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Tuesday, February 2, 2010

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.









3 comments:

Anonymous said...

Question: Are segments required for document splitting? We would like to use document splitting and are not planning to use segments.

Robert P. Calfee said...

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vikranth goud e said...

Hi Murthigaru,
Thanks for giving this useful information.