Applying Manual Adjustments

Objective

After completing this lesson, you will be able to Apply manual adjustments.

Manual Adjustments

Introduction

Greg has been asked to make a manual adjustment posting. Adjustment postings are usually made at month end to ensure the financial statements accurately display the financial results.

The adjustment posting is usually posted to all ledgers but in Greg’s case the different accounting principles (local GAAP vs. IFRS) have caused the adjustment posting to have different values.

Manual Adjustment Postings

In this scenario, a pension provision is calculated according to local GAAP resulting in EUR 3,000 and EUR 5000 according to international financial reporting standards (IFRS). 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 Group field is in the document header.

Thus, Greg will use the Ledger Group field when posting the journal adjustments by selecting the Ledger Group field ‘0L’ which will only post to the 0L ledger (IFRS). The second journal adjustment posting will be made to Ledger Group ‘2L’, thus posting a different value to the respective 2L local GAAP ledger (See examples below).

In the first journal entry, in the header section Greg will choose Ledger Group ‘0L’ for the IFRS journal posting and the second journal adjustment posting will only post to Ledger Group ‘2L’ for the local GAAP journal posting.

Post to a Ledger Group

Practice yourself using the interactive simulation to post a manual ledger adjustment.

Log in to track your progress & complete quizzes