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Question: Why and How we Revalue the Fixed Assets in SAP?

Answer

Purpose of Revaluation
A revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be helpful in order to decide whether to invest in another business. If a company wants to sell one of its assets, it is revalued in preparation for sales negotiations.

Procedure for Revalue the Fixed Assets:
1. Go to OABW and check both revalue APC and depreciation in the depreciation area where you want to post. This would help in identifying the area where the revaluation will have to be posted.
2. Go to OAYR and select the company code. Then click on the posting rules.
In the book depreciation area, go to other posting settings. Check post revaluation. This setting is required for posting the revaluation amount.
3. Go to AO90 and Create a revaluation APC as well as clearing account. The revaluation APC has to be a recon account and the revaluation clearing a P&L. Similarly create for depreciation as accumulated and a normal P & L.
4. Now go to ABAW, and select the asset to be revalued. Put the transaction type as 800. Press enter.
In the next screen give an asset value date, amount to be posted as revaluation. Now click save. An asset accounting document will be generated.

Note:
This revaluation amount will not be posted automatically. Once depreciation run takes place then only the amount gets posted to the GL account. Hence it is advisable to run at the year end.
Also the depreciation run has to be for the first time in order to get the revalued amount to be posted. Otherwise, the amount will not be posted in the GL account.
Run the Depreciation for a period in AFAB. If you do a test run you would be able to see the revaluation amount that has to be posted and the same would be reflected in the planned values in asset explorer (AW01N).
Same won’t be reflected in the posted values unless the depreciation run was not a test run.
Once the depreciation run is done, revaluation account APC will be debited and the revaluation clearing account will be credited.
This revaluation account will then be transferred to P & L account by passing a manual entry.

Can you please Provide details of Asset Asset Accounting in SAP?

Asset Accounting in SAP
 Asset Accounting records all accounting transactions relating to the management of assets.
It consists of the following
- Asset Master Data
- Accounting Transactions in Asset Accounting
- Closing Procedure in Asset Accounting
 Each asset belongs to a company code and business area. All postings made for the asset (acquisitions, retirements, depreciation, etc.) are applied in the assigned company code and business area.
 Additionally, you can assign the asset to various CO objects (cost center, internal order, activity type) and logistic organizational units (for selection purposes only).

Asset Class
 The asset class is the main criteria for defining the asset. Each asset has to be assigned to an asset class. In the asset class, you can define certain control parameters and default values for depreciation and other master data.
 Assets that do not appear in the same line item of the balance sheet (such as buildings and equipment) have to be assigned to different asset classes. Additionally, there is at least one special asset class for assets under construction and one for low-value assets. The asset classes used by IDES for this are:
 4000 For assets under construction
 5000 For low-value assets
 Note 1: You can also create asset classes for intangible assets and leased assets. There are functions available for processing leases.
 Note 2: The application component PM (Plant Maintenance) is used for the technical management of assets. The application component TR (Treasury) is used for managing financial assets.

Asset Valuation
 It often occurs that asset balances and transactions need to be valuated differently for various purposes. You may, for example, use various valuation methods for:
 Financial statements based on regional requirements
 Financial statements for tax purposes (if a different deprecation method is allowed)
 Controlling (costing)
 Parallel accounting methods for group financial statements (per IAS, US-GAAP, etc.)
 In order to keep more than one valuation basis, so-called depreciation areas are kept in the R/3 System. Separate transaction figures are kept in each area:
 per asset and depreciation area
 For individual value components such as balances, depreciation, remaining book value, etc.
 Various data is stored in the asset master data for depreciation areas and controls the calculation of normal and special depreciation for the special depreciation area. You can thus use a different depreciation method for general business procedures than the depreciation method required by the tax authorities.

Integration of Asset Accounting with General Ledger
 Since the depreciation areas in asset accounting do not exist in the general ledger, these values have to be posted to various G/L accounts in the general ledger. The G/L accounts are then used in various financial statement versions (financial statements per GAAP, financial statements for tax authorities, group financial statements, and so on).
 These G/L accounts are:
 Balance sheet accounts, which record the adjustments to the asset's value
 Depreciation accounts for depreciation and appreciation
 The assignment of the G/L accounts to various valuation areas is saved in a single account assignment key, which is entered in the asset master record. Assets of the same asset class all have the same account assignment key, that is, their values are all posted to the same reconciliation accounts.
 Note: Many companies prefer to keep parallel valuations in Asset Accounting (either statistically or for information purposes) and not in the general ledger. In this case, you do not need to make the related G/L account assignments.
 For reporting purposes, parts of an asset can be kept under asset sub-numbers, and assets can be combined in group assets.
 The main asset is assigned the sub-number 0000, allowing the asset sub-numbers to be assigned as desired.
 A group asset has its own master data. Several main assets can be assigned to a group. This is important in the USA.

