- SAP Managed Tags:
In case of large manufacturing organizations -wherein there are value flows (i.e., transfer of goods between affiliated entities, there is a requirement to have a clear visibility of these internal supply chain movements as per different valuation perspectives i.e.
- Legal perspective looks at the business transactions from a company’s point of view. Pricing is driven by legal requirements and tax optimization strategies. Legal valuation may include an intercompany markup
- Group view considers the group (represented by controlling area ) as a whole. The processes are valued by eliminating intercompany/inter-profit center profits.
- Profit center valuation looks at profit centers as independent entities within the group and provides a framework for transfer prices
SAP S/4HANA Universal Parallel Accounting (UPA) Solution, as introduced in on -premises release 2022, supports multiple valuations with a single valuation ledger approach instead of versions in controlling. It replaces the erstwhile Parallel COGM solution. Some of the key use cases supported by Universal Parallel Accounting solution are as under-
- Multiple Currencies
-Support of up to 10 currencies in GL, Asset Accounting, Controlling (except Currency type 20) - Parallel Valuations
-Different capitalization /settlement rules per GAAP
-Different depreciation keys/useful life
-Ledger-specific postings, for example, provisions
-Inventory valuation & actual costing runs per ledger
-Follow on processes-Allocation, Overheads, Variance Analysis, Actual Costing - Alternative Fiscal Year Variant
-Fiscal year variant for local financial reporting which is deviating from the fiscal year variant for central reporting on group level (Restriction-The posting period start dates and posting period end dates for the FYVs should be the same) - Group Valuation
-Consolidated (group ) view where intercompany profits between trading partners are eliminated in real-time.
With SAP S/4HANA on premise release 2023, profit center valuation in UPA was delivered for greenfield customers. Legal & group valuation was available in S/4HANA 2022 version itself. S/4HANA Universal Parallel Accounting with Advanced Intercompany Sales solution offers complete view of inventory & business processes across the value chain.
SAP Group Reporting Preparation Ledger (GRPL) within SAP S/4HANA and SAP Group Reporting enables early access to finance data with a high level of details pertaining to consolidation dimensions. Group reporting dimensions are updated into the accounting document at the time of posting. Any of the ledgers (group, profit center, legal) can be defined as a group reporting preparation ledger Group and profit center valuation view will enable to deliver "management" views of the group results. Thus, it is possible to view contents of the ledger with the intercompany postings in the financial statements in operational accounting or in group reporting.
It may be noted that for now , S/4HANA UPA Solution is available only for Greenfield customers (whose business scenarios are vetted by SAP) and can be activated in a system wherein there is no transaction data! Also, the solution is subject to restrictions!! Please refer to the links shared in the Reference section for details ...
Let us understand some of the key configuration steps relevant for leveraging group valuation in Universal Parallel Accounting set up, along with group reporting preparation ledger.
Note- There are detailed configuration steps for activating Advanced Intercompany Sales solution as listed in SAP OSS note -3233830 - Configuration Steps for Advanced Intercompany Sales in SAP S/4HANA (Refer link shared below ). The same are not covered in this blog
https://me.sap.com/notes/3233830
SAP Universal Parallel Accounting- Parallel Valuations –Ledger Setup via Config node -Define Ledger & Currency Settings (IMG Node:FINSC_Ledger )
With Universal Parallel Accounting, the new ledgers for group and profit center valuation use the same accounting principle and fiscal year variant as ledger 0L. Asides from Company code Currency & Group Currency, additional 8 currency types can be defined.
SAP S/4HANA UPA –Group Valuation –Intercompany Transactions
Valuation clearing account needs to be defined (via IMG node-8KEN) to eliminate intercompany revenue and expenses in delivering and receiving company respectively
SAP S/4HANA UPA –Group Reporting –Product Cost Controlling
SAP delivers costing variants for group valuation, with a costing type that links to the relevant ledger and a valuation variant that links to the valuation view for profit center valuation. Standard Cost estimates are to be executed for a combination of ledger and plant. Actual costing run can be executed for a combination of ledger and plant. Event based WIP and variance calculation are supported. Below Fiori apps can be leveraged for group wide value chain & cost analysis-
- Display Material Value Chain
- Display Actual Costing Result
Configure Group Reporting Preparation Ledger
You can define an accounting ledger as a group reporting preparation ledger. This is done by creating a group reporting preparation ledger configuration for an accounting ledger. In addition to defining an accounting ledger as a group reporting preparation ledger, you assign a consolidation chart of accounts (COA) to the accounting ledger.
There can only be one entry per accounting ledger. Select an accounting ledger that you want to define as a Group Reporting Preparation Ledger. This activates the derivation of group reporting fields in the group reporting preparation ledger.
Group Reporting Fields Derivation in Accounting Reports
Group reporting fields can be made available in the “Trial Balance” report in accounting. As a prerequisite for showing the group reporting fields in the “Trial Balance” report, the fields need to be activated in the “Trial Balance” report in the extensibility framework.
Create custom data source extension for the “Trial Balance” data source (C_TRIALBALANCEQ0001) via the “Custom Fields” app, …
S/4HANA UPA-Group Valuation Flow with postings to group valuation clearing account -Intercompany Sales
The process for advanced intercompany sales provides functions that allow two affiliated companies to participate in a single intercompany process, with the following features
- An external customer places an order on the selling company
- A sales organization assigned to the selling company creates a standard sales order of sales document type OR- that triggers the ordering of goods from another company, which acts as the delivering company
- A standard sales order can initiate the entire process, which is integrated into the value chain monitoring framework (VCM)
- Support for Valuated Stock in Transit & Event based Revenue Recognition
Posting of goods issue (PGI) in delivering company
Posting of Intercompany customer invoice in delivering company
Posting of Intercompany supplier invoice in selling company
S/4HANA UPA- Consolidated Reporting
With the integration with group reporting preparation ledger, the group reporting fields can also be used in particular accounting reports. The reports can be executed with relevant ledgers both for legal and management views
Summary
SAP S/4HANA Universal Parallel Accounting along with Advanced Intercompany Sales & Group Reporting Preparation Ledger provides a robust framework for real-time, on-the-fly analysis of entity’s contribution to the overall margin, value chain & group wide intercompany flows.
Useful Links for further Reference
- 3191636 - Universal Parallel Accounting (SAP S/4HANA 2023): Scope Information
https://me.sap.com/notes/3191636/E
- FAQ: SAP Universal Parallel Accounting
https://launchpad.support.sap.com/#/notes/3265275
- SAP Help –Universal Parallel Accounting Scope
Defining the Scope for Universal Parallel Accounting | SAP Help Portal
- Post activation steps for Universal Parallel Accounting
Post-Activation Steps for Universal Parallel Accounting | SAP Help Portal
- Universal Parallel Accounting -Configuration Guide
https://me.sap.com/notes/3207221/E
1 Comment
