SAP FICO Advanced – New GL
Benefits and Functionality of the New General Ledger
Unified Financial and Management Accounting
Supports Different Reporting Purposes:
- Segment Reporting: Legal reporting requirements based on business segments is met with standard segment reporting rolling up from Profit Centers.
- Management Reporting: Additional reporting capability has been added. ABAP line item reports contain more standard reporting dimensions, Drill Down Reporting is now based on the CO-PA capability & real time updates to BI virtual cubes enable BEX reporting formats.
- Legal Entity Reporting: From clearly defined multi-ledger assigned to different legal entities is standard.
- Parallel Accounting: The multi-ledger approach enables for different accounting standards, different fiscal year variants and different currencies all to be tracked and balanced.
- Transparency: Data is reportable across all ledgers and reporting dimensions via drill down reporting.
- Compliance: Clearly defined audit trails and clearly defined legal entity reporting is standard within ERP GL.
- Extensibility: Customers can add custom designed reporting dimensions to the total tables.
Saves Cost and Time:
- TCO Reduction: Faster closing leads to reduced cost. Also, maintenance costs are reduced do to a simpler landscape and finally custom coding for Business Areas, Profit center accounting, Special Ledgers & Segment reporting is reduced.
- Fast Close: The ERP GL eliminates many of the “traditional” closing steps. For example the reconciliation of the CO ledgers to the FI-GL ledger is now eliminated with real updates from CO to FI.
Extensibility for Customer Dimensions
- New GL has option to expand standard accounting with
(i) Industry Specific fields.
(ii) Customer-defined fields.
- Meets International expectations:
(i) Integration of management dimentions in the GL.
(ii) Supports allocation on additional dimensions in the GL.
Balanced Books for any Dimension
- Essential for segment reporting and management reoprting
(i) Balance sheets for segments.
(ii) KPI (Key Performance Indicator) including Balance sheets accounts.
- Important for Various Industries such as Public sector, insurance, Media, etc., and often for legal requirements.
- The New G/L enhances the standard functionality available in the Classic G/L by incorporating more unified model of the data.
- The new GL functionality which came into existence from ECC 5.0 Version in SAP and called as mySAP ERP.
Classic GL vs New GL
- SAP has consolidated multiple tables in classic GL (such as GLT0, GLPCT, GLFUNCT, COFIT etc.) into a single FAGLFLEXT totals table with New GL. This unified model of the data in a single table provides flexibility and faster response time for reporting. FAGLFLEXT can also be enhanced by adding customer defined fields.
Table Architecture: Classic GL vs New GL
- The New General Ledger supports Parallel Accounting by using either Parallel Accounting or Parallel Ledgers. Both the approaches are equally powerful, however, the choice will depend on the specific customer situation.
- The Parallel Accounting approach in New GL is as powerful as in Classic GL (in SAP R/3). However, the Parallel Ledgers approach in the New GL is much better than the SAP R/3 approach of using classic GL and the Special Ledger application.
- We can maintain as many Parallel Ledgers as possible. (For parallel valuation – Local GAAP, Group GAAP, Tax purposes and for different Fiscal year variants).
- You must designate one ledger as the Leading ledger based on the same accounting principle as that of the consolidated financial statements.
- You can have as many Subsidiary Ledgers (Non-leading Ledgers) as you want as parallel ledgers to 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.
- All company codes are automatically assigned to the leading ledger (cannot be deactivated).
- The leading areas of Asset Accounting (Area 01) is posted to the Leading Ledger and Controlling is integrated to the Leading Ledger.
- Non-leading ledgers can have different fiscal year variants and different posting period variants per company code to 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 the parallel ledgers; these are optional. Alternative currencies are not possible.
- All financial transactions in the system are posted to all the ledgers if no ledger is specified in the transaction. If you generate a financial statement or gl account report, all the ledgers contain the data of the transaction posted. To post only to specific ledger (e.g. Leading Ledger), the Ledger Group field in the header should be filled-up with Leading Ledger. The transaction won’t affect the other ledgers (Non-Leading ledgers).
- With document splitting, the system splits accounting line items according to specific characteristics. This enables you to create financial statements for entities such as segments and meet the legal requirements such as International Accounting Standards (IAS) regulations for segment reporting.
In new General Ledger Accounting these are the scenarios that are available for customers to activate:
FIN_SEGM: Segment Reporting
FIN_PCA: Profit Center Update
FIN_GSBER: Business Area
FIN_UKV: Cost of Sales Accounting
FIN_CONS: Preparation for Consolidation
FIN_CCA : Cost Center Update
- Document Splitting is activated at Client level and can be deactivated by company code. There is a splitting methods assigned to the activation.
- Splitting rules:
- Identify the Document type used for the business process.
- Each Document type is assigned to a combination of Business Transaction and Business Transaction Variant.
- Determine the Item category for all line items of the financial document. Item category is derived from its assignment to GL Accounts.
- Identify the lines that do not have a Profit Center (PC) derived against them. These lines will be split based on Splitting rules.
- For a combination of Splitting rule and Item category, determine the Base item category to be used to split the line item to be split.
- Document splitting is basically divided into three steps:
- passive splitting
- active splitting
- The system first tries Passive Splitting, in which it copies rules from a previous transaction. Then it tries Active Splitting, which includes the rules and method that predefined in the SAP ERP System or customer defined splitting rules. Then, if Zero-balancing is active, it tries to do Zero-balancing.
- Passive splitting: Passive splitting is used especially with clearing transactions (e.g., payment transaction F-53). The system creates a reference to the existing account assignments and uses these account assignments as the basis for the line items to be split. You cannot change the settings for passive splitting because they are pre-set in the system. For the payment transaction, the system takes the rules from the earlier transaction of the vendor invoice and applies those rules from the vendor invoice.
- Active splitting (Rule-based document splitting): In Active splitting, the system splits the documents on the basis of predefined splitting rules. The SAP ERP system is delivered with many such predefined rules. If standard splitting rules are not sufficient or you want to enhance the functionality, you can create your own splitting rules.
- Splitting using zero-balancing: Zero-balancing the document ensures not only that the document is balanced but also that the document is balanced for the characteristics. You can define the characteristics that you want to use for zero-balancing, such as a segment or a profit center.