11/27/24, 6:47 AM

General Ledger Accounting (FI-GL)

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Configuring Ledgers

Purpose
Before you can work with the functions of General Ledger Accounting, you have to configure your ledgers. Once you have planned
the data structure of your general ledger accounting, you make settings in Customizing of your SAP system to reflect this.

 Note
You configure your ledgers in the form of ledgers. The term ledger describes a technical view of a database table and it is used
in this documentation as a synonym for a general ledger.

Prerequisites

You made the general settings for the fiscal year, posting periods, and currencies.

You have created company codes and at least one controlling area, and have assigned the company codes to a controlling
area.

Process Flow
Follow these steps to configure your ledgers for general ledger accounting:

1. Create the required ledgers in the Customizing activity Define Settings for Ledgers and Currency Types (transaction
FINSC_LEDGER). You are required to have a leading ledger. In addition, you can create additional standard ledgers or
extension ledgers.

2. Assign company codes to the ledgers. Ensure that you assign all company codes to the leading ledger.

3. Make the settings for currencies, the fiscal year variant, and the posting period variant.

4. Assign accounting principles to the ledgers/company codes. There are two ways to handle parallel accounting:

Using ledgers (recommended):

Assign one accounting principle to each ledger/company code.

Using the account approach:

You can assign multiple accounting principles for each ledger/company code. To do so, select the Parallel
Accounting Using G/L Accounts checkbox in the company code settings for the ledger.

 Note
You can group standard ledgers together into ledger groups that you can then post collectively.

Result
You have configured your ledgers for general ledger accounting and can now create your master data (chart of accounts, G/L
accounts, segment, profit centers).

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Ledger

Use
A ledger is a central repository for accounting data.

You define your ledgers in Customizing under Financial Accounting Financial Accounting Global Settings Ledgers Ledger
Define Settings for Ledgers and Currency Types . When you create a ledger, the system automatically creates a ledger group
with the same name.

Structure
These are the types of ledger:

Leading Ledger

You must designate one ledger as the leading ledger. In the standard system, the leading ledger is 0L. This ledger is updated
in all company codes, that is, it's assigned to all company codes. The document numbers assigned in this ledger apply for
all dependent ledgers. The leading ledger contains the complete set of document items in table ACDOCA.

In each company code, the leading ledger receives exactly the same settings that apply to that company code: the
currencies, the fiscal year variant, and the variant of the posting periods. You can define a second and third parallel currency
for your leading ledger for each company code. To do so, go to Customizing and choose Financial Accounting Financial
Accounting Global Settings Ledgers Ledger Define Currencies of Leading Ledger .

The leading ledger is integrated with Controlling (CO) and therefore forms the basis for CO actual data. That means that the
CO actual version VERSN 0 is essentially the same as the leading ledger.

Non-Leading Ledgers

Alongside the leading ledger, you can have other non-leading ledgers or extension ledgers. The non-leading ledgers are
parallel ledgers to the leading ledger. They can be based on a local accounting principle, for example. You have to activate a
non-leading ledger for the individual company codes. Non-leading ledgers also contain the complete set of document items
in table ACDOCA.

 Note
Posting procedures with subledger or G/L accounts managed on an open item basis always affect all ledgers. This
means that you cannot perform ledger-specific postings to subledger or G/L accounts managed on an open item basis.
If you manage G/L accounts on an open item basis to monitor accounting aspects such as reserve allocations and
reversals, you need to take additional measures in your internal controls system.

Non-leading ledgers can have different fiscal year variants and different posting period variants in each company code than
the leading ledger of this company code. The second and third currency of the non-leading ledger must be a currency that
is managed as second or third currency in the respective company code. However, you do not have to have a second and
third currency in non-leading ledgers; these are optional. Alternative currencies are not possible.

Extension Ledgers

Extension ledgers are created based on an underlying ledger. The postings to the underlying ledger also apply for the
extension ledger, without a need for redundant data storage. When you run reports for an extension ledger, the data of the
underlying ledger is also called. Therefore, only the manual postings made directly in the extension ledger are stored
physically on the database. (Automatic postings are not possible.) You can assign a separate company code and a separate
posting period variant to the extension ledger. However, currency settings and the fiscal year variant are not allowed to
differ from the underlying ledger.

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You can create different extension ledgers that are based on the same underlying ledger. You can also define an extension
ledger based on another extension ledger.

Extension ledgers are useful, for example, for providing information from a management viewpoint, without the need for
touching the data of the underlying ledger.

Day Ledgers

You use a day ledger if you want to create reports for average balances (reports for displaying average daily balances). You
can activate the day ledger for drilldown reporting.

You are not allowed to define day ledgers as the leading ledger or use them as the representative ledger in a ledger group.

