings is transferred as down
payment surplus. In both cases, postings can be made to FI during the settlement of the
order/project.
Account approach:
Assignment of different accounts in Posting rules in WIP Calculation and Results Analysis (OKG8)
Ledger approach
Assignment of accounting principle in Posting rules in WIP Calculation and Results Analysis (OKG8)

Provisions from Controlling
For internal orders, sales orders, and projects carrying revenues, provisions can be created
by means of results analysis or WIP calculation.
Provisions are created for probable losses when the plan costs exceed the planned revenue. In the
subsequent periods, these provisions are automatically used until the complete amount has been
realized as a loss.
Provisions are created for uncovered costs when the calculated cost of sales exceeds the actual costs
(using results analysis) or when the credit amount exceeds the actual costs due to goods receipts (WIP
calculation). In the subsequent periods, these provisions are automatically used whenever subsequent
costs are incurred. The provisions are cancelled upon order completion.
Provisions for complaints and commission are created on the basis of planned costs for specific cost
elements. In the subsequent periods, these provisions are automatically used whenever costs are
incurred for these cost elements.
For all of these provisions, postings are created automatically in FI during settlement
(managed in transaction OKG8). A results analysis version can be created for each
accounting principle. In this way, the different results analysis versions can be used to create
different amounts of provisions that can then be used or cancelled when the order attains
different statuses.
With IFRS, results analysis is also used to make revenue postings (revenues in excess of
billings) automatically on the basis of the percentage of completion. If the revenues that are
actually made exceed the revenues determined, the revenue surplus is calculated and
transferred to FI as a provision.

Manual Accruals/Deferrals
(Transaction ACACACT)
Accruals and deferrals need to be allocated to the relevant periods. The use of parallel
accounting may mean that different accrual/deferral postings need to be made, depending on
the accounting principle.
Account approach:
Assignment of the accounts to a set of rules (such as accrual type)
The program (periodic accrual run) is run for each accrual type.
Assignment of the accrual method to the accounting principle (determination of the
ledger group)
The program is run for each accounting principle.

Doubtful Receivables
(SAPF103 and SAPF104 or FAGL_DR_PROVISION (New G/L with EhP3)
Receivables sometimes need to be portrayed as doubtful receivables. SAPF103 selects the

overdue receivables and posts them as doubtful receivables across multiple ledgers (special
G/L transaction). SAPF104 or FAGL_DR_PROVISION (which replaces SAPF104 in New G/L
Accounting with EHP3) creates postings for doubtful receivables on provision accounts.
SAPF104 (account approach only)
Customizing: Assignment of accounts to transaction key (KTOSL)
The program is run for each provision method (period selection).
FAGL_DR_PROVISION
Account approach
Assignment of account to provision method
The program is run for each valuation area and provision method.
Ledger approach
Assignment of accounts to valuation area and provision method
The program is run for each valuation area and provision method.

Provisions (Manual Posting in Financial Accounting)
It may be necessary for specific transactions (such as legal costs or acquisition

costs) to be posted as provisions.
Account approach:
Manual posting of provision amounts on different provision accounts
With ERP 6.0 EHP3, manual processing of provisions (that is, manual posting and
clearing) for each ledger (only G/L accounts)


Components
Financial Accounting
under covering
Asset Accounting SAP ERP 5.00 ff. Depreciation Areas
SAP ERP 6.17 FI-AA (new) Valuation Decisions
Controlling
Smart Financials G/L Integration
Material Management CO Integration
Fiscal Year Variants
Others
Processes:
- Asset Aquisition with
valuation differences
- Depreciation
- Integrated Asset
Retirement
- Assets under Construction
- Low Value Assets

Components
Asset Accounting
Controlling Activation of Costs:

Percentage of Completion / Revenue in excess of billings
Material Management vs.
Completed Contract Work in Progress (WIP)
Others
Parallel Valuation of Costs of Goods Manufactured (COGM)
Parallel Accounting in Controlling
One version of truth in CO - Parallel Valuation via CO closing processes
Usually only the leading ledger representing group accounting integrates with CO.
Thereby a consistent set of data all over the group for accounting and management
reporting purposes is ensured with the following benefits:
Data for controlling is derived from internationally comparable numbers which are unique within
the group.
Internationally comparable numbers are represented by the leading ledger.

