NOTES ON BAIC SETTINGS.

COMPANY: Company represents the group. It contains up to 6 characters. It is alpha

numeric. The definition of company is optional. A company can have any number of
company codes

COMPANY CODE: it is the organizational unit in the financial accounting for which a
complete set of books of accounts are maintained for external legal reporting i.e. to prepare
the legal financial statements. It is four-character id. It is alphanumeric.

Country: the information given in this field is called the home country of the company code
and every other country is considered by the system as foreign country.

Currency: the currency entered in this field is called ‘company code local currency’. Every
other currency is treated by the system as foreign currency. This information is used by the
system in identifying the foreign currency. The financial statements are prepared in the
company code local currency.

Language: the language entered in this field determines the language in which the books of
accounts are maintained, the checks and correspondence documents are printed.

BUSINESS AREA: it is the organizational unit in the financial accounting which structures
the organization according the geographical area of operations or the line of activity to which
the business transactions can be posted. The branches of the organization can be taken as the
business area. The purpose of the business areas is to prepare the financial statements for the
internal management analysis purpose. The definition of the business areas is optional. The
system identifies the expenses and incomes with the business areas by specifying the business
area while entering the business transactions in the documents. The business areas are not
assigned to any company code. The business areas are created at client level. This enables
any company code can use the same business area.

FISCAL YEAR VARIANT.

Fiscal year means accounting year. The accounting year means the period of 12 months for
which the companies prepare financial statements normally.

The fiscal year may be calendar year (January to December). It may be non calendar year
also. The non calendar year contains the period of 12 months starting from the any month of
the current year and ending with before month in the next calendar year. For example: April
2010 to march 2011, July 2010 to June 2011, October 2010 to september2011.etc.

The accounting year 2010-2011 is called the fiscal year 2010 in sap
The accounting year 2011-2012 is called the fiscal year 2011 in sap
The accounting year 2012-2013 is called the fiscal year 2012 in sap and so on.

The accounting year 2010-2011 contains the period starting from April 2010 and ending with
March 2010. in this case
April 2010 is called the 1st posting period of fiscal year 2010
May 2010 is called the 2nd posting period of fiscal year 2010
June 2010 is called the 3rd posting period of fiscal year 2010
.
.
.

December 2011 is called the 9th posting period of fiscal year 2010
January 2011 is called the 10th posting period of fiscal year 2010
February 2011 is called the 11th posting period of fiscal year 2010
March 20111 is called the 12th posting period of fiscal year 2010

CALENDAR YEAR.

For example calendar year 2010 contains the period from January 2010 to December 2010.
in this case

January 2010 is called the 1st posting period of fiscal year 2010
February 2010 is called the 2nd posting period of fiscal year 2010
.
.
.
.
November 2010 is called the 11th posting period of fiscal year 2010
December 2010 is called the 12th posting period of fiscal year 2010.

The above periods are called the normal posting periods. To close the books of accounts and
to prepare the financial statements from them we have to carry on lot adjustments. To carry
on the year-end adjustments in sap we have the concept of special posting periods.
The special posting periods are the part of the last posting period of the fiscal year. The
maximum no. of special posting periods is 4.

In the fiscal year variant we define the no of normal posting periods and the no of special
posting periods. The maximum no of posting periods in sap is 16(12 normal posting periods
and 4 special posting periods.)

The sap software comes with some default fiscal year variants.
For example:

V3 April to March 12 normal + 4 special periods

K3 calendar year 12 normal + 3 special periods

K4 calendar year 12 normal + 4 special periods.

The system identifies the posting period automatically from the posting date. The posting
period variant can be assigned to one or more company codes.
 CHART OF ACCOUNTS

Chart of accounts is the list of general ledger accounts used by the organization. It is
compulsory to define the chart of accounts before creating the general ledger master record.
There are three types of chart of accounts.

1. OPERATIONAL CHART OF ACCOUNTS: It is the list of the general ledger accounts

used by the company code in to which all the daily business transactions are posted. From
this chart of accounts the financial statements are prepared. It is compulsory every company
code should be assigned with one operational chart of accounts.

2. COUNTRY SPRECIFIC CHART OF ACCOUNTS: It is the list of general ledger accounts

used to meet the country specific legal requirements.