 Note
If you use the account approach for parallel accounting, you need only one ledger. That is automatically the leading ledger.

Example

You create your consolidated financial statements in accordance with the IFRS accounting principles. Your individual company
codes apply the local accounting principles US GAAP or German HGB to produce their financial statements. You therefore create
three ledgers:

Ledger 0L (leading ledger) that is managed according to the group accounting principle

Ledger L1 (non-leading ledger) that you activate for all company codes that apply US GAAP

Ledger L2 (non-leading ledger) that you activate for all company codes that apply HGB

Extension Ledger
Use

Ledgers build the basis for reporting and financial statements in Accounting by storing related transaction data and journal entries.
For this reason, all posting-relevant configuration settings for a company code, such as the accounting principles, currency
settings, fiscal year variants (FYVs), and posting periods, must be linked to a specific ledger.

A ledger that contains a full set of configuration settings and full posting information is called a standard ledger.

Every system needs one main standard ledger that is called the leading ledger (by default, this is ledger 0L). As this ledger contains
all information necessary to make postings, it is the basis for other ledgers that might be created in addition for other purposes.

Depending on your business requirements, the leading ledger could, for example, be used for your company’s consolidated
financial statements or for your local financial statements.

If companies need additional views of their financial data, for example, according to another accounting principle, they can use the
option of extension ledgers.

As long as there's one underlying standard ledger as a basis, you can have multiple extension ledgers on top of each other. They
inherit the configuration settings of the underlying ledger and only store delta information that is not posted to the underlying
ledger. Reporting on extension ledgers always includes the data from the underlying ledger although it is not physically stored in
the extension ledger. Extension ledgers that are based on a standard ledger thus have a smaller data footprint than two parallel
standard ledgers.

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To fulfill different adjustment and reporting purposes and to benefit from different management views, it is also possible to create
multiple extension ledgers based on one underlying standard ledger.

How do extension ledgers work?

Extension ledgers inherit the configuration settings of their underlying ledger. They cannot have differing currency settings or
FYVs. However, they can have different accounting principles, posting period variants, or company codes assigned to serve their
specific purpose. They don’t store postings made to the underlying ledger but only the manual postings made directly to them.

Use cases for an extension ledger could be, for example, to create an extension ledger to be used for posting into closed periods for
restatement purposes, and in parallel to create another extension ledger to be used for adjustments for consolidation purposes
only. To create an extension ledger, go to Customizing and choose Financial Accounting Financial Accounting Global Settings
Ledgers Ledgers Define Settings for Ledgers and Currency Types .

When you create an extension ledger, you also have to specify the underlying ledger as well as the extension ledger type. The
extension ledger type indicates what type of journal entries is posted to this extension ledger. There are various types of extension
ledgers that you can choose from according to your business needs. For more information, see Extension Ledger Types.

Alternatives to extension ledgers

Depending on your business needs, you might need an additional standard ledger in addition to your leading ledger. This could be
the case, for example, if you need a different FYV or want to use different currency settings. This could become necessary, for
example, if the tax year or global reporting year differs from the local reporting year. In this case, you can’t use an extension ledger,
which would inherit the underlying ledger's configuration settings, but have to create another standard ledger that acts as a non-
leading ledger. This ledger receives all postings, including manual entries, from the leading ledger that are posted without a ledger
group or that are posted to a ledger group assigned to the non-leading ledger. In other respects, it is kept separate with its own
configuration settings. You can also create extension ledgers based on non-leading ledgers.

Here’s how ledgers can be built:

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The following table shows how the leading ledger with its full configuration settings and the other kinds of ledgers can differ from
the leading ledger:

Differences to Leading Ledger Possible?

Ledger: Different currency Different fiscal year Different posting Different Different company
settings possible? variant (FYV) period variant accounting code assignment
possible? possible? principle possible? possible?

Non-leading ledger Yes Yes Yes Yes Yes

(compared to
leading ledger)

Extension ledger No No Yes Yes Yes

(compared to
leading ledger)

Example
Your company wants to report with both consolidated financial statements and local financial statements. You have the following
options to set up your ledgers to fulfill this requirement:

You configure a leading ledger for the consolidated financial statements plus one parallel non-leading ledger for the local
financial statements or vice versa.

You configure a leading ledger for the consolidated financial statements plus one extension ledger for the local financial
statements or vice versa.

You configure only one leading ledger to cover the different financial statements.

Extension Ledger Types

Depending on the purpose of your extension ledger, you might need full journal entries, that is, journal entries with real document
numbers, or only journal entries with purely technical document numbers.

When you create an extension ledger, you also have to specify the extension ledger type. The extension ledger type indicates what
type of journal entries is posted to this extension ledger.

