AA - Simple Finance PDF

Parallel Accounting in the
SAP Simple Finance add-on

for SAP Business Suite powered by SAP HANA
Fixed Asset Accounting

in SAP New General Ledger
Product Management Financials

October, 2014
SAP Accounting powered by SAP HANA
Structure of the Presentation
At the end of this presentation you will be able to explain how
Parallel Accounting for Fixed Assets can be portrayed using

General Ledger Accounting (new) under Account Approach and
Ledger Approach.
In detail you will be able to configure and explain

Depreciation Areas
Valuation Decisions
G/L Integration
CO Integration
Fiscal Year Variants
Processes:
Asset Aquisition with valuation differences
Depreciation
Integrated Asset Retirement
Assets under Construction
Low Value Assets
2014 SAP AG or an SAP affiliate company. All rights reserved. Public 2
Contents
Account approach for parallel valuation

configuration
processes
Ledger approach for parallel valuation

configuration
processes
Summary

Parallel valuation of Fixed Assets in

account approach
Configuration
Accounting principles, depreciation areas and G/L Integration

Required depreciation areas (example)
Valuation decisions
CO integration scenarios
Parallel valuation of fixed assets in account approach

Accounting principles
The FI-AA application component portrays parallel accounting using depreciation areas integrated across
the suite via accounting principles:
Accounting principles have to be defined explicitly even in the account approach for parallel
accounting.
Thereby the corresponding valuation (e.g. IFRS, local GAAP, Tax*) is defined and named.
All sub ledgers and feeding applications in accounting can be integrated per accounting principle.
Every depreciation area has to be assigned to one of these accounting principles.
Ledger groups as technical link: Even though in the account approach only one single ledger 0L is
defined and updated, to each accounting principle a unique and distinct ledger group needs to be
assigned.
These ledger groups only relate to and embrace the one single leading ledger 0L.
They serve as a technical means of integration per valuation on document level. Thereby a navigation from line item
reporting (e.g. out of the Asset Explorer) into the related documents is facilitated.
They do not imply the introduction of a ledger concept under the account approach:
System users (end users) are not bothered by and do not see a ledger group. Ledger groups do not necessarily
show up on a screen.
Only the one single and unique leading ledger 0L is updated and used in reporting. All of these ledger groups just
refer to ledger 0L.
*Financial statements for tax-legislation based valuation are supported and can be implemented. Note however
that no (localized) content for tax valuation is delivered by SAP!


Depreciation Areas valuation and reconciliation
The FI-AA application component portrays parallel accounting using depreciation areas:
Depreciation areas represent valuation decisions in the fixed asset accounting sub ledger.
In the asset class or single asset master, asset valuation is determined by depreciation keys and useful life per
depreciation area.
Valuating transaction (e.g. in the closing process) can be explicitly restricted by depreciation area or accounting
principle.
For each asset class the G/L account determination for asset reconciliation account and Accumulated depreciation
account for ordinary depreciation is defined per depreciation area.
Depreciation areas establish valuation consistency

Any leading depreciation area of a valuation must not inherit values from any other deprecation area: The Adoption
of values from depreciation area must be initial.
Value and parameter take over must only be defined within the same accounting principle assignment.


Depreciation areas establish reconciliation between asset sub ledger and G/L per currency:
For every additional currency type defined on the company code a corresponding depreciation
area with posting indicator Area does not post needs to be defined in the leading accounting
principle. Thus FI-AA is reconcilable with the Balance Sheet in each valuation and each relevant
currency.
Depreciation areas establish reconciliation between asset sub ledger and G/L in real time.
The depreciation area settings specify whether
Asset balances are posted in real time*, depreciation is posted (Area Posts in Realtime or
periodically. Area Posts APC immediately
and depreciation periodically**)
Only depreciation is posted (Area Posts Depreciation only)
No postings are made (Area Does Not Post)

For every accounting principle there must be at least one leading depreciation area which posts
ACP in real time. Thus APC update to the G/L account is real time in all accounting principles.*
* The periodic posting run (RAPERB2000) is needed for depreciation areas for Special Items (Sonderposten-Bereiche) only.
Only for this exceptional requirement the posting indicator may as well be set to the value (Area Posts APC and depreciation
periodically
** Non-leading depreciation areas for parallel valuation are configured with posting indicator Area posts APC immediately and
depreciation periodically, which means the same as real time.
Parallel Accounting in FI-AA

Valuation decisions
Approach and Valuation Affect:

Same approach, but different valuation: The corresponding asset reconciliation accounts for
each valuation belong to corresponding nodes in Financial Statement Versions.
Different approaches:
Transaction activated as Fixed Asset in IFRS and as Current Asset in local: The corresponding asset
reconciliation accounts for each valuation are assigned to Fixed Asset node in the IFRS Financial Statement
Version and to the Current Asset node in the local GAAP Financial Statement Version.
Transaction activated in IFRS, and registered as expense in local GAAP (one-sided asset): Per asset
class or per asset master the depreciation areas for local GAAP can be flagged as Deactive in Determine
Depreciation Areas in the Asset Class.
Customizing: Different depreciation parameters (such as method and useful life)

are defined for each depreciation area in an asset or asset class.
"Post-Capitalization of Cash Discount to Assets"

With document splitting active: Cash discounts are capitalized with payments real time.
Without document splitting: periodic run of SAPF181.