3. GROUP CHART OF ACCOUNTS: It is the list of general ledger accounts used by the
entire corporate group to prepare the consolidated financial statements. The definition of the
group chart of accounts is optional.

The chart of accounts contains the data for every general ledger account such as name of the
account, number of the account, account group and maintenance language etc.

A chart of accounts can be used by the one or more company codes. In this case the name of
the account, account number and account group is same in all company codes. This is
possible when all the company codes are lying in the same country.

A company code can be assigned with two types of chart of accounts. I.e. operational chart
of accounts and country specific chart of accounts.

ACCOUNT GROUPS
All the general ledger accounts of the organization are classified in to different groups for the
easy and convenient management of gl accounts. These are called the account groups. The
gl account master records are created under the respective gl account group. For this we
assign the number range for every gl account group. At the time of creating the GL account
master records we select the a number from the number range of the accounts group under
which the GL account master records is created and give to the GL account master record.
The following are the functions of the gl account groups.

1. to control the number to be allotted to the general ledger master record created under
the respective group.
2. to control the display of fields to be maintained in the general ledger master records
created un the respective the group.i.e whether every field is required or optional or
displayed or suppressed.

There is no limit to the maximum no of gl account groups. But the there should be
minimum two-gl account groups.i.e balance sheet account group and profit and loss
accounts group.

We can add the gl account groups during the fiscal year if the need arises. We can delete
the gl account group provided no accounts are created in that group.
 POSTING PERIOD VARIANT

The posting periods are defined in the fiscal year variant. To prevent documents from
being posted to wrong posting period, desired periods can be closed. Usually the current
posting period is open and all other periods are closed. At the end of period it is usually
closed and the next period is opened. A period is opened by entering a range into the
posting period variant which encompasses this period. It is possible to have as many
periods open as required. During the procedure of financial closing, some special periods
may also be open for closing postings. The following activities are involved in the
maintenance of the posting period variant
1 Define the posting period variant
2. Assign the posting period variant to the company code
3. Open and close posting period.

RETAINED EARNINGS ACCOUNT

While creating the expenses accounts and incomes accounts we have to specify the profit
and loss account type. For this it is compulsory to create one retained earnings account. We
can define any no of profit and loss account types. For example operating profit and loss a/c
to know the operating profit and non operating profit and loss account to know the operating
profit or loss. At the year end the balances in these profit and loss accounts are taken to the
Balance sheet.

DOCUMENT TYPES AND NUMBER RANGES

The business transactions are posted in to the system through an accounting process called
“posting”. As evidence of posting, a record is generated and stored in the database. This
record is called DOCUMENT.
There are two categories of documents.

1. Original documents. These include the vouchers, cheque book, purchase invoices, copies
of sales invoices and receipts. These are the basis for entering business transactions in to the
system.
2. Processing documents. These include the recurring documents, sample documents, and
accounting documents.
The accounting documents represent the posting of original documents into the system.

Every accounting document contains two parts.

1.Document Header. This part contains the data such as document date, posting date, posting
period, currency, company code, DOUCMENT TYPE. Etc.

3. Document line item part.

Rent a/c dr 10000 (line item no 1)

To cash a/c 10000 (line item no 2)

A document can contain up to 999 line items.
The document line item part contains the data such as posting key, gl account no. and amount
etc. for every line item.
The document type controls the following.

1. The number to be assigned to the document

2. It differentiates the business transactions among the account types and for every
account type it differentiates among the nature of business transactions.

The document types are defined at the client level and are therefore valid for all company
codes. The standard system is delivered with documents types which can be used, changed
or copied.

The number ranges for document types are defined at company code level.

FIELD STATUS VARIANT.

During document entry, different fields are displayed depending on the transaction and the
account used. For example, when posting expenses, cost center and tax information is usually
required. However, when posting cash, this same information is not necessary. These
different displays during document processing are controlled by the field status.

For each category of general ledger account, e.g., cash accounts, expenses accounts, you
need to determine the status of every document entry field. Will text be required,
suppressed or optional for document entry when using these gl accounts? Will cost center be
required, suppressed or optional for document entry when using these gl accounts? Etc., etc.
these “rules” are grouped in to field status groups for each category of general ledger
accounts. The field status groups are collected under one field status variant. The field status
variant is assigned to the company code. No posting can be made until this is complete. R/3
delivers a standard set of field status group. It is recommended to copy the standard delivered
field status groups and modify as necessary.