Transaction Types in Asset Accounting
 The transaction type is an addition to the asset posting keys 70 and 75 and it has to be included when posting to an asset account. The transaction type is necessary for asset accounting, since it specifies exactly where the asset posting is listed in the asset history sheet.
 The transaction type is the distinguishing characteristic of the various asset postings, which include:
 Buying and selling
 Credit memos
 Acquisitions from internal production
 Adjustment postings
 Retirements without revenue
 Depreciation and appreciation
 and so on
 Asset transactions (acquisitions, retirements) can be posted in various ways to meet the organizational and business requirements of the company. In FI-AA you can post:
 Without a vendor or a purchase order. The offsetting entry is made in a G/L clearing account.
 Integrated with A/P but without reference to a purchase order.
 Via materials management using the MM functions (purchase order, goods receipt, invoice receipt).
 When posting to accounts of two subsidiary ledgers, the reconciliation accounts of both subsidiary ledgers are updated in the general ledger.

Unplanned Depreciation
 Unplanned depreciation is posted if something happens to the asset which permanently lowers the asset's value.
 As with every asset transaction, you need to use a specific transaction type for unplanned depreciation.
 It is possible to enter different values in the various valuation areas for the damages incurred. For example, the company may set the loss higher for cost accounting than for the company's financial statements.
 After posting the transaction, the unplanned depreciation is saved as planned values. The actual amounts are posted when the depreciation posting run is carried out during closing.

Assets under Construction
 The expenses for assets under construction can be managed in two ways:
 In the application component IM (Investment Management), you can create, post, and manage investment orders. These orders are then reconciled with the asset under construction. IM provides extensive functions for supporting investment procedures.
 If IM is not used, the asset under construction can be posted to directly in Asset Accounting, since assets under construction rarely occur.
 Once the asset is complete,
 master data has to be created for the completed assets
 The values from the asset under construction account have to be posted again as completed assets, and the assets have to be activated. To do so, the expenses can be distributed to several asset accounts using a distribution rule.

Asset Explorer
 Asset Explorer offers a clear overview per depreciation area, asset, and fiscal year for:
 Planned values
 Posted transactions
 Posted amounts
 Posted and planned depreciation
 Depreciation parameters

Closing Procedure in Asset Accounting
 Closing can roughly be divided up into two types of work:
 Legal requirements (mandates required by the government)
 Technical/organizational tasks (preparatory steps that are necessary technically or that support the accounting organization)
 The switch to the New Year is completed in the old fiscal year, thus carrying the balances of the asset accounts forward to the new fiscal year.
 At the beginning of the new fiscal year, a technical reconciliation is performed, which compares the transaction figures in Asset Accounting with the corresponding figures in the G/L accounts.
 Afterwards, inventory is taken and adjustment postings are made should any corrections need to be made. The depreciation posting run posts the depreciation to the general ledger.
 Since only one depreciation area can post its asset postings to the general ledger, the additional, relevant depreciation areas are posted to the general ledger using a program (periodic asset account postings).
 The asset history sheet can now be created.
 Note: Different steps in the closing process may be required in certain countries. Your trainer will be able to explain the main features that are specific to your country.

Asset Inventory
 You can create one or several inventory lists with the R/3 System for the inventory process. The lists are given to the employees who complete the inventory check. They note any discrepancies and return the list to the accounting department, and the accountants enter the corrections in the system.

Depreciation Posting Run
 All depreciation (normal depreciation, special depreciation, unplanned depreciation) is initially kept in the form of planned values in Asset Accounting. Only after the depreciation posting run has been completed is the depreciation actually posted in Asset Accounting. Additionally, a batch input is created which contains the postings for the G/L accounts. When this is run, the depreciation is posted to the corresponding depreciation accounts.