G/L integration technical clearing account
For integrated asset acquisition postings a Technical Clearing Account for

Integrated Asset Acquisitions is to be defined. Thereby the business transaction
integrated asset acquisition can be divided into an operational part and a
valuating part. The operational part (vendor invoice) is updating only common
accounts, the valuating part (asset capitalization) is posting to accounting principle
specific accounts via separate documents.
On document-level both parts (operational part and valuating part) are each balancing
to zero.
The Technical Clearing Account for Integrated Asset Acquisitions is ensured to
balance to zero as well:
It is debited by the operational part and credited by the valuating part updating the leading
depreciation area (area with posting indicator Area Posts in Realtime ) with same amount. Both
documents are posted within the same logical unit of work.
Non-leading valuations are updating the Contra account: Acquisition value posting instead of the
technical clearing account.
It cannot be posted to manually, since it is defined as asset reconciliation account.


Required Depreciation Areas
The portrayal of parallel valuation requires the depreciation areas listed below.
The following examples assume:

There are three different valuations: IFRS, local GAAP (L-GAAP), Tax*.
Only one currency type is considered relevant for this example
Posting of
Depreciation area Accounting Principle Aquisition and Production Cost Period Depreciation
01 IFRS X X
20 (calculation) IFRS X
30 local GAAP X X
60 Tax* X X
* Note that for country-specific Tax valuation no content is delivered by SAP.


In Area 01
Asset balance sheet values and depreciation are posted real time.
In Area 20
Only cost-accounting depreciation is posted; another type of depreciation can be specified, and the
accounts specified need to be created as cost elements.
In Area 30
Asset balance sheet values are posted real time
Where appropriate, depreciation is posted with a different base value.
In Area 60
General features:
Activation differences (postings with differing APC values such as capitalization of freight costs under local
GAAP) are entered manually via accounting principle specific documents.


Integration with Controlling
Scenario 1:
Depreciation area 01 posts to Controlling

This is the leading depreciation area In Controlling, the international valuation is
It posts to Controlling
portrayed as the cost-accounting approach.
Accounts are created as cost elements
Depreciation area 20 is not used.
Posting of
Depreciation area Accounting Principle Aquisition and Production Cost Period Depreciation
01 IFRS X X (CO)
30 local GAAP X X
60 Tax X X


Scenario 2:
Depreciation area 01 does not post to Controlling

Accounts are not created as cost elements
Depreciation area 20 posts to Controlling The cost-accounting approach portrayed

It posts to the P&L for the group valuation (e.g. IFRS) differs from group valuation.
Posting of
Depreciation area Accounting Principle Aquisition and Production Period Depreciation
Cost
01 IFRS X X
20 (calculation) IFRS X (CO)
30 local GAAP X X
60 Tax X X


Scenario 3:

P&L accounts in area 01 are not created as cost elements

Cost Accounting is valuated according
to local valuation portrayed in area 30.
P&L accounts are created as cost elements
Posting of
Depreciation area Accounting Principle Aquisition and Production Period Depreciation
Cost
01 IFRS X X
30 local GAAP X X (CO)
60 Tax X X


Assets activated in only some (but not all) accounting principles
Different valuation approach - transactions activated in IFRS, and registered

as expense in local GAAP (one-sided asset): :
Only relevant accounting principles need to be represented on the asset or on asset class
by their corresponding depreciation areas
All transactions issued within FIAA will affect the capitalization only for those accounting
principles which are relevant for the involved asset(s).
P&L postings for all other accounting principles have to be handled manually by the end user


Behavior during integrated asset acquisitions:

Due to the necessity to balance the technical clearing account, for each ledger group assigned to
the chart of depreciation a separate document has to be posted.
If a certain ledger group is not represented on the asset by an area which posts APC online to GL,
the posting will be re-directed to Account for non-operating expense (KTNAIB)
If no ledger group is represented on the asset by an area which posts APC online to GL, the system
issues an error can be changed into warning, then statistical areas in FI-AA will be updated


In the new architecture (continued):

Behavior during integrated retirements:
For those accounting principles which are not represented on the asset by an area which posts APC
online to GL, the revenue will remain on the manually entered revenue account. The end user might
need to manually transfer this value to a different P&L account.
issues an error (which can be changed into warning, then statistical areas in FI-AA will be updated)
Behavior during creation of assets:
Due to the P&L posting of acquisition costs during integrated acquisitions, the system has to check
that no other depreciation area in this accounting principle posts depreciation to GL. Otherwise, the
expense amounts in the P&L statement would be doubled over the useful life of the asset
If such a setup is found, the system issues an error message. This message can be changed into a
warning, e.g. if the asset is not used for integrated acquisitions


account approach
Processes
Asset Aquisition
Depreciation
Asset Retirement and scrapping
Asset under Construction
Low Value Assets

Asset Acquisition
Different APC values reflecting different accounting principles have to be posted to

corresponding accounts (for example, freight costs shall not be capitalized for local GAAP).
01 IFRS
30 L-GAAP
L-GAAP 60 Tax FI-AA
IFRS
Pure
Pure IFRS Local GAAP
Accounts
Accounts
Tax local
Common Postings IFRS GAAP Tax
Accounts Pure Vendor Invoice against technicial
Tax GAAP clearing and tax account (1 doc.) X X X
Accounts over gross amount including freight
Asset Acquisition (Activation) X
against technical clearing account
X
or contra account aquisition per
accounting principle (1 doc. Per
X
ledger)
Chart of Accounts Reduction of APC by freight costs
-- X --
(ledger group-specific document)


