The new features introduced with the 3F0 - Event-Based Production Cost Posting scope item also enable parallel accounting for group and local accounting standards, which is generally called universal parallel accounting (UPA).
Indeed, it can support your company, if it has some of the following requirements, to:
- Submit financial statements based on different principles: the group accounting principle (IFRS) and the local accounting principle (GAAP), which are valid for the individual countries/regions.
- Use multiple currencies for reporting purposes: group currency, company code currency, and freely defined currency.
In production accounting, UPA allows data to be reported on the ledger level, in real-time, including calculations (overhead, WIP or variance calculation) with fewer manual adjustments or closing tasks. UPA enables you to analyze the different values of actual costs (not covered in this course), WIP, target costs, and variance for different accounting principles through the different parallel ledgers. They are directly calculated for each currency (up to 10) without currency translation. It is really a parallel accounting.
By default, UPA capability is implemented with the Event-Based Production Cost Posting solution (Scope Item: 3F0) for production and process orders or product cost collectors.
The following cost key figures can then be viewed with multiple currencies and parallel ledgers in the apps, Work in Process - Event-Based, Analyze Production Costs - Event-Based, Order Cost Details - Event-Based and Display Line Items - Production Accounting in production accounting:
- Material standard costs
- Sales order costing
- Actual costs
- Target costs (calculated based on material/sales order standard cost)
- Work in process (and reserves for unrealized costs)
- Total Price Differences and Variance split by categories
Currently, planned costs and target costs are only available for the leading ledger.
Note
In SAP S/4HANA Cloud, Public Edition, UPA is compulsory.
To better understand the ledger principle in Universal Parallel Accounting, you need to know more about the requirements your group must fulfill. Here is an example of the different ledgers your group can implement. The purpose of production accounting is to analyze the value of actual costs, work in process (WIP), and variances for each accounting principle.
In the context of your global organization, financial statements must be submitted according to multiple local accounting principles of your different subsidiaries and a common accounting principle (for example, IFRS) across all entities for your whole group.
Your corporation, using the UPA feature, may need to display:
- At least parallel valuations in unconsolidated views (not including eliminations) for the different selected principles (group and local GAAP)
- On request, include parallel valuation in a consolidated view (integrating intercompany eliminations at the Group or Business Unit level)
Inside your global organization, you typically trade internally and agree on transfer prices between the affiliated companies and profit centers. To meet the latter requirement and obtain a consolidated view, these intercompany profits must be eliminated.
In Production Accounting, ledgers are used to distinguish the product costing approaches, such as ledger 2L (Companies)-unconsolidated and 0L (Headquarters) - unconsolidated or 4G (Headquarters)-consolidated or PC (Profit Center)-consolidated).