Cost Accounting: Value Flow
Structuring costs by
Time FI-AA
Payroll FI Logistics Functional Area
sheet (depreciation)
Cost Center A
Cost Element Accounting
Cost Center B
..
Personnel costs
Cost Center Accounting
Structuring by
Cost Element
Material costs
Costs for services

Cost Object Accounting
Period End Closing / Settlement / ML valuation run:

- Collection of primary and secondary costs by object
- Specification of amount of costs to be activated in B/S (such as WIP)
Tax
Local GAAP
Balance Sheet (B/S) parallel valuation via
IFRS
WIP multiple results analysis versions
Stocks material ledger: Valuation run / AVR
Assets under Construction multiple capitalization versions
Income Statement (P&L)

Revenue in excess of billings results analysis versions
Cost of Goods Sold (CoGS) results analysis versions

Necessity of parallel accounting in CO
Usually only the leading ledger shall post to CO to have a consistent set of data
all over the group for accounting and management reporting purposes.
Data for controlling should be derived from international comparable
numbers within the group.
Usually the internationally comparable numbers are represented by the leading
ledger.
But there are some countries that require actual costs based on their country specific
law.
Brazil
Russia
Turkey
Also one industry specific regulation in USA is requiring actual costs
FERC (Federal Energy Regulatory Commission)

Parallel Valuation of Costs of Goods Manufactured (CoGM)
Different depreciation values (according to two different accounting principles) can be

transferred into Cost Center Accounting.
The depreciation costs can be included in the activity rates for the work performed and in
the costs of goods manufactured, both of which are calculated at period close.
Ledger groups / accounts in FI-GL with inventory values calculated according to two
different valuation methods, can be updated. For example,
CO Version 0 represents the leading valuation (IFRS) Actual costs are calculated
using the periodic costing run and update inventory values in the leading ledger in FI-
GL.
Second CO Version represents the local valuation (GAAP), Actual costs are
calculated using an alternative valuation run and update inventory values in the local
ledger in FI-GL.
.
If your leading valuation is based on standard costs and your local valuation based on actual
costs then
CO Version 0 represents the leading valuation (IFRS) and is used to determine the standard
costs.
The second CO Version represents the local valuation (GAAP). Here you can use the
periodic costing run to update the inventory values in the local ledger in FI-GL.

Cost Accounting with parallel valuation of COGM: Value Flow
FI FI-AA (perform depreciation run)

Ldg-Grp Ldg-Grp N Ldg-Grp Ldg-Grp N
0L IFRS) (LGAAP)) 0L IFRS) (LGAAP))
Structuring costs by
Type (Cost Element)
Cost Element Accounting Version 0 Valuation (Version)
Version N
Cost Center Accounting (parallel Functional Area
(legal Valuation) COGM)
Cost Object Accounting Organization (Cost Center

Period End Closing / Settlement / ML valuation run:

- Collection of primary and secondary costs by object
- Specification of amount of costs to be activated in B/S (such as WIP)
Tax
Local GAAP
Balance Sheet (B/S) parallel valuation via
IFRS
WIP multiple results analysis versions
Stocks material ledger: Valuation run / AVR
Assets under Construction multiple capitalization versions
Income Statement (P&L)

Revenue in excess of billings results analysis versions
Cost of Goods Sold (CoGS) results analysis versions

Value Flow for Parallel Valuation of CoGM
Depreciation Area 01 Depreciation Area 02

Asset Accounting (IFRS) (Local GAAP)
Perform Depreciation Run
Ledger 0L Ledger N
(IFRS) (Local GAAP)
Controlling Version 0 Version N

Update of Depreciation Expenses by Cost (legal valuation) (parallel COGM)
Center and Version
Controlling Version 0 Version 0 Version N

Direct Activity Allocation at
(legal)
X (legal) (par. COGM)
standard; Actual Rate
(Standard rate) (Actual rate) (Actual rate)
Calculated at Period Close
Version 0 Version N
Actual Costing
Y (par. COGM)
X
Periodic Costing Run (legal) OR
Updates either leading valuation or local valuation* (Actual rate) (Actual rate)
Actual Costing Version N Y

Alternative Valuation Run (par. COGM)
Updates local valuation if both valuations use actual costs*
(Actual rate)

