Introducing Advanced Valuation

As part of the intelligent closing processes, the Advanced Valuation processes are integrated with SAP S/4HANA Cloud as tasks in closing activities.

With Advanced Valuation in Financial Accounting you have the capability to carry out steps in your month-end closing processes with jobs that are set up in a similar way and are straightforward to use. Advanced Valuation supports you in accounting standards, for example, IFRS9. The following processes are part of advanced valuation and are realized as job templates in the Schedule General Ledger Jobs app:

• Advanced Foreign Currency Valuation
• Post Balance Sheet Reclassification
• Post Credit-Risk Based Impairment
• Post Discounting of Long-Term Assets and Liabilities

• Advanced valuation generally uses the delta posting logic (exception: Balance Sheet Reclassification).
• Only gain and loss G/L accounts are configured, thus a simplified account determination. No original (Recon/ banks etc.) and adjustment G/L (General Ledger) accounts are required.
• Posting to original G/L accounts are supported (Reconciliation, Bank, etc.).
• Processing status details per line item.
• Parallel accounting and valuation posting into all currency types.
• Link between valuation journal entry and original journal entry.
• Grouping rules for valuation of several items. e.g., if there is an invoice and it has a debit/credit note then both will be grouped together. There will be one valuation posting for the group.

Advanced valuations steps need to be carried out in the following sequence:

The best point in time to activate advanced valuation is when your fiscal year has ended. You can of course activate advanced valuation at any point in time in your fiscal year, but this requires additional effort.

Once you have activated Advanced Valuation you can no longer use the following apps:

• Perform Foreign Currency Valuation (FAGL_FCV)
• Regroup Receivables / Payables (FAGLF101)
• Perform Further Valuations (F107)

You can also no longer use the following job templates:

• Foreign Currency Valuation
• Regroup Receivables/Payables
• Provision for Doubtful Receivables

If there are no postings in the productive system, you can deactivate Advanced Valuation in the Activate Advanced Valuation configuration item. If you are an existing customer and you have already added or are about to add a new country/region version to your system using the Central Business Configuration environment, please be aware that Advanced Valuation is automatically activated for this new country/region.

Advanced valuation in financial accounting jobs uses the delta posting logic (exception: B/S Reclassification - see topic Reclassifying the Balance Sheet in this training). You can't choose between either the reversal posting logic or the delta posting logic as you can do for classic valuations. Thus, the valuation isn't reset in the next period and the next valuation is determined based on the former valuation(s).

One of the main characteristics and innovation highlights compared to the Classic Valuation Runs is, that all Advanced Valuation Runs are posting onto the reconciliation account maintained in the business partner. The major benefit of this new approach is that e.g. for the Advanced Valuation Runs, all effects (from Foreign Currency Valuation, from Credit-Risk-Based Impairment, from Discounting) can be found in one account. This reduces the reconciliation and reporting efforts tremendously. Apart from that, the number of G/L accounts will be reduced which from another point of view reduces the maintenance effort.

For the Advanced Valuation Runs, SAP provides the function to handle errors with the restart capability. The users get informed in the result list which items have not been processed successfully as well as why these items haven’t been processed properly. This will not lead to a cancelation of the whole run. For the items processed correctly, a valuation journal entry is created.

After solving the issue for the erroneous items, the application job can be executed again to create valuation journal entries for the remaining items, too.

By using semantic tags to tag accounts and account ranges, you don´t have to select accounts manually. When you've assigned a tag to a valuation rule, the tagged accounts are considered by the respective advanced valuation job. If new accounts are created within a range that you've already tagged, these new accounts are automatically tagged and thus selected. Additional advantages of using semantic tags are:

• You can assign semantic tags in the Manage Global Hierarchies app.
• You can configure the semantic tags according to your needs.
• The usage of tagging accounts results in a simple selections screen. You don´t have to manually select or exclude accounts or account ranges since you've already identified the relevant accounts for your process by defining the rules in configuration.

Switching is only relevant for you if you're already using any of the Classic Valuation Runs. If you're starting to use Advanced Valuation in Financial Accounting with the current release, it's activated by default. There are prerequisites for switching, such as all the necessary configuration settings. Once activated, and after you have made postings, you can no longer deactivate Advanced Valuation.

Here is a helpful link;

https://help.sap.com/docs/SAP_S4HANA_CLOUD/0fa84c9d9c634132b7c4abb9ffdd8f06/c94554b929754b41820b9d6ccf3591b7.html?q=advanced%20valuation