3530183 - Assigning Accounting Principles to Ledgers and Company Codes in SAP S/4HANA Cloud Public Edition: Details on Configuration in General Ledger Accounting and Asset Accounting

You are setting up your SAP S/4HANA Cloud Public Edition system and you want to make the correct settings for ledgers and accounting principles in general ledger and asset accounting.

SAP S/4HANA Cloud Public Edition 

General Information

Before you start your configuration process, decide on the number of ledgers that you need to activate during the initial scoping activities.

In most cases, SAP recommends activating two ledgers—either (0L and 2L for IFRS) or (0L and 3L for US GAAP). The decision to add more ledgers should be based on specific business requirements, keeping in mind that this will increase database volume.

Be aware that this is a one-time decision which cannot be reverted later.

All scope items that offer ledger-specific configuration options are visible in the scoping and can be selected for activation only during the initial scoping activities.

The following scope items are relevant for the deployment of ledgers:

Scenario	Ledger	Visibility in the initial scoping phase	Information messages that must be confirmed by the customer
J58: Accounting and Financial Close	0L (leading ledger)	Always active as part of each bundle (for example, EMC)	Your current scope does not contain a group ledger scenario (1GA: Accounting and Financial Close Group Ledger IFRS or 2VA: Accounting and Financial Close - Group Ledger USGAAP). • The following scenarios can be added only during initial scoping. If you want to add them after your initial scope has been finalized, your system has to be reprovisioned and your project reimplemented: 1GA: Accounting and Financial Close Gr. Ledger IFRS 2VA: Accounting and Financial Close - Gr. Ledger USGAAP 5HG: Asset Accounting - Add. Deprec. Area 5KF: Asset Under Construction – Add. Deprec. Area • Alternative fiscal year variant can only be used in the scenarios with more than one ledger. • The tax depreciation area in Asset Accounting is deployed only if local accounting principle is assigned on company code level. Are you sure you want to complete the activity without choosing any of these scenarios?
1GA: Accounting and Financial Close (IFRS)	2L (non-leading ledger)	Must be selected by the customer	This scenario can only be added or removed during initial scoping and activation. If you don’t select the scenario now but need it later, your system has to be reprovisioned and your project reimplemented. Important to Know: • You can only change the assignment of accounting principles to ledgers and company codes before the first posting in the system. You do this in the "Assign Accounting Principle to Ledger and Company Code" configuration activity. • Alternative fiscal year variants must be assigned to non-leading ledger. • The tax depreciation area in Asset Accounting is deployed only if the local accounting principle is assigned on company code level. • For parallel accounting purposes, you should assign the corporate accounting principle (e.g.IFRS) to the leading ledger 0L and your local accounting principle to your non-leading ledger 2L.
2VA: Accounting and Financial Close (USGP)	3L (non-leading ledger)	Must be selected by the customer	This scenario can only be added or removed during initial scoping and activation. If you don’t select the scenario now but need it later, your system has to be reprovisioned and your project reimplemented. Important to Know: • You can only change the assignment of accounting principles to ledgers and company codes before the first posting in the system. You do this in the "Assign Accounting Principle to Ledger and Company Code" configuration activity. • Alternative fiscal year variants must be assigned to non-leading ledger. • The tax depreciation area in Asset Accounting is deployed only if the local accounting principle is assigned on company code level. • For parallel accounting purposes, you should assign the corporate accounting principle (e.g.US-GAAP) to the leading ledger 0L and your local accounting principle to your non-leading ledger 3L.
5W2: Group Valuation	4G (non-leading ledger)	Must be selected by the customer	The ledger scenario Group Valuation can only be added during initial scoping, deletion after activation is non-supported. Important to Know: • The scope supported by the group valuation scenario listed in the SAP Notes 3100892 and 3093830 will be confirmed with this selection. • The accounting principle assignment to ledger 4G must be done after the initial content activation. You do this in the "Assign Accounting Principle to Ledger and Company Code" configuration activity. • This scenario will store the consolidated view on the intercompany business transactions.

Please keep the following points in mind for the decision on the available ledger scenarios:

1. The required ledger scenarios must be selected during initial scoping.
   
   
2. The activation of additional ledgers is not possible after initial content deployment.
   
   
3. Removal of ledgers that are already activated is not supported.
   
   
4. Removal of scope items that are already activated is not supported.
   
   
5. All company codes that are activated in the system must be assigned to the leading ledger (0L).
   
   
6. The assignment of company codes to non-leading ledgers can be deleted.
   
   
7. The accounting principle assignment must be changed after initial content deployment using customizing activity "Accounting Principle Assignment to Ledger and Company Codes" before any postings are recorded in the system.
   SAP recommends the following accounting principle assignment:
   a. The corporate accounting principle should be assigned to the leading ledger (e.g. IFRS, USGP).
   b. The local accounting principle should be assigned to the non-leading ledger on company-code level.
   i. Important: Only this assignment enables the deployment of depreciation area in Asset Accounting.
   ii. An alternative fiscal year variant (AFYV) must only be assigned to the non-leading ledger. The AFYV should be aligned with the local accounting principle.   
    