The types of journal entries are listed here, in sequence starting with the type that contains the most extensive data to the least
extensive data:

1. Standard journal entries:

This type of journal entry is identical to the journal entries posted to the underlying ledger. This type of journal entry is
saved with document numbers. These journal entries cannot be deleted and have to be reversed when required. You can
use extension ledgers with standard journal entries, for example, for manually adjusting journal entries to a different set of
accounting principles or for a certain kind of management adjustment postings that are not visible in the underlying ledger.

2. P - Line items with technical numbers /no deletion possible:

This type of journal entry is saved using technical numbers only (that is, without document numbers). They cannot be
deleted and have to be reversed when required. You can use these journal entries, for example, for commitments or
predictive accounting purposes.

3. S - Line items with technical numbers/deletion possible:

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This type of journal entry is saved using technical numbers only (that is, without document numbers). These journal entries
can be deleted. You can use them, for example, for simulation purposes.

4. G - Journal entries for G/L adjustment postings

This type of journal entry is intended for adjustment postings from a general ledger perspective.

You can enter account assignments for subledgers, such as fixed assets, materials, or cost centers. However, the system
checks only whether these assignments exist. It does not run any other consistency checks. The assignments may,
therefore, be incomplete from a subledger perspective.

In addition, you cannot perform any subledger-specific functions or reporting with this type of journal entry.

You can use these journal entries for the following postings, for example:

Cash basis accounting: post journal entries as soon as cash is received or disbursed.

Realignment: make manual transfer postings from a general ledger perspective, such as functional areas or profit
centers.

Note that the creation of multiple extension ledgers is restricted by the extension ledger type and follows this logic:

On top of an extension ledger with the standard journal entries type, you can create an extension ledger of any type.

On top of a type P extension ledger, you can create another type P or type S extension ledger.

On top of a type S extension ledger, you can only create another type S extension ledger.

Example
You create a ledger (AB). On top of ledger AB, you want to create two extension ledgers: E1 to be used for management adjustment
postings, and E2 to be used for simulation purposes. For extension ledger E1, you select extension ledger type Standard journal
entries. On top of extension ledger E1, you create extension ledger E2 using extension ledger type S.

For extension ledgers that are used for simulation purposes (in the example, ledger E2), posting periods are copied from the
underlying ledger and can't be changed. The reason for this is that posting periods have no impact on simulation postings and it's
therefore irrelevant whether a posting period is open or closed.

Ledger Group

Definition
A ledger group is a combination of standard ledgers for the purpose of applying the functions and processes of General Ledger
Accounting to the group as a whole.

Use
You can combine any number of ledgers in a ledger group. In this way, you simplify the tasks in the individual functions and
processes of General Ledger Accounting. For example, you can make a posting simultaneously in several ledgers.

Each ledger is also created automatically as a ledger group of the same name. You can use these automatically created ledger
groups to process an individual ledger.

You only have to create those ledger groups that you want to process together in a function using processing for several ledgers.

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If you do not enter a ledger group, processing is performed automatically for all ledgers. You therefore do not need to create a
ledger group for all ledgers.

Keep in mind that extension ledgers cannot be included in ledger groups. For each extension ledger, there is only one ledger group
with the same name, containing just that extension ledger. The system posts to the extension ledger whenever its underlying
ledger is posted.

You define your ledger groups in Customizing for Financial Accounting (New) under Financial Accounting Global Settings (New)
→ Ledgers → Ledger → Define Ledger Group.

Structure

Representative Ledger of a Ledger Group

When you define each ledger group, you have to designate one of the assigned ledgers as the representative ledger for that ledger
group.

The system usually uses the representative ledger to determine the posting period during posting and to check whether the
posting period is open. The posting is then made to the assigned ledgers of the ledger group using the appropriate fiscal year
variant for each individual ledger.

 Note
When the posting periods of the representative ledger are open, the postings are made to all other assigned ledgers, even if
their posting periods are closed.

Alternatively, you can specify that the system performs the postings using the posting periods of the non-representative ledgers.
For more information, see G/L Account Posting.

The following rules apply for the specification of the representative ledger of a ledger group:

If the ledger group has a leading ledger, the leading ledger must be designated as the representative ledger.

If the ledger group does not have a leading ledger, you must designate one of the assigned ledgers as the representative ledger.
During posting, the system uses the fiscal year variant of the company code to check whether the selection is correct:

If all ledgers in the ledger group have a different fiscal year variant to that of the company code, you can designate any ledger as
the representative ledger.

If one of the ledgers in the ledger group has the same fiscal year variant as that of the company code, you must designate that
ledger as the representative ledger.