Asset History Sheet
 The asset history sheet is the most important and most complete evaluation available for closing. As with financial statements, the structure of the asset history sheet is based heavily on country-specific requirements. It is thus possible to create various asset history sheet versions.
 Each asset history sheet version contains various history sheet groups such as:
 Book values at the beginning of the fiscal year
 Acquisitions
 Retirements
 Adjustment postings
 Depreciation
 Book values at the end of the fiscal year

Configuration Steps for Asset Accounting
1 EC08 - Copy Chart of Depreciation
2 FTXP- Creation of 0% Tax Codes
3 OBCL- Assign Tax Codes for non-Taxable Transactions
4 OAOB- Assign Chart of Depreciation to Company Code
5 IMG -Specify Account Determination
6 IMG - Create Screen Layout Rules
7 OAOA- Define Asset Classes
8 AS08 -Define Number Ranges for Master Classes
9 AO90 -Integration with GL
10 OAYZ –Determine Depreciation Areas in Asset Classes
11 IMG - Define Screen Layout for Asset Master Data
12 AO21 - Define Screen Layovers for Asset Depreciation Areas
13 FBN1 - Define Number Ranges for Depreciation Postings
14 OAYR - Specify Intervals and Posting Rules
15 OAYO - Specify Round up Net Book Valuation
16 Depreciation Keys
17 Define Base Methods
18 AFAMD - Define Declining Balance Methods
19 AFAMS – Define Multi level Methods
20 AFAMP – Define Period Control Methods
21 AFAMA – Define Depreciation Keys
22 AS01 – Asset Master Creation
23 AS11 – Creation of Sub-Asset
24 F-90 – Asset Purchase Posting
25 AW01 - Asset Explorer
26 AFAB – Depreciation Run
27 F-92 – Sale of Asset
28 ABUMN - Transfer of Asset
29 ABAVN - Scrapping of Asset

Asset Accounting: Accounting Entries:

1. Acquisition: With Vendor -F-90
Fixed Asset a/c Dr
(With acquisition cost)
Vendor Cr
2. Asset Disposal – Sales to a Customer: - F-92
Dr. Customer account (A/R)
Cr. Revenue for asset disposal
Cr. Fixed asset – acquisition cost
Dr. Accumulated depreciation
Dr. Clearing account for asset disposal
Cr. Gain/loss of fixed asset disposal
The posting date of the retirement posting will also be updated into the field "deactivation date" in the asset master as the retirement date.
3. Asset Disposal – As a Scrap -ABAVN
An asset could be disposed as a scrap. In this case, no revenue is expected and a loss will be realized in the P&L if the fixed asset being scrapped still carries a net book value.
Cr. Fixed asset – acquisition cost
Dr. Accumulated depreciation
Cr. Gain/loss of fixed asset disposal
4. Asset Transfer within a Company – Reclassification
The NBV(Net Book Value) of an existing asset master record could be transferred to another asset within the same company.
Cr. Asset – acquisition cost (old asset)
Dr. Accumulated depreciation (old asset)
Dr. Asset – acquisition cost (new asset)
Cr. Accumulated depreciation (new asset)
The old asset being transferred will become a retired asset and the transfer posting date will be updated as the retirement date in the asset master record. For the new receiving asset, the transfer will be the same as if it is being acquired. The transfer posting date will be used as the capitalization date.
5. Asset under Construction (AUC)
(Internal Order as Investment Measure)
1. Define the AUC Asset Class (with investment measure) - OAOA
2. Define the Asset Class – for Main Asset - OAOA
3. Define Investment Profile - OITA
 -Assign the AUC Asset Class (Step-1) in the investment profile
4. Assign Investment Profile to Model Order - OITA
5. Define Order Type (Investment) - KOT2
- Settlement Profile - OKO7
- Maintain Allocation Structures - OKO6
- Planning Profile - OKOS
- Budget Profile - OKOB
6. Create an Internal Order - KO01
- With the Investment Profile
- AUC automatically created by the system using Asset Class given in the Investment Profile
1. Post the amounts to IO - FB01
Dr. Material supplied to Asset (Expenditure)
Cr. Cash account
2. Settle the amounts to AUC from IO (Pricing type: Automatic) - KO88
Dr. Asset under Construction account
Cr. Contra Capitalized
Create the Main Asset - AS01
3. Settle the amounts to Main Asset from AUC - KO88
Dr. Final Asset account
Cr. Asset under Construction account
4. Sale of Asset from One Company code to another Company code
A. If Selling and Buying Company is separate Entities:
In Selling Company:
A/R Posting
Dr Customer a/c (for the sale value)
Cr Revenue –Asset Retirement
Asset Posting
Dr Clearing of Asset Retirement
Dr P&L (Loss)
Dr Accumulated Depreciation
Cr Asset
In Buying Company:
Dr Asset
Cr Vendor
Note:
- Posting date of the document will be copied into the asset master as the capitalization date.
- The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
- Asset acquisition posting could also be done without PO from the MM module.
- Posting could be done in FI posting only.
B. If selling and buying Company is Inter Companies - ABT1N
An inter company transfer in the asset history sheet can be an asset acquisition in one company code and an asset retirement in another company code. Fixed assets can only be evaluated at client, and not company code level.
In Selling Company:
A/R Posting
Dr Inter Company Customer a/c
Cr Revenue –Asset Retirement
Asset Posting
Dr Clearing of Asset Retirement
Dr P&L (Loss) $1300
Dr Accumulated Depreciation
Cr Asset $6000
In Buying Company:
Dr Asset
Cr Inter Company Vendor
1. Note:
- Posting date of the document will be copied into the asset master as the capitalization date.
- The depreciation start date of each depreciation area will also be determined and updated in the depreciation area data tab page.
- Asset acquisition posting could also be done without PO from the MM module.
- Posting could be done in FI posting only.
2. Note:
The process for posting intercompany transactions is as follows:
- The initial entry is parked.
- Then an email is sent to the other branch to view the document.
- On approval of the transaction, the parked document is then posted to the g/l in both companies. The company receiving the revenue will be the one responsible to book into system using the US dollar as base currency.
5. Month End Processing – Depreciation Run-AFAB
Dr. Depreciation expense
Cr. Accumulated depreciation