Asset Acquisition with valuation differences (e.g. freight costs not capitalized for local GAAP)
Document Entry: Financial Accountant
31 K Vendor 160000 (Payable) 10.200
70 A Asset FIAA-1000-0 PRCTR1 KOSTL1
L-GAAP 40 S GL L4xxxxxx (freight expense) 200 Freight shall not be capitalized

75 A Asset L13000 (Machines) PRCTR1 KOSTL1 in local GAAP (New Transaction:
limit posting to AccPrinc local GAAP)
Generated documents:
(1) Common Accounts D 70 Tec.Clearing Acc. Acquisition 999999 10.200
C 31 Account Payable 160000 10.200
(2a) With Acc.Princ. IFRS IFRS

D 70 Machines I13000 10.200
C 75 Tec.Clearing Acc. Acquisition 999999 10.200
(2b) With Acc.Princ. local GAAP L-GAAP

D 70 Machines L13000 10.200
C 75 Contra Account Aquisition L999999 10.200
(2c) With Acc.Princ. TAX Tax

D 70 Machines T13000 10.200
C 75 Tec.Clearing Acc. Acquisition T999999 10.200
(3) With Acc.Princ. local GAAP L-GAAP

D 40 Freight Expense L4xxxxxx 200
C 75 Machines L13000 200

IFRS
AP Reconcilation Tech.Clear.Acc.Acqu. Asset Reconcilation. Freight expenses
1) 10.200 1) 10.200 2a) 10.200 2a) 10.200
Contra Acc.Acqu. Asset Reconcilation L-GAAP
1) 10.200 1) 10.200 2b) 10.200 2b) 10.200 3) 200 3) 200
Asset Reconcilation Tax

Contra Acc.Acqu.
1) 10.200 1) 10.200 2c) 10.200 2c) 10.200
Transaction vendor invoice

1) Technical Clearing Account Acquisition to Vendor (common accounts)
2a) Asset to Technical Clearing Account Acquisition ( IFRS accounts )
2b) Asset to Contra Account Acquisition (Local GAAP accounts)
2c) Asset to Contra Account Account Acquisition (Tax GAAP accounts)
Transaction correction freight cost

3) Freight expenses to Asset (local GAAP accounts)


Depreciation
Assets are depreciated using different depreciation rules in accordance with different
accounting principles. The use of different depreciation parameters (such as method and
useful life) for the different accounting principles produces different depreciation values,
which are posted to the corresponding accounts
01 IFRS
30 L-GAAP
IFRS L-GAAP 60 Tax FI-AA
Pure
Accounts
Accounts
Tax
Common
local
Accounts Pure Postings IFRS GAAP Tax
Tax GAAP
Accounts Straight-line depreciation over
X -- --
5 years as per IFRS
Straight-line depreciation over
-- X --
10 years as per local GAAP
Degressive depreciation over
-- -- X
3 years as per Tax Law
Chart of Accounts


Due to the different net book values, the accounting principles can produce different
losses/gains that need to be posted to the respective ledgers.
(Assumption: gains are achieved under IFRS, whereas local GAAP and Tax produce losses)
01 IFRS
30 L-GAAP
IFRS L-GAAP 60 Tax FI-AA
Pure
Accounts
Accounts
Tax
Common
Accounts Postings IFRS local Tax
Pure
GAAP
Tax GAAP
Accounts Customer invoice against Sales X X X
Revenue common accounts
Asset Retirement with gains X -- --
Asset Retirement with losses -- X --
Asset Retirement with losses -- -- X
Chart of Accounts

Document Entry: AR Accountant
01 C Customer 140000 (Receivable) 8.500

(Assumption:
50 S 820000 (Sales revenue asset retir.) Asset# Net book value IFRS 8.000-, local GAAP 9.000,-, Tax 9.500)
(5) To common accounts
D 01 Account Receivable 140000 8.500
C 50 Sales revenue Asset Retirement 820000 8.500
(6) To IFRS accounts IFRS

D 40 Clearing Acc.Asset Retirement I825000 8.500
(Acc.Princ. IFRS)
C 75 Machines I13000 8.000
C 50 Gain/Loss I2xxxxx 500
LGAAP
(7) To local GAP accounts D 40 Clearing Acc.Asset Retirement L825000 8.500
(Acc.Princ. local GAAP) C 75 Machines L13000 9.000
D 40 Gain/Loss L2xxxxx 500
LGAAP
(8) To Tax-valuation accounts D 40 Clearing Acc.Asset Retirement T825000 8.500
(Tax-GAAP) C 75 Machines T13000 9.500
D 40 Gain/Loss T2xxxxx 1000


IFRS
AR Rec. Clear.Acc.Retir. Sales revenue. Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 6) 8.500 5) 8.500 2a) 10.000 6) 10.000 6) 2.000 3) 2.000 3) 2.000 6) 500
L-GAAP
Sales revenue. Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 7) 8.500 5) 8.500 2b) 10.000 7) 10.000 7) 1.000 4) 1.000 4) 1.000 7) 500
Tax
Sales revenue. Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 8) 8.500 5) 8.500 2b) 10.000 8) 10.000 8) 500 4) 500 4) 500 8) 1000
Transactions (Retirement) with sales revenue of 8.500

