New GL

Basics of New General ledger

Manish Kumar

* Screenshots and all other information are based on mySAP ECC 5.0 version. The purpose of this ppt is to give a
basic understanding and the configuration settings required for new GL implementation.
Contents
• Why use the New GL??

• Settings for new GL

• New GL- An User’s Perspective

• Reporting
Why use the New GL??
Business Requirement New GL functionality

* Reporting as per different Concept of multiple ledgers- Leading & Non

GAAP leading ledger

* Unified management & legal Profit Centre integrated with GL

reporting

* Segmental reporting as per Segment defined as an enterprise element

US GAAP
* Financial statement below Document split functionality
company code level

* Reporting as per cost of sales Functional areas included

accounting
Settings for New GL-(i)
• Organizational structure is created to map the
business structure of the organization in SAP.

• ControllingArea- To provide a closed environment for cost

accounting. Cross company code cost accounting.

• Company Code- Legal entity for external reporting.

Compliance with local requirement as per the law of the land.

• Chart of Accounts- Grouping of all GL accounts used.

•Profit Centers -For internal management reporting as an

independent responsibility centre “Companies with in the
company”.
Settings for new GL-(ii)
• Leading Ledger- Based on the same accounting principle as that of
consolidated financial statement. Integrated with all non-leading ledger
& gets many of the parameters from the company code.

• Non-leading Ledger- Based on local accounting principles =>

Assignment to alternate currencies & fiscal year variant that differ from
that of leading ledger.

• Ledger group- Grouping of ledger created for the purpose of

applying the function of accounting to all ledgers. A representative
ledger defined with in the ledger group determines the posting period
for all the ledgers included in that ledger group.

• Segments() FI account assignment object derived from the master

data of Profit center. Used for segment reporting.
* Excerpt from IAS 14: … reporting is required for a business or geographical segment when the majority of its revenues stems
from sales to external customers and segment revenues account for at least 10% of total internal and external revenues of all
segments, segment income accounts for at least 10% of all segment income, or segment assets account for at least 10% of the
assets of all segments
Settings for new GL-(iii)
• Functional areas- For classifying the expenses of an organization by
functions. Required for producing the financial statement as per cost of
sales approach.

•Parallel Accounting (0L-Leading Ledger may use IFRS, Non leading

ledger group uses local accounting principle)- Different accounting
principle applied to different ledgers.

• Scenarios- Define the field to be updated in ledgers when it receives

posting from other applications. Some std scenarios are assigned to
ledgers are

• FIN_CONS- Update of consolidation transaction type & trading

partner field

• FIN_PCA- Update of profit centre & partner PC field.

• FIN_SEGM- Update of segment, PC and etc.

Settings for new GL-(iv)
• Document splitting- Line items are split along selected This ensures
creation of financial statements at level below company code.

• The system identifies relevant GL accounts for split as per the

assigned item category in configuration.

•Document split rules are decided based on the transaction, variant

assigned to the document type in configuration.

• “ Profit Centre may be used as Characteristic” for document split.

• The standard document split method 0000000001( split of customer,

vendor & tax) line items.
 Settings for New GL-(v)
Segment

•Segment is a FI account assignment object and is derived from profit centre master data. The corresponding
segment is automatically updated for the relevant profit centers. The segment can be updated from BADI ‘s also
(FAGL_DERIVE_SEGMENT).
Settings for New GL-(vi)
Segment

• To post, analyze and display document segment in the new GL, the
following steps are required.

• Define the segments in configuration.

• Derive the segments- SAP supports derivation of segment from

profit centre master data.

• Maintain the field status variant of the required FI accounts.

• Assign the required scenario to relevant ledgers.

Settings for New GL-(vii)
Parallel Financial reporting

• Parallel financial accounting means that financial statements have to

created in accordance with different accounting rules.

•Business reason- Accounting in local view is no longer sufficient by itself

in the globalised world of business partners. Internationally recognized
accounting standard such as IFRS are the need of the hour.

• New GL lets you use different ledgers as per different accounting

principle.

• In SAP system each client has one leading ledger & essentially more
than one non leading ledger.
Settings for New GL-(viii)
Parallel Financial reporting

•The use of non leading ledger makes it possible to use a different fiscal year
variant with in the same company code. In earlier versions of SAP it was not
possible to use different fiscal year with in the same company code.

Fiscal year variant for leading ledger derived from Fiscal year variant for non leading ledger different
Company Code . from leading ledger .
Settings for New GL-(ix)
Implications of using different fiscal year

• In Asset accounting it is still not possible for depreciation areas to have

fiscal year variants with different start & finish dates.

•If a fiscal year variant is assigned to a depreciation area with different start
& finish dates, the system issues error message.

• Possible solution- In the New GL in Asset Accounting, it is still not possible for
depreciation areas to have fiscal year variants with different start and finish dates. If
you try to assign a fiscal year variant to an area, whereby the fiscal year variant
infringes this restriction, the system issues error message AC 531.However, you can
assign a ledger group to this area for an inconsistent valuation, whose ledger has
different fiscal year variants to the valuation area in Asset Accounting. This is both
technically possible and a desired function..

•SAP contends that this issue arises because of technical restrictions.

•Refer SAP Notes No- 844029

Settings for New GL-(x)
Cost of Sales Accounting

• New GL has the ability to provide profit & loss statement of the
organization based on cost of sales accounting principle.

•For this, all the expenses incurred are allocated to functional areas in SAP
system.
New GL- User perspective-(i)
• Different views of a FI document - Two views of any FI document
possible in New GL, Entry View & Ledger View

•Entry view- In the entry view a document contains the document line
items originally entered or transferred from the original component..
New GL- User Perspective-(ii)
• In the general ledger view, a document contains the document line
items originally entered or transferred from the original component and
split line items generated by document splitting. Documents in the
general ledger view always apply to a specific ledger.

Additional line item created as a result of document split.

New GL Reporting-(i)
Reports in New GL

• The standard RFBILA00( Financial Statements) is still available in New

GL.

• The new feature includes the ability to run the report for non leading
ledgers.
New GL Reporting-(ii)
Reports in New GL

• New GL has the ability to give the financial statement as per the
requirement (either at company code level or organization level below it).

• The dynamic selection button ( ) on the report screen gives the

flexibility to select additional entries such as profit centre, functional area
etc.
• By navigating through the drill down reporting (S_PL0_86000028) it is
very easy to turn a company code report to a profit centre report.