Commercial law in certain countries allows the use of valuation methods that vary between the consolidated financial statement and the individual financial statement. Especially when subsidiaries in one jurisdiction have to create their individual financial statements according to regulations that are either not permissible or not desired in the jurisdiction of the parent company, such a corporation must then disclose different valuations in parallel for both ‘sponsors.’ This can affect numerous items on the balance sheet and income statement. Here a few, typical examples:

• Capitalization rules and depreciation methods for fixed assets

• Principle of imparity when valuating foreign currencies

• Fundamentals for creating provisions

• Valuations for long-term production

• Valuation of inventory

These parallel valuations are portrayed, as of this release, using special G/L accounts in the FI system. These additional account numbers must be created in the same chart of accounts for all cases where such valuation differences can occur. Validation rules can be used to ensure that only certain document types are posted and that only entries between these ‘special accounts’ are posted within one document. In a later release, SAP plans to provide the ability to post these ‘adjustment entries’ to original accounts with a deviating actual version.’

By applying the option to define multiple, parallel financial statement versions in the same chart of accounts/ledger, you can now create both individual financial statements using local valuation as well as corporate statements for the corporate parent company by switching the respective accounts.

During data transfer to consolidation, however, the values cannot yet be differentiated. Only later, when in another release the above portrayal of actual versions is implemented, will separate data transfers for local values and adjustment entries into consolidation be possible. Until then, this differentiation can only be supported within the reporting of FI using the financial statement versions, and also, only the values of the corporate-valuated accounts can be transferred to Consolidation.