5) Customer Invoice LG Blank
6) Asset retirement LG IFRS
7) Asset retirement LG local GAAP
8) Asset retirement LG Tax


For assets under construction, the following distinction is made:
Without investment measure:

Such assets are treated as regular asset acquisition.
As investment measure:
Costs are collected on a WBS element or an internal order (capitalization key in
the master record).
The costs are collected and capitalized/settled to the asset. They are assigned
to the depreciation area on the basis of the combination of capitalization key
and capitalization version. In this way, different percentages of capitalization
can be applied.
Additional external invoices that need to be handled differently depending on
each accounting principle have to be entered as an adjustment document after
the asset has been capitalized (as a regular asset acquisition).


Asset under Construction (Investment Measure)
The expenses are collected on an internal order and settled to the asset under construction.
Different APC values have to be capitalized using different accounting principles.
Assumptions:
Freight Costs are capitalized under IFRS only
100% of other expenses are capitalized under IFRS and
local GAAP
80% of other expenses are capitalized under Tax Law.
(Percentages applied are defined in the capitalization key

of the asset under construction.)
01 IFRS
30 L-GAAP
L-GAAP FI-AA
IFRS 60 Tax
Pure
Accounts
Accounts
Tax Postings IFRS
local
Tax
GAAP
Common
Settlement of internal order to asset
Accounts Pure under construction with 100% incl. X -- --
Tax GAAP freight costs
Accounts Settlement of internal order to asset
-- X --
under construction with 100%

-- -- X


Asset under Construction (Investment Measure) (e.g. freight costs not capitalized for local GAAP)
Process Assumptions:
flow: Other expenses, Freight Costs are capitalized under
Freight costs IFRS only
100% of other expenses are
capitalized under IFRS and local
Investm. GAAP
Order 80% of other expenses are
Ext. Procurement,
Production costs
capitalized under Tax Law.
Settlement AuC, Asset
Generated documents by settlement:

IFRS
(1) To IFRS accounts
D 70 Machines I32000 10.200
C 50 Other Expenses I415000 10.000
C 50 Freight Expenses I472000 200
local GAAP
(2) To local GAAP accounts
D 70 Machines L32000 10.000
C 50 Other Expenses L415000 10.000
Tax
(2c) To Tax GAAP accounts
D 70 Machines T32000 8.000
C 50 Other Expenses T415000 8.000


Asset under Construction (Investment Measure) (e.g. freight costs not capitalized for local GAAP and Tax)
Asset Reconcilation. IFRS

Other expenses Freight expenses
(1) 10.200 (1) 10.000 (1) 200
Asset Reconcilation Other expenses L-GAAP

(2) 10.000
(2) 10.000
Asset Reconcilation Other expenses Tax

(3) 8.000
(3) 8.000
Settlement of Investment Order

(1) Asset to Other expenses and to Freight expenses (IFRS accounts)
(2) Asset to Other expenses (local GAAP accounts)
(3) Asset to Other expenses (Tax GAAP accounts)


Depreciation of Low-Value Assets
The limits for low-value assets differ depending on the Accounting Principle applied.
The maximum low-value asset amount is defined in the country data (OA08)
(the country key has been assigned to the company code). It can as well be defined per company code
and depreciation area (OAYK).
Assets with APC that are smaller or equal to the smallest LVA value of all accounting principles are
capitalized in an asset class and depreciated immediately.
All assets that are greater than the smallest LVA value of all accounting principles are created in a second
asset class. Whereas in one area immediate depreciation occurs at 100%, depreciation is performed in
another area corresponding to the useful life. Changes to the respective depreciation key and the useful
life need to be made manually in the asset master record for each depreciation area.
01 IFRS
30 L-GAAP
IFRS L-GAAP FI-AA
60 Tax
Pure IFRS
Pure
Local GAAP

Accounts
Accounts local
Tax Postings IFRS
GAAP
Tax
Common Straight-line depreciation over
X -- --
Accounts 3 years as per IFRS
Pure
Tax GAAP -- X --
Accounts Immediate depreciation as per local
GAAP and per Tax Law
-- -- X






Due to the necessity to balance the technical clearing account, for each accounting principle
assigned to the chart of depreciation a separate document has to be posted.
If a certain accounting principle is not represented on the asset by an area which posts APC online
to GL, the posting will be re-directed to Account for non-operating expense (KTNAIB)
If no accounting principle is represented on the asset by an area which posts APC online to GL, the
system issues an error can be changed into warning, then statistical areas in FI-AA will be
updated


Behaviour of one-sided assets (continued):

If no accounting principle is represented on the asset by the leading area of this valuation, the
system issues an error (which can be changed into warning, then statistical areas in FI-AA will be
updated)


ledger approach
Configuration
G/L Integration on the level of depreciation areas

Required depreciation areas (example)
Valuation decisions
CO integration scenarios
Parallel valuation of fixed assets in ledger approach

