SAP Simple Finance blog series-1-Parallel Accounting with multiple Ledger & Extension (Appendix )Ledger Usage
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
SAP S/4 Finance blog series-2-Reporting options with COPA as use case
IBP Setup and overview
SAP S/4 Finance blog series-3-SAP Integrated Business planning-Overview & Setup
S/4 1511 release & its details
S/4 Finance- Blog series-6- 1511 changes in detailsS/4 Finance- Blog series-6- 1511 changes in details
S/4 Finance- Blog series-5- 1511 and its details
CO-FI initial setup
SAP S/4 Finance blog series-4-Changes in Controlling & how to use them
PS- Some more names 🙂 – “Appendix ledger” is now renamed as “Extension ledger”, “Base Ledger” as “Underlying Ledger” and “Standard Ledger” remains unchanged
Excellent narration Rishab. Much appreciated.
Thanks Srinivas, appreciate the response 🙂
Updated the blog with the use case with new asset accounting, would love if someone from SAP can add more details on it.
Excellent piece of information.. thanks for sharing!
I have been playing with the appendix ledgers in a sandbox. The functionality looks good and I understand the use case. However, I decided to also create a parallel standard ledger so I could highlight the differences to the users. Unfortunately, I receive the following error:
This appears to indicate that in simple finance only the appendix ledger is allowed as a non-leading ledger. Was the N1 ledger from your example a migrated ledger? or did you create it new in that system after simple finance was updated?
Can you confirm if you are able to create multiple standard ledgers in you simple finance instance? Or can someone from SAP confirm that the appendix ledger is now the only type of ledger that can be used for parallel ledgers in simple finance 1503?
You can always have non leading ledger created. Now you have just got 2 options:-
1 ) Standard
In your screenshot above, I think you are trying to assign an appendix ledger to company code. This is not possible.
You can create a non leading as standard ledger only.
If you want to assign appendix ledger, make sure you create the appendix ledger which has 0L or any standard ledger assigned to it.
The appendix ledger will be mainly used as a reporting ledger only.
As said in blog it wont be possible to have New asset accounting in the appendix ledger.
Hope this clarifies.
I have able to create an Appendix Ledger without issue it is assigned to 0L as the base ledger and assigned it to a company code.
The issue I am having is creating a standard non-leading ledger and assigning that to a company code is when the error above is received.
I will look into it further myself through other channels.
Thanks for you feedback and again this is a very helpful blog covering a topic with very little standard documentation.
Yes John, and if you see the posting which can be made, I dont think you can assign an Appendix ledger directly without it having an standard ledger assignment.
Thanks again, and lets keep exploring new things in S4 HANA
I am not trying to create an appendix ledger without a standard ledger assignment.
Please see my note below. It appears to be bad error that is being thrown by SAP. I will open and OSS and let you know what I find.
Update on this error I displayed above. This is an issue that I will open an OSS note for. If you create a new standard ledger, don't save it, click the company code settings, select new entry you will receive the above error. If you save after creating the ledger, then come back and assign the company codes the error is not received.
Hope this helps if anyone else has this error.
Awesome John 🙂 🙂 , you help make SAP better
Very informative and useful post....keep going 🙂
Just a doubt, if i post a document in FB01L to an Asset, how will it impact?
Hi Suresh, if your question is that can I post to an appendix ledger by FB01L..well no you cant.
You cant setup the depreciation area on Appendix ledger only.
So only option is to use Standard ledger if you want to use New Asset Accounting
I think we can post to appendix ledger by FB01L.
I think my reply was confusing 🙂
So for appendix ledger:-
1) To normal document- Yes you can post and it is like any other ledger specific posting, as written in the blog 😉
2) Now Suresh was asking ( or I assumed 😳 ) that he wants to post to an asset from FB01L with reference to asset. Thereby using Appendix ledger for asset accounting.
To this I have to say it is not quite possible or useful. This is because you cant have a depreciation area linked to Appendix ledger. So in this regard I said it is not possible to post to Asset and use New Asset Accounting with Appendix ledger
I hope this clarifies my reply..
