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Former Member

Hi Friends, I am starting this blog series to provide details on some of the key new features of Sfin 2.0  / Simple Finance 1503 on premise edition.

Today I want to talk about the changes Parallel ledger and functionality of using Extension / Appendix ledger.

We will talk about the change in customizing, feature and how it helps in reducing data volume.

Change in Configuration :???:

To assign additional ledger to company code in the Simple Finance, these is few change in the location of customizing nodes

So if you see the above node, the assignment of Ledger to Company code is moved from the ledger menu.

Now the assignment is going to be done under the initial preparation steps for Simple Finance Migration

The node is "Define Settings for Journal Entry Ledger"

Inside the customizing is not much different:-

You can setup the ledger and Assign it to company code.

One key difference you can see if appearance of Appendix Ledger.

As per standard help provided by SAP:-

There are two types of ledger:

  • Standard: A standard ledger contains a full set of journal entries for all business transactions.
  • Appendix: An appendix ledger is assigned to a standard ledger and inherits all journal entries of the standard ledger for reporting. Postings made explicitly to an appendix ledger are visible in that appendix ledger but not in the underlying standard ledger. This concept can be used to avoid duplication of journal entries if many business transactions are valid for both ledgers and only a few adjustments are required in the appendix ledger.

For our example we will define another ledger A1 and use it. We will define it as an Appendix ledger. When you define an Appendix ledger , it also should have a base ledger which is the main ledger for the appendix ledger. For our example we will keep base ledger as "0L".

So what does this mean??

Lets suppose we have a company code with assignment to Ledger N1 as non leading ledger, To this we also assign ledger A1 for the company code.

Now we do a normal FB50 posting and see its affect on ACDOCA table:-

We will see how it is present in ACDOCA table:-

Note We see entry for both 0L and N1 ledger but not A1 as it is an appendix ledger.

Now we will do a ledger specific posting in ledger A1 itself using FB50L and compare how ACDOCA looks like

Now as you can see the ledger specific entry gets posted only to A1 ledger, which is similar to behavior in SAP New GL.

The key difference is that for appendix ledger entries do not flow in all cases, only when ledger specific posting are made.

How does new Asset Accounting fit with Appendix Ledger??

With SAP Simple Finance , SAP brought out new asset accounting which basically allowed firms to maintain ledger / accounting principle.

While writing this appendix ledger, a question was posed by my colleague Bharat on how this would work with New Asset Accounting.

A short answer would be It doesn't . It would be great if someone from SAP too confirms it.

To demo this, we first assign an accounting principle to our Ledger & Company Code combination

Next we will try to change our COD / Chart of Depreciation and see if we can use / assign this accounting principle

So we assign the accounting principle 60 here.

Note-we see the target group 0L shown for principle 60 which is assigned to our ledger A1. So only the Base ledger gets assigned in the COD.

Once we try to save it gives an error as the Target group is already assigned to main accounting principle / GAAP.

So for the appendix ledger and its assigned accounting principle the ledger group will always be 0L or the base ledger.

Hence it will mean that we cannot use appendix ledger (only) for the new asset accounting as you would always have 0L assigned to your main GAAP.

This is another criteria to evaluate your use of Appendix ledger

OK!!, So what does this mean

So the most profound change with using appendix ledger will be in reduction of data volume. You will not have an N multiple number of entries based on the ledger defined. Also the appendix ledger will show the entries of main ledger for reporting.

What is the use case for this? :???:

Suppose if the parallel ledger / Non leading defined in your current landscape does not have too many difference  in Accounting principles ( may be the accounting GAAP regulation are similar) and the number of Adjustment entries are very few ( say just ~ 20-30)

Then using an appendix ledger instead of an standard ledger / New GL parallel ledger will provide a data reduction by almost 100 %.

This will be a key benefit for organization having multiple entities in a single client.

Another criteria will be the use of New asset accounting and having cases where we have some asset posted to only a single GAAP / Accounting principle.

If these scenarios are present, then you cannot use appendix ledger to maintain those.

So these are the two main criteria for business / consultant to check before using appendix ledger.

Hope this blog helps, I will take up another concept in the next blog in the series.

Other blogs in the series:-


Reporting options with S/4 HANA

SAP S/4 Finance blog series-2-Reporting options with COPA as use case

IBP Setup and overview

SAP S/4 Finance blog series-3-SAP Integrated Business planning-Overview & Setup

S/4 1511 release & its details

S/4 Finance- Blog series-6- 1511 changes in detailsS/4 Finance- Blog series-6- 1511 changes in details

S/4 Finance- Blog series-5- 1511 and its details

CO-FI initial setup

SAP S/4 Finance blog series-4-Changes in Controlling  & how to use them

PS- Some more names :smile: - "Appendix ledger" is now renamed as "Extension ledger", "Base Ledger" as "Underlying Ledger" and "Standard Ledger" remains unchanged

Regards

Rishab

70 Comments
RPrabakar
Participant
0 Kudos

Thanks Babu, thought SAP would address this ever demanding functionality at least in S4 world. Looks like custom solution will come into play for some more time.

