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marssel.vilaa2: New General Ledger -
Introduction
Posted by Marssel Vilaa Mar 23, 2009
The New GL concept covers all the above mentioned functions and requirements in one place, while continue
providing all the existing functions.
New GL functionalities are part of ECC 6.0 version. However, we have done only technical upgrade from
earlier 4.7e version to ECC 6.0 and not the functional upgrade. Hence, to reap the benefits of ECC 6.0 fully, we
must go for the under-mentioned New GL functionalities offered by it.


Various additional functionalities with the introduction of New GL:


Document Splitting


Today, in the current SAP R/3, Vendor line items and Customer line items (except special GL accounts) in a
financial document do not retain profit centers. Through month-end closing activities, Vendor and Customer
open line items are transferred to Profit Center accounting via F.5D and 1KEK transactions. This means that,
there is no real-time transfer of profit center to PCA. Nor FI do retain any profit center for these accounts at all.
Tax Line items bring profit center from either substitution or default profit center assignment (3KEH).
In the New GL scenario, for each financial account document, document splitting functionality applies account
assignment information (profit center) to the non-assigned GL accounts (Vendor, Customer and Tax line items
in particular and any other accounts not assigned due to any reasons, in general).

Document splitting function is based on the following model.

Accounting documents, in most of the cases, contain GL accounts with assignments. That is, accounts of
expenses and revenues. Such accounts (i.e. Expenses or revenues) do provide dependent GL accounts (i.e.
Accounts payables, Account receivables and tax accounts) with account assignments (profit center) based
on the context (i.e. invoice or payment). Account assignments from original processes are supplied to the
subsequent processes.

For example, Account assignment (profit center) is passed on from GR/IR account to Vendor line item in
invoice and the profit center from invoice is passed on the vendor line item in payment.


Balanced books (zero balance) by dimensions like Profit Center, segment, Business area etc.

marssel.vilaa2: New General Ledger - Introduction
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Today, in the current SAP R/3, system does not ensure that every financial accounting document is balanced
by profit center or segment or business area. That is, balance is not zero, profit center-wise or segment-wise
or business area-wise in a financial document. As a result, any profit center report does not provide zero
balance financial information (trial balance).

In the New GL, every financial document can be ensured to have a zero balance by profit center, segment or
business area, depending upon the business requirements. This functionality ensures drawing out balance
sheet at Profit center level, segment level or business area level.

In a company where different steams of business are being carried on, local accounting standards do require
reports on segment-wise or business-wise. This requirement is ensured to be met through balanced books by
different dimensions (profit center, segment, business are etc.).


Real-time integration of Financial Accounting with FI:


Today, in the current R/3, there is no real time integration of CO with FI, though the reconciliation of CO and FI
is ensured through reconciliation ledger period-end activities.

In the New GL, real-time integration of CO with FI is ensured. This ensures transfer of cross-entity controlling
postings to general ledger in real time. This transfer allows continuous reconciliation of Cost Accounting books
with financial books and removes the need for any subsequent reconciliation. This again ensures balanced
books by different dimensions as well.

Real time integration function works on the following model. As we know, there are many activities which
are only internal to CO. The examples are Cost allocation through distribution, assessment and overhead
surcharge application, settlement of costs from one cost object to another cost object etc. These business
transactions do create postings only in CO.
Through real-time integration, system passes a corresponding FI document for these CO documents, if and
only if the posting involves any cross controlling entities like different profit centers, cross company codes etc.


Parallel Ledgers:


Today, in the current R/3, meeting the requirements of drawing out financial statements based on other
accounting principles like IFRS, US GAAP etc. are met thorough separate SAP application, i.e. Special
Purpose Ledgers.
In the New GL scenario, this is clubbed in FI general ledger itself. Consequently Ledger concept has come into
play.
marssel.vilaa2: New General Ledger - Introduction
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We are now able to create different Ledgers for different accounting principles. That is, one ledger for Local
GAAP, one for US GAAP, one for IFRS, one ledger with different fiscal year other than the one being used in
the company code etc. In SAP terminology, these are called Leading Ledger and Non-leading Ledgers. The
ledger for Local GAAP is called Leading Ledger and all others are non-leading ledgers.

Posting logics to various ledgers:

All FI postings will invariably go to the Leading ledger. All these postings will also go to the Non-leading
ledgers unless otherwise restricted. We can also carry out Ledger specific postings. That is, we can post
some documents only to certain ledgers, while not posting the same to others.
We have created Non-Leading ledger L3, which is meant for posting with different fiscal year than the one used
for the Company code. That is, in Brazil company code, fiscal year variant for the company code is April to
March (V3). While postings happen to leading ledger with V3 variant, the same will get posted with K4 fiscal
year (Jan to Dec) in L3.
3146 Views Tags: erp, business_solutions, business_process_expert, sap_developer_network,
integration_and_certification, international_financial_reporting_standard_(ifrs)
Marssel Vilaa in response to Naresh Krishnamoorthy on page 3
Sep 4, 2013 2:03 PM
Thank you, Naresh. All the best.
Naresh Krishnamoorthy
Sep 4, 2013 1:58 PM
Great and well written Blog.

Best Regards,
Naresh K.