Average Balance Ledger
Use
You can store average balances for actual data by period and profit center using a separate ledger in Profit Center Accounting.
When fluctuations arise in balance sheet account balances during a period, the average balance ledger lets you smooth out these fluctuations. In addition, the average balance gives you a more accurate impression of the fixed capital during the period than analyzing the balance on a specific date (such as the end of the period).
To analyze average balances, you need to activate the average balance ledger, ledger 8Z. This ledger is assigned to the normal profit center ledger 8A.
The average balance ledger tells you the average balance per account throughout the entire month. The transactions that take place during the period are updated by account in summarized form. Each value is weighted depending on when it occurred in the period. A transaction posted on the first day of the period is updated with its full value in the average balance ledger. Later transactions are updated proportionately, depending on when they occurred.
At the beginning of February (28 days), account 100000 has an opening balance of $ 10,000.00.
On February 15, an inflow of $10,000.00 is recorded.
On February 22, an inflow of $10,000.00 is recorded.
The average balance can be calculated as follows:
((14 days * 10,000.00) + (7 days * 10,000.00) + (7 days * 30,000.00)) / 28 days = $17,500.00
Internally, the system initially takes the opening balance of the period as the average. Each transaction during the period is then recorded as a "change" to the opening balance and weighted according to how many days are left in the period.
In this example, the system calculates the following:
Opening balance |
10,000.00 |
Inflow on 2/15: (10,000.00 * 14 days) / 28 days |
5,000.00 |
Inflow on 2/22: (10,000.00 * 7 days) / 28 days |
2,500.00 |
Average balance |
17,500.00 |
Features
Calculating the Average Balance
The opening balance is always read from ledger 8A.
When you activate the average balance ledger in Customizing, you can decide how the average balance should be calculated. Specifically, you can decide whether it should be calculated using the posting date or using a customer enhancement. The period in which a transaction is posted always depends on the posting date. Consequently, it does not make sense to calculate the average balance based on the value date.
Note that quantities are not weighted in the average balance ledger.
For more information on using customer enhancements to calculate average balances, see the Implementation Guide (IMG) for Profit Center Accounting.
Information System
You can define reports on average balances using the Report Painter. No reports on average balances can be defined using drilldown reporting.
Even though the average balances are posted by month, it is still possible to report on annual average balances in the information system. To do this, you can use the following key figures, which are predefined in the R/3 System:
Average balance in local currency |
Calculates the average balance for one month |
Average balance in group currency |
Calculates the average balance for one month |
Average balance in transaction currency |
Calculates the average balance for one month |
Aggregated average balance in local currency (YTD) |
Calculates the average balance since the beginning of the year |
Aggregated average balance in group currency (YTD) |
Calculates the average balance since the beginning of the year |
Aggregated average balance in transaction currency (YTD) |
Calculates the average balance since the beginning of the year |
The average balances can also be displayed per profit center or balance sheet account.
The following Standard Reports are structure by accounts or profit centers and show the average balances either on the aggregate or by period:
8A50 |
Average Balance, Year to Date / Accounts |
8A51 |
Average Balance, Year to Date / Profit Centers |
8A52 |
Average Balance, Period / Accounts |
8A53 |
Average Balance, Period / Profit Centers |
For the key figure "Year-to-date", the system calculates the average of the average balances for all periods. Example:
Year-to-date through period 3:
((AB January * 31 days) + (AB February * 28 days) + (AB March * 31 days)) / 90 days