8. The system deploys the depreciation area in Asset Accounting automatically based on the accounting principle assignment in General Ledger.
   
   
9. The manual deletion of a depreciation area is not supported.
   
   
10. If a reassignment of accounting principles is required in a system with existing postings, customers can use the "Schedule Accounting Data Changes" app with the "Reset Transaction Data" job template. Please note that this functionality can be used in Development and Test systems but not in Production system. 
    
    If you run into the error FINS_ML_START013, please check SAP Note 3094192 - Error message FINS_ML_START013 in S/4HANA Cloud.
    
    
    

SAP Best Practice content is delivered in the following structure (the example illustrates the content for the following countries/regions: Germany, United States, and India)

General Ledger: Accounting Principle Assignment to Ledger and Company Code

Ledger	Company Code	Corporate AP (assignment at ledger level)	Local AP (assignment at company code level)	Fiscal Year Variant
0L	1010		DEAP	K4
0L	1710		USAP	K4
0L	1810		INAP	K4
2L	1010	IFRS	IFRS	K4
2L	1710	IFRS	IFRS	K4
2L	1810	IFRS	IFRS	K4
3L	1010	USGP	USGP	K4
3L	1710	USGP	USGP	K4
3L	1810	USGP	USGP	K4

 

Asset Accounting: Assign Valuation View to Accounting Principle

Accounting Principle	Valuation View
DEAP	0DE_0001
DEAP	0DE_0015
USAP	0US_0001
USAP	0US_0090
USAP	0US_0091
USAP	0US_0092
USAP	0US_0093
INAP	0IN_0001
INAP	0IN_0015
IFRS	0IFRS_0032
USGP	0USGP_0034

 

Asset Accounting: Define Depreciation Areas in Company Code

Company Code	Ledger	Depreciation Area	Valuation View
1010	0L	01 – Book Depreciation Area	0DE_0001
1010	0L	15 – Local Tax	0DE_0015
1010	2L	32 – IFRS	0IFRS_0032
1010	3L	34 – USGP	0USGP_0034
1710	0L	01 – Book Depreciation Area	0US_0001
1710	0L	90 - Federal Tax ACRS/MACRS	0US_0090
1710	0L	91 - Alternative Minimum Tax	0US_0091
1710	0L	92 - Adjusted Current Earnings	0US_0092
1710	0L	93 - Corporate Earnings & Profits	0US_0093
1710	2L	32 – IFRS	0IFRS_0032
1710	3L	34 – USGP	0USGP_0034
1810	0L	01 – Book Depreciation Area	0IN_0001
1810	0L	15 – Local Tax	0IN_0015
1810	2L	32 – IFRS	0IFRS_0032
1810	3L	34 – USGP	0USGP_0034

 

SAP recommends to reassign the accounting principles after the initial content activation and before any postings are recorded in the system. You do this using the "Accounting Principle Assignment to Ledger and Company Code" (103556) configuration activity.

The recommendation for each scenario available in SAP S/4HANA Cloud Public Edition is as follows:

Scenario 1: Ledger 0L (Configuration settings as recommended by SAP)

General Ledger: Accounting Principle Assignment to Ledger and Company Codes

Asset Accounting: Define Depreciation Area

 

Important to Know:

1. SAP Best Practice content should not be changed. The local accounting principle should remain assigned at company-code level. This assignment enables the deployment of tax depreciation areas in Asset Accounting.
   
   
2. An alternative fiscal year variant cannot be used if only one ledger is activated.

 

Scenario 2: Ledger 0L & Ledger 2L (IFRS) (Configuration settings as recommended by SAP)
General Ledger: Accounting Principle Assignment to Ledger and Company Codes
Asset Accounting: Define Depreciation Area

Important to Know:

1. The corporate accounting principle should be assigned to the leading ledger 0L (for example, IFRS). The corporate accounting principle will be valid for all company codes that are assigned to ledger 0L.
   
   
2. The local accounting principle should be assigned on company-code level. This assignment in General Ledger enables the deployment of tax depreciation areas in Asset Accounting.
   
   
3. An FYV must be assigned to a non-leading ledger for the local accounting principle.
   
   
4. When an additional country/region is activated at a later point in time, a local accounting principle for the respective country/region can be used.