 Note
You may be unable to use the same ledger group for all company codes. In that case, you have to create separate ledger groups
and, in each one, designate a different ledger as the representative ledger.

Daily Special Ledger

Definition

A day ledger is a totals table with a fiscal year variant of 366 periods and containing all original postings for the general ledger.

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Use
You create a day ledger if you want to create reports for average balances (reports for displaying average daily balances). You can
activate the day ledger for drilldown reporting. For more information, see SAP Note 599692.

 Caution
You may not define a day ledger as the leading ledger or as the representative ledger in a ledger group.

For day ledgers, you also cannot define different posting periods and a fiscal year that differs from the fiscal year of the
representative ledger.

Example
When defining a cycle for a ledger, you can specify a ledger group.

You can define this ledger group so that it contains the source ledger and the day ledger.

Note, however, that an allocation is posted as period-end closing on the last day of the period.

Let us assume that you have made the following postings:

Date Amount in EUR

January 5 100

January 8 200

January 17 300

February 5 400

This results in the following balances in the ledgers:

Leading Ledger (16 Periods) Daily Special Ledger

Period/Amount Period/Amount

1 /600 5 /100

2 /400 8 /200

17 /300

36 /400

If you perform the allocation for January (postings up until January 31), you distribute EUR 600 to other units:

Leading Ledger (16 Periods) Daily Special Ledger

Period/Amount Period/Amount

1/0 5 /100

2 /400 8 /200

17 /300

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Leading Ledger (16 Periods) Daily Special Ledger

Period/Amount Period/Amount

31 / -600

36 /400

 Note
For more information on allocation in General Ledger Accounting, see Allocation.

Making Settings for Ledgers

Use
In General Ledger Accounting, you can use multiple parallel ledgers. You do this to produce financial statements according to
different accounting principles, for example. You create a ledger for each of the general ledgers you need. You must check the
settings of your leading ledger even if you do not use parallel ledgers.

Procedure

You make the settings listed below in Customizing for Financial Accounting under Financial Accounting Global Settings
Ledgers Ledger Define Settings for Ledgers and Currency Types .

In the Ledger view, create additional ledgers, for example, if you require parallel accounting. You can create different currency
settings for each ledger. Extension ledgers inherit the currency settings of their underlying ledgers. Ledger 0L is the leading ledger
in the scope of delivery, to which all businesses are assigned.

In the Company Code Settings for Ledgers view, assign the required currency types for each ledger.

Configure fiscal year variant and open period variant for non-leading ledgers. Note that you can’t change the currency and fiscal
year variant settings for ledgers/company codes for which postings already exist. Set the Parallel Accounting Using G/L Accounts
indicator if you want to use several accounting principles within one ledger.

 Tip
For each ledger, you can display a detail screen by double-clicking the relevant row in the ledger.

If you expand the details, you can see whether the general ledger has calculated as an approximation a currency that is not kept
in a subledger. If slight deviations, for example, rounding differences, are possible for a particular application component for
which there is no historical data, this is indicated by the Deviation in <Application Component> checkbox.

In the Accounting Principle for Ledger and Company Code view, you assign the corresponding accounting principle to each
combination of ledger and company code.

If you are using a parallel accounting approach and need to assign more than one accounting principle in a ledger, ensure that you
have selected the Parallel Accounting Using G/L Accounts indicator in the Company Code Settings for the Ledger view. This
setting checks whether the number of accounting principles assigned is correct.

For information about the relevant currency settings, see Currencies Managed in Parallel in the Universal Journal.

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Scenario in General Ledger Accounting

Definition
Combination of Customizing settings from different business views. These Customizing settings are used to specify which posting
data is transferred from other application components to General Ledger Accounting (for example, cost center update or profit
center update).

Use

You assign the desired scenarios to your ledgers. For each ledger, you define which fields are filled with posting data from other
application components.

To assign a scenario to a ledger, go to Customizing for Financial Accounting and choose Financial Accounting Global
Settings Ledgers Ledger Assign Scenarios and Customer Fields to Ledgers (see also Making Settings for Ledgers).

SAP delivers a number of scenarios in the standard system. You cannot define your own scenarios.

To display the fields for a scenario, go to Customizing for Financial Accounting and choose Financial Accounting Global
Settings Ledgers Fields Display Scenarios for General Ledger Accounting .

Structure
For each scenario, the system transfers the posting data relevant for General Ledger Accounting from the actual and plan
documents.