For every field we can maintain only either of the following status.

1. Suppressed status: if this is selected then that particular field is hidden in the
document while posting the business transaction.
2. Required status: if this is selected for a field then it is compulsory to give the
information in that field.
3. Optional status: if this selected for field then that field is displayed in the document
but we may or may not provide the information in that field.

In short the field status variant controls the display of fields to be entered at the time
of posting the transactions to the gl accounts (at the time of the document entry)

All the fields in which we can enter the information at the time of the document entry are
grouped in to 41 groups which defaulty delivered along with the soft ware. We have to copy
all these groups in to our field status group and make necessary setting.

VALUE DATE.
 It is the expected date of realization of funds involved in the bank instruments i.e. cheque or
bank draft. According to the field status group g005. This filed is selected as required. This
information can be used by the treasury management module to do the cash planning.

TOLERANCE GROUPS

Tolerance groups for gl accounts: setting the maximum limits equal to which or below
which the differences in balance sheet gl accounts are automatically taken to the profit and
loss account or some predefined account like sundry balances written off a/c. based on the
requirements of accounting department we define different tolerance groups and we assign
them in the respective gl account master records. Based on the limits specified in those
tolerance limits, the differences in that gl account is automatically transferred to profit and
loss account. The limits are applied at account level not for the every transaction level in that
gl account.

A tolerance group can be assigned in any no of gl account master records. But a gl account
master record can be assigned with only one tolerance group. The upper limits can be
specified either for the debit difference or for credit difference separately. we can define the
upper limits either in terms of whole amounts or in terms of percentages or both. if the both
the terms are defined, the system will consider the lower of the two as upper limit, and
behaves accordingly.

Tolerance group for employees: For the employees of the accounting dept. we define the
upper limits for posting procedures. The following are the posting procedures.

1. The amount of a document an employee can post into gl accounts, vendor accounts,
customer accounts and asset accounts
2. The amount of the open item he can deal with
3. The percentage of cash discount he can offer or post
4. The amount of payment difference he can accept.

GENERAL LEDGER ACCOUNTING

There are two types of data.

1. Master data: the data which is permanent in existence is called master data. The
record which contains the master data is called master record. The master data is
again and again used during processing.
2. Transactional data: it is the data which is posted to the master record during the
daily management of the business. This is temporary in existence

The General ledger master record contains the data under two segments.

1. Chart of accounts segment: this segment contains the data such as account group,
short text and long text etc. When all the company codes are using the same chart
of accounts this data is same in every company code.
2. Company code segment: this segment contains the data such as account currency,
line item display and sort key etc. This data is specific to every company code.

We can create the general ledger master record in the following ways.
1. At chart of accounts level first then at the company code level
2. Centrally (we can enter the data both in chart of accounts segment and company
 code segment at the same time)

The fields in the General Ledger master record:

1. Account Currency: it is the currency in which the GL account is maintained. The

account currency is automatically defaulted from the company code local
currency. We can change the account currency, if necessary. If the account
currency is company code local currency then we can post the business
transactions in any currency into that account. If the account currency is other
than company code local currency (foreign currency), then we can post the
business transactions into that account in that currency only.

2. Only balances in local currency: if this check box is selected, the system displays
the balances in the company code local currency only. For this purposes if any
foreign currency business transactions are posted, the system will convert those
foreign currency business transaction in to the company code local currency. For
this we require some settings.

3. Line item display: by selecting this check box the system displays the line items
in this GL account. i.e it maintains the details of the business transactions posted.

4. Sort key: it is the criteria according to which the business transactions are
organized in the GL account. The sort keys are system defined.

EDITING GL MASTER RECORD

Once the GL account master record is created we can not change the following fields
1. GL Account number
2. Company code
3. Account group
4. Status of open item management if the any business transactions are existing as open
items in that GL account. Once open items are cleared we can change the status

PARKING THE DOCUMENTS

It is the activity of keeping the documents pending for posting due to want of
authorization. The need for parking arises due to the operation of tolerance group for
employees. The documents are parked by the junior level employees and authorized by
the senior level employees. The parked documents do no update any gl accounts. The gl
accounts are updated when that is authorized i.e. posted by the senior employees. The
junior level employee or the senior level employee can change the parked document
before it is authorized. Once it authorized and posted by the senior employee neither of
them can change it. While authorizing the parked document the senior employee has the
following options.
1. he can post it as it is
2. he can change it if necessary
3. He can delete
4 . he can reject
Even though the parked documents do not update any GL accounts, the system considers
these parked documents for evaluation purposes such calculating taxes etc.
Sap Fico Basic settings notes
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HOLDING
DOUMENTS

It is the activity of keeping the documents pending for posting due to want of
information. When the information necessary to post the document is not completely
available we hold the document. The held documents do not update any gl accounts.
When the required information is available we can retrieve the held document and
give the information and we can post it. Then only the gl accounts are updated. When
holding the document the system will ask for the temporary document no. which is to
be given by the user. The temporary document no is alphanumeric.

SAMPLE
DOCUMENTS

This is the special type of document. This is used to post the business transactions
which occur frequently every day. Using the sample document we can reduce the
posting
burden on the users. The sample document is template for original/accounting
document. Sample documents do not update any transaction figures. We have to define
a special number range for sample documents. The number range no. for sample
documents is X2. The following functions are available for the sample documents.
1. Display
2. Change
3. Delete.

RECURRING
DOCUMENTS

There are some business transactions which occur regularly at fixed intervals.
Examples are rent payment; payment of term loan installment and payment of vehicle
loan installment. In order to post this type of transactions we can use this recurring
document functionality. To use the recurring documents two conditions are to be
satisfied..
1. The day of posting should be same in every interval
2. The amount of the transaction should be same in every interval.

For every recurring document we should specify the fist run date. Last run date
and interval for posting.
The original recurring documents do not update any transactional figures. The
transactional figures are updated when the accounting documents are posted using
the recurring documents by running the recurring cycle.

The following functions are available for recurring documents.

1. Display
2. Change
3. Delete.
Sap Fico Basic settings notes
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We have to define the special number range for recurring documents also. The
number range no. for recurring documents is X1.

FOREIGN CURRENCY POSSTINGS

Translation ration for currency translation: it is the relation between the minimum
units of two currencies in the commercial usage for the conversion purpose. For any
pair of currency the translation ration is always 1:1. but for the Japanese Yen the
relation is always 1:100

Foreign exchange quotations: there are two types of quotation which we can enter
in the foreign currency tables.
1. Direct quotation: for one unit of foreign currency how many number of units of
company code local currency. It is convenient to use the direct quotation when the
foreign currency is bigger than the company code local currency.

2. Indirect quotation: for one unit of company code local currency, how many
number of units of foreign currency. It is convenient to use the indirect quotation
when the company code local currency is bigger than the foreign currency.

Transaction currency: it is the currency in which the business transaction occurs. It

is also called document currency. For every foreign currency posting the system
stores two figures. One in document currency and the other in company code local
currency.
INTEREST CALCULATIONS

Interest calculation types: there are three interest calculation types in sap.

1. Balance interest calculation. This type is used to calculate interest on gl

account balances. For example on term loans. This type is denoted as ‘S’ in
the system
2. Item interest calculation. This type is used to calculate the interest on
vendor/customer account balances. This type is denoted as ‘P’ in the
system.
3. Penalty interest calculation. This type is used to impose the penalty on the
interest payments. this is denoted as ‘Z’ in the system

The first and second types are used by the commercial enterprises and the third type
is used by the financial institutions.

Interest indicator. This is the identification for which we assign all values necessary for
Sap Fico Basic settings notes
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calculating the interest. The interest indicator is assigned in the term loan account
master record to enable he system to calculate the interest according to the values
specified in it.

Reference rate of interest. It is identification for which we assign the real interest rate
i.e.
12%, 13% etc. the reference rate of interest is assigned to the interest indicator. We
can define any no of reference rates of interest.

Calendar type: the calendar type determines the no of days to be considered for
per period for which interest is calculated. There are 4 types of calendars
available for interest calculations in sap.

1. Bank calendar (B): it uses 30days as basis for the month and 360 days as the basis
for the year

2. French calendar (F): it uses the actual no of days in a month as the basis for the
month and 360 days as the basis for the year

3. Gregorian calendar (G): it uses the actual no of days in a month as the basis for
the month and 365 days as the basis for the year.

4. Japanese calendar (J): it uses 30 days as the basis for the month and 365 days as
the basis for the year.

REVERSALS

The reversal function is used to reverse the error documents. There are five types of
reversals in sap.