Business Requirement: Parallel reporting according to multiple accounting principles to reflect results of
different depreciation rules and for activation of costs in inventory and valuation of cost of goods sold
Solution: Post depreciation to cost centers into parallel actual versions in CO, calculate actual activity rates
based on depreciation, calculate parallel actual material prices in material ledger and revaluate inventory
and costs of goods sold.
Asset Accountant Financial Accountant Controller Controller
Post Post manual Calculate Calculate actual

depreciation to adjustments to actual activity material prices/
cost centers cost centers rates revalue CoGS
Post depreciation in parallel valuation

areas to different versions in CO.
Customer
In CO parallelbusiness
actual versionschallenges
can be defined for up to 3 Business value
parallel valuations (valuations 5, 6 and 7).
In previous releases, only the values in the leading ledger Allows global manufacturing organizations to set activity
Operational postings are posted to all valuations
were transferred to controlling. Other values were prices that take account of depreciation according to IFRS
Some closing activities can post to a specific valuation
unavailable for controlling and therefore could not be used and local GAAP
Parallel actual activity
to determine valuations can and
prices be assigned
update to a valuation
inventory values
area of a valuation plan in asset accounting
for the goods manufactured.
Depreciation is posted by depreciation run to cost centers
with parallel values from parallel valuation areas.


Post other valuation differences manually to cost center

in parallel actual versions only for parallel ledgers, not available for multiple account approach
Customer business challenges

Ledger group specific postings (transaction FB50L) can be
Business value
used
In to post releases,
previous other costsonly
withthe
valuation
valuesdifferences to cost
in the leading ledger Allows global manufacturing organizations to set activity
centers
Ledger
unavailable forgroup is assigned
controlling to accounting
and therefore principle
could not be used and local GAAP
Accounting
to determine principle
activity pricesisand
assigned to CO
update valuation
inventory values
Only
for the goodstomanufactured.
postings cost centers as account assignment are
allowed in ledger specific postings to parallel CO valuations


Calculate actual activity rates

and revaluate activity allocations for the paralle versions where needed
Actual activity rates are calculated for the leading version 0
Customer business
and all parallel challenges
actual valuations in CO. Business value
Different costs
In previous posted toonly
releases, costthe
centers in parallel
values CO
in the leading ledger Allows global manufacturing organizations to set activity
valuations will result in different actual activity prices.
Revaluation
unavailableof foractivity allocations
controlling from othercould
and therefore cost centers
not be used and local GAAP
can be activated by actual version in CO (e.g. valuation at
to determine
standard costsactivity prices
in version 0 vs.and update
actual costsinventory
in parallelvalues
version)
Only by actual activity rates the differences in costs on the
cost centers can flow into inventory and cost of goods.

Calculate multi-level actual material prices
in Material Ledger and revaluate inventory and cost of goods sold
Calculation can
Customer business
be performedchallenges
using the periodic costing run Business value
for the leading version 0, or if version 0 is used for reporting
at previous
In standard prices for one
releases, of the
only the values
parallel in
actual versions.ledger
the leading Allows global manufacturing organizations to set activity
If
were transferred
periodic to controlling.
costing run Other values
is used for version were
0, parallel actual prices that take account of depreciation according to IFRS
unavailable for controlling and therefore could notruns.
versions can be calculated with alternative valuation be used and local GAAP
Actual activity rates
to determine from
activity version
prices andare assigned
update to the costing
inventory values
runs. Cost centers are credited with the closing posting
Revaluation of Inventory and CoGS are posted to assigned
ledgers/accounts the original CO object only in version 0.

Value Flow for Parallel Valuation of CoGM
Depreciation Area 01 Depreciation Area 02

Asset Accounting (IFRS) (Local GAAP)
Perform Depreciation Run
Ledger 0L Ledger N
(IFRS) (Local GAAP)
Controlling Version 0 Version N

Update of Depreciation Expenses by Cost (legal valuation) (parallel COGM)
Center and Version
Controlling Version 0 Version 0 Version N

Direct Activity Allocation at
(legal)
X (legal) (par. COGM)
standard; Actual Rate
(Standard rate) (Actual rate) (Actual rate)
Calculated at Period Close
Version 0 Version N
Actual Costing
Y (par. COGM)
X
Periodic Costing Run (legal) OR
Updates either leading valuation or local valuation* (Actual rate) (Actual rate)
Actual Costing Version N Y

Alternative Valuation Run (par. COGM)
Updates local valuation if both valuations use actual costs*
(Actual rate)


Components
Asset Accounting
Controlling
Material Management Parallel Valuation of stock for different consumption sequence

assumptions (LIFO, FIFO)
Others Revaluation of stock, COGS and WIP via Material Ledger
Parallel Accounting in Material Management
Externally purchased goods
Parallel accounting is possible in the Materials Management (MM) application component.
Operational stock valuation in MM is done either based on standard price or on moving

average price.
Parallel valuation is important on balance sheet date. On balance sheet date operational
valuation has to be corrected.
Stocks have to be valuated based on a consumption sequence like FIFO valuation (first
in, first out), lowest value principle or LIFO valuation (last in, first out) according to the
accounting principle.
This valuation is transferred from MM to FI

Parallel Accounting in Material Management
Externally purchased goods
Balance Sheet valuation is done by transaction MRN9.

