1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger implath2Fsystom%2Fapo'k2Ftemplates%42F prnt%s2F&showPrintalog=t FI-NEW GENERAL LEDGER ‘Over view on New General Ledger SAP has introduced a new concept called as SAP New GL structure, Let us understand this concept of SAP New GL structure and its use ‘Typically in SAP you can depict parallel accounting. Which means you can Carry out valuations and closing operations for a ‘company code according to local accounting principle and a second accounting principle (parallel) i.e. the group accounting principle, Till version 4,7 you could carry out the parallel accounting only by using additional accounts. Certain GL accounts are common between 2 accounting areas. Certain GL accounts applicable only for local reporting Certain GL accounts applicable only for group reporting, ‘This kind of a set up requires 2 retained earnings accounts. ‘The disadvantage of this set ups is lot of GL accounts are required and sometimes reconciliations become difficult. To overcome with the above approach SAP has now introduced the SAP New GL Structure, In this approach Parallel accounting is depicted using an additional ledger, ‘The data for one accounting principle is stored in the general ledger. This Ledger is known as the Leading ledger or Leading valuation view. For each additional (parallel) accounting principle, you create an additional Ledger. ‘The advantages of this approach are:- 1) You do not have to create any additional G/L accounts, 2) You manage a separate ledger for each accounting principle 3) You can use the standard reporting functions to create a financial statement 4) You can have different fiscal year variants attached to each of the additional ledger. '5) You can make manual postings to any of the additional ledgers. 6) Cost of Sales Accounting You can perform cost of sales accounting in General Ledger Accounting, For this purpose, General Ledger Accounting contains the Functional Area dimension. Above all these functions of the new general ledger, S.A.P provides for Document Splitting and CO to Fl reconciliation Introduction to Document Splitting in new GL Document Spliting in new GL in SAP ECC is one of the key changes introduced by SAP to streamline multiple reporting requirements and to enable faster closing process for No functionality was more keenly awaited as document spliting However, certain lines in financial posting (like Payables, Receivables) would not generate any value for profit centre. This is because of an apparent conflict between the requirements for accounting and the requirements for reporting of financial transactions, itpsiistes.google.com/stisapfcotutor-new.general-odgerimp=%o2Fsystom*s2Fapp%2Ftemplates%2 print%2F&showPrntDialog=*1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t = For the purposes of reporting, a Vendor line item could belong to multiple profit centers, on the basis of procurement of goods / services will be posted to relevant profit center = For the purposes of accounting, the Vendor line item belongs to the legal entity that is the company code responsible for the payment of vendor dues. All nancial postings catered to accounting requirement of the posting. At the month-end, users could execute a series of steps to transfer Vendor, Customer, Asset and Inventory balances to Profit Centers. During this transfer, the outstanding balance at the time of transfer would spit by profit centre and post to respective profit centers ‘The disadvantage with this process was that the Trial balance by profit centre could only be reasonably generated at the end of the month after the balances were transferred to profit centers. Real-time reporting by profit centre for balance sheet items was not possible, unless the user manually split the lines during data entry. The process to transfer balances to Profit Centre increased the time to close books at end of the month. New GL in SAP ECC Document spliting functionality in new GL performs automatic split in real-time, for the line items on a financial document for the user-selected characteristics (called scenarios") like profit centre, segment , Business areas, Functional area. SAP delivers pre-configured spliting rules that can be used to perform the online document split. SAP customers can configure the rules to Suit their business processes, if the pre-configured rules do not satisfy their business requirements. ‘The document spliting functionality was delivered with another useful functionality ~ zero/ self-balancing. This functionality enables SAP customers to produce a complete AND a balanced balance sheat and Profit & Loss by Profit Centre. Functions of Document spliting in new GL in SAP: Active Split ‘The amounts on the line items that do not have Profit Centre will be split in the ratio of the amounts on the base line items, The line item to be split and the base line item can be configured by the users, Example of Document Splitting during Vendor Invoice processing (Active Split) Active split occurs when the amounts on the line items that do not have Profit Centre are split by the system based on preconfigured splitting rules, Let us look at an example of a Vendor Invoice posted in new GL. The Vendor Invoice is posted to expense accounts for costs belonging to two profit centers. There is an input tax posted as part of this transaction. This view is called the “data entry view". ‘The Vendor Account is credited with AUD 