Setting up the ledgers in the right way for Two-Tier Scenario

[Yannick1]

Dear experts

in the product expert training session in April Nicoleta Cernea gives advise how to set-up the ledgers using parallel ledger accounting. What was not especially advised is the recommended set-up for Two-Tier szenarios.

The customer is a company in Germany with subsidaries in USA, India and China. The subsidaries will be implemented in SAP S/4HANA Public Cloud. The corporate accounting of the group is the German GAAP (HGB).

Are there any recommendation from SAP side how to deal with this.

Best regards

Yannick

[Ernesto_Cepeda]

Hi Yannick,

This is a complex question that has multiple possible solutions… Usually for USA you will need the USGP accounting principle and for India you could potentially need an alternative Fiscal Year Variant .

That said, without additional information I would suggest to:

• Activate the Scope Items 1GA (which enables ledger 2L - IFRS) and 2VA (which enables ledger 3L – USGP). Scope Item J58 (which enables ledger 0L) is mandatory.
• Leave ledger 0L as leading with the German GAAP and select one of the parallel ledgers to manage the local accounting principles and (potentially) the alternative Fiscal Year Variant

You can see some additional information in the following blogs:

• SAP Recommendation: Assignment of Corporate Accounting Principle to Ledger

• Assign Accounting Principles to Ledgers and Company Codes

• Ledger Scenarios: Choosing the Right Combination for Your Business Needs
• SAP S/4HANA Cloud, public edition: Options for Accounting Principles and Ledgers 

Please review with the Partner and customer to confirm that this is aligned with the business requirements since, as I mentioned at the beginning, the flexibility that the system provide is high but it has to support the Global and Local legal requirements. 

I strongly recommend to document and sign off from customer key business users (e.g. CFO or accountant).

Please note that the ledgers are some of the primary settings selected at scoping while the system is being provisioned. It is not possible to add or delete ledgers after the system as been provisioned.

If you have additional comments or questions please add them here so the community can help.

I hope this helps!

Ernesto Cepeda

[Yannick1]

Hi Ernest, thanks for you response. Is there any documentation what are exactly the differences betweeen leading and non-leading ledger. What are the limitations? Thanks again