Accruals and deferral concept is used for income and expenditure, as this is recognised when it is earned or incurred and

not when cash is received or paid. Suppose rent, electricity etc are supposed to pay next month but you have received the bills in this current month, in these circumstances you raise a accural posting to your prepaid accounts. The same with the deferrals, supoose your going to receive some interest from bank etc, but wanted to account in this current month for financial statements. Thats is why you give the reason code and reversal date so that in the next month when you run F.81 all this postings will be picked for reversals. This will help you in posting your actuals in the current month

This T.Code (FBS1) is used for posting Provision Entries. Every provision entry, need to be reversed when we book actual cost in the next month. We reverse this provision entries thru F.81, which will reverse the entries based on the reversal date given in the Provision entry (FBS1).

The bottom line for using accrual and then do the reversal, is when you are not sure about the exact expenditure or income amount, but you do the posting based on estimation (popularly called provisions). This has to be reversed when you will post the actual expense or revenue. Otherwise, you will have duplicate entries. For example, you company is paying taxes quarterly to tax authorities. You can post(accrue) the taxes monthly, estimated based on the taxes paid last year for the same period (or based on certain percentage formula), and you will reverse those the next month. You can do the same for the next 2 months as well. You will post the actual expense when you will know the exact amount of tax to be paid quarterly. The accrual accounting principle is that you don't just reflect the expense or revenue when the cash is settled, but when the business activity is performed.

Hi, Would you please describ what is the accrual process? I have one example. Like I m paying rent for the year in advance for 12 month on 1st Jan. How I will post entry in sap?what will be my month end process for the same? like on 1st jan: F-53 paying to vendor 12000 now what entry we will post as accrual entry? which t code we will use? how much amount we will post/reverse? Kindly provide details for paying usd 12000 for whole year and then how we will do in sap? Regards,

but we need to show in system to get the correct picture. Pankaj Ist Month: Vendor Cr 3000 Expense Rent (G/L) Dr 1000 Prepaid Rent (G/L) Dr 2000 2nd Month: Expense Rent (G/L) Dr 1000 Prepaid Rent (G/L) Cr 1000 3rd Month: Expense Rent (G/L) Dr 1000 Prepaid Rent (G/L) Cr 1000 Hi. can you please eloberate more this above example. To Create Accrual/Defferal Documents use T Code: FBS1 . Ist Month: Vendor Cr 3000 Expense Rent (G/L) Dr 1000 Prepaid Rent (G/L) Dr 2000 Here actually we have not paid to vendor.81 . can you please explain me with example. with which t code? when we will reverse this . Chandra Hi. Thanks a lot for this reply. Regards.Pankaj Hi Accruals entries will be created for Payables.Enter Accrual/Deferral Document To Reverse Accrual/Defferal Documents use T Code:F. how we will show this in sap for all three months. thanks for the reply. let say we pay 3000 usd phone bill in Mar End for Jan-Mar. like in the first month you did following entry. like we are paying Phone bill once a three month. what entry/processes do we need to run in sap every month? kindly explain with accounting entry.Reverse Accrual/Deferral Document What ever scenario you have asked in the SDN Form is related to Down Payments (Advance Payments) which is a Special GL Transactions for which you have to configure Special GL Configuration settings for Downpayments Made. like Salaries/Telephone/Electricity/Rent/Agency Commissions/Discounts for the month January will be paid in the month of February. Thanks & Regards. this is a separate business process apart from Accruals and Deferrals concept. the same processs is for Receivables known as Deferral Entries.right? so how we will post this entry in SAP. I think i m now getting on to the meaning. Suppose if you are drawing Financial Statements at the January month end then you can use Accrual Entries which will be reversed in the 1st date of next month February.

And another(more flexible) create Accruals object ACACTREE01. . In your case Accrued expense(Expense incurred but not invoiced/paid). One as described BCSJVS ChnadraBS. There are two functionality of accruals. and run periodic posting ACACACT. Also using ACACTREE01 you can simulate values. with which t code? kindly explain the above for all three months? Thanks & Many regards.02 you'd to reverse one.01 Dr P&L a/c 1000 Cr Phone a/c On 01. and it's better to calculate by average amount and allocate it till months( 3000/3=1000). Sometimes you can make Opening and Closing posting Opening posting Dr Clearing a/c 3000 Cr Phone a/c 3000 and then periodic posting. as this is not real.Income and expenditure is recognized when it is earned or incurred and not when cash is received or paid. So every month you'd to do next posting (Periodic posting) 31.It's accrual basic. Pankaj Hi.entry.

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