Accounting principles
The FI-AA application component portrays parallel accounting using depreciation areas integrated across
the suite via accounting principles:
Accounting principles have to be defined explicitly even in the account approach for parallel
accounting.
Thereby the corresponding valuation (e.g. IFRS, local GAAP, Tax*) is defined and named.
All sub ledgers and feeding applications in accounting can be integrated per accounting principle.
Every depreciation area has to be assigned to one of these accounting principles.
Ledger groups define G/L-integration per area: a unique and distinct ledger group needs to be
assigned to each accounting principle.
These ledger groups usually have one distinct ledger serving as ledger from which financial statements for the
corresponding valuation are produced.
Since the ledger group is updated in the document header, it serves as well as a means of integration per valuation
on document level. Thereby a navigation from line item reporting (e.g. out of the Asset Explorer) into the related
documents is facilitated.
Indirectly every depreciation area is assigned to one of these ledger groups via assignment of accounting principles.
*Financial statements for tax-legislation based valuation are supported and can be implemented. Note however
that no (localized) content for tax valuation is delivered by SAP!


Depreciation areas represent valuation decisions in the fixed asset accounting sub ledger.
In the asset class or single asset master, asset valuation is determined by depreciation keys and useful life per
depreciation area.
Valuating transaction (e.g. in the closing process) can be explicitly restricted by depreciation area or accounting
principle.
For each asset class the G/L account determination for asset reconciliation account and Accumulated
depreciation account for ordinary depreciation is defined on each depreciation area with posting indicator Area
posts in realtime.
Alternatively an identical G/L account number can be used in different accounting principles, if in areas to inherit the
account determination the Alternative Depreciation Area is defined accordingly. In this way, only one APC account
and only one VA account, for example, are required for several accounting principles of an asset class. A reduced
version of the chart of accounts can be used for easier reference.
Depreciation areas establish valuation consistency

A leading depreciation area of a valuation must not inherit values from any other deprecation area: The Adoption of
values from depreciation area must be initial.
Value and parameter take over must only be defined within the same ledger group assignment.


Depreciation areas establish reconciliation between asset sub ledger and G/L per currency:
For every additional currency type defined on the company code a corresponding depreciation
area with posting indicator Area does not post needs to be defined in each accounting principle.
Thus FI-AA is reconcilable with the Balance Sheet in each valuation and currency.
Depreciation areas establish reconciliation between asset sub ledger and G/L in real time.
The depreciation area settings specify whether
Asset balances are posted in real time*, depreciation is posted (Area Posts in Realtime**)
periodically.
Only depreciation is posted (Area Posts Depreciation only)
No postings are made (Area Does Not Post)
For every accounting principle there must be at least on depreciation area with posting indicator
Area posts in realtime. Thus APC update to the G/L account is real time in all accounting
principles.*
* The periodic posting run (RAPERB2000) is needed for depreciation areas for Special Items (Sonderposten-Bereiche) only.
Only for this exceptional requirement the posting indicator may as well be set to the value (Area Posts APC and depreciation
periodically


Valuation decisions

Same approach, but different valuation: An identical G/L account number can be used in different
ledgers. By the field Alternative Depreciation Area in the depreciation area it can be ensured, that
the G/L account determination is defined only once. In this way, only one APC account and one
account for accumulated depreciation, for example, are required for all accounting principles of an
asset class. A reduced version of the chart of accounts can be used for easier reference.
Transaction activated as Fixed Asset in IFRS and as Current Asset in local: A different G/L account number
can be used in different depreciation areas.
Transaction activated in IFRS, and registered as expense in local GAAP: Per asset class or per asset master
the depreciation areas for local GAAP can be flagged as Deactive in Determine Depreciation Areas in the Asset
Class.


Without document splitting: Cash discounts are capitalized via periodic run of SAPF181.


G/L integration technical clearing account
For integrated asset acquisition postings a Technical Clearing Account for

Integrated Asset Acquisitions is to be defined. Thereby the business transaction
integrated asset acquisition can be divided into an operational part and a
valuating part. The operational part (vendor invoice) is updated with ledger group
BLANK, the valuating part (asset capitalization) is updated per ledger group and
accounting principle.
On document-level both parts (operational part with no ledger group specified and
valuating parts with specific ledger groups) are each balancing to zero.
The Technical Clearing Account for Integrated Asset Acquisitions is ensured to
balance to zero as well in each valuation:
It is debited by the operational document and credited by the valuating document of for each ledger
group with same amount. All documents are posted within the same logical unit of work.
It cannot be posted to manually, since it is defined as asset reconciliation account.


The portrayal of parallel valuation requires the depreciation areas listed below.
For every ledger there must be a depreciation area with posting indicator Area posts in
realtime. In these areas, APC update is accurate with every transaction in real time. (Delta
areas are not necessary, delta postings are not used.).
The following examples assume:

There are three different valuations: IFRS, local GAAP (L-GAAP), Tax*.
The local GAAP- and the Tax* ledger are non leading ledgers
Only one currency type is considered relevant for this example
Posting of
Ledger Group/
Depreciation area Ledger Leading Aquisition and Period
Accounting Principle
Production Cost Depreciation
01 0L / IFRS 0L X X X
20 (calculation) 0L / IFRS 0L X
30 N1 / local GAAP N1 X X
60 N2 / Tax* N2 X X
* Note that no content is delivered by SAP for country-dependend Tax valuation.


