In this lesson, we will explain how SAP S/4HANA supports parallel currencies, parallel valuations in a consolidated and non-consolidated view, and local fiscal year variants.
In SAP S/4HANA Cloud, public edition as well as the last releases of the other SAP S/4HANA modalities, controlling can take part in the end-to-end function of parallel accounting by supporting multiple ledgers for different accounting principles. The main supported scenarios include:
- Parallel valuation for single entities: International companies need to follow both local and international accounting standards that affect inventory valuation, WIP calculation, asset values, and so on.
- Parallel valuations for consolidated views: For steering purposes, customers require a group view where intercompany profits between trading partners are eliminated in real-time. Additionally, a business unit view might be required where transfers to another business unit are treated as an external sale.
- Multicurrency capabilities: In internationally operating companies, financial and management reporting needs to be available in several currencies, including beyond local and group currency additional currencies such as functional currency.
- Country fiscal year: Companies operating in certain countries require a fiscal year variant for their local financial reporting, which is deviating from their fiscal year variant for their central reporting on group level.
End-to-End Value Flow With Universal Parallel Accounting
- Capitalization of Assets:
Costs are collected on a WBS element, at a certain point in time, the costs are capitalized.
- When settling cost from WBS element to asset under construction, the values are calculated and posted per ledger.
- Capitalization of assets is posted per ledger.
Different values per ledger are evaluated at the time of settlement.
- Actual costing according to local GAAP: In certain countries like Brazil, inventory needs to be valuated at actual cost according to the local accounting principles.
- Controlling: knows all ledgers, for example actual cost rates are calculated per ledger
- Production Order: Actual costing can be run per ledger.
- Inventory valuation: Capitalization rules for inventory valuation can differ between different GAAPs.
- Standard price can be calculated per ledger based on capitalization rules which apply to this GAAP.
- Profitability Segment: During goods movements, the material price defined for each ledger will be used to valuate goods movement.
Inventory values are correct at the time of the posting.