Second ledger HGB

[former_member133246]

Dear All,

we are at the beginning of a international S4 HANA Cloud implementation project and we need to decide how many ledgers we want to use and which one they should be (IFRS, US GAAP etc.).

We would like to use two ledgers. First / leading ledger should be the local accounting principle ledger (in Poland PLAP). Second / Non-leading ledger should be HGB (German accounting principle DEAP) because the headquarter of this company is in Germany. It is not mandatory for them to report with IFRS or US GAAP, thats why the customer wants to have DEAP as the non leading ledger to ease some group consolidation processes.

Important to know is that in a future project wave also Germany is part of the implementation which means that in this case the leading and the non-leading ledger would be DEAP that could cause problems.

What are your thoughts on that? Is it allowed to define DEAP as Non-Leading ledger or is it mandatory to choose between IFRS or US GAAP?

thank you and best regards

Marcel

[OwenLiu]

We helped you to accept the answer, since there were no updates after 7 days.

You can unaccept it anytime if you have further questions.

[Batista · Accepted solution]

Thank you Javier and Marcel.

I also discuss with stakeholders:

Q1: It is possible to assign DEAP (accounting principle SAP delivers representing HGB) to the leading ledger, under the conditions described in the help.com (CBC customer, no postings…). In general, it is correct, that give the recommendation to assign the Group GAAP to the leading ledger and the local GAAP to the non-leading ledger – unless there are other reasons for doing it differently like sequential document numbers which are available in the leading ledger.

Q2: this is still a restriction the multiple assignment of 1 accounting principle to both ledgers, however SAP's working towards a solution, especially interesting for customers that e.g. have the need of slightly different posting logic/rule in “Local HGB” compared to “Group HGB”.

Can you reach out to me separately and I can put in contact with colleagues to evaluate the case?

We will then inform the community once ready to do so.

Thank you

[marcelinho3394]

Thank you Sandra, I really appreciate your work for me!

We are at the beginning of the implementation project right before our Fit 2 Standard Workshops. We will use CBC on a 3 system landscape. The development system is not requested right now.

A prerequisite to use DEAP as leading ledger for all company codes is to activate the German localization in the system. We are not 100% sure if we will ever implement our German headquarter company code on our Cloud system. They are a R3 customer and want to implement all foreign countries first before they decide to also roll-out Germany on the cloud system. Question: If we are activating Germany to use DEAP, is it mandatory for us to also create a German company code? Or could we use the German localization without creating any org. structure. We just want to use DEAP at the moment.

Our plan would then be to use DEAP as leading ledger and IF Germany will be implemented on S4 Hana Cloud then we will assign any other accounting principle (for example PLAP) as non-leading ledger to avoid the multiple assignment.

In parallel we are also checking to adapt IFRS to our DEAP needs, to avoid this discussion but it is important for us to have all information together to find the best solution.

Thank you and best regards

Marcel (marcel.schmidt@nagarro-es.com)

[Javier_del-Peso]

Hi Marcel,

Question 1) Well this is recommended in the help, and main reason is because if you implement Group Reporting, it's the leading ledger what integrates with GR and companies consolidate in the Group Principle. Your example may be a company not using GR. Technically both options are possible, but the help and I support recommends 0L being assigned to Group Principle.

Question 2) The problem is not for the Polish company, but for the potential case of a German company which will have the same accounting principle in both ledgers and that is not possible. Try to assign Local Polish principle to both ledgers and you'll get the restriction. Solution is always to have a whole group approach and to assign IFRS or USGAAP to leading and local to non-leading, that's the only way that all companies, present or future can be configured avoiding duplicate principle. What you do then with the Group Principle is flexible, just don't link the description to the meaning / usage.

Regards,

Javier del Peso

[Javier_del-Peso]

Hi Marcel,

This is always a complex setting, but please apply this principle as there are some limitations you need to know :

- Change the assignment of the leading ledger 0L, which by default is assigned to a local accounting principle, to the accounting principle you use for the whole entity. This means that you assign the corporate accounting principle (IFRS or US-GAAP) to the leading ledger 0L
- Your local accounting principle is the one you assign to the non-leading ledger 2L or 3L.

Group Principle has to be always IFRS or US GAAP. You can’t enter the same set of accounting principles to two standard ledgers, so if the corporate is also in scope they cannot have DEAP in both ledgers, hence the limitation.

But you can adapt the IFRS principles to your DEAP needs for all company codes in ledger 0L.

Understand that settings in leading ledger 0L are same for all company codes, while settings in 3L non leading ledger are different at company code level.

Regards,

Javier del Peso

[marcelinho3394]

Hi Javier,

thank you so much for your helpful answer!

Two questions:

1) Why do you think that it is better to change the assignment of the leading ledger to for example IFRS or US GAAP and use the non-leading ledger as the local accounting principle? I guess because of your last sentence? The assignment of the accounting principle is the same for all company codes for the leading ledger.

I checked a customer system (not using CBC) and saw that the leading ledger is 0L but different accounting principles are assigned to the company codes. See attached screenshots.screen1.pngscreen2.png

2) I read in the article which was posted by Sandra that if we are activating Germany we are able to use DEAP as for example the leading ledger for all company codes. We would get a problem if we create a German company code because both ledgers cannot follow the same accounting principle. Thats why we could assign for example the Polish GAAP to the non-leading ledger just to prevent the duplicate. Could this be a solution?

Have a nice weekend and best regards

Marcel

[Batista]

Hi

check here:

https://help.sap.com/viewer/0fa84c9d9c634132b7c4abb9ffdd8f06/latest/en-US/f455c1e89c954cdb8feff7abd9...

I believe would support your questions above. I will also try to get some more details. Please expect few days.

Thank you