Parallel Accounting in Financial Accounting

In Financial Accounting, the following functions or valuation reports are affected by parallel accounting:

Prerequisites

Prerequisites for Reclassification and Sorting of Receivables and Payables

You can use the reclassification/sorting report to reclassify and sort your receivables and payables according to sort methods that you define, such as for due date periods.

If you want to sort and reclassify the receivables and payables for different accounting principles, you have made the following settings:

You have defined the valuation areas.
To do this, in the Implementation Guide for Financial Accounting (New), choose General Ledger Accounting (New) Periodic Processing Valuate Define Valuation Areas .
You have defined the account determination for each valuation area.
To do this, in the Implementation Guide for Financial Accounting (New), choose General Ledger Accounting (New) Periodic Processing Valuate Reclassify Transfer and Sort Receivables and Payables
- Define Adjustment Accounts for Receivables/Payables by Remaining Term
- Define Adjustment Accounts for Changed Reconciliation Accounts
- Define Adjustment Accounts for Investments
  Double-click a transaction to select it. The Enter Chart of Accounts dialog box appears.Choose with the quick info text Change Valuation Area.
You have defined a sort method for each valuation area.
To do this, in the Implementation Guide for Financial Accounting (New), choose General Ledger Accounting (New) Periodic Processing Valuate Reclassify Transfer and Sort Receivables and Payables .
To enable the execution of the postings resulting from the sorting and reclassification for your parallel accounting principle, you have made the following settings depending on the approach you have selected:
1. Portrayal Using Additional Accounts:
  You assign an accounting principle to the valuation areas. You have already assigned accounts to the valuation areas under point 2. You create separate accounts for each type of accounting.
  
  To do this, in the Implementation Guide for Financial Accounting (New) choose General Ledger Accounting (New) Periodic Processing Valuate Assign Valuation Areas and Accounting Principles .
2. Portrayal Using Parallel Ledgers:
  You have defined the additional accounting principles and assigned them to the parallel ledgers (or ledger group) (see Defining and Assigning Accounting Principles). You then assign these accounting principles to the valuation areas as described under 4.a).
  
  Run the sorting/reclassification valuation report separately for each accounting principle (see also Reclassification and Sorting of Receivables and Payables).

Prerequisites for Value Adjustments

If you want to perform value adjustments for doubtful receivables, you have the following options:

You can post the value adjustments manually.
You can post the value adjustments automatically using the flat-rate individual value adjustment. To do this, you have to define rules in Customizing. In these rules, you define when the system should adjust which receivables, and when the corresponding provisions are to be posted.
For more information, see Value Adjustments.

If you want to perform the value adjustment for different accounting principles, you have made the following settings:

You have defined the account determination for each valuation area (as in point 1 above).
To enable the execution of the postings resulting from the value adjustment, you have made the following settings depending on the approach you have selected:
- Portrayal via additional accounts:
  You have made the settings as described in 4.a).
- Portrayal via parallel ledgers:
  You have made the settings as described in 4.b).

Prerequisites for Foreign Currency Valuation

You use the foreign currency valuation to valuate open items posted in a foreign currency and balances of G/L accounts and balance sheet accounts managed in foreign currency. The report creates the postings that result from the valuation automatically. You have defined the account determination for these postings in Customizing:

For the valuation of open items, the postings are to expense/revenue accounts for exchange rate differences and balance sheet adjustment accounts for receivables and payables.
For the valuation of foreign currency balances, the postings should be to balance sheet adjustment accounts if you want to perform several valuations in parallel.
Foreign Currency Valuation Using Valuation Area
You perform the foreign currency valuation for the valuation area. The exchange rate differences are determined by key date, posted, and then immediately reversed. During clearing, the complete exchange rate difference is posted.

Note
If you want to perform the foreign currency valuation for different accounting principles, and use different approaches, you have to run the report separately for each different valuation area.

The foreign currency valuation takes account of the document splitting characteristics such as the profit center.

For more information about the foreign currency valuation, see Foreign Currency Valuation.

End of the note.

Accruals

Recurring entries
You can make recurring entries in additional accounts or an additional company code. You cannot use recurring entries for accruals postings in a parallel ledger.

Provisions

Different accounting principles frequently have a different valuation approach for provisions. To post provisions, you have the following options in Financial Accounting:

For materials or services that you have already received, you create provisions if the invoice is posted in a different period to the goods receipt or the service. You generally have to post these provisions manually. You therefore perform a manual posting for each accounting principle.
You can post provisions for doubtful receivables automatically using the flat-rate individual value adjustment. In Customizing, you assign a value adjustment key to a valuation area.
To do this, in the Implementation Guide for Financial Accounting (New), choose Accounts Receivable and Accounts Payable Business Transactions Closing Valuate Valuations Define Value Adjustment Key . You then define this value adjustment key in the customer master record.

Note
For more information, see the documentation of the IMG activity.

End of the note.
You can determine and post provisions for probable losses and uncovered costs for long-term orders and products using the results analysis function in Controlling.

Note
For more information, see Parallel Accounting in Controlling.

End of the note.