Financial Statement Version-configuration

Financial statement versions group together related accounts into Balance Sheet and Income Statement format for financial purposes.SAP uses the FSV assigned to the Company Code statement reports in the system. FSV items are similar to hierarchy nodes.

There are 4 main configuration settings that can be grouped under the heading general specification.  They are as follows

Maint. Language :The maintenance language determines the language in which FSV is kept

Item keys Auto.: This indicator specifies whether item keys are assigned automatically or manually.it is recommended that this indicator is set so that item keys are assigned automatically.

Chart of Account:Enter the Chart of Account to which this FSV relates to.

Group account number: we shall set this indicator if we wish to assign numbers from group chart of accounts instead of operating Chart of Account . Group chart of accounts are part of consolidation function. This setting is only valid if you are using the consolidation functionality of SAP.

The IMG Path for the creation of FSV is given below:
Financial Accounting->General Ledger Accounting->Business Transactions-> Closing->Documents->Define Financial Statement Versions

Transaction code : OB58


Rules for creating the financial statement version

1. The following special items (highlighted in red in the structure maintenance) have to be assigned on the second hierarchy level (directly below the root node with the description of the financial statement version):

     o  Assets
     o  Liabilities
     o  Not assigned


2. The following special items  have to be assigned below the special item Liabilities in the hierarchy:
    o  Net result: loss
    o  Net result: profit

3.The special item P+L result  can be assigned as required. However, it must not be assigned as a subnode of another special item

 

Explaination of General ledger fields:Part 2

Field Status Group: The Field Status group controls the account assignments that are made to the account. It also controls postings to cost centres , internal orders, are required, not allowed or optional.

 

Post Automatically Only: This field indicator is selected if we don’t want users posting manually to this account. When the indicator is selected, the system can only post the transactions based on configuration in the account assignment tables. Once the posting is made to this account, we need to avoid deselecting this account. If you deselect it on your inventory accounts, it could cause your G/L account to become out of balance with the material ledger.

 

 

Supplement Auto. Postings: With this indicator selected, the account assignments for line items that are generated automatically by the system  will be manually updated.

 

Rec. Acct. Ready for Input: This field denotes that recon account is ready for posting when you’re creating a document. The indicator is used for Fixed Asset reconciliation accounts.

 

Planning Level: The Planning level indicator is used in displaying the cash management position in the Treasury sub module.

 

Relevant to Cash Flow: This indicator tells the system that the account affects cash flow(receives incoming payments or sends outgoing payments)

 

House Bank: If you are creating G/L accounts for a bank account select the house bank that the G/L Account  belong to in this field.

 

Account ID: If the house bank is selected in the preceding field, the account id for the house bank to which GL belongs to is selected in this field

 

Interest indicator: If we want to calculate interest on the G/L account, select the indicator ID for the interest calculation

 

Interest Calculator Freq.: Select the ID for the interval at which the interest calculation should be run.

 

 

Key Date of Last Int.Calc.:The system updates this field with the date at which the last interest calculation was run.

 

Date of last Interest Run: The system stores the last date that interest was posted to this account.

 

 

Explanation of General Ledger Fields

Fields  that appear on the GL account company code segment are explained below:
Account currency: account currency is the currency in which account is managed.
This field should be filled with company code currency. By doing so, the account allows to post entries in any other currency in that account. If at any case, any other currency is used apart from company code currency,  the posting is restricted to that currency only.

Asset accounting : Briefing

Asset Accounting

 

Like AP and AR, Asset Accounting  is the subsidiary ledger of Financial Accounting. The appropriate general ledger are updated each time we post. There are various accounts maintained on Fixed Asset like Appreciation and Depreciation, Asset purchasing, Asset Selling , Scrapping, Transfer of Asset etc 

Procurement of services without Purchase order(related to GST)

This process is related to passing of invoices in the Finance module where the Material Management department is not involved. Invoices that will be routed through FI include insurance and other miscellaneous services.

·         These invoices will be passed through the T-code F-43 or FB60.

·         The Finance department will verify the document and update the Payables a/c that is, creating a liability. Finance will process the payment through the automatic payment program.

·         In GST regime, while booking such expenses where PO is not created, depending on the type of expenses, SAC / HSN code should be given in the input screen. For every transaction business place has to be captured, apart from business place below objects should also be captured in input screen.

Ø  GST Partner: Vendor code with whom purchase transaction is made. This is required to capture the vendor GSTIN.