1. Individual reversals: this function is used to reverse a single document only at

a time. When the document is reversed, the system reverses the posting keys
only.
2. Reverse of reversal: this function is used to reverse a document which was
already reversed.
3. Mass reversal: this function is used to reverse a group of documents at a time.
But once the document is reversed it cannot be reversed directly. We can do it
in the indirect way.
4. Accrual/deferral document reversals: this function is used to reverse the
accrual and deferral documents posted on the last day of the month
5. Cleared item reversals: this function is used to reset the open items which
were cleared.
Sap Fico Basic settings notes
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At the time of reversing the documents, the user can give the date on which the
reverse document is to be posted. If the user does not give any date, the system posts
thereverse documents as on the posting date of the original document.

While reversing the document the user has to specify the reversal reason. We can
define our own reversal reasons in addition to the reversal reasons which were already
defined in the system

ACCRUAL AND DEFFEREAL DOCUMENTS.

In every business transaction there are two aspects.

1. service aspect
2. payment aspect

if the service aspect happens first and then the payment aspect, it is called accrual
business transaction. Example: out standing expenses (expenses payable) and out
standing incomes (incomes receivable). If the payment aspect happens first and then
the service aspect then it is called deferral business transaction. Example: pre paid
expenses and incomes received in advance.

Open item management: if any GL account is maintained on the open item

management then we can display the items which are pending for payment or the
items which are pending for receipt. We can manage only the balance sheet accounts
on the open item management. For the GL account which is managed on the open
item management we display
1. only open items ( items which are pending for payment or the items which are
pending for receipt
OR
2. Only cleared items (the items on which the amount was paid or the items on
which the amount was received

OR
3. all items : we can display both open items and cleared items ( in one screen).

ACCOUNTS PAYABLES NOTES

THIS COMPONENT IS USED TO RECORD AND PROCESS THE BUSINESS TRANSACTIONS WITH
VENDORS
WE CAN DESIGN BALANCE CONFIRMATRIONS,ACCOUNT STATEMENTS AND OTHER FORM OF
REPORTS TO SUITE THE REUIREMENTS

VENDOR MASTER DATA

FOR EVERY ACCOUNT WE SHOULD CREATE MASTER RECORD WHICH CONTROLS HOW THE
BUSINESS TRANSACTIONS ARE PROCESSED.
Sap Fico Basic settings notes
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SPECIFICATIONS MADE IN THE MASTER RECORD ARE USED AS DEFAULT VALUES

vendor master data segements

general, purchase, company code

IT INCLUDES NAME,ADDRESS,LANGUAGE TELEPHONE NO,COMMUNICATION DATA WHICH

CAN BE USED BY ALL THE COMPANY CODES. IT IS STORED AT CLIENT LEVEL

IT INCLUDES RECONCIALATION ACCOUNT NO AND PAYMENT TERMS AND PAYMENT METHODS

ETC.
THIS SPECIFIC TO EVERY COMPANY CODE
THIS DATA IS STORED AT COMPANY CODE LEVEL

USED BY THE PURCHASE DEPARTMENT OF THE OF THE COMPANY.

IT INCLUDES THE ORDER CURRENCY,TERMS OF DELIVERY.

VENDOR ACCOUNT GROUPS

BASED ON THE SIMILARITIES REGARDING THE MASTER DATA MAINTENANCE REQUIREMENTS

VENDORS ARE GROUPED TOGETHER

THESE ARE CALLED VENDOR ACCOUNT GROUPS

CONTROLS
A NUMBER RANGE FOR ASSIGNING ACCOUNT NUMBER
WHCH FIELDS ARE SUPPRESSED,REQUIRED AND OPTIONAL

FIELD STATUS GROUPS

CONTROLS
A NUMBER RANGE FOR ASSIGNING ACCOUNT NUMBER
WHCH FIELDS ARE SUPPRESSED,REQUIRED AND OPTIONAL
Sap Fico Basic settings notes
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AUTOMATIC PAYMENT PROGRAM

Using the automatic payment program we can configure the system

To print the checks, payment advices and payment summery for the

due invoices of the due vendors.

