FI Functional Consultant is to bridge the end-user and the SAP. He/She has to understand the functional requirement of the user, make it validate for the SAP and work accordingly. One of the biggest task before FICO consultants is revised schedule VI requirements. So enhancement of the SAP for end user based on requirement of revised schedule VI is a challenge to any consultant.
Revised schedule VI.
Schedule VI to the Companies Act, 1956 (‘the Act’) provides the manner in which every company registered under the Act shall prepare its Balance Sheet, Statement of Profit and Loss and notes thereto.
Major changes related to the Balance sheet
Current and non-current classification has been introduced for presentation of assets and liabilities in the Balance Sheet. The application of this classification will require assets and liabilities to be segregated into their current and non-current portions. For instance, current maturities of a long term borrowing will have to be classified under the head “Other current liabilities.
A liability shall be classified as current when it satisfies any of the following criteria:
(a) it is expected to be settled in the company’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within twelve months after the reporting date; or
(d) the company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
All other liabilities shall be classified as non-current.
In the old format companies kept their Long term loans under Non current liabilities. But as per the revised schedule vi this could be converted into current one year prior to maturity.
When the client is simply want to implement FICO without other modules the task of consultant is very difficult to capture the data relating to the time of maturity of investments and loans etc.,
In that case the revised schedule VI requirements are a hectic task for the consultants to segregate current and non-current based on time lines.
I suggest one solution which may require little bit of manual intervention.
As per the new requirement the segregation of current and noncurrent is required only at the time of every quarter ending. At the time of entering the data the maturity date can be captured for long term liabilities. This date should be compared with the current date on quarter ending. If the date of maturity is less than one year this can be transferred to a temporary GL code for the time being. On the first day of the succeeding quarter the entry could be reversed to the original GL code. By the way we can clear the temporary codes.
An ABAP program can be utilised for fulfilling this task . I also invite our gurus to contribute more this subject so as to develop a suitable solution for this problem. I wish you all a happy and prosperous new year. N.Selvakumar.