Ø  Place of Supply: This is the place where actual supply of service is taken place.

Ø  Tax Code: This is required to calculate tax automatically and post into relevant GL accounts.

Ø  All the above fields will be made mandatory in FB 60 transaction code.

 

Flow of Entries:

 

Accounting entry in case of Intrastate:

 

CGST Input A/c   Dr

Expense A/c           Dr

SGST Input A/c                  Cr

 Vendor A/C                                      Cr 

  

Accounting entry in case of Interstate:

 

IGST Input Credit                              Dr

Expense A/c                                       Dr

Vendor A/c                                        Cr

Exchange Rate and Translation Ratio

This article describes the posting of invoices  in multiple currencies for the same entity. The system need customization and configuration of the conversion rate and translation ratio of currency in SAP .

Before that we need to understand about Exchange rate type. We can define exchange rate for each currency pair. The exchange rate can be differentiated through different exchange rate type.

The exchange rate type is defined in Customization under General Settings ->Currencies->Check Exchange rate types

The following exchange rate types exist

·         Buying Rate

·         Bank Selling Rate

·         Average Rate

·         Historical Exchange Rate

·         Key Date Exchange Rate

The system normally uses exchange rate type (M) average rate.

Further to this, we need to understand more about Translation Ratio. The translation ration between two currencies means how a currency can be related with each other.

SAP normally recommends 1:1 ration for each currency pair. However, in some cases, SAP has inherent round off difficulties. This generally happen when one of the currency is strong and stable and other is too weak owing to the inflationary trends and other factors prevailing in the country. 

Exchange Rates are used to maintain the relationship between two currencies and to translate an amount into other currency. It is defined at client level and therefore applies for all company codes.

Exchange rates are defined for following purposes

·         Posting and Clearing

·         Exchange Rate Differences

·         Foreign Currency Valuation

Define Translation ratios

IMG: SAP NetWeaver ->General Settings -> Currencies -> Define Translation Ratios for Currency Translation Transaction: OBBS Table: TCURF

To enable an entity, post invoices in multiple currency, after translation ratio, exchange rates need to be maintained It is very important to lock the table entries during exchange rate maintenance as per basic database design principles to avoid any data record access during update.

Exchange rates are used to find the value of a given currency with respect to other currency.      

Define Exchange rate

IMG: General Settings -> Currencies -> General Settings -> Currencies -> Enter Exchange Rate Transaction: OB08 Table: TCURR

After all these necessary configuration, we are able to receive or post invoices with Multiple currency

Questions and answers

What is the difference between company and company code?
A company is the organizational unit used in the legal consolidation module to roll up financial statements of several company codes. The Company Code is the smallest organizational ! unit for which a complete self-contained set of accounts can be drawn up for purposes of
external reporting.

How many chart of accounts can be attached to a company code?
One or more Operative Chart of Accounts can be assigned to a company code.
A
COA must be assigned to a company code. This COA is the operative COA
and is used in both FI and CO. One Chart of Account can be assigned to
many Company codes i.e., Multiple company codes can either share the
same or have separate COA. But a company code (Country specific Company
code or International Company code) can have a country specific COA
also along with Operative COA. The link between the regular COA and the
country COA appears in the alternate number field of the G/L master
record.
Eg: If a company’s subsidiaries are located in both US
& Mexico. We need to configure 2 Company codes – one for US and
another for Mexico,for eg U100 and M100. The same way we create 2 COA’s
one for US & one for Mexico, USCA and MXCA. Mexico has different
govt reporting requirements than the US so we will need to define a
company code specific to Country Mexico and also create a country
specific COA to be used, in addition to normal COA. In tcode OBY6(Comp
Code Global Parameters) of CC M100 we define normal COA i.e.,USCA in
Chart of Accounts field and MXCA in Country Chart/Accts field.


What are substitutions and validations? What is the precedent?
Validations are used to check settings and return a message if the prerequisite check condition is met.
Substitutions are similar to validations; they actually replace and fill in field values behind the scenes without the user’s knowledge unlike validations that create on-screen msgs to the user.


What is a controlling area?
The Controlling Area is the central organizational unit within CO module. It is representative of a contained Cost Accounting  where costs and revenues can be managed.


Define relationship between controlling area and company code?
A controlling area may include one or more company codes which must use the same operative chart of accounts as the controlling area. A Controlling Area can contain multiple company code assignments but a single company code can be assigned to only one controlling area.