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Ledgers in SAP S4 HANA – Standard & Extension Ledger
Published by pradeep on june 11, 2019 june 11, 2019.
Last Updated on April 24, 2023 by Pradeep
What are Ledgers in SAP S4 HANA?
Ledgers in SAP S4 HANA store different types of accounting documents. With this, the primary responsibility of General Ledger accounting is to provide a comprehensive picture of external accounting and accounts by reconciling all business transactions in the SAP Software system.
Since this system is fully integrated with the company’s other operational areas. Thus, it ensures that the accounting data is always complete and accurate.
Further, the documents stored in ledgers are based on rules of legal accounting and financial statements set by different types of accounting principles in SAP. It helps companies to record and report their financial data in a structured manner.
Standard Total Table
Ledgers for saving and analyzing values are based on the Total Table. SAP recommends that you use the standard total table.
- In ECC the table is FAGLFLEXT
- In S4 HANA the table is ACDOCA
Types of Ledgers in SAP S4 HANA
Ledgers in SAP S4 HANA Finance are of two types. These are the following:-
- Standard Ledgers (Leading or Non-Leading Ledger)
- Extension Ledgers
Standard Ledger in SAP S4 HANA
Standard Ledger includes Leading & Non-Leading Ledger.
Leading Ledger
In New G/L there is one leading ledger for each client that is valid for all company codes. An important decision you need to make is which accounting standard to use in the leading ledger. We cannot deactivate this assignment once we have defined it. You can define only one ledger as the leading ledger. SAP provides the leading ledger 0L as standard.
Example – A leading ledger “0L” for multiple companies codes 1000,2000,3000 & 4000.
Non-Leading Ledger
The non-leading ledgers are used as parallel ledgers together with the leading ledger.
Parallel ledgers are ledgers that we manage in parallel within a general ledger. We can use these to apply different accounting standards such as IAS/IFRS or US-GAAP etc.
Both Classic GL and New GL are standard Ledgers. These are the two ways to implement General Ledger Functionality. By implementing New GL we can get a lot of benefits.
Benefits of SAP New GL
Extended Data Structure provides flexibility
SAP combined multiple total tables of classic GL (old ERP) like GLTO, GLPCT, etc into a single total table i.e. FAGLFLEXT with New GL. This single Table provides flexibility and a faster response time for reporting. Also, we can add customer-defined fields in FAGLFLEXT.
Learn all major Tables in SAP FICO
Segment Reporting
From a statutory requirement point of view, we can define multiple accounting standards by using the New GL functionality that we call Parallel Accounting. Also, the New GL has document-splitting functionality that provides Segment Reporting . However, this functionality is not available in classic GL.
Real-Time Integration between FI and CO
Another disadvantage of classic GL has the period-end close reconciliation ledger functionality to synchronize FI and CO for cost transfers across the functional area, business area , and company code originating in CO. New GL has a real-time integration between FI and CO that occurs with each transaction originates in SAP Controlling . Instead of posting done by reconciliation ledger during period-close.
Parallel Accounting
New GL provides Non-Leading Ledger parallel with Leading Ledgers for parallel accounting like IFRS and GAAP. We can also implement Parallel accounting using an Account-based approach which is also available in classic GL.
Faster Period close is possible with New GL with the following features:
- We don’t need Reconciliation Ledger anymore
- We don’t require to do Balance sheet Adjustments
- Likewise, we also do not require to do Profit and Loss Adjustment
- Activities related to special Purpose Ledger are not required
- Depreciation Posting is online instead of a batch session
Also Read: SAP General Ledger Period-End Closing
Extension Ledger in SAP S4 HANA
While understanding the concept of SAP S4/HANA Finance Ledgers, it is important to know that SAP also introduced Extension Ledgers along with Leading and Non-Leading Ledgers.
Extension ledgers are options that we can for CO reporting . These ledgers staple on top of an Underlying Ledger (Standard Ledgers – can be leading or Non-Leading Ledger ) As a result, there are no data duplications.
As explained above, SAP S/4 HANA Ledgers are of two types- Standard Ledgers (Leading or Non-Leading Ledgers) and Extension Ledgers.
Features of Extension Ledger
We can activate Extension Ledger in S/4 HANA. We can activate standard ledgers in S/4 HANA even if we were not using New GL and not sued Non-Leading Ledgers in SAP ECC . Also, we can activate Extension Ledgers at any period.
Extension Leger stores data in ACDOCA Table only. It does not store Postings specifically made to the standard ledger.
Example – You have your standard Ledger (Leading Ledger) as “0L” and Extension Ledger as “N2”.
