03. NEW GENERAL LEDGER CONFIGURATION

 1. New General Ledger

Let us understand this concept of SAP New GL structure and its use. Typically in SAP you can depict parallel accounting. Which means you can carry out valuations and closing operations for a company code according to local accounting principle and a second accounting principle (parallel) i.e. the group accounting principle.

Till version 4.7 you could carry out the parallel accounting only by using

Additional accounts.

Certain GL accounts are common between 2 the accounting areas. Certain GL accounts applicable only for local reporting Certain GL accounts applicable only for group reporting.

This kind of a set up requires 2 retained earnings accounts. The disadvantage of this set ups is lot of GL accounts are required and sometimes reconciliations become difficult.

To do away with the above approach SAP has now introduced the SAP New GL structure. In this approach parallel accounting is depicted using an Additional ledger.

The data for one accounting principle is stored in the general ledger. This ledger is known as the Leading ledger or Leading valuation view. For each additional (parallel) accounting principle, you create an additional ledger

The advantages of this approach are:-

1) You do not have to create any additional G/L accounts

2) You manage a separate ledger for each accounting principle

3) You can use the standard reporting functions to create a financial statement

4) You can have different fiscal year variants attached to each of the additional ledger.

5) You can make manual postings to any of the additional ledgers.

Configuration Scenario:

ABC Group of companies (Parent company) is a multinational company with companies across the world with base in Germany. The company has decided to implement SAP for its subsidiary ABC Electronics located in USA. ABC Group of companies have to use the common chart of accounts. The currency in USA is USD. The Parent company wants the accounts to be prepared based on Calendar year January to December. The Financial reporting should be in EURO.

ABC Electronics Inc has a local reporting requirement as per Corporate Law

Based on the above requirements we need to configure the following using the SAP New GL structure

Company code created 1009 – ABC Electronics Inc.

The company code currency– USD

Parallel currencies to be implemented – EURO

Common chart of accounts – COA

Ledger 0L (leading valuation view) reporting period – Jan to Dec for group reporting

Ledger L9 (additional ledger) for local reporting under Corporate Law.

2. Ledgers

Define Ledgers for General Ledger Accounting

You define the ledgers that you use in General Ledger Accounting. The ledgers are based on a

totals table. SAP recommends using the delivered standard totals table FAGLFLEXT.

The following types of ledgers are available:

Leading Ledger

The leading ledger is based on the same accounting principle as that of the consolidated

financial statement. It is integrated with all subsidiary ledgers and is updated in all company

codes. You must designate one ledger as the leading ledger.

In each company code, the leading ledger automatically receives the settings that apply to that

company code: the currencies, the fiscal year variant, and the variant of the posting periods.

In our scenario the group reporting is handled by the Leading Ledger.

Non-Leading Ledger

The non-leading ledgers are parallel ledgers to the leading ledger. They can be based for

example on local accounting principles.

You must activate a non-leading ledger by company code.

For each ledger that you create, a ledger group of the same name is automatically created.

In our scenario the local reporting is handled by the Non- leading ledger.