Parallel Accounting in Financial Accounting

Use

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

Features

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 need to have defined a sort method for each valuation area.

  • You need to have defined the account determination for each valuation area.

  • 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:

    • Portrayal via additional accounts:

      You need to have created additional accounts for each accounting principle.

    • Portrayal via additional ledger:

      You need to have assigned the parallel accounting principle to the additional ledger.

    • Portrayal via additional company code

Execute the report separately for each accounting principle.

Valuation 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.

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

  • You need to have defined the account determination for each valuation area.

  • To enable the execution of the postings resulting from the value adjustment, you need to have made the following settings:

    • Portrayal via additional accounts:

      You need to have created additional accounts for each accounting principle.

    • Portrayal via additional ledger:

      You need to have assigned the parallel accounting principle to the additional ledger.

Foreign Currency Valuation

Foreign currency valuation valuates open items posted that were posted in foreign currency and the balances of G/L accounts or balance sheet accounts managed in foreign currency. The report creates the postings that result from the valuation automatically. For the postings, you need to have defined the account determination 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.

The following two approaches are available for foreign currency valuation:

  • Classic Foreign Currency Valuation

    Classic foreign currency valuation determines exchange rate differences relating to the key date. These valuated exchange rate differences are stored as information in the original document. During clearing, the exchange rate difference for the last valuation is posted as realized exchange rate difference.

  • Foreign Currency Valuation Using Valuation Area

    You can perform the foreign currency valuation using 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 Note

    You have the option of combining both approaches. For this, SAP recommends using classic foreign currency valuation for the leading valuation (that is, the valuation approach used in General Ledger and in Controlling). Only classic foreign currency valuation guarantees that cash discounts and exchange rate differences are posted to Controlling. SAP recommends using a valuation area for the additional valuation approach.

    End of the note.

If you want to perform foreign currency valuation for different accounting principles, it may be necessary for you to perform the report several times for different valuation areas so that you can use a separate accounting approach for each valuation area.

Note Note

With this procedure, it is not possible to split the exchange rate differences acrossprofit centers or business areas. You can use a default account assignment for the cost element to assign the exchange rate differences to profit centers or business areas.

End of the note.
Accruals

In Financial Accounting, you can use various functions to post 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 an additional ledger. You need to perform the accrual postings separately for each accounting principle.

  • Manual Accruals

    You can use the Manual Accruals functions to post the accruals postings to additional accounts or in an additional ledger. You only need to start one posting run; the postings are made simultaneously for the different accounting principles.

    You can assign to each accounting principle a separate accrual method in which you specify whether accruals are to be linear or declining balance, for example.

  • Manual postings

    If you perform parallel accounting using an additional ledger, you can make accruals postings using manual postings.

    • You use the G/L posting function in General Ledger Accounting for accrual postings to the General Ledger.

    • You use the actual posting function in the Special Purpose Ledger for accrual postings to the additional ledger.

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 can post provisions for doubtful receivables automatically using the flat-rate individual value adjustment.

  • 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.