Hats off to you for such an excellent initiative and contribution. One quick question is, if I'm migrating from New GL (with operating and non leading ledger) to SFIN then why would ideally I need a Appendix ledger. Because ideally I should be doing away with my non-leading ledger and using appendix ledger not both, please clarify.
Top of it if my NAA cannot work stand alone with Appendix ledger then even the above stated does not hold good, am I correct?
Thanks & regards,
Excellent question..and it opens many perspectives:-
1) If you are migrating to Sfin and if you have 2 ledgers...both the ledgers have to be migrated and created as Standard ledgers... The technical migration and details on AC100 will tell you this.
It also makes sense as since the migration will move FAGL totals table to the new table and would want to have both the ledgers present to be able migrate 1 on 1..
2) So can you ever use Appendix ledger...yes but my guess is only after your Sfin system is up and running.
On your second statement..yes..if you have some Asset posting in non leading ledger..you cant use the Appendix ledger.. You should definitely go Standard ledger
So hope this clarifies this issue.
Thanks for replying Rishab.
Considering this, eventually if I have a situtation wherein I have a 0L as well as non operating ledger existing in New GL then ideally I need to set these up as standard ledgers in SFIN.
Eventually this means still I will be duplicating entries in ACDOCA table. This is because as per example provided in post above, when I post a document using FB50, this will update ACDOCA table for all the standard ledgers within SFIN, please confirm.
Top of it I cannot do away with setting up my non leading ledger in SFIN as standard ledger considering that I have asset accouting entries posted to my non leading ledger in existing New GL which cannot be supported in SFIN if I set it up as appendix ledger.
Once I set up my 0L as well as non operating ledger as standard ledgers, ideally speaking I don't need any appendix ledger as its not significant any more. So eventually I don't gain much from SFIN from a ledger perspective except for the fact that FAGLFLEXT (totals) table is not required in SFIN.
The whole reason SFIN cameup with appendix ledger is to avoid duplicate records per ledger in the table but that does not work well with NAA stand alone postings not going into Appendix ledger, please confirm my understanding on this shortcoming.
About your query, I have couple of points which I would like to mention:-
1) Migration process- If you see the below given path and when you run the migration, SAP would check your current settings and migrate the customizing to your new Sfin system. I am talking about the step highlighted in yellow.
This step will migrate your customizing and will create your existing ledgers as standard ledgers ( lets say L1 is your ledger)
Now after this you run the subsequent steps and migrate the ledger level data.
This is the step which will occur in migration and is pretty much standard and you cant change much here.
But if you really want to use appendix ledger only ( which means you dont have any depreciation area which was posting to L1 and have only very few posting in L1), then
you may decommission L1 ( read note-891144) and then create appendix ledger and use it.
This will be an expensive route and benefit will only be on data volume front. Also it would be fraught with issues considering you are doing SFIN migration too.
2) The idea of appendix ledger is to support reporting for a GAAP which is not much different from my leading GAAP ( if I may say it) for my entity. So in your scenario, if client wants to have a book for tax reporting purpose where very few accounting difference lies, you can use the appendix ledger.
Hope this helps,
I will confirm that you cannot use NAA with appendix ledger standalone.
Thank you for your perspective 🙂 🙂 , It has added a good dimension to this blog
Thanks a lot Rishab for the clarification, I'm quiet clear now.
I'm leading here at at client site and we plan to migrate to SFIN next year....so all of this did help me to get deeper insight....will keep this blog posted for few newer things that I research and find.
Sure Prasad, happy to help
Thanks for Sharing. I have a Different Question Not Really Related to Topic Here, But Can you Please Confirm if a Client can Activate Central Finance Business Function "FINS_CFIN" on Simple Finance 1503 System?
I have completed migration of sFIN release 2 on a Sandbox and currently validating the transactions in various sub-ledgers. In Asset accounting when in run depreciation I am betting below error.
Processing Terminated due to RFC error. Error message no: AA765. Any help in this regard please?
Could you please open a discussion in this forum..
More people will be able to see your query and reply to it.
Also please provide more details on the issue.
Hi Rishab, I have updated it as add comment only here in the blog. Not sure where it is missing
When you tried to assign a depreciation area to the appendix ledger did you use a delta area?