Scenario Fields Filled Technical Field Name

Cost Center Update Cost Center RCNTR

Sender Cost Center SCNTR

Preparations for Consolidation Trading Partner RASSC

Transaction Type RMVCT

Business Area Business Area RBUSA

Partner Business Area SBUSA

Profit Center Update Profit Center PPRCTR

Partner Profit Center PRCTR

Segment Reporting Profit Center PRCTR

Segment PSEGMENT

Partner Segment SEGMENT

Cost of Sales Accounting Functional Area RFAREA

Partner Functional Area SFAREA

 Caution

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You have to set up cost of sales accounting. The Functional Area field is not filled automatically by the assignment of the
scenario to your ledger. For more information, see Activating Cost of Sales Accounting.

Integration
If you use document splitting, define the fields of a scenario that you have assigned to the ledger as document splitting
characteristics.

 Note
For more information, see Making Settings for Document Splitting.

Profit Center Update

Use
A profit center is an organizational unit that reflects a management-oriented structure of the company and for which an individual
period result can be determined. The division of a company into profit centers makes it possible for management responsibility to
be delegated to these local organizational units and enables these organizational units to be self-controlled. In this way, a profit
center acts like a company within the company.

 Note
The manager of a profit center is responsible for costs and revenues, whereas the manager of a cost center deals with the units
in which capacity costs arise.

With Profit Center Accounting, you determine internal operating profit for a profit center using either period accounting or cost of
sales accounting. You can also draw up balance sheets for profit centers and output financial key figures (such as return on
investment, cash flow, or sales per employee). For this, you convert the profit center into an investment center.

Implementation Considerations
You want profit center accounting to be integrated in the General Ledger Accounting application component as opposed to
using the classic Profit Center Accounting application component (in Enterprise Controlling) in parallel to General Ledger
Accounting.

 Note
It is not useful to activate classic Profit Center Accounting alongside the Profit Center Update scenario, especially since this
would increase the data volume.

If you already use classic Profit Center Accounting and would now like to perform profit center accounting in General Ledger
Accounting, you can continue to run classic Profit Center Accounting in parallel to the Profit Center Update scenario in General
Ledger Accounting during an interim phase. Nevertheless, we would advise against using this parallel setup in the long term due
to the effort required for reconciliation and the increased volume of data. (See also SAP Note 826357 and the restrictions
described therein.)

Performing profit center accounting within General Ledger Accounting offers the following advantages:

You can use document splitting. By using document splitting, you can display payables and receivables specific to the profit
centers where they occurred and, if desired, you can also create balance sheets at the profit center level.

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For more information, see Document Splitting.

There is no need for any reconciliation tasks between General Ledger Accounting and Profit Center Accounting.

For more information on customizing Profit Center Accounting, see the documentation in the Implementation Guide (IMG) under
Financial Accounting General Ledger Accounting Master Data Profit Center .

Integration
If you want to display payables and receivables specific to the profit centers where they occurred, you have to use document
splitting.

If you use the Segment Reporting scenario with the Segment characteristic, you also need to activate the Profit Center Update
scenario.

In Profit Center Accounting, you can use period accounting and/or cost of sales accounting. If you want to use cost of sales
accounting, you must additionally activate the Cost of Sales Accounting scenario and make the corresponding settings for Cost of
Sales Accounting.

Features
Determining the Period Result and Creating a Balance Sheet

The main aim of profit center accounting is to determine the period result for each profit center. The SAP system allows you to
portray the period result according to both period accounting as well as cost of sales accounting.

By assigning different balance sheet items (such as fixed assets, payables and receivables, material stocks, and work in process) to
profit centers, you can also output your company’s fixed assets by profit center. In this way, you use your profit centers as
investment centers. This also makes it possible for you to determine a number of financial key figures by profit center, including
return on investment, working capital, and cash flow.

Goods movements between profit centers can be valuated either at external prices, group-internal prices, or specially defined
transfer prices.

Organization

You can divide up your company into profit centers in the following ways:

By product (product lines, divisions)

By region (locations)

By function (production, sales)

Profit Center Accounting can thus be used by companies in all sectors of industry (machinery, chemicals, services, and so on) and
for all forms of manufacturing (such as repetitive manufacturing, make-to-order production, or continuous flow production).

The assignments of all profit-relevant objects to profit centers play an important role. These determine how your business is
divided up into areas of responsibility. You make these assignments in the master data of the original objects (such as materials,
cost centers, orders, projects, sales orders, assets, cost objects, or profitability segments).

Every profit center is assigned to the controlling area organizational unit. All profit centers of a controlling area are assigned to a
profit center standard hierarchy that reflects the organizational structure of profit center accounting in your company.

Actual Postings

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For manual G/L account postings in General Ledger Accounting, you can specify the profit center or partner profit center. In the
case of primary cost elements, the profit center or partner profit center is derived automatically from the cost-relevant account
assignment. For payables and receivables as well as for automatically generated posting items, yon cannot enter the profit center
manually. If you use document splitting, the system can provide these items with a profit center.