Asset Accounting in SAP ECC 6.0
a. Fixed Assets can have multiple depreciation areas to handle multiple GAAP requirements. e.g., Local GAAP vs. US GAAP.
Note: Specify the General Ledger that is posting to Asset Accounting (Define valuation areas for parallel valuation, and Delta valuation area to post valuation deference)
• Depreciation area 01 – Asset valuation area 01 (will always link to the Leading Ledger)
• Depreciation 02 and depreciation area 12 – Other asset valuation areas that can be tied to NLs as required.
b. The program used for transaction ASKB has changed to RAPERB2000 and for AFAB, it is RAPOST2000
c. Functional area assignment is mandatory
d. Previously in 4.6C we use to give the batch ID in the variants in ASKB and AFAB. Now it is mandatory to have direct postings done for depreciation and APC postings. Therefore for document types which handle depreciation, the batch input session must be unchecked.
e. Posting indicators in depreciation area (Old assignments)
1. Post depreciation at periodic intervals to the general ledger.
2. Post asset values & depreciation at periodic intervals
3. Automatically post values online (real time)
Additional Assignments as New GL
4. Post APC directly + depreciation
5. Post APC only on periodic basis
6. Post APC only

Question: Can you specify the Configuration steps required for Fixed Assets Depreciation (Tax)?

Answer1:

Specify the depreciation area type - type of depreciation area – OADC
Define Depreciation keys –AFAMA,
Define Declining Balance Methods in – AFAMD (say for Tax Purpose)
Note: Calculation Methods are assigned to Depreciation key, and the Depreciation key is assigned to the Asset Master Record, Asset master is assigned to an Asset Class, which will govern how system will calculate Depreciation on that Asset.
Use transaction - OAAR to open Book 10 (tax book), to make changes. (See details in OSS note -646691.

Answer2:

Opening a New depreciation area in SAP in post-Production environment
- Assign Financial Statement Version to company code and deprecation area – OAYN
- Make Depreciation Key default available for change by Screen Layout – AO21
Drill into screen layout rule, and then check ‘Asset class’ to maintain at the asset class level
- Assign Tax book to Asset Classes – OAYZ
1. Activate the new depreciation area in the existing asset classes you have as need be. Uncheck the deactivate box and then enter any default depreciation terms and screen layout for the depreciation area in the asset class. These values are proposed when creating the asset and can be overwritten if need be. You must go into each asset class that you want the depreciation area activated in and uncheck the deactivated box. The default depreciation terms are not required.
2. Be sure to activate on the AUC asset class, so APC values can flow from investment measures (WBS or Internal Orders) to the fixed asset.
- Change name of Tax book (optional) – OADB
- Specify the depreciation area type - type of depreciation area - OADC
- Specify rules for value takeover - OABC
Determine how the depreciation area is to get their APC values. They get their values from another book (book X) (most of the time, it comes from book 01). Then determine if new book is to be identical to book X (with No Changes allowed).
Book X being the depreciation area the new book is taking the values from.
Specify depreciation area applicability for transactions
Menu path: Asset Accounting (Lean Implementation) - Depreciation Areas - Specify Allowed Depreciation Types for Depreciation Areas
1. Make Tax book applicable for all activities used by book 01
(Deselecting ‘Ident’ (for identical) here allows different depreciation schedules to book 10 vs. book 01)
- Set Transfer of Depreciation Terms - OABD
You do the same thing for the depreciation terms and the rules of takeover, and you also determine if you want the new book to be the identical to book x (with No changes allowed). Again, book X being the depreciation area new book is taking the values from. If you have more than one Tax book, it is advisable to have the second Tax book take over values from the first so that Tax only adjustments flow automatically to both books.
Create Tax Adjustment Transaction Type(s) for new book
- Copy 100 to Z transaction type - AO73
- Restrict to Book 10 - OAYA
- Determine if you want that depreciation area to calculate ordinary depreciation - OABN
- Same thing with Special Depreciation - OABS
- Determine order of ordinary and special depreciation calculation - AOBK
- Assign accounts for special depreciation if depreciation area will post and have any - AO94
- Determine Unplanned Depreciation - OABU
- Assign accounts for Unplanned Depreciation if necessary - AO95
- Post-Production: Activate on existing asset base - AFBN (program RAFABNEW)
Note: Once the depreciation area is configured to your specifications. You will then need to run a program in the environment. This program is the program that inserts the depreciation area into your existing assets that are already active in your system. It does not insert the depreciation area into assets that have already been deactivated (retired). The program can create the depreciation area with or without values depending on the setting you choose when you run the program, and according to the configuration settings made in OABC (as for what values it will take). You can also copy the depreciation keys from the existing depreciation area into the new depreciation area. If you need to open the new depreciation area on existing AUC assets, you will need to run an SAP-supplied alternate program. Create and run a Z program based on SAP note 317806. It is possible that the settlement from an existing WBS to the final fixed asset will not post to the new depreciation area unless this step is taken.

Bloger Comment:

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How we have answered  your questions, and to what extent we were able to respond to your questions. It is very much required for the bloggers.
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or
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SAP ECC 6.0 - New New GL

Question:
Please give me brief explanation and configuration steps on ECC 6.0 new features:

1. New GL concepts and is there any methods that we can do this for new installations
2. Document Splitting and how many rules are there & what are those?
3. Segments and Segment Reporting
4. Parallel Valuation
5. Migration from Classic GL to New GL

