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Author's profile photo Verena Stuetz

In-Depth with SAP S/4HANA – Ledger Scoping Q&A

Co-authored by Ulrich Hauke and Verena Stuetz


On March 23, 2023, Nicoleta Cernea hosted an In-Depth with SAP S/4HANA session on Ledger Scenarios in SAP S/4HANA Cloud, Public Edition.  For the benefit of participants, as well as those who may have missed the session, we’ve summarized the questions that were answered during the session, and we’ve also collected some additional resources that you might find helpful.

Thanks to all participants for all the valuable questions you posted during the session or asked on the line. We all learn a lot from each other in these great interactions.

  • Question 1:
    Can you confirm that as of SAP S/4HANA Cloud, Public Edition release 2302, it is possible to have three ledgers activated in parallel, that is, using a local accounting principle, IFRS, and US GAAP at the same time?
    Yes, it is possible to use up to three ledgers in parallel.
  • Question 2:
    What is SAP’s recommendation with regards to the assignment of accounting principles to the leading ledger 0L (local or corporate?), as you mentioned that intercompany allocations are based on ledger 0L?
    We recommend that you use the leading ledger 0L with a corporate (group) accounting principle and one of the non-leading ledgers for the local accounting principle. One of the reasons for this recommendation is that intercompany scenarios run based on the leading ledger.
  • Question 3:
    If the default accounting principle assignment is switched as you recommend, will this take effect also in other areas, such as asset accounting valuation, where accounting principles are assigned to different valuation views?
    Yes, switching the accounting principle assignments that are defined in general ledger will update the related areas (such as asset accounting and event-based revenue recognition (EBRR). This assignment must be done using the Assign Accounting Principles to Ledgers and Company Codes configuration activity.
  • Question 4:
    If a company uses IFRS and a local accounting principle, is the recommendation to assign IFRS to leading ledger 0L?
    Yes, the SAP recommendation is to assign the corporate accounting principle to the leading ledger and the local accounting principle to a non-leading ledger.
  • Question 5:
    You mentioned that IFRS and US GAAP are allowed as corporate accounting principles. Is it also possible to choose a different one (e.g. ITAP) as the corporate accounting principle and to assign this to ledger 2L or 3L?
    Yes, this is possible. You can use any accounting principle that is activated in the system as your corporate accounting principle as long as you make sure that at least one ledger has the accounting principle assigned on company code level.
  • Question 6:
    Can the leading ledger be changed in the SAP S/4HANA Cloud, Public Edition?
    In SAP S/4HANA Cloud, Public Edition, ledger 0L is always the leading ledger. This setting cannot be changed. You can, however, change the assignment of the accounting principle to this ledger (by default, this is the local accounting principle).
  • Question 7:
    Is it possible to delete the ledgers 2L or 3L?
    As soon as you have finished and activated your ledger scoping settings, you cannot delete ledgers anymore.
  • Question 8:
    Because it is not possible to delete ledgers, can you deactivate a non-leading ledger for certain company codes?
    The company codes that are activated in the system must be assigned to the leading ledger. From the non-leading ledger, however, this assignment can be deleted.
  • Question 9:
    Is it possible to create a new accounting principle, for example, an international public sector accounting principle, and assign this to ledger 2L?
    No, it’s not possible to create your own accounting principles. Instead, you can select the relevant scope items (2VA for USGP and 1GA for IFRS; J58 comes automatically with the local accounting principle) during scoping, and then change the assignments of accounting principles to ledgers according to your business needs.
  • Question 10:
    Can I use parallel accounting based on an accounts approach in SAP S/4HANA Cloud, Public Edition.
    No. In SAP S/4HANA Cloud, Public Edition, parallel accounting can only be implemented by using parallel ledgers.
  • Question 11:
    Can I select three parallel standard ledgers when I am using Manage Your Solution in a 2-system landscape as my configuration environment?
    No, you can only select three parallel ledgers when you are setting up your system using SAP Central Business Configuration in a 3-system landscape. This means that you can’t select three ledgers for new company codes in Manage Your Solution (2-system landscape) either.


Additional Resources

For a demo on how the ledger scoping is done in the system, check out this video:

For more background information, see the following links:

SAP Community:

Blog: Which ledger scenarios are available as of SAP S/4HANA Cloud 2302?

SAP Help Portal Documentation:

More Information on SAP S/4HANA Cloud:

  • Finance Collection Blog (roadmap, quarterly release highlights, microlearnings) here
  • openSAP Microlearnings for SAP S/4HANA for Finance and GRC here
  • SAP S/4HANA Cloud Customer Community for Finance here
  • SAP S/4HANA Cloud, public edition release info here
  • SAP S/4HANA PSCC Digital Enablement Wheel here
  • Early Release Webinar Series here
  • Inside SAP S/4HANA Podcast here
  • Best practices for SAP S/4HANA Cloud here
  • SAP S/4HANA Cloud Community: here
  • Feature Scope Description here
  • What’s New here
  • Help Portal Product Page here

Follow us via @SAP and #S4HANA, or Ulrich Hauke via @HaukeUlrich and LinkedIn




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      Author's profile photo Sharmila Devi Palanisamy
      Sharmila Devi Palanisamy

      Thank you Ulrich & Verena for this post.

      With reference to question # 10, is this an indication for on-premise customers on classic GL + accounts approach that the future enhancements/functionality on S/4HANA will primarily be based on parallel ledgers? So, the right thing to do is to migrate to parallel ledgers approach before a S/4HANA conversion. I understand that there is no migration tool right now to move to parallel ledgers approach from accounts approach post a S/4HANA brownfield conversion.




      Author's profile photo Verena Stuetz
      Verena Stuetz
      Blog Post Author

      Hi Sharmila,

      thank you for this question.

      Yes, the way forward is the use of parallel ledgers. And as you correctly assumed, we recommend to migrate from accounts to parallel ledgers before the conversion to SAP S/4HANA.
      You can find more information in SAP Note 3042755 - S4TWL - Migration from account solution to ledger solution.

      Best regards,


      Author's profile photo Sharmila Devi Palanisamy
      Sharmila Devi Palanisamy

      Thank you Verena.

      SAP has a DMLT tool that can help with the SDT approach for customers who would want to convert from accounts approach to parallel ledgers approach and move to S/4HANA instead of a two step approach via the New GL migration scenario 5.


      Best regards,


      Author's profile photo Srinivasa Murthy
      Srinivasa Murthy

      Hi Verena


      Thank you for an informative blog. Is there something similar in S4 HANA?

      we have a possible scenario where a smaller part of the company is live. This is S4HANA onprem not CLOUD. The parent company is based out of Japan. None of the subsidiaries are traded on stock exchanges but they are based in Canada, the US and Mexico.

      0L has been denoted as IFRS

      2L is called CGAAP but called local GAAP

      US is next followed by Mexico. The parent company might get on the the same instance but most likely not.


      from what I understood out of your blog and the related video is that:

      0L should be local company code legal reporting

      2L - IFRS

      3L - US GAAP


      Given that we already have the definitions configured and Canada live, is there something we need to watch out for in legal reporting and Asset Accounting. I think the group currency is USD and not JPY.

      Thank you for your insights.