Data from Upstream Applications

Data from upstream applications (such as Logistics) generally already contains a profit center or a partner profit center as a result
of the assignment of objects (such as material or sales order) to a profit center. In some business transactions, the profit center or
partner profit center is determined for selected items (such as payables or receivables) during document splitting.

With the standard settings, the system updates to General Ledger Accounting any additional lines created for goods movements
between profit center boundaries when the following prerequisites are met:

You use transfer prices.

You use the profit center valuation approach.

You have assigned as a parallel currency the currency type and valuation type of the profit center valuation to the leading
ledger as well as to the other relevant ledgers.

If you do not use the profit center valuation approach in the system, you can use the Business Add-In (BAdI) Update of Internal
Revenues Between Profit Centers (FAGL_INTERNAL_ACCOUNTS) to activate the update of additional lines created in the legal
valuation view. In such cases, the system updates the additional lines in all ledgers in General Ledger Accounting.

Planning

You can perform planning at the profit center level.

For more information, see Integrated Business Planning for SAP Simple Finance Add-On for SAP Business Suite powered by SAP
HANA.

Reporting

The Reporting tool offers flexible analysis options for analyzing plan and actual data that has been posted. The reports in the
standard delivery represent a simple information system for controlling profit centers. In addition, you can use various tools to
create your own reports to tailor them to your individual requirements.

Tools

General Ledger Accounting provides a range of tools, such as validation, substitution, archiving, and Application Link Enabling
(ALE).

Constraints
Profit Center Accounting is always performed within a controlling area. SAP does not support profit center accounting that is
performed across all controlling areas.

Additional Information
SAP Note 826357

Authorizations for Profit Centers

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Use
You can define profit center authorizations for posting, clearing, and displaying documents.

Prerequisites
You have made the following settings in Customizing:

1. In Customizing for Financial Accounting, you have activated the scenario Profit Center Update for at least one ledger.

2. You have assigned the authorizations for the desired profit centers in the user’s profile.

3. In Customizing for Financial Accounting, you have activated the authorization check for profit centers under Financial
Accounting Global Settings Authorizations Activate Authorization Check for Profit Centers .

See also the prerequisites detailed in the documentation on this IMG activity as well as the link to the documentation on
authorization object K_PCA.

Features
When you have activated the authorization check for profit centers, the system reacts as follows:

A document can only be posted if the user has authorization for all profit centers to which postings were made in the
document. The authorization check is performed simultaneously during data entry.

For manual clearing, the system only selects those open items that, in accordance with the general ledger view, make
postings to profit centers that are initial or for which the user is authorized.

For document display, the system only displays those line items for which the profit centers are initial or in which postings
are made to authorized profit centers.

 Note
The authorization check for profit centers does not enable transactions to be processed entirely from the point of view
of profit centers. This means, for example, that automatic payment processes and automatic clearing continue to be
performed centrally and not specific to profit centers - even when the authorization check is activated for profit centers.

Segment Reporting

Use

You use segment reporting to portray the items in the financial statements by segment. The detailed results are then presented by
segment. Annual financial statements supplemented by the segment information from segment reporting provide deeper insights
into the financial position, asset position, and profit situation of a company.

Segment reporting is required by some accounting principles, such as US GAAP and IFRS.

Integration
On the basis of the documents in new General Ledger Accounting, the system determines the segments that are relevant for the
individual balance sheet items. The documents only contain segment information when document splitting is activated with the
Segment characteristic.

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 Note
In the case of documents that have been transferred from Contract Accounts Receivable and Payable (FI-CA), it is not
possible to perform document splitting subsequently in General Ledger Accounting. Such documents must therefore already
contain the segment information before the transfer. For more information about using segment reporting in combination with
Contract Accounts Receivable and Payable, see The Segment in Contract Accounts Receivable and Payable.

Prerequisites
The following prerequisites must be met for segment reporting:

In Customizing for Enterprise Structure under Definition Financial Accounting Define Segment , you have defined
the segments that are relevant for segment reporting.

For information about segment derivation, see Segments.

You have made the default settings for document splitting in Customizing for Financial Accounting under General Ledger
Accounting Business Transactions Document Splitting .

Furthermore, you have made the following settings specifically for segment reporting:

In the activity Define Document Splitting Characteristics for General Ledger Accounting, you have defined the
segment as a document splitting characteristic. For the system to produce a zero balance for each document, you
need to have set the Zero Balance indicator for the segment.

In the activity Define Zero-Balance Clearing Account, you have specified a clearing account for the line items that
the system creates during document splitting to produce a balance of zero for the Segment characteristic.