Question: New GL concepts and is there any methods that we can do this for new installations
Answer:
a. Key Design Considerations - New in ECC 6.0:
1. The new GL can fulfill requirements for both legal and management reporting.
2. PCA functions are integrated in the new GL (except for transfer pricing).
3. Segment reporting for IAS and US GAAP is now possible.
4. Contains functional area dimension
5. Real-time integration with CO – no need for reconciliation ledger.
b. Additional dimensions are added in new GL:
- Check dimensions required for Consolidation (Legal and Management).
- Use parallel ledgers for multiple GAAP requirements. Use Lead Ledger for US GAAP.
-Use other ledgers for local GAAP requirements.
Note: The new GL allows you to perform parallel accounting i.e., multiple ledgers in parallel. During posting, you can have data posted to all ledgers, to a specified selection of ledgers or to a single ledger.
c. Functional Area in ECC 6.0
- Functional area is a structure used to classify operational expenses by function such as, administration, sales and distribution, marketing and production.
- Functional area can be defined in the GL Master (Chart of Accounts level), Cost Element or CO cost object. If Functional Area is defined in the GL master, the attribute is taken over to the Primary Cost Element Master, and Functional Area defined in Cost Element master takes precedence over Functional Area defined in Cost Object. (Note: Functional area derivation is determined from the real cost object- like Internal Order, Project, Cost Center, WBS, PA segment, whereas Profit Center is always a statistical object. Therefore, functional area is not derived from Profit Center.)
d. Asset Accounting in ECC 6.0
- Fixed Assets can have multiple depreciation areas to handle multiple GAAP requirements. e.g., Local GAAP vs. US GAAP.
Note: Specify the General Ledger that is posting to Asset Accounting (Define valuation areas for parallel valuation, and Delta valuation area to post valuation deference)
• Depreciation area 01 – Asset valuation area 01 (will always link to the Leading Ledger)
• Depreciation 02 and depreciation area 12 – Other asset valuation areas that can be tied to NLs as required.
- The program used for transaction ASKB has changed to RAPERB2000 and for AFAB, it is RAPOST2000
- Functional area assignment is mandatory
- Previously in 4.6C we use to give the batch ID in the variants in ASKB and AFAB. Now it is mandatory to have direct postings done for depreciation and APC postings. Therefore for document types which handle depreciation, the batch input session must be unchecked.
- Posting indicators in depreciation area (Old assignments)
1. Post depreciation at periodic intervals to the general ledger.
2. Post asset values & depreciation at periodic intervals
3. Automatically post values online (real time)
Additional Assignments as New GL
4. Post APC directly + depreciation
5. Post APC only on periodic basis
6. Post APC only
e. Cost of sales accounting in New GL
- We can activate Cost of Sales Accounting in New GL. Cost of sales accounting is a way to create a profit and loss statement (P&L) for a company by comparing the revenues to the costs or expenses incurred to obtain these revenues. The expenses are mainly divided by functional area such as: Manufacturing, Administration, Sales, and Research and Development
f. Configuration points for New GL:
1. All GL Accounts will need to be Profit Center relevant. Field Status Groups will need to be modified to make profit center required in all Balance sheet accounts.
2. Segments have to define based on the segment reporting requirements and assign them to appropriate profit center
3. Activated document splitting by profit center and each document will be balanced by profit center using a zero balance clearing account.
4. Business transaction variant is assigned to all custom document types.
5. All GL accounts are mapped to an item category.
6. Activated real time integration from CO to FI
7. Assign document splitting rule to business transactions
8. Create new clearing accounts - CO to FI clearing account, and Auto document split clearing account (document using document “YF”.)
9. Defined default profit centers by company code using FAGL3KEH transaction

Question: Document Splitting and how many rules are there & what are those?
Answer:

1. With document splitting, accounting line items are split according to specific characteristics. For example: Profit Center, Segment. This way, you can create financial statements for entities such as Segments and meet legal requirements.
Example: Vendor Invoice is for say $11000 (which includes 2 purchase amounts and taxes)
JE without Document split
Dr Raw Material – A $8000 (Profit Center A)
Dr Raw Material – B $2000 (Profit Center B)
Dr Tax $1000
Cr Vendor $11000
(Here we cannot identify the Tax and Vendor balance for each profit center, and hence this document is not balanced for Profit Centers)
So the document has to be balanced for the specific characteristic (in this example, Profit Center)
- The accounting lines for Vendor and Input Taxes are split according to the pre-defined criteria (Rule)
- The splitting-criteria for Vendor accounts is Purchase expenses (base line Item category) in 80:20 (Purchase proportion)
Cr Vendor A/C $8,800 PC-A
Dr Purchases A $8,000 PC-A
Dr Tax 800 PC-A

Cr Vendor A/C $2,200 PC-B
Dr Purchases B $2,000 PC-B
Dr Tax $200 PC-B
Now the entry got balanced for profit centers.
2. Document splitting can be done automatically, and also you can configure the rules for splitting. The splitting can be divided as - Active split, Passive split, and Clearing lines/zero balance formation by document.
a. Splitting rules for financial transactions
Splitting rules for Vendor Invoice
- Vendor and tax items are accounting items to be split
- Expense items are the base items
Splitting rules for Customer Invoice
- Customer items to be split
- Revenue items to be the base items
b. Splitting method
- The splitting method is the main key used to activate splitting in the new G/L
- It’s the main driver for document splitting
- It’s the list of all splitting rules for all business transactions
- Technically, it’s a collection of splitting rules, business transactions, and business transaction variants
SAP pre-delivered with Splitting Method 0000000001 (split of customer, vendor & tax)
- Document Type (KR)
- Business Transaction (Vendor Invoice 0300), and Business Transaction Variant (Standard variant 0001)
- Splitting Rules
Item Categories to Split (Vendor, Tax)
Base Item Categories (Expenses)
c. Item categories (Item categories are pre-defined in the system)
- Item category is the grouping of new G/L Accounts
- Instead of defining the splitting rules for all expense accounts individually, the item category groups all expense accounts together
- You could have one rule for all expenses
d. Business transaction/business transaction variant
- A business transaction is a general breakdown of an actual business process
Examples of business transactions: Vendor Invoice (0300), Customer Invoice (0200), Depreciation posting (0000), and Asset posting (0000) ect.
- A business transaction variant is a specific version of a business transaction provided by SAP
- There are various business transaction variants already defined in the system
- In Financial Accounting, various document types are linked to the business transactions and business transaction variants
e. Document Types
- To ensure that every relevant financial transaction is considered for document splitting, categorize the document types according to specific business transaction variants
- Assign business transaction and business transaction variants for the document types
- Standard SAP document types are already defined with appropriate values
- All custom documents will start with ‘Z’