 

Scenario 3: Ledger 0L & Ledger 3L (USGP) (Configuration settings as recommended by SAP)

General Ledger: Accounting Principle Assignment to Ledger and Company Codes

Asset Accounting: Define Depreciation Area

Important to Know:

1. You can only change the assignment of accounting principles to ledgers and company codes before the first posting in the system. You do this in the "Assign Accounting Principle to Ledger and Company Code" configuration activity. 

2. Alternative fiscal year variants must be assigned to non-leading ledger. 

3. The tax depreciation area in Asset Accounting is deployed only if the local accounting principle is assigned on company code level.

4. For parallel accounting purposes, you should assign the corporate accounting principle (e.g. USGP) to the leading ledger 0L and your local accounting principle to your non-leading ledger 3L. 

Scenario 4: Ledger 0L & Ledger 2L (IFRS) & 3L (USGP) (Configuration settings as recommended by SAP)

General Ledger: Accounting Principle Assignment to Ledger and Company Codes

Asset Accounting: Define Depreciation Area

 

Important to Know:

1. The corporate accounting principle should be assigned to the leading ledger 0L (for example, IFRS or USGP). The corporate accounting principle is valid for all company codes that are assigned to ledger 0L.
   
   
2. The local accounting principle should be assigned on company-code level. This assignment in General Ledger enables the deployment of tax depreciation areas in Asset Accounting.
   
   
3. An AFYV must be assigned to non-leading ledger for the local accounting principle.
   
   
4. When an additional country/region is activated at a later point  in time, the local accounting principle for the respective country/region can be used.
   
   
5. For each ledger that is activated in the system, additional steps are required during the monthly or annual closing activities.

 

Scenario 5: Activation of Group Valuation (Ledger 4G) in addition to leading ledger and non-leading ledger (Configuration settings as recommended by SAP)

General Ledger: Accounting Principle Assignment to Ledger and Company Codes

Asset Accounting: Define Depreciation Area

 

Important to Know:

1. There is no accounting principle assigned to ledger 4G as SAP Best Practice content.
   
   
2. If Group Valuation is activated, one additional non-leading ledger (2L or 3L) needs to be activated.
   
   
3. The corporate accounting principle should be assigned to the leading ledger 0L (for example, IFRS or USGP). The corporate accounting principle is valid for all company codes that are assigned to ledger 0L.
   
   
4. The local accounting principle should be assigned on company-code level. This assignment in General Ledger enables the deployment of tax depreciation areas in Asset Accounting.
   
   
5. A FYV must be assigned to a non-leading ledger for the local accounting principle (ledger 2L or 3L).
   
   
6. When an additional country/region is activated at a later point in time, the local accounting principle for the respective country/region can be used.
   
   
   
   

The following list describes some important checks that are run to prevent incorrect configuration settings regarding the accounting principle assignments together with an explanation of the related error messages that can occur:

1. All ledgers must have an accounting principle assigned
   • Error message in configuration activity: Accounting Principle cannot be empty for Ledger 4G CoCode XXXX (Message no. FINS_ACDOC_CUST616)
   • Error message for postings: Correct the Customizing settings for ledgers for the universal journal (Message no. FINS_ACDOC_CUST201 )
       
   
   
2. Only one local ledger is allowed to have a country-specific accounting principle assigned
   • Error message: Only one ledger can have local acctg principles on CoCode level assigned (Message no. FINS_ACDOC_CUST499)
       

3. Exactly one ledger must have a local accounting principle assigned at company code level

   • Error Message: No ledger configured for local accounting principles on CoCode level (Message no. FINS_ACDOC_CUST558)
       

4. Corporate Accounting principles IFRS or USGP cannot be assigned at company code level

   • Error message: Accounting principle IFRS cannot be assigned as local accounting principle (Message no. FAA_CFG_CHECK071)
   • Error message: Corporate acc principle IFRS cannot be assigned to local ledger 0L comp XXXX (Message no. FINS_ACDOC_CUST618 )
       
5. Rules for the assignment of multiple accounting principles
   • Error message: No multiple accounting principle assignment without leading ledger 0L (Message no. FINS_ACDOC_CUST537)
   • Error message: Assign accounting principle XXXX to leading ledger 0L as Corp AccPr (Message no. FINS_ACDOC_CUST557)
   • Error message: Accounting principle assigned to more than 1 ledger on company code level (Message no. FINS_ACDOC_CUST535)
       

Ledger Scenarios: Choosing the Right Combination for Your Business Needs

Assign Accounting Principles to Ledgers and Company Codes

KBA , FI-GL-GL-2CL , Basic Functions (Public Cloud) , FI-AA-2CL , Asset Accounting (Public Cloud) , How To

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