For more information about the Customizing settings for document splitting, see Making Settings for Document Splitting.

For the segment to be shown in the G/L account items in the entry view, we recommend making the following settings:

In Customizing for Financial Accounting under Financial Accounting Global Settings Ledgers Fields Define Field
Status Variants , define the segment as an Optional Entry for all relevant field status variants. This affects all field status
variants of the field status groups that are relevant for transferring the accounts to General Ledger Accounting.

In Customizing for Financial Accounting under Financial Accounting Global Settings Document Define Posting Keys
, define the segment as an Optional Entry for all relevant posting keys.

 Note
If you use FI-CA integration, you have to make additional settings. For more information, see The Segment in Contract Accounts
Receivable and Payable

Additional Information

For more information about implementing General Ledger Accounting together with segment reporting and FI-CA integration, see
SAP Note 1502792.

Cost of Sales Accounting

Use
The profit and loss statement of an organization can be created according to two different procedures:

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Period accounting

Cost of sales accounting

Cost of sales accounting compares the sales revenue for an accounting period with the manufacturing costs of the activity. The
expenses are allocated to the commercial functional areas (manufacturing, sales and distribution, administration, and so on).
Expenses and revenues that cannot be assigned to the functional areas are reported in further profit and loss items, sorted
according to expense and revenue type.

With this type of grouping, cost of sales accounting identifies where costs originate in a company. It therefore portrays the
commercial purpose of the expense.

Prerequisites
You have made the required settings in Customizing. For more information, see Activating Cost of Sales Accounting .

Functional Area

Definition

A functional area is an account assignment characteristic that sorts operating expenses according to their function. For example:

Manufacturing

Administration

Sales and distribution

Research and development

Use
If you use cost of sales accounting, you have to sort your operating expenses by functional area.

You define your functional areas in Customizing for Financial Accounting under Financial Accounting Global Settings
Functional Area for Cost of Sales Accounting Define Functional Area .

Integration
You can add the functional area to the master data of various objects. During posting, the system derives the functional area from
the master data of the assigned objects.

For more information, see Derivation of the Functional Area.

Activating Cost of Sales Accounting

Process Flow
You make the following settings in Customizing under Financial Accounting Financial Accounting Global Settings Functional
Area for Cost of Sales Accounting :

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1. Define your functional areas:

Choose Define Functional Area .

2. Choose Activate Cost of Sales Accounting for Preparation .

This sets the Functional Area field as being ready for input in the master data of the objects, but the functional area is not
yet derived during posting.

3. Add the functional area to the master data of objects:

Choose Enter Functional Area . For more information, see Functional Area in Master Data.

4. You can also define a substitution rule for deriving the functional area.

Choose Define and Activate Substitution for Cost-of-Sales Accounting . Alternatively, choose Financial Accounting
Financial Accounting Global Settings Tools Validation/Substitution Define and Activate Substitution for Cost-of-
Sales Accounting .

 Note
Define a substitution rule only if you have additional requirements regarding the derivation of the functional area. Before
defining a substitution rule, check if it suffices to add the functional area to the master data of the objects.

5. Activate cost of sales accounting for your company codes.

Choose Activate Cost of Sales Accounting .

 Note
To display cost of sales accounting, cost of sales accounting must be active for the company code and the
corresponding ledgers.

Result
You have activated cost of sales accounting. The functional area of postings is derived by the system. For more information, see
Derivation of the Functional Area.

You are now able to create a profit and loss statement based on cost of sales accounting. For more information, see Creating
Financial Statements According to Cost of Sales Accounting.

Functional Area in Master Data

Use
You can add the functional area to the master data of various objects:

G/L account

Cost element

Cost center

Orders

Order type

Internal order

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Sales order with make-to-order and requirements class

Maintenance, service, and QM order

Production order, product cost controller, and cost object hierarchy

WBS elements

Project profile and project definition

WBS element

Networks

Network type

Network header

Network activity

During posting, the system derives the functional area from the master data of the assigned objects. For more information, see
Derivation of the Functional Area.

Prerequisites
If you want to be able to enter the functional area in the master data of the specified objects, the Functional Area field in the
master data must be ready for input. You need to have activated cost of sales accounting for your company codes or activated it
for preparation. You make this setting in Customizing for Financial Accounting under Financial Accounting Global Settings
Functional Area for Cost of Sales Accounting :

Activate Cost of Sales Accounting for Preparation

Activate Cost of Sales Accounting

 Note
The master data of the following objects is not company code-dependent, rather it is assigned to higher-level
organizational units:

Object Assigned Organizational Unit

G/L account Chart of accounts

Cost element

Cost center category Client

Order type

In such cases, the Functional Area field is ready for input in all company codes of a client, provided that the status of cost of
sales accounting is either In Preparation or Active for at least one company code of the client.

