Managing Fiscal Year Variants

The Bike Company has established its fiscal year from January 1 to December 31. The new subsidiary adopts this fiscal year for consistent financial reporting and cross-company controlling purposes. Although the fiscal year variant K4 is already assigned through the copy of the new company code, Paloma wants to familiarize herself with the definition and additional types of fiscal year variants.

The accounting period, or fiscal year, typically lasts 12 months. It is divided into posting periods, each defined by a start and end date.

Special periods are used to subdivide the last posting period for closing operations.

The figure, The Fiscal Year, shows a fiscal year with 12 posting periods and four special periods. The posting periods are marked 1 to 12, and the special periods are marked 13 to 16.

The fiscal year is defined as a variant and can be assigned to many company codes.

Fiscal year variants can be:

• Year-independent:

  The periods' number and start and end dates are the same for every year.

  Example: 12 Posting Periods, 4 Special Periods, Start Date 01.01. End Date 31.12.

• Year-Specific:

  Periods are defined for a specific Fiscal Year

  Example: Week-based Fiscal Year Variant ("4-4-5" fiscal year variant) for the fiscal year 2024

If each fiscal year of a fiscal year variant uses the same number of periods and the posting periods always start and end on the same day of the year, the variant is year-independent.

Year-independent fiscal year variant can either follow the calendar year or not

If you define a fiscal year as the calendar year, then the posting periods are equivalent to the months of the year. Therefore, a fiscal year must have 12 posting periods.

If a fiscal year is defined as a non-calendar year, each of the posting periods is defined with their end dates. A non-calendar year can be defined with the posting periods ranging from 1 to 16.

If the non-calendar year does not start on January 1st, the periods of the year that belong to the former or the coming fiscal year must have an indicator -1 or +1.

The fiscal year variant contains the number of posting periods in the fiscal year and the number of special periods.

Configuring Fiscal Year Variant K4 involves checking the "Calendar year" box, which automatically sets the number of posting periods to 12. additionally, you can define up to four special periods that subdivide the year-end closing period for creating supplementary financial statements, further splitting the last regular posting period. A fiscal year usually has 12 posting periods. In General Ledger Accounting , you can define up to four special periods. No additional period definition is required when using the calendar year option.

A fiscal year variant is defined as year-specific based on one or both of the following conditions:

• The start and the end dates of the posting periods for some fiscal years differ from the dates of other fiscal years.

• Some fiscal years use a different number of posting periods.

If one year of a fiscal year variant has fewer posting periods than the others, it is called a shortened fiscal year. This variant could be required if closing has to be carried out before the end of the normal fiscal year.

For example, in a case where the beginning of the fiscal year needs to be changed or if the company was sold. Before defining the period dates, you must define the shortened fiscal year and the number of posting periods in it. For a shortened fiscal year, you can only assign a lower number of posting periods.

For more information related to Year-dependent Fiscal Year Variants, see:

Fiscal Year and Calendar Year | SAP Help Portal

Shortened Fiscal Year | SAP Help Portal