Reclassifying the Balance Sheet

Objective

After completing this lesson, you will be able to customize the balance sheet reclassification.

Reclassification of Balance Sheet Items Introduction

Balance Sheet reclassification is the final step in the sequence of the Advanced Valuation processes. You use the Post Balance Sheet Reclassification job to sort your assets and liabilities according to their remaining term and their balance so that they can be reported correctly in your financial statements. You must perform adjustment postings to do this and will find the Post Balance Sheet Reclassification job in the Schedule General Ledger Jobs app.

The Post Balance Sheet Reclassification job offers the following features:

  • Adjustment postings to trade receivables and payables according to maturity.
  • Adjustment postings for receivables with debit balances and payables with credit balances.
  • Consumption of not cleared payments to determine the amount to be reclassified.
  • It enables reporting capabilities of impairment effects separated from other valuations and balances.
  • It is integrated with the other processes of advanced valuations represented by the following jobs:
    • Advanced Foreign Currency Valuation
    • Post Discounting of Long-Term Assets and Liabilities
    • Post Credit-Risk Based Impairment

The Financial Statement version can be simplified as less general ledger accounts are required for adjustment postings.

Reclassification of Balance Sheet Items Configuration

Before you can execute the job for the B/S reclassification, you must make individual settings in the customizing to ensure that the configuration meets your requirements.

The following video explains the key steps in the configuration and demonstrates the B/S reclassification run in the SAP system.

Define Rules for B/S Reclassification

A valuation rule defines which journal entry line items are valuated and how the valuation amounts are calculated by the system. A valuation rule can also define to which G/L accounts the valuation amount is posted.

SAP delivers the following rules that you can use for reclassification:

  • SBSR:

    B/S Reclassification (Global AP)

  • SLBS:

    B/S Reclassification (three increments)

The balance sheet image shows reclassified payables and receivables. Assets include Vendors with debit balance totaling 1000. Liabilities list Payables divided by terms: <1 year (2000), 1-5 years (3000), >5 years (4000), with adjustments from the Post B/S Reclassification Job.

In the preceding figure, to facilitate the creation of the financial statements, the payables with long remaining terms have been corrected according to the valuation rule SLBS B/S Reclassification and the assigned S3IRCL Aging for Reclassification with three increments on the source reconciliation account "Payables".

A target G/L account has been used as the offsetting account. In addition, vendors with a debit balance have been regrouped.

You can create more rules or agings if necessary.

Account Determination

The SAP screen shows an overview of G/L account assignments for reclassification. It lists details like Chart of Accounts (YCOA), Target Account, Aging, Aging Increment, Source Account, and the Reclassification Method.

For each combination of aging, aging increment and source account enter a target account in the settings of the valuation rule. The target account is the account to which the job posts the reclassified debit or credit balances.

The reclassification can be performed based on the following reclassification methods:

  • Only by maturity:

    The debit balance or credit balance is posted to the target account according to its maturity. The system ignores whether it is a debit or a credit balance.

  • Credit Balance:

    If the balance of the group, where the source account belongs to, sums up to a credit balance, the system reclassifies this balance to the target account according to its maturity.

  • Debit Balance:

    If the balance of the group, where the source account belongs to, sums up to a debit balance, the system reclassifies this balance to the target account according to its maturity.

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