Key Features
You have the following options for adding the functional area to the master data of the objects specified:

Add functional area

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You can add the functional area provided that no postings exist for this object.

Change functional area

You can change a functional area that has already been entered as long as no postings exist. Where postings already exist,
you can no longer change the functional area. Postings that have already been made cannot be changed automatically. The
functional area is derived only in the case of new postings.

 Note
However, if you have to change the functional area and postings already exist, you can change the error message from
work area FH with number 600 to a warning message and then change the functional area. You do this in Customizing
for Financial Accounting under Financial Accounting Global Settings Tools Change Message Control . You then
have to transfer existing postings manually.

Functional Area in Internal Orders

Use
You can enter the functional area in the master data of internal orders.

Key Features
When you create an internal order, the system checks whether a functional area exists in the order type or in the model order:

If a value exists, the value is transferred as default value into the master data of the internal order.

If there is no value, the system checks whether a functional area exists for the specified responsible cost center. If a value
exists in the cost center, this value is transferred as default value into the master data of the internal order.

SAP provides the user exit COOPA_01 in the standard system. You can use this to check whether the functional area in the master
data matches the functional area in the order type. You can also define your own checks in this user exit.

 Recommendation
To ensure the consistency of the functional area in the master data of the internal orders and the consistency of the responsible
cost center, define the Functional Area field as a display field. This prevents the functional area from being entered manually in
the internal order. In Customizing for Controlling, choose Internal Orders Order Master Data Screen Layout Select
Fields .

Activities
Choose Controlling Internal Orders Master Data Order Create or Change.

Derivation of the Functional Area

Use

The system derives the functional area so that expenses can be grouped by functions during the following postings:

Primary postings (postings in Financial Accounting) to an income statement account

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Secondary postings (allocations in Controlling)

 Note
The system derives the functional area for both objects involved in an allocation.

The system does not derive a functional area in the following cases:

Postings to balance sheet accounts

Entering statistical key figures in Controlling

 Note
Only real and statistical cost objects will be considered for deriving the functional area. If, for example, the account assignment
consists of a sales order item, but the posting line also contains a WBS element as an attribute, the WBS element will be
ignored and the functional area will be derived from the sales order item.

Prerequisites
To enable the derivation of the functional area when a posting is made, you have to activate cost of sales accounting for the
company code in which you are making the posting. For more information, see Activating Cost of Sales Accounting.

Key Features
The system derives the functional area when you enter a document. The system determines the functional area based on the
information in the coding block. The functional area is displayed on the entry screen.

The derivation follows this sequence:

1. The system derives the functional area from the master records of the objects being posted.

If there is account assignment to an object during a posting, the system checks if a functional area is entered in the master
record of the object. The system stores this functional area temporarily.

2. The system derives the functional area from the master record of the G/L account.

The system checks if a functional area is entered in the master record of the income statement account. This functional
area overwrites the one derived from the account assignment object.

3. The system derives the functional area by means of the substitution for the Financial Accounting component, event 0006.
If a functional area was already determined, it is overwritten by the one from the substitution.

You are required to define a substitution in the following cases:

If you can't enter a functional area in the master data of an object, such as a business process or a real estate object

If you want to define exceptions, where you don't want the derivation to be made from the given object

Creating Financial Statements According to Cost of Sales

Accounting

Use

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You can create financial statements using cost of sales accounting. For this, you can use the standard report 0SAPBSPL-01.

Prerequisites
Your Financial Accounting is reconciled with Controlling. For more information, see Real-Time Integration of Controlling with
Financial Accounting.

You have defined a financial statement version in which you have assigned your functional areas to the financial statement items.
For more information, see Financial Statement Versions with Functional Areas.

Features
The profit and loss statement is organized according to your functional areas. The profit and loss statement is organized according
to your functional areas. The system compares the figures for the selected fiscal year and the preceding fiscal year and displays
the variance between the two fiscal years.

Activities
1. From the SAP Easy Access menu, choose Accounting Financial Accounting General Ledger Information System
General Ledger Reports Financial Statement / Cash Flow General Actual/Actual Comparisons Financial
Statement: Actual/Actual Comparison .

2. Run the report with your own financial statement version.

You can use these sample reports as templates for your own reports. You can find settings that control copying, defining, and
editing of drilldown reports in Customizing for Financial Accounting under General Ledger Accounting Information System
Drilldown Reports (G/L Accounts) .

For more information about defining drilldown reports, see the SAP Library under Defining Drilldown Reports.

You can also use the Report Painter to create your own reports. Since the Report Painter works with sets for the grouping, you
have to convert your financial statement versions into sets.

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