440,00; this is the amount that is relevant for accounting. ‘SAP will split the document in the background based on pre-configured splitting rules. The split document is reflected in the "General Ledger view’ will look as below. ‘The amounts on the Vendor line and the amounts on the Tax line are split to the profit centers in the ratio of the amounts of the expense lines. This is a reporting view of the same financial document; the vendor payable is AUD 440 in accounting view but is split by Profit Centre in the reporting view Functions of Document spliting in new GL in SAP: Passive Split Passive split occurs when the amounts on the line items that do not have Profit Centre are split by the system based on preceding processes. This is defined within SAP code and cannot be configured. An example is when Vendor Invoice is paid, the Vendor line items on the payment document are split in the ratio of the original split in the preceding Vendor Invoice document. Example of Document Spitting during Vendor Payment processing (Passive Split) Let us look at passive split in a business process when the above Vendor Invoice is paid in full. The accounting document in data entry view is as below. itpssistes.google.com/stisapficotutor-new.generalodgerimpl=%o2Fsystom*s2Fapp%2Ftemplates%2Fprit%2F&showPnntDialog=*1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t ‘SAP will carry over the split on the Vendor line item from the preceding process (Vendor Invoice process) and will spit the Vendor line in the payment document in the same ratio, The split document is shown in the General Ledger view. Functions of Document spliting in new GL in SAP: Self-balancing Document spliting functionality in new GL allows the users to produce a balance sheet by profit centre (or dimension — according to the functional areas). However, the Balance Sheet is not a balanced Balance Sheet. As you notice in the document below, the total of Profit Centre 1100 is in the credit of $30 and the total of Profit Centre 1000 is in the debit of $30. ‘The Profit Centre Managers do not have enough information in their respective Balance Sheets to analyze the cause of the difference or which Profit Centre is owing! in debt to their Profit Centre ‘The self-balancing functionality in new GL will produce additional entries in General Ledger view to offset the balance in each profit centre in the document. This process will normally occur when = multiple profit centers has been derived on all lines of the financial document and hence, active document splitting was not required = the total amount on all lines for any given profit centre is not zero As in the previous example, the self balancing entry is automatically posted based on configuration settings. In the self-balancing clearing entry below, you will notice that the line item has also populated a partner profit centre, This will allow Profit Centre Managers to analyze the clearing account by Profit Centre owing! owed. ‘As you can see, document splitting functionality provided in new GL in SAP is a very powerful feature of the new SAP version. It allows business users to generate trial balance by Profit Centre in real time. This also makes redundant the month end processes to transfer Balance Sheet balances to Profit Centers — another feature of new GL - thereby ‘enabling faster close. CO to Fl reconeiliation CO to Fl reconciliation is one of the significant process improvements in SAP new GL. With New GL, SAP will reconcile CO ledger with FI ledger real-time. If differences exist, it posts an adjustment document in the corresponding ledger to reconcile the two ledgers. Crass company allocation within Controlling is generally the main cause of difference. We will use a cross company allocation example to examine how new GL. reconciles CO Ledger with Fl Ledger. CO Fl Ledger Reconciliation When allocations are made within Controlling, they might post to two cost objects or two cost centers that belong to different ‘company codes. In legal terms, one company code has charged cost to another company code. Since this allocation occurs in Contralling, the legal impact of cross company allocation is required to be reflected in Financial Accounting Without SAP new GL, business users are required to execute a period end job to reflect this posting in Financial Accounting. With new GL, SAP posts documents in Financial Accounting simultaneously with the cross company allocation posting in Controlling. The obvious advantage of this is faster period end close because users do not have to execute the period end job to reconcile the ledgers. New GL ensures integrity of data between the two ledgers is maintained throughout. Demonstration of how new GL handles COFI reconciliation. ‘As an example: A cross company code cost centre allocation in Controlling. This posting should generate a real-time cross- ‘company posting in Financial Accounting One of the pre-requisites is that SAP new GL is active. It is not essential to have document spliting active. But as a default we assume that this is active for the purpose of this scenario Profit Centre 1300 is assigned only to Company Code V001 and Profit Centre 5001 is assigned only to Company Code VO0S. itpsiistes google.com/stisapfcotutor-new.generalodgerimpl=%o2Fsystom’s2Fapp%2F templates’ prit%2F&showPrntDialog=*1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t ‘This demonstration of COFI Real-Time Integration is for a cross-company