Introducing Ledgers for Parallel Accounting

The Bike Company creates its consolidated balance sheet in accordance with International Financial Accounting Standards (IFRS). In addition, each legal entity creates their individual financial statements based on the respective local accounting principle.

As a result, a business transaction (for example provisions posting or foreign currency valuations) may be valuated differently by two legal entities, depending on the applicable accounting principles.

This prompts the question: how can different valuation approaches be mapped within one general ledger?

This lesson explains the basic concept of the ledger solution within SAP S/4HANA and belongs to the current process steps in the graphic below:

As part of the closing operations at fiscal year end, the Bike Company Germany calculates, and post pension provisions based on IFRS and local accounting principles. The provision amounts for each accounting principle are different.

The Bike Company decided to implement the ledger solution in SAP S/4HANA to map these parallel accounting requirements.

The ledger solution in SAP S/4HANA enables you to manage several "general ledgers" (in General Ledger Accounting) in parallel and create separate financial statements for each general ledger.

Ledgers for parallel accounting are always managed as standard ledgers that contain a full set of configuration settings and full posting information.

Depending on the type of posting, you can post data to one ledger at a time or all to the available ledgers at once.

The following example shows the basic principle of a manual provision allocation/acquisition posting with different amounts in different ledgers:

• In this example, pension provisions are calculated according to local GAAP (resulting in EUR 3,000) and according to international financial reporting standards (resulting in EUR 5,000).
• The postings of these two valuation approaches must be made in separate G/L journal entries. While the G/L accounts used are identical, two separate journal entries are needed as the ledger is a document header level element (Field= Ledger-Group).

This enables you to create separate evaluations for each ledger (for example, a balance sheet, income statement, or trial balance).