In Area 01
Asset balance sheet values and depreciation are posted real time.
In Area 20
Only cost-accounting depreciation is posted; another type of depreciation can be specified, and the
accounts specified need to be created as cost elements. Area 20 need to be integrated with ledger
group including the leading ledger.
In Area 30
In Area 60
General features:
The leading ledger assignment is flexible. IFRS (or any group GAAP) can as well be assigned to area 30.
Activation differences (postings with differing APC values such as capitalization of freight costs under local
GAAP) are entered manually via ledger group specific documents.


Valuation decisions

Same approach, but different valuation: An identical G/L account number can be used in different
ledgers. By the field Alternative Depreciation Area in the depreciation area it can be ensured, that
the G/L account determination is defined only once. In this way, only one APC account and one
account for accumulated depreciation, for example, are required for all accounting principles of an
asset class. A reduced version of the chart of accounts can be used for easier reference.
Transaction activated as Fixed Asset in IFRS and as Current Asset in local: A different G/L account number
can be used in different depreciation areas.
Transaction activated in IFRS, and registered as expense in local GAAP (one-sided asset): Per asset
class or per asset master the depreciation areas for local GAAP can be flagged as Deactive in Determine
Depreciation Areas in the Asset Class.


Without document splitting: periodic run of SAPF181.


Scenario 1:

This is the leading depreciation area
It posts to the leading ledger
In Controlling, the leading valuation is
It may use the same accounts as depreciation areas 30 and 60
portrayed as the cost-accounting approach.
Posting of
Ledger Group/
01 0L / IFRS 0L X X X (CO)
60 N2 / Tax N2 X X


Scenario 2:

This may be configured as leading depreciation area
It generally uses the same accounts (not created as cost elements) as
depreciation areas 30 and 60

It posts to Controlling The cost-accounting approach portrayed
Accounts are created as cost elements differs from that in the leading valuation.
The accounts used are different to those used in depreciation areas
01, 30, and 60
Posting of
Ledger Group/
01 0L / IFRS 0L X X X
20 (calculation) 0L / IFRS 0L X (CO)
60 N2 / Tax N2 X X


Scenario 3:

Some of the (P&L) accounts it uses may be different to those used by
depreciation areas 30 and 60
In Germany and Austria, the current trend is to portray the German
Commercial Code (HGB) in area 01
Depreciation area 30 posts to Controlling In Controlling, group accounting is

It posts to Controlling (leading area) portrayed as the leading valuation with the
group approach being portrayed in area 30.
Some of the (P&L) accounts used may be different to those used in
depreciation area 01
Posting of
Ledger Group/
01 N1 / IFRS N1 X X
30 0L / local GAAP 0L X X X (CO)
60 N2 / Tax N2 X X


Fiscal Year Variants
The start date and end date of the fiscal year variant in the depreciation areas in
Asset Accounting need to correspond to the fiscal year variant (FYV), of the
leading ledger.
Non leading ledgers can use a different FYV if Business Function FIN_AA_CI_1
is active and if the Allow Differing Variants for Depreciation Areas with G/L
Integration-flag is activated in customizing. Again, the start and end date of the
fiscal year must be unique.
If a deviating fiscal year start and end date in non-leading ledgers is required for
a certain accounting principle, a work-around as described in SAP Note 1951069
can be implemented: the accounting principle can be assigned to a ledger group
with two ledgers, one of which shares the FYV of the leading ledger and is the
representative ledger of this ledger group, the other has the deviating FYV. (For
restrictions on this, see SAP Note 844029).Value and parameter take over must
only be defined within the same ledger group assignment.


ledger approach
Processes
Asset Aquisition
Depreciation
Asset Retirement and scrapping
Low Value Assets
Parallel Accounting in FI-AA: Processes

Asset Acquisition
Different APC values reflecting different accounting principles have to be posted to the
ledgers (for example, freight costs shall not be capitalized for local GAAP).
01 IFRS
30 L-GAAP
60 Tax FI-AA

FI-GL
IFRS (Leading) local

Postings IFRS GAAP Tax
0L local GAAP
Vendor Invoice against technicial 0L N1 N2
N1 Tax clearing and tax account (1 doc.)
N2 over gross amount including freight
Asset Acquisition (Activation) 0L
against technical clearing account
N1
per accounting principle (1 doc. Per
ledger) N2
Reduction of APC by freight costs
-- N1 --
(ledger group-specific document)

Document Entry: Financial Accountant
31 K Vendor 160000 (Payable) 10.200
70 A Asset FIAA-1000-0 PRCTR1 KOSTL1
L-GAAP 40 S GL 4xxxxxx (freight expense) 200

Freight shall not be capitalized
75 A Asset 13000 (Machines) PRCTR1 KOSTL1 in local GAAP (New Transaction:
limit posting to LG N1 (local GAAP))
BLANK
(1) With LG Blank D 70 Tec.Clearing Acc. Acquisition 999999 10.200
C 31 Account Payable 160000 10.200
(2a) With LG 0L (IFRS) IFRS

D 70 Machines 13000 10.200
(2b) With LG N1 (local GAAP) L-GAAP

D 70 Machines 13000 10.200
(2c) With LG N2 (TAX) Tax

D 70 Machines 13000 10.200
(3) With LG N1 (local GAAP) L-GAAP

D 40 Freight Expense 4xxxxxx 200
C 75 Machines 13000 200


AP Reconcilation Tech.Clear.Acc.Acqu. Freight expenses
1) 10.200 1) 10.200 2a) 10.200 2a) 10.200
Asset Reconcilation L-GAAP
1) 10.200 1) 10.200 2b) 10.200 2b) 10.200 3) 200 3) 200
1) 10.200 1) 10.200 2c) 10.200 2c) 10.200
Transaction vendor invoice

