Regrouping Payables/Receivables on a Balance Sheet
You might have to regroup payables/receivables on a balance sheet for the following reasons:
- Receivables and payables must be listed separately on the balance sheet. Because some vendors might have a debit balance at the end of the period, you need to display their balance as a separate group in the receivables section of the balance sheet.
- In some countries, payables/receivables are grouped on the balance sheet according to their remaining life.
- Both regroupings are carried out using a special program. At the same time, these regroupings are removed for the first day of the next period, because regrouping is not necessary for daily processing.
In the figure, to facilitate the creation of the financial statements, the payables with long remaining terms have been reposted to different accounts. In addition, vendors with a debit balance have been regrouped. An adjustment account has been used as the offsetting account. This is because adjustments cannot be posted directly to a reconciliation account.
Hint
Foreign currency valuation and regrouping can be completed in different ways to meet different legal requirements. The results are then posted to the various accounts used by different versions of financial statements. The regrouping program is also used if the reconciliation account for a vendor was changed during the year.
Regrouping of Receivables and Payables
Before creating financial statements, you must group your receivables and payables according to their remaining life so that they are correctly displayed in the financial statements. To group them correctly, you must make adjustment postings.
FAGL_CL_REGROUP Program
The FAGL_CL_REGROUP program, which can be used to regroup and sort the receivables and payables, has the following functions:
- It sorts receivables and payables according to their remaining life and makes the required transfer postings.
- It makes the required adjustment postings (for example, for changed reconciliation accounts).
- It determines where the transfer postings are required. When you define the sort method in Customizing, you can select the cases where receivables and payables should be regrouped.
Regrouping of Customers with Credit Balances or Vendors with Debit Balances
The balance of an account determines whether the system displays the account as a receivable or as a payable.
Receivables and payables are displayed separately according to their remaining life.
To ensure that the system generates transfer postings when you start the FAGL_CL_REGROUP program, make the relevant selections for the sort methods used in Customizing.
Manage Global Hierarchies - Reclassification
Financial statement version managed by the Manage Global Hierarchies app offers the option to assign reclassification attributes directly to the corresponding balance sheet subnode. When you execute a balance sheet report, the corresponding balance sheet values are displayed according their remaining life. Postings using adjustment accounts are not required.
To do this, proceed as follows:
Define the aging set in customizing under Financial Accounting - General Ledger Accounting - Periodic Processing - Advanced Valuation in General Ledger Accounting - General Settings - Define Aging Increments for Advanced Valuation according to your reporting requirements. Select the aging category REC – Reclassification.
Choose the Hierarchy tab in the corresponding Financial Statement Version and assign your aging set.
Assign the Aging Increments to the corresponding Balance Sheet Subnodes.
Add the G/L accounts to be sorted to the relevant Balance Sheet Subnodes.
Note
This reporting-based reclassification function does not replace the program FAGL_CL_REGROUP (Balance Sheet Supplement – OI- Analysis). It is an option to report Receivables/Payables according their remaining life before period end postings has been executed by the program FAGL_CL_REGROUP.