Recently implemented Sfin parallel ledgers.
Beautifully put to gether.
Great job & Thanks 😉
Thanks Aman for your kind words 🙂
Very informative article.
Great work, indeed very helpful.
Thanks Ruksana, do read other blogs put by me 🙂 🙂
Just thinking aloud on use of appendix ledger... If i have some crazy audit adjustment (pushed down from corporate) that i do not want updated on my leading ledger... i can create appendix ledger and post audit adjustments.
In the end i have 2 sets of trial balance
- Trial balance before audit adjustment on leading ledger 0L
- Trial balance after audit adjustment on appendix ledger.
Just a suggestion... there will always be a counter argument.
Yes that is a good use case 🙂 🙂
and more we know and understand about the solution the more we can link and use SAP better 🙂
Thanks for great blogs here, lots of learning. Here are some more doubts - in NGL leading and non leading ledgers were pointed to different FY variants, would that be possible now with extension ledger (Appx Ledg), in that case we may have NAA inconsistency..what are your views, can we discuss in detail about it?
Thanks - Prabhakar
To my understanding, the company code settings for the appendix ledger are derived from the standard ledger to which it is assigned. So I beleive it won't be possible to assign a different FY to an appendix ledger.
rishab bucha kindly confirm.
I have one question- I am trying to configure appendix ledger but when I go to "Define ledger" there is no option of "appendix ledger " in drill down. It's "Standard Ledger" and "Extension Ledger".
Also can I have Appendix ledger assigned to another appendix ledger or it should be always leading/non leading ledger?
Appendix ledger is renamed to Extension ledger and the extension ledger will behave the same as told about appendix ledger
About the second question, you cant have an extension ledger assigned to another extension ledger.
Thanks Rishab.. 🙂
Rishab, very good blog. With reference to your error coming from new AA please notice that if you configure the system in NewGL to use account-approach parallel accounting, same error will come in AA. As i need to configure separate accounting principle within the same leading ledger i want to assign them in AA dep. areas. Then ledger group is inactive as field and you can set only acc. prinicple per each dep. area. If you put both, you have same error as you stated, as well... Now i'll post incident message most probably to get some help from SAP...
Good going Karwacki, Do post your solution and response.
Excellent Blog. It is very useful piece of inofrmation. I have recently started learning about SFIN and your blogs will certainly help me. Once again Thanks for the Efforts.
"KEEP WRITING & SHARING"
Thank you for your kind words, Other 4 blogs are present which will help you further,
Excellent document.Thanks for the contribution.
Thank you for your kind words,
There are other 4 blogs done by me on IBPF, COPA reporting and FI-CO setup steps
Would love to hear from you on those too,
Thanky you very much for excellent article.
all the best erwin
Thanks for your feedback,
Please do check my other blogs on IBP, COPA reporting, 1511 feature, CO initial setup.
Would love to hear from you
Nice Presentation Rishab,
I do have a question for the use cases mentioned above for Appendix ledger. I understand the first point of using its as similar to parallel ledger. Could you explain the other use you mentioned, pasted below.
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.
Thank you for your feedback,
The criteria which I mentioned is for using New Asset accounting solution which allows ledger / accounting principle specific posting and maintenance of Asset values.
This wont work if you have appendix ledger and you can only go for delta accounting approach.
Hope this helps,
As per SAP, Appendix ledger can’t be assigned for any automatic postings, it’s just for manual ledger specific postings. May be SAP will trying to add some other functionalities in future. Regards Murali. N
Great discussion. Elsewhere in the KT material, it is mentioned that extension ledgers are used to post the adjustments (babu you are right). That said, in new asset accounting, SAP has dropped dep area posting ( delta area differential posting between 2 dep areas were posted earlier). Now that it is based on accounting principle, most of the times two accounting principles will not have same fiscal year variant, for ex US GAAP(sep-aug) and India GAAP (Apr-Mar). This will also have some issue in New Asset Accounting as both Asset and FI modules should have one fiscal year variant. Feel free to share your thoughts.
in sFIN also no specific solution, please check sap note 1951069
Thanks Babu, thought SAP would address this ever demanding functionality at least in S4 world. Looks like custom solution will come into play for some more time.
