Adjustment Using Provisional Inflation Indexes (SAP Library)

Adjustment Using Provisional Inflation Indexes

Purpose

Most countries only work with definitive indexes, but in some countries, the inflation indexes are first published as provisional figures before the definitive values are published.

The SAP System allows you to calculate inflation adjustments using provisional indexes. If you want to, it can make the appropriate postings and then reverse them before the definitive index is published.

Process Flow

The government publishes the provisional inflation index for the period and you maintain the index values accordingly.

You run the Inflation Adjustment of G/L Accounts program for provisional indexes.

The program calculates the inflation adjustments and creates two batch input sessions, one with the inflation adjustment documents, and one with documents to reverse these postings.

You process the first of the two batch input sessions.

The system:

Posts the inflation adjustment documents, so that the G/L accounts are effectively adjusted for inflation using the provisional inflation figures

Updates the last provisional adjustment date in the adjusted G/L accounts and line items

Once you have checked the figures, you process the second batch input session.

The system posts the documents with the reverse postings, thus returning the G/L accounts to their unadjusted state.

The government publishes the definitive inflation index for the period.
You overwrite the inflation value in the inflation index (if it has changed from the provisional value) and mark it as definitive value.
You run the Inflation Adjustment of G/L Accounts program again, but this time for definitive indexes.