1000 vendors

200 vendors have become due as on the date of executing the program
Xyz vendor . For this vendor 25 invoices due

Only 10 invoices due

In this case the system prints checks only for these ten invoices only

We can configure the different payment methods like check, bank transfer, wire

Transfer etc.

SAP FI
Accounts Payable
Sap Fico Basic settings notes
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H OUSE BANKS
n BANKING ORGANISATIONS OR BANK
BRANCHES ARE CALLED BHOUSE BANKS IN
SAP
n THE ACCOUNTS MAINTAINED AT HOUSE
BANKS ARE CALLED ACCOUNT IDS
n WE HAVE TO MAINTAIN A GL ACCOUNT
MASTER RECORD FOR EACH ACCOUNT ID
AND ASSIGN THAT ACCOUNT ID IN HOUSE
BANK MASTER RECORD.

RECONCIALATION ACCOUNTS
n IT IS THE CONTROL ACCOUNT MAINTAINED IN THE
GENERAL LEDGER TO POST ALL THE BUSINESS
TRANSACTIONS EFFECTED IN THE SUBLEDGER
ACCOUNTS I.E VENDOR ACCOUNTS
n IT IS USED TO KNOW THE TOTAL AMOUNT OF THE
VENDORS PAYABLE BY THE COMPANY AT ANY
POINT OF TIME
n THE FIGURE TO BE REPRESENTED IN THE BALANCE
SHEET IS TAKEN FROM THIS ACCOUNT.
n WE CANNOT POST DIRECTLY INTO THESE
ACCOUNTS
Sap Fico Basic settings notes
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SPECIAL BUSINESS
TRANSACTIONS
n Sap classifies the business transactions with
vendors into normal business transactions and
special business transactions
n Normal business transactions include purchases,
payments, and returns
n Special business transactions include advance
payments to vendors also called down payments
on current assets, bills of exchange, and
guarantees

SPL GL INDICATOR
n IT IS THE KEY WHICH DESCRIBES THE
NATURE OF THE SPECIAL BUSINESS
TRANSACTIONS
n EXAMPLE
ADVANCE FROM CUSTOMERS A
BILLS OF EXCHANGE W
GUARANTEES RECEIVED G
Sap Fico Basic settings notes
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ASSET ACCOUNTING
n THIS COMPONENT IS USED TO PROCESS THE BUSINESS
TRANSACTIONS RELATING TO ASSETS
n THE FOLLOWING ARE THE ASSET TRANSACTIONS
n ACQUISITION OF ASSETS
n SALE OF ASSETS
n TRANSFER OF ASSETS
n SCRAPPING OF ASSETS
n CALCULATION OF DEPRECIATION AND BALANCE SHEET
VALUES
n ASSET ACCOUNTING IS ALSO MAINTAINED ON THE
PRINCIPLES OF SUBSIDIARY LEDGERS
n THE PURPOSE OF THE ASSET ACCOUNTING IS TO CALCULATE
AND POST THE DEP AND TO FIND THE VALUES OF ASSETS TO
BE REPRESENTED IN THE BALANCE SHEET

DEPRECIATION

nIT IS THE REDUCTION IN THE VALUE

OF ASSET DURING THE EXPECTED
USEFUL LIFE OF THE ASSET DUE TO
NORMAL WEAR AND TEAR
SCHEME OF ENTRIES
DEPRECIATION A/C DR 100000

TO ACC DEP ON ASSET A/C 10000

PROFIT AND LOSS A/C DR 100000

TO DEPRECIATION A/C 100000

Sap Fico Basic settings notes
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ASSET CLASSES
n IT IS THE CRIETERIA FOR CLASSIFYING THE
ASSETS OF THE COMPANY ACCORDING TO
MANAGEMENT AND LEGAL REQUIREMENTS
n ASSET CLASSES PROPOSE THE DEFAULT
VALUES FOR ASSET MASTER RECORDS AND
DEPRECIATION CALCULATION ON THE
ASSETS CREATED UNDER THE RESPECTIVE
CLASS

RULES FOR CREATION OF

ASSET MASTER RECORDS
1. MAIN ASSET MASTER RECORDS ARE
CREATED WITH REFERENCE TO
ASSET CLASS
2. SUBASSET MASTER RECORDS ARE
CREATED WITH REFERENCE TO THE
MAIN ASSET MASTER RECORD
Sap Fico Basic settings notes
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DEPRECIATION AREA
IT IS THE AREA SHOWING THE
VALUATION OF FIXED ASSETS FOR
PARTICULAR PURPOSE SUCH AS
INDIVIDUAL FINANCIAL
STATEMENTS,BALANCE SHEET FOR
TAX PURPOSE,OR MANAGEMENT
ACCOUNTING VALUES

