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The New GL concept covers all the above mentioned functions and requirements in one place, while continue

providing all the existing functions.

New GL functionalities are part of ECC 6.0 version. However, we have done only technical upgrade from earlier 4.7e

version to ECC 6.0 and not the functional upgrade. Hence, to reap the benefits of ECC 6.0 fully, we must go for the

under-mentioned New GL functionalities offered by it.

Various additional functionalities with the introduction of New GL:

Document Splitting

Today, in the current SAP R/3, Vendor line items and Customer line items (except special GL accounts) in a financial

document do not retain profit centers. Through month-end closing activities, Vendor and Customer open line items

are transferred to Profit Center accounting via F.5D and 1KEK transactions. This means that, there is no real-time

transfer of profit center to PCA. Nor FI do retain any profit center for these accounts at all. Tax Line items bring profit

center from either substitution or default profit center assignment (3KEH).

In the New GL scenario, for each financial account document, document splitting functionality applies account

assignment information (profit center) to the non-assigned GL accounts (Vendor, Customer and Tax line items in

particular and any other accounts not assigned due to any reasons, in general).

Document splitting function is based on the following model.

Accounting documents, in most of the cases, contain GL accounts with assignments. That is, accounts of expenses

and revenues. Such accounts (i.e. Expenses or revenues) do provide dependent GL accounts (i.e. Accounts

payables, Account receivables and tax accounts) with account assignments (profit center) based on the context (i.e.

invoice or payment). Account assignments from original processes are supplied to the subsequent processes.

For example, Account assignment (profit center) is passed on from GR/IR account to Vendor line item in invoice and

the profit center from invoice is passed on the vendor line item in payment.

Balanced books (zero balance) by dimensions like Profit Center, segment, Business area etc.

Today, in the current SAP R/3, system does not ensure that every financial accounting document is balanced by profit

center or segment or business area. That is, balance is not zero, profit center-wise or segment-wise or business

area-wise in a financial document. As a result, any profit center report does not provide zero balance financial

information (trial balance).

In the New GL, every financial document can be ensured to have a zero balance by profit center, segment or business

area, depending upon the business requirements. This functionality ensures drawing out balance sheet at Profit

center level, segment level or business area level.

In a company where different steams of business are being carried on, local accounting standards do require reports

on segment-wise or business-wise. This requirement is ensured to be met through balanced books by different

dimensions (profit center, segment, business are etc.).

Real-time integration of Financial Accounting with FI:

Today, in the current R/3, there is no real time integration of CO with FI, though the reconciliation of CO and FI is

ensured through reconciliation ledger period-end activities.

In the New GL, real-time integration of CO with FI is ensured. This ensures transfer of cross-entity controlling

postings to general ledger in real time. This transfer allows continuous reconciliation of Cost Accounting books with

financial books and removes the need for any subsequent reconciliation. This again ensures balanced books by

New General Ledger - Introduction

Posted by Marssel Vilaa in marssel.vilaa2 on Mar 23, 2009 10:20:14 PM

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different dimensions as well.

Real time integration function works on the following model. As we know, there are many activities which are only

internal to CO. The examples are Cost allocation through distribution, assessment and overhead surcharge

application, settlement of costs from one cost object to another cost object etc. These business transactions do

create postings only in CO.

Through real-time integration, system passes a corresponding FI document for these CO documents, if and only if

the posting involves any cross controlling entities like different profit centers, cross company codes etc.

Parallel Ledgers:

Today, in the current R/3, meeting the requirements of drawing out financial statements based on other accounting

principles like IFRS, US GAAP etc. are met thorough separate SAP application, i.e. Special Purpose Ledgers.

In the New GL scenario, this is clubbed in FI general ledger itself. Consequently Ledger concept has come into play.

We are now able to create different Ledgers for different accounting principles. That is, one ledger for Local GAAP,

one for US GAAP, one for IFRS, one ledger with different fiscal year other than the one being used in the company

code etc. In SAP terminology, these are called Leading Ledger and Non-leading Ledgers. The ledger for Local GAAP

is called Leading Ledger and all others are non-leading ledgers.

Posting logics to various ledgers:

All FI postings will invariably go to the Leading ledger. All these postings will also go to the Non-leading ledgers

unless otherwise restricted. We can also carry out Ledger specific postings. That is, we can post some documents

only to certain ledgers, while not posting the same to others.

We have created Non-Leading ledger L3, which is meant for posting with different fiscal year than the one used for the

Company code. That is, in Brazil company code, fiscal year variant for the company code is April to March (V3). While

postings happen to leading ledger with V3 variant, the same will get posted with K4 fiscal year (Jan to Dec) in L3.

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Tags: erp, business_solutions, business_process_expert, sap_developer_netw ork, integration_and_certif ication,

international_financial_reporting_standard_(ifrs)

2 Comments

Like (1)

Naresh Krishnamoorthy Sep 4, 2013 1:58 PM

Great and well written Blog. Best Regards,Naresh K.

Like (0)

Marssel Vilaa Sep 4, 2013 2:03 PM (in response to Naresh Krishnamoorthy)

Thank you, Naresh. All the best.