1) Technical Clearing Account Acquisition to Vendor LG Blank
2a) Asset to Technical Clearing Account Acquisition LG IFRS
2b) Asset to Technical Clearing Account Acquisition LG local GAAP
2c) Asset to Technical Clearing Account Acquisition LG Tax
Transaction correction freight cost

3) Freight expenses to Asset LG local GAAP


Depreciation
Assets are depreciated using different depreciation rules in accordance with different
accounting principles. The use of different depreciation parameters (such as method and
useful life) for the different accounting principles produces different depreciation values,
which are posted to the corresponding ledgers
01 IFRS
30 L-GAAP
60 Tax FI-AA

FI-GL

Postings IFRS GAAP Tax
0L local GAAP
N1 Tax 0L -- --
5 years as per IFRS
N2 Straight-line depreciation over
-- N1 --
10 years as per local GAAP
Degressive depreciation over
-- -- N2
3 years as per Tax Law


Due to the different net book values, the accounting principles can produce different
losses/gains that need to be posted to the respective ledgers.
(Assumption: gains are achieved under IFRS, whereas local GAAP and Tax produce losses)
01 IFRS
30 L-GAAP
60 Tax FI-AA

FI-GL
IFRS (Leading)
Postings IFRS local Tax
local GAAP GAAP
0L
Customer invoice against Sales 0L N1 N2
N1 Tax Revenue
N2 Asset Retirement with gains 0L -- --
Asset Retirement with losses -- N1 --
Asset Retirement with losses -- -- N2


Document Entry: AR Accountant
01 C Customer 140000 (Receivable) 8.500

(Assumption:
50 S 820000 (Sales revenue asset retir.) Asset# Net book value IFRS 8.000-, local GAAP 9.000,-, Tax 9.500)
(5) With LG Blank BLANK
D 01 Account Receivable 140000 8.500
C 50 Sales revenue Asset Retirement 820000 8.500
(6) With LG 0L (IFRS) IFRS

D 40 Clearing Acc.Asset Retirement 825000 8.500
C 75 Machines 13000 8.000
C 50 Gain/Loss 2xxxxx 500
LGAAP
(7) With LG N1 (local GAAP) D 40 Clearing Acc.Asset Retirement 825000 8.500
C 75 Machines 13001 9.000
D 40 Gain/Loss 2xxxxx 500
LGAAP
(8) With LG N2 (Tax) D 40 Clearing Acc.Asset Retirement 825000 8.500
C 75 Machines 13001 9.500
D 40 Gain/Loss 2xxxxx 1000


IFRS
AR Rec. Clear.Acc.Retir. Sales revenue. Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 6) 8.500 5) 8.500 2a) 10.000 6) 10.000 6) 2.000 3) 2.000 3) 2.000 6) 500
L-GAAP
Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 7) 8.500 5) 8.500 2b) 10.000 7) 10.000 7) 1.000 4) 1.000 4) 1.000 7) 500
Tax
Asset Reconcilation Acc.Depr. Depr.Exp. Gain/Loss
5) 8.500 8) 8.500 5) 8.500 2b) 10.000 8) 10.000 8) 500 4) 500 4) 500 8) 1000
Transactions (Retirement) with sales revenue of 8.500

5) Customer Invoice LG Blank
6) Asset retirement LG IFRS
7) Asset retirement LG local GAAP
8) Asset retirement LG Tax


For assets under construction, the following distinction is made:
Without investment measure:

Such assets are treated as regular asset acquisition.
As investment measure:
Costs are collected on a WBS element or an internal order (capitalization key in
the master record).
The costs are collected and capitalized/settled to the asset. They are assigned
to the depreciation area on the basis of the combination of capitalization key
and capitalization version. In this way, different percentages of capitalization
can be applied.
Additional external invoices that need to be handled differently depending on
each accounting principle have to be entered as an adjustment document after
the asset has been capitalized (as a regular asset acquisition).


Asset under Construction (Investment Measure)
The expenses are collected on an internal order and settled to the asset under construction.
Different APC values have to be capitalized using different accounting principles.
Assumptions:
Freight Costs are capitalized under IFRS only
100% of other expenses are capitalized under IFRS and
local GAAP
80% of other expenses are capitalized under Tax Law.
(Percentages applied are defined in the capitalization key

of the asset under construction.)
01 IFRS
30 L-GAAP
FI-GL 60 Tax FI-AA

IFRS (Leading)
local GAAP local
0L Postings IFRS
GAAP
Tax
N1 Tax Settlement of internal order to asset

N2 under construction with 100% incl. 0L -- --
freight costs
-- N1 --

-- -- N2


Asset under Construction (Investment Measure) (e.g. freight costs not capitalized for local GAAP)
Process Assumptions:
flow: Other expenses, Freight Costs are capitalized under
Freight costs IFRS only
100% of other expenses are
capitalized under IFRS and local
Investm. GAAP
Order 80% of other expenses are
Ext. Procurement,
Production costs
capitalized under Tax Law.
Settlement AuC, Asset
Generated documents by settlement:

IFRS
(1) With LG 0L (IFRS)
D 70 Machines 32000 10.200
C 50 Other Expenses 415000 10.000
C 50 Freight Expenses 472000 200
local GAAP
(2) With LG N1 (local GAAP)
D 70 Machines 32000 10.000
Tax
(2c) With LG N2 (TAX)
D 70 Machines 32000 8.000


Asset under Construction (Investment Measure) (e.g. freight costs not capitalized for local GAAP and Tax)

Other expenses Freight expenses
(1) 10.200 (1) 10.000 (1) 200
Asset Reconcilation L-GAAP

(2) 10.000
(2) 10.000

(3) 8.000
(3) 8.000
Settlement of Investment Order

(1) Asset to Other expenses and to Freight expenses LG 0L (IFRS)
(2) Asset to Other expenses LG N1 (local GAAP)
(3) Asset to Other expenses LG N2 (Tax)


Depreciation of Low-Value Assets
The limits for low-value assets differ depending on the Accounting Principle applied.
The maximum low-value asset amount is defined in the country data (OA08)
(the country key has been assigned to the company code). It can as well be defined per company code
and depreciation area (OAYK).
Assets with APC that are smaller or equal to the smallest LVA value of all accounting principles are
capitalized in an asset class and depreciated immediately.
All assets that are greater than the smallest LVA value of all accounting principles are created in a second
asset class. Whereas in one area immediate depreciation occurs at 100%, depreciation is performed in
another area corresponding to the useful life. Changes to the respective depreciation key and the useful
life need to be made manually in the asset master record for each depreciation area.
01 IFRS
30 L-GAAP
FI-GL 60 Tax FI-AA

Postings IFRS Tax
GAAP
0L local GAAP
Tax 0L -- --
N1 3 years as per IFRS
N2 -- N1 --
Immediate depreciation as per local
GAAP and per Tax Law
-- -- N2






Due to the necessity to balance the technical clearing account, for each accounting principle
assigned to the chart of depreciation a separate document has to be posted.
If a certain accounting principle is not represented on the asset by an area which posts APC online
to GL, the posting will be re-directed to Account for non-operating expense (KTNAIB)
If no accounting principle is represented on the asset by an area which posts APC online to GL, the
system issues an error can be changed into warning, then statistical areas in FI-AA will be
updated


Behaviour of one-sided assets (continued):

issues an error (which can be changed into warning, then statistical areas in FI-AA will be updated)

Summary
You should now be able to explain how Parallel Accounting for

Fixed Assets can be portrayed using General Ledger Accounting
(new) under both, Account and Ledger Approach. In detail you
should be able to explain
the necessary configuration on the level of depreciation areas
the fundamental valuation decisions to be taken,
Configure the
G/L Integration as well as the
CO Integration of Fixed Asset Accounting
the degree to which different Fiscal Year Variants per valuation are
supported by SAP Accounting
how the Balance Sheet is affected by FI-AA-processes:
Asset Aquisition with valuation differences
Depreciation
Assets under Construction
Low Value Assets

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Parallel Accounting in the

SAP Simple Finance add-on

Fixed Asset Accounting

Product Management Financials

Structure of the Presentation

At the end of this presentation you will be able to explain how

Parallel Accounting for Fixed Assets can be portrayed using

In detail you will be able to configure and explain

Account approach for parallel valuation

Ledger approach for parallel valuation

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 3

Parallel valuation of Fixed Assets in

Accounting principles, depreciation areas and G/L Integration

Parallel valuation of fixed assets in account approach

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 5

Parallel valuation of fixed assets in account approach

Depreciation areas establish valuation consistency

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 6

Parallel valuation of fixed assets in account approach

No postings are made (Area Does Not Post)

Parallel Accounting in FI-AA

Approach and Valuation Affect:

Customizing: Different depreciation parameters (such as method and useful life)

"Post-Capitalization of Cash Discount to Assets"

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 8

Parallel valuation of fixed assets in account approach

For integrated asset acquisition postings a Technical Clearing Account for

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 9

Parallel valuation of fixed assets in account approach

The following examples assume:

* Note that for country-specific Tax valuation no content is delivered by SAP.

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 10

Parallel valuation of fixed assets in account approach

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 11

Parallel valuation of fixed assets in account approach

Depreciation area 01 posts to Controlling

Depreciation area 20 is not used.

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 12

Parallel valuation of fixed assets in account approach

Depreciation area 01 does not post to Controlling

Depreciation area 20 posts to Controlling The cost-accounting approach portrayed

20 (calculation) IFRS X (CO)

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 13

Parallel valuation of fixed assets in account approach

Depreciation area 01 does not post to Controlling

Depreciation area 20 is not used.

30 local GAAP X X (CO)

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 14

Parallel valuation of fixed assets in account approach

Different valuation approach - transactions activated in IFRS, and registered

2014 SAP AG or an SAP affiliate company. All rights reserved. Public 15

Parallel valuation of fixed assets in account approach

Behavior during integrated asset acquisitions:

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Parallel valuation of fixed assets in account approach

In the new architecture (continued):

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Parallel valuation of Fixed Assets in

Parallel valuation of fixed assets in account approach

Different APC values reflecting different accounting principles have to be posted to

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Parallel valuation of fixed assets in account approach

Document Entry: Financial Accountant