First and foremost my complements to you and other community members on all the good work done here. You guys are amazing..
Secondly i thought of highlighting the use for appendix ledger and the thought process i believe SAP is having with this functionality.
The fact that with implementaion of Sfin a universal journal holding all CO assignments and PA segment information in one Journal document actuallly takes away the flexibility of posting CO only documents.
Like in ECC we always have the flexibiltity to post CO only documents to transfer cost between cost centres, run assessment/ distribution cycles and Top down distributions for PA segments even after our month end closing as these are for managemnet reporting purposes only but required internal reporting and valuations
But with introduction of Universal Journal how will you post a Universal journal to the main ledger when you financial period have closed? How could we make necessary adjustments for Managemnet reporting? What should i do when i want to change percentage allocation of say storage cost to my products based on COGS instead of Quantity for the last there years?
the Appendix ledger is required to take care of such reporting adjsument requirement after your financial books have closed. Ths should be strictly treated as CO only documents that helps in correcting enhancing the data quality for internal reporting.
Appendix ledger can not and should not be used as non-leading Ledger for parallel valuation purposes and that is why it is not integrated with asset accounting as reported by many users in the forum,
Excellent point Pulkit, Thank you for taking time to write it.
I too felt the same that Appendix ledger will be a good place to manage internal books.
But this blog was before I had done AC100 and AC110 🙂 😉 😉
I think your comment really adds a lot of value to the whole discussion.
Thanks Pulkit for the valuable inputs.
Thanks Pulkit for clearing the clouds. Appendix ledger has to be used for creating management view without influencing the data in the base ledger.
Hi Rishab ,
Can you clarify few thing , 1) if we do any entry in FB50 ( with leading ledger) is there any entry got posted in appendix leader . 2) If we made any entry FB50L with appendix ledger is it posted in appendix ledger only . 3 ) Can we have more than one appendix ledger .
Hi Martina - Here is what functionality of Appx Ledger, hope it helps. All appx Lgr will have to shadow base ledger, no appex lgr can shadow another appx lgr, that's the basic principle. Ledgers can be stapled on top of each other providing a flexible mechanism for adjustments and reporting. An important use case are management views on top of legal data. Besides creating a master record, appendix ledgers need no additional configuration. Reporting on the appendix ledger always includes the data of the base ledger. Multiple appendix ledgers can point to the same base ledger. Appendix ledgers can point to another appendix ledger instead of a base ledger - creating a hierarchy of ledgers. Benefit of reduced data footprint Benefit of reduced reconciliation as only (manual) delta postings are maintained in the appendix ledger.
Thanks for the blog. It has been very informative.
We are just starting on our journey to S4 and are doing our due diligence to go on the right path..
We are on ECC6.0 EHP6 classic GL on DB2 and are planning what is the best path to get to S4 HANA finance 1511 or 1605 (whichever is applicable and relevant).
While going to S4 we also want to go to Parallel ledgers but not immediately... is it still possible to move from our parallel accounting classic GL to S4 HANA Finance 1511/1605 (which mandates New GL) without parallel ledgers or document split activated?..
I guess the question is do we have to define all the parallel accounting ledgers right away with the move to S4 (in our case while migrating from classic GL) or can we stage that and still get the initial benefit of moving to S4 HANA and the universal journal, simplification, fiori apps etc.. and then do the parallel ledgers transformation after a year or so..
Appreciate your views.
Greeting of the day,
The need to have the parallel ledger is mostly from your business requirement , namely do you need to comply with more than 1 accounting principle for your reporting either due to legal or due to internal reporting standards.
If you have such requirement, you can enable the parallel ledger, the idea is whenever you are going to create a new ledger assignment:-
a) Historical entry would needs to be migrated where applicable
b) You might have to use SAP migration service to move your existing data.
Appendix ledger would not have such compulsion, as it is just a staple on ledger on top of your main ledger and can be defined and used if the number of entries are less.
Another perspective for your question would be how many depreciation areas which you have currently as when you move to S/4 HANA and new asset accounting it will follow deprecation to ledger assignment and will need you to define those ledger and accounting principle.