- If you post a document to “0L”, The system will update ACDOCA with Leading Ledger posting to “0L” only. However when you try to extract reports like FAGLL03 for ledger “N2”, the system will calculate all postings of “0L” with N2 for balances.
- Further, if you post a document to “N2”, the system will update ACDOCA with ledger postings to “N2” only.
Benefits of Extension Ledger
- Setting up new Extension ledgers is easy. It is not necessary to perform any kind of data migration only the configuration is needed. This is enabled by the extension ledger concept as just inherits the historical data of the underlying ledger. You can activate or deactivate the extension ledger in a productive system anytime during the year without having to migrate data as is the case with the standard ledger.
- All reports supporting standard ledgers work also with extension ledgers. This is also applicable to FIORI apps and classical GUI reports.
- Only Delta values are kept in the extension ledger so reduced the data footprint.
- Can be used for Foreign Currency Valuation.
- Can be used for Predictive Accounting under Marginal Analysis .
Restriction of Extension Ledgers
- We cannot post to vendor or customer reconciliation accounts
- Also, we can’t post with GL accounts with open item management
- Extension Ledger doesn’t have Integration with Asset Accounting
Configuration – The setup of the extension ledger is simple
Please note that the Extension ledger is not a replacement for Non-Leading Ledgers, but it can reduce the use of Non-Leading Ledgers.
Now let us have a comparison of the Standard Ledger and Extension Ledger .
Standard Ledger Vs. Extension Ledger
Also Read: Accounting vs. Ledger Approach in New Asset Accounting in SAP
We learnt what are ledgers in SAP S4 HANA and what are their key role in SAP Financial Accounting . We have majorly two types of ledgers with their roles and features.
Further, you understood, that the extension ledger has a special purpose in S4 HANA and those features make it mandatory to learn from an SAP consultant’s point of view.
Finally, you should conclude that ledgers form an important part of SAP S/4HANA Finance and on which many of the accounting processes are dependent.
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2473138 - Parallel ledger currency assignment for a company code
You have a question regarding which currencies you can assign to your parallel ledgers
Environment
- Financial Accounting (FI)
- SAP ERP Central Component
- SAP enhancement package for SAP ERP
Parallel ledger currency, Leading ledger, Non-leading ledger, company code, index currency , KBA , FI-GL , General Ledger Accounting , FI-GL-FL , Flexible Structures , How To
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SAP Simple Finance - Ledger Management
In SAP Simple Finance, you can use multiple ledgers in parallel. Ledgers are used to generate different financial statements as per accounting principles. Ledgers are defined in Customizing for Financial Accounting New.
To create a ledger, navigate to Financial Accounting (New) → Financial Accounting Global Settings (New) → Ledgers → Ledger.
When a ledger is created, the system automatically creates a ledger group with the same name.
Types of Ledger
In SAP Simple Finance system, there are two types of Ledger −
Leading Ledger
You have to define one ledger as the leading ledger and in the standard system leading ledger is 0L . The leading ledger is assigned to all the company codes. A Leading ledger contains the same setting like currencies, fiscal year variant, and posting period variant that apply to the company code.
It is also possible to define a secondary and third currency for each leading ledger. Navigate to SPRO → IMG → Financial Accounting Global Settings (New) → Ledgers → Ledger → Define Currencies of Leading Ledger.
Non-Leading Ledger
Non-Leading ledgers are also called extension ledgers . Non-Leading ledgers are based on local accounting principles. You can perform assignment of Ledger to Company code from the ledger menu.
Navigate to SPRO → IMG → Define Settings for Journal Entry Ledger and Currency Type.
In Customizing, you have to set up the ledger and assign it to the company code. Assume that there is a company code with assignment to Ledger N1 non-leading ledger, we also assign ledger A1 for the company code.
You can display this in the financial table - ACDOCA. Enter the transaction code SE16n in Transaction box → Press ENTER key. Enter the table name - ACDOCA and see the display.
Let us say you have to create financial statements as per IAS Accounting and individual company codes has local accounting principles such as US GAAP.
You can create following Ledger types −
Ledger 0L − You can create a Leading Ledger to manage as per group accounting principle.
Ledger L1 − You can create a Non-leading Ledger that can be used to manage all company codes as per US GAAP.
IMAGES
VIDEO
COMMENTS
This ledger is updated in all company codes, that is, it's assigned to all company codes. The document numbers assigned in this ledger apply to all dependent ledgers.