For balance sheet valuation correction technique is used. Corrections are stored to
valuation correction accounts.
Account Solution
Customizing: Valuation correction Accounts have to be assigned to a account
modification
Adequate account modification has to be selected for MRN9
Ledger Solution
Customizing: Ledger groups have to be assigned to accounting principle
Valuation correction Accounts have to be assigned to a account
modification
For each Valuation Run the necessary accounting principle has to be selected

Parallel Accounting in Material Ledger (actual costing)
In case that Material Ledger is activated a periodic unit price is calculated using the value
flows for the period. (Operational stock valuation with standard price)
Periodic actual costing run determines single and multilevel costs of all goods for each
period performs revaluation of stock, costs of goods sold and WIP at actual price
according to the leading accounting principle.
Alternative valuation runs are used to perform revaluation of stock, costs of good sold
and WIP according to non-leading accounting principles using alternative activity rates
and / or alternative material prices.

Parallel Accounting in Material Ledger (actual costing)
For balance sheet valuation based on actual costs basically the non leading valuation is
done be alternative valuation run (AVR) .
Account Solution
Customizing: Valuation correction Accounts have to be assigned to a account
modification
Classic AVR is used to do the necessary delta postings
COGM AVR can also be used with adequate BADI (Full Postings)
Ledger Solution
Customizing: Ledger groups have to be assigned to accounting principle
For classic AVR Valuation correction Accounts have to be assigned to
a account modification
For COGM AVR only the ledger group has to be assigned to an
accounting principle

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ParallelAccounting SAP ERP

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Parallel Accounting in SAP ERP

in SAP New General Ledger

Product Management Financials

Aims of this presentation:

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 2

Portrayal of Parallel Accounting in SAP ERP

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 3

Local Close SAP R/3 SAP ERP

Parallel special purpose ledgers X X

Parallel company codes X X

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 4

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 5

Common accounts are used where no material valuation differences occur.

It is advisable to have clearly discernable account number ranges or distinguishing digits or

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 6

Options for creating charts of accounts:

Common accounts retain a 0, but all local valuation accounts have

A prefix is added to all account numbers. Chart of accounts is

IFRS Reporting Local Reporting => Validation of the layer is

Local GAAP Common Accounts IFRS

FC Losses Sales FC Losses FC Gains

Balance Balance Balance

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 8

International accounting principle for example IFRS is primary valuation

Leading Ledger Non-Leading Non-Leading

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 9

Typical Transactions: incoming invoice, outgoing invoice, payment

Typical Transactions: Accrual, provision, foreign currency valuation

1. Same approach and valuation

=> One posting to common accounts or in all ledgers

Example: Incoming invoice for external activities

Expenses: Ext. Activities Payables Tax

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2. Same approach but different valuation

=> Separate postings to local and IFRS accounts or ledgers respectively

Example: Depreciation or reserves for pensions

Expenses: Pensions Accruals

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Examples: (1) Posting only relevant for IFRS: Financial Leasing

Expense Provision for Expenses

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Scenario: Two valuation approaches with IFRS as leading approach

For December 2013, the following depreciation is made:

With a complete posting, the postings appear as follows:

Debit "Local Valuation: Depreciation" 600

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With delta postings, the following postings are made:

Credit "Local Valuation: Depreciation" 400

In this case, the local posting corrects existing values.

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Portrayal of Parallel Accounting in SAP ERP

Receivables, Payables, foreign currency balance sheet accounts may be valuated

The valuation report has to be run for each valuation area.

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Receivables (where applicable, payables) can be valuated differently by number of days

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Valuation area ----> Accounting principle ----> Ledger group

The program is run for each valuation area.

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Receivables can be transferred as doubtful receivables (special G/L transaction).

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Receivables (where applicable, payables) can be portrayed by remaining term on

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