Former Member
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Hi Rishabh,

First and foremost my complements to you and other community members on all the good work done here. You guys are amazing..

Secondly i thought of highlighting the use for appendix ledger and the thought process i believe SAP is having with this functionality.

The fact that with implementaion of Sfin a universal journal holding all CO assignments and PA segment information in one Journal document actuallly takes away the flexibility of posting CO only documents.

Like in ECC we always have the flexibiltity to post CO only documents to transfer cost between cost centres, run assessment/ distribution cycles and Top down distributions for PA segments even after our month end closing as these are for managemnet reporting purposes only but required internal reporting and valuations

But with introduction of Universal Journal how will you post a Universal journal to the main ledger when you financial period have closed? How could we make necessary adjustments for Managemnet reporting? What should i do when i want to change percentage allocation of say storage cost to my products based on COGS instead of Quantity for the last there years?

the Appendix ledger is required to take care of such reporting adjsument requirement after your financial books have closed. Ths should be strictly treated as CO only documents that helps in correcting enhancing the data quality for internal reporting.

Appendix ledger can not and should not be used as non-leading Ledger for parallel valuation purposes and that is why it is not integrated with asset accounting as reported by many users in the forum,

Regards

Pulkit

Former Member
0 Kudos

Excellent point Pulkit, Thank you for taking time to write it.

I too felt the same that Appendix ledger will be a good place to manage internal books.

But this blog was before I had done AC100 and AC110 :smile: :wink: :wink:

I think your comment really adds a lot of value to the whole discussion.

Regards

Rishab

former_member189603
Participant
0 Kudos

Thanks Pulkit for the valuable inputs.

0 Kudos

Thanks Pulkit for clearing the clouds. Appendix ledger has to be used for creating management view without influencing the data in the base ledger.

0 Kudos

Hi Rishab ,

Can you clarify few  thing , 1) if we do any entry in FB50 ( with leading ledger) is there any entry got posted in appendix leader .  2) If we made any entry FB50L with appendix ledger is it  posted in appendix ledger only . 3 ) Can we have more than one appendix ledger .


Regards ,

Martina

RPrabakar
Participant
0 Kudos

Hi Martina - Here is what functionality of Appx Ledger, hope it helps. All appx Lgr will have to shadow base ledger, no appex lgr can shadow another appx lgr, that's the basic principle.  Ledgers can be stapled on top of each other providing a flexible mechanism for adjustments and reporting.   An important use case are management views on top of legal data.  Besides creating a master record, appendix ledgers need no additional configuration.   Reporting on the appendix ledger always includes the data of the base ledger.  Multiple appendix ledgers can point to the same base ledger.  Appendix ledgers can point to another appendix ledger instead of a base ledger - creating a hierarchy of ledgers.  Benefit of reduced data footprint  Benefit of reduced reconciliation as only (manual) delta postings are maintained in the appendix ledger.

Former Member
0 Kudos

Hi Rishab,

Thanks for the blog. It has been very informative.

We are just starting on our journey to S4 and are doing our due diligence to go on the right path..

We are on ECC6.0 EHP6 classic GL on DB2 and are planning what is the best path to get to S4 HANA finance 1511 or 1605 (whichever is applicable and relevant).

While going to S4 we also want to go to Parallel ledgers but not immediately... is it still possible to move from our parallel accounting classic GL to S4 HANA Finance 1511/1605 (which mandates New GL) without parallel ledgers or document split activated?..

I guess the question is do we have to define all the parallel accounting ledgers right away with the move to S4 (in our case while migrating from classic GL) or can we stage that and still get the initial benefit of moving to S4 HANA and the universal journal, simplification, fiori apps etc.. and then do the parallel ledgers transformation after a year or so..

Appreciate your views.

Thanks,

Krushanu

Former Member
0 Kudos

Hello Krushanu,

Greeting of the day,

The need to have the parallel ledger is mostly from your business requirement , namely do you need to comply with more than 1 accounting principle for your reporting either due to legal or due to internal reporting standards.

If you have such requirement, you can enable the parallel ledger, the idea is whenever you are going to create a new ledger assignment:-

a) Historical entry would needs to be migrated where applicable

b) You might have to use SAP migration service to move your existing data.

Appendix ledger would not have such compulsion, as it is just a staple on ledger on top of your main ledger and can be defined and used if the number of entries are less.

Another perspective for your question would be how many depreciation areas which you have currently as when you move to S/4 HANA and new asset accounting it will follow deprecation to ledger assignment and will need you to define those ledger and accounting principle.

It is just the when you want to bite the bullet :smile:

Regards

Rishab

Former Member
0 Kudos

Rishab,

Thanks for your reply and the clarification.

So if I get this right, We can go ahead and implement S4HANA Finance 1511 moving from ECC 6.0 EHP 6.0 classic GL to the new S4 (New GL universal journal structure) without implementing parallel ledgers.

And later when we have our clear requirements of the number of parallel ledgers required as per different accounting principles and the depreciation areas, we can then implement parallel ledgers with historical entries to be migrated to the ledgers.