Assign Accounting Principles to Ledgers and Company Codes Parallel Accounting and Currencies Sustainability Accounting Universal Component Breakdown Fiscal Year and Fiscal Year Variant Currencies Chart of Accounts (Two-System Landscape) Management Accounting and Margin Analysis Accounting and Financial Close Treasury Management Financial Operations
Assign company codes to the ledgers. Ensure that you assign all company codes to the leading ledger. Make the settings for currencies, the fiscal year variant, and the posting period variant. Assign accounting principles to the ledgers/company codes. There are two ways to handle parallel accounting: Using ledgers (recommended):
Structure Example Use A ledger is a central repository for accounting data. You define your ledgers in Customizing under Financial Accounting Financial Accounting Global Settings Ledgers Ledger Define Settings for Ledgers and Currency Types. When you create a ledger, the system automatically creates a ledger group with the same name. Structure
Assign Accounting principle to Ledger Group This is where we will work on. Tcode - FINSC_LEDGER. Let's get started step by step with pictorial representations for better clarity. Click Currency Setting for Company Code Click on "New Entries". Enter Company code - SC00 Currency type - 30 Currency - USD (client currency in SCC4)
How to check company code is assigned to leading ledger | Leading Ledger 0LT Code - FINSC_LEDGERSAP S4 HANA Finance | SAP Passion #FINSC_LEDGER #SAPS4HANAFin...
There is no option to change the leading ledger in Configuration Activity 'Assign Accounting Principles to Ledgers and Company Codes' in CBC. SAP Knowledge Base Article - Public. 3195490-How to assign leading ledger in CBC - S/4HANA Cloud. Symptom.
The assignment of an accounting principle to the ledger group means that each depreciation area is assigned indirectly to a ledger group. Features Each real depreciation area of a valuation (accounting principle) carries all values of its own financial reporting.
The leading ledger is integrated with all subsidiary ledgers and is updated in all company codes. In General Ledger Accounting, only one ledger must be specified as the leading ledger. The leading ledger is always a standard ledger. SAP Help, Wiki, Q&A and other resources for Leading Ledger
0 Former Member Dec 19, 2017 at 02:45 PM Assignment of company code to leading ledger 884 Views Follow RSS Feed Hi All, I am facing an issue while posting document in F-02. Getting error message "Company code is not assigned to leading ledger". Kindly advice if any configuration is missing. I am using SAP HANA. Thanks
In New G/L there is one leading ledger for each client that is valid for all company codes. An important decision you need to make is which accounting standard to use in the leading ledger. ... SAP provides the leading ledger 0L as standard. Example - A leading ledger "0L" for multiple companies codes 1000,2000,3000 & 4000. Non-Leading ...
You have a question regarding which currencies you can assign to your parallel ledgers. SAP Knowledge Base Article - Preview. 2473138-Parallel ledger currency assignment for a company code. Symptom. ... Leading ledger, Non-leading ledger, company code, index currency , KBA , FI-GL , General Ledger Accounting , FI-GL-FL , Flexible Structures ...
You can perform assignment of Ledger to Company code from the ledger menu. Navigate to SPRO → IMG → Define Settings for Journal Entry Ledger and Currency Type. In Customizing, you have to set up the ledger and assign it to the company code.
03-29-2010 0 Kudos You cannot assign the non leading ledger in the middle . Please request the SAP migration service. Show replies Former Member 03-25-2010 0 Kudos Dear, Use below path..... SPRO>Financial Accounting (New)>Financial Accounting Global Settings (New)>Ledger>Define and Activate Non-Leading Ledgers
1 - You should try to create a new ledger group specific for this new company code and assign it. But remember that new company code will assign to leading ledger (0L); 2 - You've to check with MM and SD teams how the posts can be done for specific ledger group. In the FI these posts only can be done by these two tcodes;
1. Your Leading Ledger Company code Fiscal year variant and Controlling area Fiscal year variant should be the same. 2. If you have the Non-Leading Ledger with a different fiscal year variant, then assign the 2nd (V3) fiscal variant to your 2nd company code in OB37. 3.
Assigning Company Codes to Non-Leading Ledgers 61 Views Follow RSS Feed Hi Friends, I am assigning Company Codes to Non-Leading Ledgers in the New GL configuration settings, but I am getting message with different types of options giving but I am not sure which one I need to select. I have attached for your reference.
This can be handled using the ledger approach. You can have a ledger for group financials with leading ledger and fiscal year variant from Jan to Dec. Than you set up a non leading ledger and for company A, you assign a fiscal year variant from Jan - Dec. Similarly in non leading ledger for company B, assign a fiscal year variant from April to ...
The case is one side which posts to non-leading ledger will use WBS elements for their services and would like to use WIP calculation with POC method RA. However they want to post it only to FI non-leading ledger. I checked KKA2 t-code RA for project but there is no ledger selection.