code posting. The similar lagic and configuration step applies to cross profit centre, cross functional area, or any of the other new GL scenario, SAP new GL design dri 19 COFI Reconciliation ‘The below configuration has to be done to enable COF! reconciliation. Define Variants for Real-Time Integration Assign Variants for Real-Time Integration to Company Codes Define Account Determination for Real-Time Integration Define rules for selecting CO Line items Transfer CO Documents retrospectively Define Variants for Real-Time Integration Here we define parameters for Real-Time Integration ‘Select the indicator to activate Real-Time Integration = Key Date: is the date from when the Integration is active. if you decide to put a date in the past, you can execute “Transfer CO documents retrospectively” if no transfer was made previously. It is recommended that you put the key date as the first date of the next fiscal period. = Account determination: This will use the account determination rules, which you will configure in the next step, to post the accounting entry in Financial Accounting. Itis recommended that you always select this indicator. If you do not select this indicator, and = Post an allocation using a primary cost element, SAP will use that GL account to post back into Fl = Post an allocation using a secondary cost element, SAP will not post an entry back into Fl ‘Assign Document Type for COF! Reconciliation postings. = Leave Ledger field blank. FI document will post to all ledgers. You could either select scenarios for which you want FI reconciliation documents to be posted; or use BAdl to select scenarios; or define Rules to select scenarios. You can, for example, select all cross-profit centre documents (within the same company code) to be posted back to Fl as woll. = Avoid selecting transfer of all CO allocation Line Items or Trace — this will impact performance of the processes. \Variant for Real-Time Integration can be defined in IMG menu path Financial Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of Controlling with Financial Accounting > Define Variants for Real-Time Integration Assign Variants for Real-Time Integration to Company Codes Variants for Real-Time Integration can be assigned by Company Code. Assign your variant to all Company codes within the Controlling Area. Assignment of Variant for Real-Time Integration can be defined in IMG menu path Financial Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of Controlling with Financial ‘Accounting > Assign Variants for Real-Time Integration to Company Codes Account Determination for Real-Time Integration ‘There are two tables to be configured: = Define intercompany Clearing = Define Account Determination for Real-Time Integration Define intercompany Clearing itpssistes.google.com/stisapfcotutor-new.general-odgerimpl=%o2Fsystom*s2Fapp%2Ftemplates%42Fprit%2F&showPrntDialog=*1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t ‘This is generally configured as a part of general Finance configuration. There is no additional configuration required here. When COF! Reconciliation posting is made in Financial Accounting, this table is used to populate the Inter Company customer and Inter Company Vendor account. ‘You can check this configuration in IMG menu Path Financial Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of Controlling with Financial Accounting > Account Determination for Real-Time Integration > Define Intorcompany Clearing Define Account Determination for Real-Time Integration When COF! Reconciliation posting is made in Financial Accounting, this table is used to populate the COF! Reconciliation clearing account. You can define the COFI reconciliation GL account in IMG menu Path Financial Accounting (New) > Financial Accounting Global Settings (New) >Real-Time Integration of Controlling with Financial Accounting > Account Determination for Real-Time Integration > Define intercompany Clearing Define rules for selecting CO Line items ‘You can define your own rules to determine which CO line items should be selected for transfer to Financial Accounting, You assign this rule in the variant for COF! Reconciliation. Selection of checkboxes in the variant is the standard way to activate the transfer; define rules only if you business process has special requirements (eg. certain cross company code postings should not transfer back to Financial Accounting), Transfer CO Documents retrospectively ‘You would only need to perform this if you activate COFI Reconciliation retrospectively in the variant definition for Real-Time Integration. Cross Company code Allocation in Controlling | created a simple cross company allocation cycle to allocate IT costs from Cost Centre 1322 in Company Code VO01 to Cost Centre 5001 in Company Code VO0S. (Once the allocation is performed, the system posts an entry into Controlling as shown below. Costs are allocated from Company Code V001 to Company Code V00S. This is a charge of costs across legal entities. Hence, the posting should reflect in the legal books as well With COFI Reconciliation active and the tables configuration as shown above, the system has posted a cross company document in Financial Accounting as shown below, ‘The General Ledger view of the two documents in Company code VO01 and 00S is shown below. Conclusion With new GL COF! Real-Time Integration functionality, users can now expect Fl documents posted in real time for all cross company