Question: Segments and Segment Reporting
Answer:
IAS accounting standards define the statutory requirements for segment reporting. New GL has document splitting functionality that enables segment reporting. Standard Segment Reporting functionality is not available in Classic GL.
- Segments are used for Used for segment reporting.
- Segment (account assignment object) derived from the master data of Profit center, and also segment can be updated from BADI’s (FAGL_DERIVE_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.

Question: Parallel Valuation
Answer:
Parallel Valuation is used for Parallel Accounting purpose. Different accounting principle applied to different ledgers.
- Can maintain different sets of books to satisfy all different requirements of Financial Statement users accurately, efficiently and effectively. Standard reports are already available and readily available to use.
- A leading ledger is created in the system (0L – ledger = GAAP). Then another ledger should be created and classified as non-leading ledger (1L – ledger = TAX).
- Financial transactions in the system are posted to both ledgers if no ledger is specified in the transaction. If you generate a financial statement or GL account report, both ledgers contain the data of the transaction posted.
- To post only to specific ledger (e.g. 0L – ledger), the Ledger Group field in the header should be filled-up with 0L – ledger. The transaction won’t affect the other ledger (1L – ledger).

Question: Migration from Classic GL to New GL
Answer:
1. New customers use Legacy data transfer to transfer from the legacy to the SAP system with New GL active. The Existing Customers transfer the data from classic ledger to New GL
2. The following are to be considered while doing data transfer to New GL.
a. Which characteristics/entities are to be reported?
b. Whether you want to use PCA or Segment, or both,
c. How you want to derive account assignments,
d. Do you want to use Functional area, preparation for consolidation, analyze CC, and use additional ledgers aside leading ledger, and whether to use existing account-based solution or migrate to Ledger – solution.
3. Based on the above the Configuration steps will be framed.
4. Migration plan: a. Define migration date (current or next fiscal year),
b. Define Company codes to be transferred,
c. Execute the necessary activities in sequence,
d. Start the migration program,
e. Monitor the migration activities in status management.
-merely the balances are transferred (before the migration date), no individual documents are transferred. (Use RFAGL_UPLOAD_CARRY_FORWARD program)
-Open items of the previous years are created based on the items themselves (with or without split info.)
-Current year postings (till the date of migration)-documents are transferred with splitting info. (Use RGURECGLFLEX program)- do the tests run before uploading.
-Migration time line
Phase’0’: single documents are not transferred, only cumulative balances are transferred.
Phase’1’: Documents from phase 1 can be followed up at activation time. Any document split will be posted.
Phase’2’: The new GL is active and use the configuration functions
5. Convert/migrate production data into new GL using SAP migration cockpit
- Load New GL migration cockpit in Development
- Create migration plan for each fiscal year variant and execute steps mentioned in the cockpit.
6. Migration Activities
• Close Posting Periods in the prior Fiscal Year
• Create Work-list/Activate migration plan
• Create Work-list (FAGL_MIG_OPITEMS_FILL) and (FAGL_MIG_RPITEMS_FILL) as background jobs.
• Create work-lists individually/Create work-list for open items.
• Create work-lists individually/Create work-list for documents.
• Enrich the open items with account assignment information
• Transfer open items from previously created work-list
• Build documents splitting information
• Subsequently post documents for current fiscal year from work-list.
• Create GL Line items and balance carry forward for all GL accounts not managed on an open item basis.
• Display log for balance carry forward.
• Reset balance carry forward.
• Repost balance carry forward manually.