It is just the when you want to bite the bullet 🙂
Thanks for your reply and the clarification.
So if I get this right, We can go ahead and implement S4HANA Finance 1511 moving from ECC 6.0 EHP 6.0 classic GL to the new S4 (New GL universal journal structure) without implementing parallel ledgers.
And later when we have our clear requirements of the number of parallel ledgers required as per different accounting principles and the depreciation areas, we can then implement parallel ledgers with historical entries to be migrated to the ledgers.
Is that a fair understanding?
Appreciate your help.
As told by me and Prabhakar below, it would be a mini project activating the ledger later.
Would make sense to try and get the requirement in this upgrade stage itself.
If business is not very keen, then its a different discussion.
Hello Krushanu, Earlier in ECC world there was sub-ledger (AA) which we could have activated later. Now in S4 world there are huge improvements where FI & CO is integrated and AA is no more shadow. You can add ledgers later but definitely it would be a different project and activating AA would be different project. Else where Nathan Genez mentions in his blog - copying for reference - My opinion? If you're a new customer and you don't activate this then you're making a mistake and potentially putting your solution at risk. How much of a risk is open to debate but it's rarely a good idea to go with an older approach when you're first implementing a particular module. You're creating a solution based on functionality that SAP has moved on from. What happens if you reach a limitation in your solution that FIN_AA_PARALLEL_VAL addresses and report it to SAP? More than likely their response will be "Please look at OSS Note 1776828 and activate the FIN_AA_PARALLEL_VAL business function". Doing that after go-live is it's own (mini-)project. Good luck with that. Link for more on assets -feel free to explore http://scn.sap.com/community/erp/financials/asset-accounting/blog/2014/07/21/new-parallel-valuation-solution-for-asset-accounting
Thanks Rishab for your views. Folks - one more point, there is no period check while activating additional ledgers in future. Reporting will go haywire if we do it later and may involve SAP's handholding. SAP should release some tool to add ledgers based on customer needs as a part of standard solution / config. All customers have unique requirements and IFRS adoption may take few years and phases if they are global company. S4HANA should come with some flexibility. Please share your thoughts as well so that SAP can listen to customer needs. Even in S4 world we will not have Asset Accounting with different FYV. SAP could not bring multiple calendar functionality. This will force customer to keep records in spreadsheets. Prabhakar
Thanks for your views! Appreciate your help!
I'm so sorry to bother you because i have some questions on sap s/4 hana fico，so please help me。
We use SAP S/4 hana 1511 FSP01.I excute T-CODE:OKEP.Please see screenshot：
More than 3 currencies / valuations are assigned to valuation area 1101
Message no. C+339
You are trying to use the material ledger for valuation area 1101. More than three currencies and/or valuations are assigned to valuation area 1101, even though the material ledger can carry only up to three currencies and valuations.
Procedure for System Administration
Correct the Customizing settings for the material ledger.
How to maintain group valuation & profit center valuation in SAP S/4 hana 1511 FSP01 Like OB22 in ECC6.0
I can not find maintain field entry 1-group valuation and 2-profit center valuation.
Hi Folks, SAP released new functionality around multiple currencies/transfer prices. Comprehensive doc link below.... https://partneredge.sap.com/content/dam/partnerexperience/PSD%20Replays/2016/CW_23/15548_20495.pdf Do check this it enumerates config steps as well and some considerations. Thanks - R Prabakar
Hi Rishab - I have one question, can you please clear my doubt
I have few explicit queries from you.
a. How can you post a document in FB50 w.r.t. ledger. As there is no option to post in specific ledger (if at all you can post, where Ledger is updated, share the screenshot)
b. Non Leading ledger & Appendix ledger is same thing
c. When we post in FB50 it posts in All the ledgers whether its leading or non leading ledger. However in Transaction, FB50L we post to specific Ledger group and the posting reflects in specific ledger only.
When i started reading this blog, i was trying to figure out,
how is appendix ledger different from non-leading ledger, you have explained it well, shows how much understanding and knowledge you have and willing to share, keep up the good work.
Arvind Leo Pereira