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Author's profile photo Raman Rana

Dynamic Reclassification of Receivables/Payables

Introduction

With this functionality, user can differentiate payables and receivables amounts based on long-term and short-term according to their maturity in FSV. By enabling “Dynamic Reclassification of Recievables/Payables for a financial statement version, user can automatically see separated amounts according to their maturity.

In this functionality, no additional accounts are required for adjustment postings. Reconciliation account is assigned in different nodes of FSV based on maturity. User can view reclassification in the Balance Sheet/Incomes Statement app.

 

Prerequisites

CBC user must setup the following configurations.

1) Activate Advance Valuation

To activate advanced valuation, activate the newest content for SAP S/4HANA Cloud (2111). Once Advanced Foreign Currency Valuation is activated, the following apps cannot be used:

  • Perform Foreign Currency Valuation (FAGL_FCV)
  • Regroup Receivables / Payables (FAGLF101)
  • Perform Further Valuations (F107)

CBC user must activate advance valuation at Company code, Ledger, Fiscal Year and Activation period level.

 

2) Define Financial Statement Version in Global Hierarchies

In this Activity, CBC User define financial statement Hierarchy through Define Financial Statement Versions in Global Hierarchies app.

SAP delivers the following aging as a standard content:

  • S3IRCL: Aging for Reclassification (3 increments)
  • SGLOBRCL: Aging for Global AP Reclassification (IFRS, USGAAP)

SAP delivers the following reclassification criteria for Aging SGLOBRCL:

  • CURRENT: Current up to 12 Months
  • NONCURRENT: Noncurrent more than 12 Months

User must assign aging content and Reclassification in Reclassification increment field in desired node of FSV.

Reclass.%20Increment%20upto%2012%20months%20on%20Current%20Liab.

Reclass. Increment upto 12 months on Current Liab.

 

Reclass.%20increment%20more%20than%2012%20months%20on%20Current%20Liab.

Reclass. increment more than 12 months on Current Liab.

 

3) Assign Financial Statement Versions to Accounting Principle

In this Step, CBC user must assign accounting principle, Chart of account to their own defined Financial statement version.

 

Process

 

  • Open Vendor/Customer invoice

An open invoice of customer and vendor where baseline date is future date. Based on baseline date and reclassification tag regrouping will be done and will be displayed in financial statement version.

 

i.e., We have created 2 open vendor invoice (50 USD and 111 USD) which are posted in period 01.2022. The net due date in these invoices is 2023 and 2024 respectively (more than one year).

 

Note- GL account 21100000 is assigned to both CURRENT and NONCURRENT reclassification in FSV.

Vendor%20Open%20items%20due%20on%20future%20date

Vendor Open items due on future date

 

  • Balance Sheet/Income Statement

In this step, Open invoices will be regrouped and displayed based on remaining terms in financial statement version.

“Trade payable domestic” node is displayed twice based on remaining terms of vendor open line items. Amount of 161 USD (111 USD + 50 USD) is due after one year and hence the same has been regrouped under NONCURRENT  Liabilities.

Balance%20Sheet/Income%20Statement%20app

Balance Sheet/Income Statement app

 

Business Benefits

Dynamic Reclassification of Receivables/Payables display and regroup open item of receivable and payable open items based on maturity. No additional accounts are needed to post the adjustment postings. User can display open items of receivables and payables real time based on reclassification Tags ( i.e., Current , Non-current) in Financial statement version.

 

Reference SAP Best practice : J58

Please refer below links for additional information.

Enable Dynamic Reclassification – SAP Help Portal

 

Thanks for reading this blog post. I would like to see your comments and  would like to  answer questions which u can post  at Q&A tag area https://answers.sap.com/tags/66233466-fcd6-45d2-a9ae-2cba38c72e19

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      Author's profile photo Nilesh Mantri
      Nilesh Mantri

      very informative blog ..