Hi Friends, I am starting this blog series to provide details on some of the key new features of Sfin 2.0 / Simple Finance 1503 on premise edition.
Today I want to talk about the changes Parallel ledger and functionality of using Extension / Appendix ledger.
We will talk about the change in customizing, feature and how it helps in reducing data volume.
Change in Configuration 😕
To assign additional ledger to company code in the Simple Finance, these is few change in the location of customizing nodes
So if you see the above node, the assignment of Ledger to Company code is moved from the ledger menu.
Now the assignment is going to be done under the initial preparation steps for Simple Finance Migration
The node is “Define Settings for Journal Entry Ledger”
Inside the customizing is not much different:-
You can setup the ledger and Assign it to company code.
One key difference you can see if appearance of Appendix Ledger.
As per standard help provided by SAP:-
There are two types of ledger:
- Standard: A standard ledger contains a full set of journal entries for all business transactions.
- Appendix: An appendix ledger is assigned to a standard ledger and inherits all journal entries of the standard ledger for reporting. Postings made explicitly to an appendix ledger are visible in that appendix ledger but not in the underlying standard ledger. This concept can be used to avoid duplication of journal entries if many business transactions are valid for both ledgers and only a few adjustments are required in the appendix ledger.
For our example we will define another ledger A1 and use it. We will define it as an Appendix ledger. When you define an Appendix ledger , it also should have a base ledger which is the main ledger for the appendix ledger. For our example we will keep base ledger as “0L”.
So what does this mean??
Lets suppose we have a company code with assignment to Ledger N1 as non leading ledger, To this we also assign ledger A1 for the company code.
Now we do a normal FB50 posting and see its affect on ACDOCA table:-
We will see how it is present in ACDOCA table:-
Note We see entry for both 0L and N1 ledger but not A1 as it is an appendix ledger.
Now we will do a ledger specific posting in ledger A1 itself using FB50L and compare how ACDOCA looks like
Now as you can see the ledger specific entry gets posted only to A1 ledger, which is similar to behavior in SAP New GL.
The key difference is that for appendix ledger entries do not flow in all cases, only when ledger specific posting are made.
How does new Asset Accounting fit with Appendix Ledger??
With SAP Simple Finance , SAP brought out new asset accounting which basically allowed firms to maintain ledger / accounting principle.
While writing this appendix ledger, a question was posed by my colleague Bharat on how this would work with New Asset Accounting.
A short answer would be It doesn’t . It would be great if someone from SAP too confirms it.
To demo this, we first assign an accounting principle to our Ledger & Company Code combination
Next we will try to change our COD / Chart of Depreciation and see if we can use / assign this accounting principle
So we assign the accounting principle 60 here.
Note-we see the target group 0L shown for principle 60 which is assigned to our ledger A1. So only the Base ledger gets assigned in the COD.
Once we try to save it gives an error as the Target group is already assigned to main accounting principle / GAAP.
So for the appendix ledger and its assigned accounting principle the ledger group will always be 0L or the base ledger.
Hence it will mean that we cannot use appendix ledger (only) for the new asset accounting as you would always have 0L assigned to your main GAAP.
This is another criteria to evaluate your use of Appendix ledger
OK!!, So what does this mean
So the most profound change with using appendix ledger will be in reduction of data volume. You will not have an N multiple number of entries based on the ledger defined. Also the appendix ledger will show the entries of main ledger for reporting.
What is the use case for this? 😕
Suppose if the parallel ledger / Non leading defined in your current landscape does not have too many difference in Accounting principles ( may be the accounting GAAP regulation are similar) and the number of Adjustment entries are very few ( say just ~ 20-30)
Then using an appendix ledger instead of an standard ledger / New GL parallel ledger will provide a data reduction by almost 100 %.
This will be a key benefit for organization having multiple entities in a single client.
Another criteria will be the use of New asset accounting and having cases where we have some asset posted to only a single GAAP / Accounting principle.
If these scenarios are present, then you cannot use appendix ledger to maintain those.
So these are the two main criteria for business / consultant to check before using appendix ledger.
Hope this blog helps, I will take up another concept in the next blog in the series.
Other blogs in the series:-
Reporting options with S/4 HANA
IBP Setup and overview
S/4 1511 release & its details
CO-FI initial setup
PS- Some more names 🙂 – “Appendix ledger” is now renamed as “Extension ledger”, “Base Ledger” as “Underlying Ledger” and “Standard Ledger” remains unchanged