CH ART OF DEPRECIATION
n A LIST OF DEPRECIATION AREAS
n EACH COMPANY CODE IS ALLOCATED TO ONE
CHART OF DEPRECIATION
n A CHART OF DEPRECIATION CAN BE USED BY
SEVERAL COMPANY CODES
n THE CHART OF DEPRECIATION AND CHART OF
ACCOUNTS ARE INDEPENDENT TO EACH OTHER
n THE CHART OF DEPRECIATION IS ALWAYS TO BE
COPIED FROM REF CHART OF DEPRECIATIONS
DEFAULTLY DELIVERED WITH THE SOFTWARE
Sap Fico Basic settings notes
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DEPRECIATION TYPES IN SAP
n 1. ORDINARY DEPRECIATION

THE PLANNED DESTRIBUTION OF THE

ACQUISITION COST OF THE AN ASSET OVER
THE COURSE OF ITS USE FUL USING A
DEPRECIATION METHOD. THE ORDINARY
DEPRECIATION DEPICTS THE VALUE
REDUTION CASUED BY THE NORMAL WEAR
AND TEAR.

SPECIAL DEPRECIATION
THE DEPRECIATION PROVIDED FOR THE
TAX REASONS .
THIS IS ALSO CALLED TAX
DEPRECIATION
Sap Fico Basic settings notes
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UNPLANNED DEPRECIATION
n THE REDUCTION IN THE VALUE OF
THE ASSET DUE TO AN EVENT WHOSE
EFFECT IS PERMANENT

THA UNPLANNED DEPRECIATION IS

ALWAYS TO BE POSTED MANUALLY.

EXAMPLE

BOOK VALUE OF ASSET AS ON 1.4.2007 100000

FIRE ACCIDENT OCCURRED ON 25.7.2007

THE ASSET WAS REVALUED AFTER ACCIDENT

AS INR 60000
SO THE DIFF OF 40000 IS CALLED UNPLANNED
DEPRECIATION
Sap Fico Basic settings notes
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ACCOUNT DETERMINATION
n IT IS THE KEY USED TO IDENTIFY THE
ASSET CLASSES AND THE RELEVANT
GL ACCOUNTS TO BE UPDATED FOR
THE ASSET TRANSACTIONS I.E
ACQUISITIION OF ASSET,SALE OF
ASSET,SCRAPPING OF ASSET ,TRANSFER
OF ASSET AND DEPRECIATION ON THE
ASSET

SCREEN LAY OUT RULE

nA GROUP OF SETTINGS THAT
SPECIFIES:
THE FIELDS THAT SHOULD BE
MAINTAINED IN THE ASSET MASSTER
RECORD
WHETHER THE FILEDS ARE REQUIRED
ENTRY FIELDS OR OPTIONAL ENTRY
FIELDS
Sap Fico Basic settings notes
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Multi level methods

Using the different combinations of method and rate

of depreciation during the Different phases
of expected useful life of the asset

Organizational structure for Materials Management

Company code Purchase organization

Plant no1 plant no2

Storage storage storage

Location 1 location2 location 2

(Warehouse ( warehouse ( warehouse

For RM ) for WIP ) for FG)

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Sap Fico Basic settings notes
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The following are some of the material types available in sap.
Price control
ROH -------------------------- raw materials v

ERSA --------------------------- stores and spares v

VERP ---------------------------packing materials v

FERT -----------------------------finished goods s

HALB ------------------------------- work in progress v

HAWA --------------------------- traded goods v

DIEN ----------------------------services v

Price control

The price control determines how the consumption and inventory values are to be

Determined for the financial accounting purpose.

V ------moving average price

S ------ standard price.

Moving average price is represents the prices of all the lots in the stock of

A material . So it is considered as the most effective rice.

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Sap Fico Basic settings notes
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Example for calculation of moving average price

100 units @ 10 p.u 100x10 = 1000

150 units @ 11 p.u 150x11 = 1650

200 units @ 12 p.u 200x12 = 2400

------ -----------
450 5050
------- ------------

Moving average price = total cost of stock/total qty of stock

= 5050/450= 11.20

no of units issued to production = 150 unit

Value of consumption 150x11.20= 1680

Business process in the materials management for purchase materials

Material requisition ( sent by the production department to stores department)

Purchase requisition ( sent by stores department to purchase department)

Call of quotations

Analysis of quotations

Purchase order ( contains the details like material no,quantity, price, date of delivery, quality parameters etc.)

Goods receipt ------ inventory of raw material a/c dr

to GR/IR clearing a/c

Invoice verification ---- GR/IR clearing a/c dr

to vendor a/c

Material issue for production ------- raw material consumption a/c dr 1

to inventory of raw material a/c
Sap Fico Basic settings notes
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Transaction event keys

These are nature of business transactions that occur in the

materials management . The transaction event keys are system defined.

We cannot create the own Transactions event keys.

BSX ------------ inventory posting

WRX --------- GR/IR clearing account

GBB --------- off setting account for inventory posting.

VNG raw material consumption

VBR raw material scrapping

AUF production receipt against production order

ZOF production receipt without production order

VAY delivery of goods when the sales a/c is revenue account

VAX delivery of goods when sale a/c is not revenue account

General modifiers
The transaction event keys are linked to “movement types”

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Sap Fico Basic settings notes
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Movement types: the movement types determine the GL accounts to be updated for

The material business transactions in the material management component, the following

Are the some of the movement types.

101---------- goods receipt

102----------- reversal of 101

201---------- issue of material to cost center

202 ----------reversal of 201

261----------- issue of materials to internal order

262 --------- reversal of 261

The movement types are linked to transaction codes in the software,

BSX (DR)

Movement type 101

WRX (CR)

WRX (DR)

Movement type 102

BSX ( CR)

GBB/VBR (DR)
Movement type 201

BSX (CR)

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Sap Fico Basic settings notes
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Transaction code for goods receipt
MIGO

BSX (DR) GBB/VBR (CR)

200121 100520
INV OF RM A/C GR/IR CLEARING A/C

INVENOTRY OF RAW MATERIAL A/C DR

TO GR/IR CLEARING A/C

TRANSACTINO CODE FOR GOODS ISSUE MB1A

GBB/VBR(DR) BSX (CR)

400000 200120
RAW MATERIAL CONSUMPTION INV OF RAW MATERIAL

RAW MATERIAL CONSUMPTION A/C DR

TO INVENTORY OF RAW MATERIAL A/C

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Sap Fico Basic settings notes
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Valuation classes: these are the keys used to categorize the materials

According to the profit &loss account and balance sheet requirements.

Raw materials Stores and spares

3000 Local raw materials 4001 local stores

3001 imported materials 4002 imported raw materials

3002 inter plant materials

3003 inter unit materials

Finished goods 7920

No of local raw materials 1000 nos

Imported raw materials 1000 nos.

Local raw materials consumption a/c 400000

Imported raw materials consumption a/c 400001

Inventory of local raw materials a/c 200121

Inventory of imported raw materials a/c 200122

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Sap Fico Basic settings notes
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At the time posting of raw material issue the user gives the material number, movement

Type and quantity. Based on the movement type the system determines the transaction

Event key. Based on the material number the system moves to the accounting tab

Of the material master record and identifies the valuation class. Then it will update the

Respective GL accounts assigned for that valuation class and for those transaction

Event keys. And It also identifies the moving average price and multiplies it with the quantity

Which is the value of consumption.

Valuation BSX WRX GBB/VBR

class
Raw material (1) ( local ) 3000 200121 100520 400000

Raw material (2)(imported) 3001 200122 100520 400001

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Sap Fico Basic settings notes
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Organization structure for sales and distribution
Company code

Sales organization 1 sales organization2

(local sales) (export sales)

Distribution channel1 distribution channel 2

(Distributors) (dealers)

Sales area: it is the each combination

Of sales organization, distribution
Channel and division
Division 1 division 2
(four wheelers) ( two wheelers)

Business process in SD

Enquiry

Quotation

Sales order

Initialization of stock/ Finished goods stock a/c dr

Transfer of goods from plant to to cogm a/c
FG stock a/c

Cogs dr
Delivery of goods
to finished goods stock a/c

Billing Customer a/c dr

to sales a/c