Inflation Accounting for Financial Accounting (FI) 

Use

This solution enables you to:

In addition to the above functions, these financial statements also draw on the information from the Inflation Accounting solutions for Asset Accounting (FI-AA) and Materials Management (MM), depending on your requirements.

Activities

Customizing

In order to be able to work with the solution, you make the appropriate Customizing settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings ® Inflation Accounting.

After you have gone into production operation, you must continue to enter the inflation indexes in Customizing as they are published.

Master Data

As regards the master data, you have to assign an inflation key to each G/L account that is to be revaluated.

Day-to-Day Activities

There is little to do in the way of day-to-day activities. However, if you require specific line items (in any form of document) to be adjusted for inflation using a specific inflation index, you must assign it to the line item when you post the document.

Closing

When the time comes for you to adjust your accounts, at period end, you run the appropriate programs to adjust various accounts for inflation:

Reporting

The adjustments that you make in the closing activities automatically flow into the general ledger, and thus into any financial statements that you prepare. You may, however, need to customize your system so that you can prepare two sets of financial statements, adjusted and unadjusted.

You can also create inflation-adjusted comparative financial statements.