code (or any of the new GL scenarios) allocations in CO. This eliminates the need to perform period end job to transfer CO postings to Fl and has greatly help reduce the period end processing time, ‘SEGMENT IN S.AP itpsiistes google.com/stisapfcotutor-new.generalodgerimpl=%o2Fsystom’s2Fapp%2F templates’ prit%2F&showPrntDialog=*1111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t ‘Segment is one of the Hierarchy Level more than the Profit Center. EX:- A company has products like Steel and Oil in 3 countries You can take 2 profit Centers (Product wise)and 3 Segments (Location Wise;) mostly used for Geograph Location ‘segment is one of the business unit and profit center is one of the geographical unit ‘One segment can be assigned to 2 or more profit centers. But one profit center cannot be assigned to 2 or more segment, ‘Segment is higher level than profit center in the organization, RELIANCE COMPANY H Products I I Gas Petrol | PROFIT CENTER PROFIT CENTER, \d states Ind united states So, GAS and Petrol are the Segements. INDIA, UNITED STATES are Profit Centers There is an argument like this If reliance Company maintain Like below ex then what is the use of segment & PROFIT CENTER RELIANCE COMPANY INDIA USA (IF INDIA AND USA ARE COMPANY CODE) OIL GAS Ol GAS (IF OIL AND GAS ARE BUSINESS AREA) Based on the above arguments We can come to a conclusion that every thing in S.A.P depends upon the Scenario and requirements of the client ‘The client might opt for Business area in Financial accounting and for the purpose of External Reporting ‘The client might opt for Segment in Contraling (Profit Center Accounting) for the purpase of internal reporting. ‘Segment as per S.A.P SAP Help Portal - itpssistes.google.com/stesapficotutor-new.goneral-odger?impl=%e2Fsystem*s2Fapp%2Ftemplates%2Fprit%2F&showPrntDialog=11111372018 htipsstes.google.comistersapticotutorf-new-generaltedger mplat%h2Fsystom%2Fapo'k2Ftemplates%42F print%s2F&showPrinialog=t Division of a company for which you can create financial statements for external reporting, ‘The accounting principles US GAAP and IFRS require companies to perform segment reporting. You can define segments in your SAP system for this purpose, You find the appropriate IMG activity in Customizing under Enterprise Structure 1) Definition © Financial Accounting - Define Segment. You can enter a segment in the master record of a profit center. The characteristic Segment. only released in combination with the characteristic Profit Center. If no segment is specified manually during posting (only possible for transactions in Financial Accounting), the segment is determined from the master record of the profit center. This profit center can also be assigned manually or derived, Ifyou want to apply different rules to derive the segment during posting, you can define your own rules for this. You find the corresponding settings in Customizing under Financial Accounting (New) ~ Financial Accounting Global Settings (New) © Tools = Customer Enhancements 1 Business Add-Ins (BAdls) " Segment Derivation ‘The document spliting procedure is the prerequisite for creating financial statements at any time for the Segment dimension, For this, you need to set up a zero balance setting for the Segment characteristic, You find the document splitting settings in ‘Customizing underGeneral Ledger Accounting (New) Business Transactions | Document Spliting. DOCUMENT SPLIT IS :- An automatic procedure for organizing line items in the document according to selected dimensions (such as organizing receivable lines by profit center). Moreover, you can effect a zero balance seiting for selected dimensions (such as profit center or segment). The zero balance setting causes additional clearing lines to be generated on clearing accounts in the document after the document has been created For example, the document spliting procedure is necessary for drawing up financial statements for the selected dimensions. US GAAP requires a virtually complete balance sheet at the segment level for segment reporting (essentially everything apart from stockholders’ equity). The segment is defined as a subarea of a company with activities that generate expenses and revenues, with an operating result that is regularly used by management for profit assessment and resource allocation purposes, and for which separate financial data is available. IFRS has almost exactly the same requirements for segment reporting, ‘You can use the Segment dimension to represent the segment levels. f you want to represent segments in two dimensions (primary and secondary segmentation), you can do this as follows: You can use the Segment dimension for the primary segmentation, You can represent the secondary segmentation in your system, ‘You can do this by including a customer field Region in General Ledger Accounting, for example. customer field ‘A.customer field is a database table field that is created and defined by the customer. ‘Such flelds are therefore not delivered in the SAP standard system. ‘The standard delivery already contains many fields (or “dimensions"), such as business area, profit center, and segment. You can also tailor the way these fields are used to your reporting needs. For these fields, SAP provides extensive functions and integrated processes, such as those for the profit center. itpssistes.google.com/stesapficotutor-new.goneral-edgorimpl=%62Fsystem*s2Fapp%2Ftemplates%2Fprit%2F&showPrntDialog=1