Is that a fair understanding?

Appreciate your help.

Regards,

Krushanu

RPrabakar
Participant
0 Kudos

Hello Krushanu, Earlier in ECC world there was sub-ledger (AA) which we could have activated later. Now in S4 world there are huge improvements where FI & CO is integrated and AA is no more shadow. You can add ledgers later but definitely it would be a different project and activating AA would be different project. Else where Nathan Genez mentions in his blog - copying for reference - My opinion?  If you're a new customer and you don't activate this then you're making a mistake and potentially putting your solution at risk.  How much of a risk is open to debate but it's rarely a good idea to go with an older approach when you're first implementing a particular module.  You're creating a solution based on functionality that SAP has moved on from. What happens if you reach a limitation in your solution that FIN_AA_PARALLEL_VAL addresses and report it to SAP?  More than likely their response will be "Please look at OSS Note 1776828 and activate the FIN_AA_PARALLEL_VAL business function".  Doing that after go-live is it's own (mini-)project.  Good luck with that. Link for more on assets -feel free to explore http://scn.sap.com/community/erp/financials/asset-accounting/blog/2014/07/21/new-parallel-valuation-...

Former Member
0 Kudos

Hello Krushanu,

Greetings,

As told by me and Prabhakar below, it would be a mini project activating the ledger later.

Would make sense to try and get the requirement in this upgrade stage itself.

If business is not very keen, then its a different discussion.

Regards

Rishab

RPrabakar
Participant
0 Kudos

Thanks Rishab for your views. Folks - one more point, there is no period check while activating additional ledgers in future. Reporting will go haywire if we do it later and may involve SAP's handholding. SAP should release some tool to add ledgers based on customer needs as a part of standard solution / config. All customers have unique requirements and IFRS adoption may take few years and phases if they are global company. S4HANA should come with some flexibility. Please share your thoughts as well so that SAP can listen to customer needs. Even in S4 world we will not have Asset Accounting with different FYV. SAP could not bring multiple calendar functionality. This will force customer to keep records in spreadsheets. Prabhakar

Former Member
0 Kudos

Prabhakar, Rishab,

Thanks for your views! Appreciate your help!

Regards,

Krushanu.

Former Member
0 Kudos

hi

I'm so sorry to bother you because i have some questions on sap s/4 hana fico,so please help me。

    Question 1:

    We use SAP S/4 hana 1511 FSP01.I excute T-CODE:OKEP.Please see screenshot:

Get error:

    More than 3 currencies / valuations are assigned to valuation area 1101

    Message no. C+339

   Diagnosis

    You are trying to use the material ledger for valuation area 1101. More than three currencies and/or     valuations are assigned to valuation area 1101, even though the material ledger can carry only up to     three currencies and valuations.

   Procedure for System Administration

    Correct the Customizing settings for the material ledger.

     Question 2:

     How to maintain group valuation  &  profit center valuation in SAP S/4 hana 1511 FSP01  Like          OB22 in ECC6.0

     T-CODE:OB22 screenshot:

T-CODE:FINSC_LEDGER screenshot:

     I can not find maintain field entry 1-group valuation and 2-profit center valuation.

  Best Regards,

        chase he

RPrabakar
Participant
0 Kudos

Hi Folks, SAP released new functionality around multiple currencies/transfer prices. Comprehensive doc link below.... https://partneredge.sap.com/content/dam/partnerexperience/PSD%20Replays/2016/CW_23/15548_20495.pdf Do check this it enumerates config steps as well and some considerations. Thanks - R Prabakar

Former Member
0 Kudos
Hi Rishab,

Thanks for Sharing. I have a Different Question Not Really Related to Topic Here, But Can you Please Confirm if a Client can Activate Central Finance Business Function "FINS_CFIN" on Simple Finance 1503 System? 
sachin_thombre
Participant
0 Kudos
Hi Rishab - I have one question, can you please clear my doubt

  1. in FB50 when we enter ledger specific posting to A1 ledger why it got updated to N1 & 0L

  2. Non Leading & Appendix ledger is same I suppose

  3. if we assign appendix ledger A1 to leading / base ledger 0L when we posted fb50l why it did not update to 0L but only it updated A1

ambrish_nigam
Explorer
0 Kudos
Hello Sachin,

I have few explicit queries from you.

a. How can you post a document in FB50 w.r.t. ledger. As there is no option to post in specific ledger (if at all you can post, where Ledger is updated, share the screenshot)

b. Non Leading ledger & Appendix ledger is same thing

c. When we post in FB50 it posts in All the ledgers whether its leading or non leading ledger. However in Transaction, FB50L we post to specific Ledger group and the posting reflects in specific ledger only.

 

Thanks

Ambrish

 
arvind_pereira
Participant
0 Kudos
When i started reading this blog, i was trying to figure out,

how is appendix ledger different from non-leading ledger, you have explained it well, shows how much understanding and knowledge you have and willing to share, keep up the good work.



thanks


Arvind Leo Pereira




 
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