Exploring the Concept of Parallel Accounting for External Accounting

Select the play button to watch the video below:

Follow Franco and Renita as they discuss the need for Parallel Accounting.

Select the play button to watch the video below:

In using Parallel Accounting, we’ve decided to utilize three general ledgers that comply with the reporting requirements in this scenario.

The three ledger groups in this scenario are as follows:

• - 0L Leading Ledger (IFRS): The main accounting principle the company must report.
• - 2L Non-Leading Ledger (Local GAAP): An additional accounting principle that the company is required to report locally.
• - TX Non-Leading Ledger (Local Tax): An additional ledger that the company chooses to maintain.

Select the Play button below to learn more about ledger groups:

All international companies have to prepare financial statements based on different accounting principles This leads to the question of why it’s required to file financial statements with different accounting principles? Watch the video below to learn more about parallel ledger direct document entry.

Parallel Ledgers – Secondary Processes

Parallel ledgers also support parallel valuation processes, which are often performed at period end.

When configuring for parallel valuation, accounting principles are defined and subsequently assigned to both the following:

• Parallel ledgers
• Valuation areas

Watch the video below to learn more:

What is a ledger-specific posting?

As new ledgers are created, the system will automatically create a ledger group containing a single ledger. You cannot add ledgers to this ledger group.

However, you can manually combine multiple existing ledgers into a ledger group

• While posting a financial document, the Ledger Group field determines which ledger or ledgers will be updated by the document. If the Ledger Group field is left blank, then all ledgers will be updated. If the ledger group is specified, only the specific ledgers assigned to the ledger group will be updated.
• Ledger specific documents cannot be posted to a customer/vendor account.
• Customer/vendor accounts are posted in all ledgers.
• In order to post to a customer vendor account, the ‘Ledger Grp’ field cannot specify a ledger group.

Select the play button below to learn more about ledger groups.

Financial Statements can be created for each ledger. When executing the Balance Sheet/Income Statement application, you can choose which Financial Statement Version and Ledger to display.

Watch the video below to learn more: