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7/28/2019 Fi Gl Manualaccruals
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© SAP AG 1
Accrual Engine&
Applications
Introduction for ConsultantsDanny Pannicke & Thomas Schachner, SAP
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© SAP AG 2
Note:
Some of the basic features of the Accrual Engine are explained with the help of an example in the chapter
‘Manual Accruals’.
SAP AG 2002
Content
Introduction: Accruals
Overview: Accrual Engine / Accrual Engine Architecture
Customizing the Accrual Engine
Customizing: Customer-Defined Accrual Methods
Customizing: Account-Determination
Debit and Credit Indicators
Applications that Use the Accrual Engine
Manual Accruals
z Example with screen shots
z Excursus: Status of Accrual Objects
z Reversal of Accrual Subobjects
z Working with Derived Accrual Types
z Customer-Defined Parameters
z Assignment Number and Automatic Clearing
Provisions for Awardsz Example with screen shots
Lease Accounting(Part of Leasing Solution - Separate Course)
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© SAP AG 3
Introduction:
Accruals
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© SAP AG 4
SAP AG 2002
1000
What Are Accruals?
800 1200 700 1100 500 1400 1100 800 1100 1100 1200
12,000
P e r i o d 1
P e r i o d 2
P e r i o d 3
P e r i o d 4
P e r i o d 5
P e r i o d 6
P e r i o d 7
P e r i o d 8
P e r i o d 9
P e r i o d 1 0
P e r i o d 1 1
P e r i o d 1 2
Given: Value + time interval Task: Distribute value over time interval
Simple Example:
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© SAP AG 5
SAP AG 2002
Simple Posting Example
D CP&L D C Accrual
12 000 (1)
800 (3) (3) 800
1 200 (4) (4) 1 200
1 000 (2) (2) 1 000
Accounting: Accruals = Periodic postings
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Accruals are necessary in many kinds of contracts, for example insurance contracts.
At the start of a year, the customer pays in advance the sum of 12,000 EUR as a premium for the whole year.
However, this value cannot be posted fully as revenue, as the insurance company has to “deliver” theinsurance during the course of the year.
Accordingly, a value of 1,000 EUR is posted as revenue each month.
At the end of the year, the full value of 12,000 EUR is then realized as revenue.
SAP AG 2002
Accrual Engine: Where Are Accruals Needed?
Contract business transactions:
Insurance, leasing etc.
Contract-like business transactions:
Bonds with fixed interests, magazine subscriptions etc.
Any periodic postings based on an amount or value:
Provisions for Awards
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© SAP AG 7
Overview:
Accrual Engine / AccrualEngine Architecture
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Contract-like data is transferred to the Accrual Engine.
The Accrual Engine makes periodic postings to Accounting based on this data.
SAP AG 2002
Accrual Engine: What it does
Accrual
Engine
Input:
Contract-like informationOutput:
Periodic postings
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The Accrual Engine is an engine and as such is not visible to the end user.
The Accrual Engine is surrounded by applications that define the business content and use the Accrual
Engine.
This can be compared with the engine in a car:
The driver works with the car, not with the engine itself.
In release 4.70, three applications use the Accrual Engine.
Accrual Engine applications are defined and delivered by SAP.
They cannot be defined by customers.
SAP AG 2002
Accrual
Engine
SDP
Leasing
Manual
Accruals
CRM
(future) IBS
Media(future)
...
Provisions for
Awards
Accrual Engine: A Generic Tool
Input
I n p u t
I n p u t Input
I n p u t
I n p u t
Output:
Periodic postings
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SAP AG 2002
Accrual Engine: Some Features
New component in MySAP Financials
Highly flexible tool
Storage of all relevant data
Input (contract-like information incl. history!)
Output (posted accruals)
Accrual Engine = ‘Accrual subledger’
Mass data processing, performance optimized
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SAP AG 2002
Accrual Engine: Benefits
Automated periodic calculation of accruals
No recurring entries with fixed values!
Automated periodic posting (self correcting!)
Simulation tools (e.g. future accruals)
Supports multiple GAAPs
Comprehensive reporting tools
Integration with BW (Business Information Warehouse)
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This diagram shows the interaction between the Accrual Engine (yellow) and the calling application (orange):
The calling application provides the user interface, which “speaks the business language of the end user”.
The Accrual Engine consists of 2 parts: Calculation and Posting
The Accrual Engine stores two types of data
y Basis Data
Contract-like master data (‘accrual objects’) and all information that is necessary for making accrual
postings is stored in the Accrual Engine as basis data.
Basis data is time-dependent.
y Posted Values
All accrual postings (opening posting, periodic accrual posting, closing posting) create documents in the
Accrual Engine that are known as Accrual Engine documents and update total records in the Accrual
Engine.The Accrual Engine documents are transferred to Accounting automatically .
In this transfer, different levels of summarization in Accounting are possible.
Of course, this kind of summarization has nothing to do with the total records in the Accrual Engine.
SAP AG 2002
Accrual Engine: Architecture
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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There are two main processes in the Accrual Engine:
y Process A: Creating accrual objects
The contract-like master data is stored as basis data (accrual objects) in the Accrual EngineThis basis data contain all relevant information that is necessary for making the accrual postings.
Depending on the settings in Customizing, it might be possible to make an opening posting when the object
is created.
The opening posting would post the total amount to be accrued to an accrual account.
y Process B: Starting a periodic posting run for a key date
Accrual objects are selected and the accruals are calculated for the relevant key date.
For example, 1,000 EUR is calculated as periodic accruals for key date 31 Jan. 2002.
In the posting part of the Accrual Engine, the delta to the accruals already posted is calculated and the delta
is posted as an Accrual Engine document to the Accrual Engine. This document is then transferred to
Accounting. In the first run, the value already posted is zero, meaning that 1,000 EUR is posted from the
accrual account to, say, a revenue account.
This delta logic means makes the Accrual Engine ‘self-correcting’ when changes are made to the basis data.
SAP AG 2002
Accrual Engine: Processes
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
Process A:
Create/
Change
Basis Data
Process B:
Calculate
and Post
Accruals
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The accrual method calculates the periodic accrual value for a key date.
For example, if you want to accrue 12,000 EUR between 01 Jan. 2000 and 31 Dec. 2000, the
‘Linear/periodically’ method would calculate the following values:y Key date = 31 Jan. 2000: 1,000 EUR
y Key date = 28 Feb. 2000: 2,000 EUR
y Key date = 31 July 2000: 7,000 EUR
y ...
SAP delivers several examples of accrual methods, including
y Linear/periodically
y Linear/daily
Customer can program their own accrual methods (more details later)
SAP AG 2002
Accrual Engine: Accrual Methods
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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The posting logic in the Accrual Engine is based on a delta logic:
y First periodic posting run with key date = 31 Jan. 2000:
Calculation yields 1,000 EUR. This full value of 1,000 EUR is posted
y Second periodic posting run with key date = 31 Mar. 2000:
Calculation yields: 3,000 EUR. As 1,000 EUR has already been posted, only the delta of 2,000 EUR is
posted
y Remark: If the first posting run was reversed before the second run, the full value of 3,000 EUR would be
posted. This ensures that exchange rate differences are avoided.
SAP AG 2002
Accrual Engine: Delta Logic
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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In the posting, two kinds of documents are created:
y Accrual Engine Document
This document is stored in the Accrual Engine
y Accounting Document
The Accrual Engine document is transferred to Accounting.
For creating the Accounting document, account determination is processed in the Accrual Engine
SAP AG 2002
Accrual Engine: Account Determination
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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The basis data (accrual objects) is contract-like master data.
It is time-dependent so that it can store a history of changes made.
The basis data is created with the purpose of storing all information about a contract that is needed for postingaccruals. For this reason, the basis data has an hierarchical structure that corresponds to contracts and contract
items. As the Accrual Engine is intended to be a generic tool, the basis data is not referred to as ‘contracts’.
Instead, it is described more abstractly as Accrual Objects. Contract items are called accrual subobjects.
Usually accruals are posted based on contract items. For this reason, the main information is contained in the
accrual subobjects.
An accrual object is uniquely identified in the Accrual Engine by a reference key.
This reference key is decoded in the user interface of the calling application, ‘Manual Accruals’ for example.
Accordingly, an accrual subobject is identified by a reference subkey
Example:
Manual Accruals defines the reference key to consist of the two dimensions:
y Accrual object type, such as ‘RENTING’ and
y Accrual object number, such as 00100.
The combination of these two fields, RENTING00100 is the reference key.
Note: The dimensions used to define an accrual object unique are dependent on the application. In the other
application, Provisions for Awards, the dimensions ‘award’, ‘granting date’ and ‘cost center‘ determine the
accrual object and not the accrual object type and accrual object number. The dimensions ‘accrual object
type’ and ‘accrual object number’ are therefore only used by the Manual Accruals .
SAP AG 2002
Accrual Engine: Structure of Basis Data
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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© SAP AG 18
Accrual objects have the following hierarchy structure:
Accrual object
y Accrual subobject
- Accrual item
The accrual object itself only links accrual subobjects.
It does not carry any information. In Manual Accruals, there is a 1:1 relationship between accrual objects and
accrual subobjects. The two terms can therefore be used synonymously.
The accrual subobject (header) contains the start-date and end-date (time interval) in which the accruals have
to be created. Examples: contract start-of-term and end-of-term.
It also links the dependent accrual items.
The accrual item is defined by the combination of
y Accrual type
Costs and revenues are different accrual types.y Accounting principle
The accruals can be different according to IAS or US GAAP
y The accrual items contain
y The value to be accrued
y The quantity to be accrued
y The accrual method (linear/periodically, linear/daily, ...)
The number of accrual items in an accrual subobject is not restricted.
It is therefore possible, for example, to accrue costs and revenues for an accrual subobject in parallel.
SAP AG 2002
Accrual Engine: Structure of Basis Data
Accrual Object
Accrual Subobject
Accrual Subobject
Accrual Subobject
Accrual Item
Assignment
Parameters
Cost center, business area, profit center, ...
Customer-defined fields like ‘Product Group’, ...
Start-date and end-date of time interval for accrual
Does not carry any information; links accrual subobjects
Each combination of
- Accrual Type (costs, revenues,...) and
- Accounting Principle (IAS, US GAAP, ...)
defines an Accrual Item:
The total value to be accrued, the total quantity to
be accrued and the Accrual Method
(linear/periodically, linear/daily) can be entered at
this level.
Header
...
Accrual Item
Accrual Item
...
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In addition to time-dependent master data, the Accrual Engine also stores the posted values, i.e. the accrued
values.
These posted values consist of
y Accrual Engine documents and
y Summary records
The Accrual Engine Documents are transferred to Accounting when they are posted.
Reconciliation with FI values is possible.
SAP AG 2002
Accrual Engine: Posted Values
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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A reporting tool is available for Accrual Engine summary records and Accrual Engine documents.
It is possible to simulate future values.
SAP AG 2002
Accrual Engine: Reporting of Posted Values
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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Technical Details:
Database Tablesin the
Accrual Engine
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This slide provides an overview of the database tables in the Accrual Engine.
The calculation part of the Accrual Engine had tables which contain the time-dependent master data for the
Accrual Objects. This data is also called basis data.
The the posting part of the Accrual Engine has tables for storing the posted values:
y The Accrual Engine documents
y Total values which contain the summarized values from the Accrual Engine documents.
The total values are stored for each fiscal year, but not at period level.
SAP AG 2002
Database Tables in the Accrual Engine
Accrual Objects
Basis Data Posted Values
Cutomizing Tables
Customizing Tables Customizing Tables
Accrual Engine (general)
Calculation Posting
T i me - De pe nde n t Ma s te r
Da ta ( ‘ Ba s i s Da ta ’ ) Acc r ua l
E n g i ne Doc u me n t s a nd
To ta l Va l ue s
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Overview of the database tables that contain transaction data (not: Customizing data).
ACEOBJ: Accrual Objects,
y GUID: Internal view of the Accrual Object
y REF_KEY: External view of the Accrual Object
Basis Data (time dependent):
y ACEDSOH: Accrual subobject header data
y ACEDSOI: Accrual subobject items
y ACEDSOP: Parameters of the accrual subobject
y ACEDSASSGMT: Assignment of the accrual subobject
Posted Values:y ACEPSOH: Copy of the header from the Accrual Engine basis data.
Contains technical information needed for posting.
y ACEPSOI: Total values at fiscal year level.
y ACEPSOIT: Accrual Engine documents.
SAP AG 2002
Database Tables in the Accrual Engine
ACEOBJACEDSOH
ACEDSOI
ACEPSOH
ACEPSOI ACEPSOIT
ACEDSASSGMT
Field Name Key
MANDT X
COMP X
BUKRS X
OBJID X
SUBID X
ACRTYPE X
ACCRULE X
DATE_TO X
DATE_FROM
AMOUNT
CURRENCY
QUANTITY
UNIT
ACRMETHOD
TIMESTMP
Field Name Key
MANDT X
COMP X
BUKRS X
OBJID X
REF_KEY
STATUS
Field Name Key
MANDT X
COMP X
BUKRS X
OBJID X
SUBID X
DATE_TO X
DATE_FROMVALITY_FROM
VALITY_TO
UNAME
CPUDT
CPUTM
REF_SUBKEY
STATUS
TIMESTMP
Field Name Key
MANDT X
COMP X
BUKRS X
OBJID X
SUBID X
UNAME
CPUDT
CPUTMDEACTDATE
REF_SUBKEY
STATUS
FIRSTYEAR
LASTYEAR
TIMESTMP
Field Name Key
MANDT X
COMP X
BUKRS X
GJAHR X
OBJID X
SUBID X
ACRTYPE X
ACCRULE X
CUMVALCAP
CUMVALACCR
VALCAPVALACCR
VALRETIRE
LASTEFFDATE
CURRENCY
TIMESTMP
Field Name Key
MANDT X
COMP X
BUKRS X
GJAHR X
OBJID X
SUBID X
ACRTYPE X
ACCRULE X
DOCNR X
VALCUM
VALTBPCURRENCY
TRANSTYPE
EFFDATE
POPER
RUNID
AWTYP
AWKEY
AWSYS
TIMESTMP
COMP X
BUKRS X
OBJID X
SUBID X
DATE_TO X
DATE_FROM
BUS_AREA
DATE_FROM
PROFIT_CTR
COSTCENTER
ORDERID
WBS_ELEMENT
ACEDSOPField Name Key
MANDT X
COMP X
BUKRS X
OBJID X
SUBID X
DATE_TO X
PARAM_NAME X
CONTENT
DATE_FROM
TIMESTMP
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Customizing theAccrual Engine
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SAP Easy Access does not contain an application menu for the Accrual Engine, as it is always used in the
context of the calling application (Manual Accruals, Provisions for Awards or Lease Accounting).
However, there is a Customizing menu for the Accrual Engine.
The major Accrual Engine Customizing activities are also available in the Customizing menu for the calling
applications.
SAP AG 2002
Accrual Engine: Customizing
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Some Customizing settings in the Accrual Engine are made separately for each calling application.
When users start Customizing activities in this way, a popup appears asking them to specify the calling
application. The calling applications are called ‘Application Component of the Accrual Engine’.
In release 4.70, there are three application components:
y ACAC: Manual Accruals
y FILA: Lease Accounting
y SOA: Provisions for Awards
These Applications components are described in the following slides.
SAP AG 2002
Accrual Engine: Customizing
F 4
S t a r t
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There are quite many customizing activities for the Accrual Engine, but only a few of them are really
interesting for most customers.
In addition to the customizing activities of the Accrual Engine, there are usually also some customizingactivities to be done in the corresponding application (Manual Accruals, Provisions for Awards, etc.).
SAP AG 2002
Accrual Engine: Important Customizing Activities
Assign company codes to the Accrual Engine
Define accounting principles and
Assign accounting principles to company codes
Define accrual types (costs, revenues etc.)
Define accrual methods (linear etc.); separate chapter!
Define posting control (summarization etc.)
Define number ranges for accrual postings (4 different number
ranges!)
Define account determination; separate chapter!
Additionally: IMG activities specific for the application
component of the Accrual Engine, e.g.:
Manual Accruals:z Define accrual object types (Insurance, Renting etc.)
z Define number ranges for accrual objects
Provisions for Awards:
z Define RFC destination for data transfer from HR system
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Red: Important customizing activities of the Accrual Engine.
Most of the customizing activities of the Accrual Engine are also available in the customizing of the
application components like “Manual Accruals” or “Provisions for Awards”.
SAP AG 2002
Accrual Engine: Important Customizing Activities
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Many messages which can occur in applications, offer a direct link to the corresponding customizing
transactions.
SAP AG 2002
Accrual Engine: Customizing, Link from Messages
L o n
g t e x t
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Customizing:Customer-DefinedAccrual Methods
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SAP AG 2002
Customizing: Customer-Defined Accrual Methods
SAP delivers a number of accrual methods:
Linear, periodically
Linear, daily with 365 days
Linear, daily with 360 days
...
Accrual methods are ordinary function modules
Customers can define (program) their own accrual
methods
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Accrual method ‘Linear’ is assigned to function module ACE_DS_METHOD_LINEAR_P1.
This function module calculates the periodic Accruals at posting period level using the fiscal year variant of
the company code.
SAP AG 2002
Customizing: Customer-Defined Accrual Methods
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Customers can develop (program) their own accrual methods by creating corresponding function modules.
These new function modules should be entered in IMG activity ‘Develop Function Modules for Accrual
Methods’.After this has been done, these new function modules are available in F4 help for the ‘Function Module’ field
in IMG activity ‘Define Accrual Methods’.
These customer-defined function modules can read data from other SAP modules to get information needed
to calculate accruals.
SAP AG 2002
Customizing: Customer-defined Accrual Methods
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The function modules that are used as accrual methods must have a certain interface. This interface is the same for all accrual
methods.
The function module (accrual method) is called during the periodic accrual run for each accrual item (combination of accrual type and
Accounting principle) separately
Description of the interface:y Import parameters:
- Import structure IS_ACE_KEY
Unique key of the accrual item.
- Import table IT_GENERAL_PARAMS
Complete history of the accrual item including accrual object header data.
- Import table IT_PARAMS
Complete history of the parameters of the accrual subobject (ACEDSOP table entries).
- Import table IT_COMP_SIMUPARAM_RANGES
In simulation mode (possible in reporting e.g. in application component ‘Provisions for Awards’) this table can contain
parameters for simulation that were entered by the user.
E.g. User can enter a simulation version which can then be evaluated by the function module.
y Change parameters:
- Change table CT_PERIOD_VALUE
In this table, the fields
valact (value that has to be accrued from DATE_FROM until DATE_TO)
vaLcum (value for the time before DATE_FROM)
valremain (value that remains to be accrued after DATE_TO)
have to be filled. The values have to be calculated in the currency key that is given (filled by the system) in this table!
It is also possible to display interim results in the final list of the periodic accrual run by creating the customer include
CI_ACCRUAL_CALC_VARIABLES with fields for the interim results. These fields can then be filled too and are
automatically displayed in the results list of the periodic accrual run.
y Export parameters:
- Export table ET_RETURN
If messages occur in the function module, they should be stored in this table.
SAP AG 2002
Customizing: Customer-Defined Accrual Methods
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Customizing:Account Determination
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The meaning of Start Account and Target Account depends on the process in the Accrual Engine, e.g.:
y Opening posting
In the opening posting, the target account is the accrual account.The start account is any account.
y Periodic recognition
In the periodic accrual posting, the start account is the accrual account, the target account is usually a profit
and loss account.
SAP AG 2002
Customizing: Account Determination
When posting Accruals, Accrual Engine documents are created in the
Accrual Engine. These documents consist of only one line item without
GL accounts and without CO assignments like cost center etc.
When the Accrual Engine documents are transferred to Accounting
(which is usually done automatically when they are posted), an
Accounting document with two line items is created from the Accrual
Engine document.
At this point in time, the Accrual Engine account determination is
executed to get the following information:
Start account
Target account
Document type
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SAP AG 2002
Customizing: Account Determination
The customizing of the account determination is done in two steps:
Define the customizing tables for the account determination
The customer can define himself, which dimensions determine the accounts
and document type!E.g. the ‘Process in the Accrual Engine and accrual type determine the start
and target account
Create customizing entries in these self-defined customizing tables!
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Defining the customizing tables of the account determination.
In this example, the start and target accounts depend on the ‘process in the Accrual Engine’ and on the
‘accrual type’. The account determination can consist of more than one step:
For each step a separate customizing table can be defined.
In this example, two steps are used:
y In the first step ‘Document Type’ the document type is determined.
y In the second step ‘Accounts’ the start and target accounts are determined.
Additionally, for each step conditions and attributes can be defined. Please read the F1-helps on the
corresponding fields to get more information.
The account determination uses a generic tool, the so-called ‘derivation tool’.
In this tool, the single steps (customizing tables and conditions and attributes) are called ‘derivation rules’ andthe entries in the customizing tables are called ‘rule values’.
Please don’t be confused about this.
SAP AG 2002
Customizing: Account Determination
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The entries in the customizing tables can be created in the same transaction using the button ‘Maintain Rule
Values’.
SAP AG 2002
Customizing: Account Determination
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SAP AG 2002
Customizing: Extended Account Determination
In addition to the ordinary account determination, there exists also a so-
called ‘extended account determination’.
Both of these account determinations use the same derivation tool!
Only difference: The extended account determination offers more
features than the simple account determination.
Basis idea of the extended account determination is explained in the
following example:
Accruals have to be done in a lot of company codes.
In all companies, the same logic is to be used to derive the accrual accounts.
Problem: The accounts depend on the chart of accounts, but the chart of
account is different in each company code.
Solution:
z Do not derive the accounts directly, but derive only account symbols.
z In a second step of the account derivation, derive the account from account symbol
and chart of accounts!
z This two-step logic can be done in the extended account determination.
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Debit and CreditIndicators
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The value of the Accrual Engine document is posted to the target account.
The value with opposite sign is posted to the start account.
SAP AG 2002
Debit and Credit Indicators in Accrual Postings
Postings which are done by the Accrual Engine create at least two kind
of documents:
Accrual Engine documents
Accrual Engine documents are stored in the Accrual Engine and eachdocument consists of one line item only: This line item contains the
information which value was accrued for which accrual object in which
period.
Accounting Documents
The Accrual Engine document is automatically transferred to Accounting.
During this transfer from each Accrual Engine document two line items are
created in the Accounting document.
The account determination yields the necessary two accounts: Start and
target account:
Accrual Engine document: 100 EUR
- 100 EUR to start account
100 EUR to target account
Accounting document
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This example could be the periodic accrual posting for accrual of costs:
The target account would be a cost account and the credit account would be the accrual account.
For accrual of revenues, the debit and credit indicators should be opposite!This can be achieved in two ways:
y Enter a negative value as ‘total amount to be accrued’, instead of a positive value or
y Enter the opposite accounts in the account determination, e.g. for the periodic postings:
Enter the accrual account as target account and the revenue account as start account.
SAP AG 2002
Debit and Credit Indicators in Accrual Postings
The debit and credit indicators are determined from the sign of the
Accounting line item:
If the value is > 0, then the debit indicator is set,
If the value is < 0, then the credit indicator is set.
Accrual Engine document: 100 EUR - 100 EUR to start account
100 EUR to target account
Accounting document
Credit: 100 EUR to start account
Debit: 100 EUR to target account
Accounting document
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Applications that Usethe Accrual Engine
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In release 4.70, three applications use the Accrual Engine.
SAP AG 2002
Applications that Use the Accrual Engine
Manual Accruals
Provisions for Awards
Lease Accounting
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‘Manual Accruals’ is a simple application that provides a user interface for working with the Accrual Engine.
Note:
Most features shown in the following slides are features of the Accrual Engine and are therefore validfor all application components in the Accrual Engine, not just for ‘Manual Accruals’.
Manual Accruals
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SAP AG 2002
Manual Accruals: Overview
Purpose: Post accruals for contract-like data
Create ‘contract data’ (accrual objects) manually in the Accrual Engine
Start periodic accrual posting runs
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The user interface for ‘Manual Accruals’ enables the end user to create accrual objects manually in the
Accrual Engine.
Note: Users can also create and change accrual objects in batch jobs using function modules. These functionmodules are:
y ACAC_OBJECT_CREATE_EXT for creating an accrual object and
y ACAC_OBJECT_MODIFY_EXT for changing an accrual object. If the Accrual Object does not yet exist,
it is created.
y Customers can generate a report that selects contract-like data from any DB table and calls on the above-
mentioned function modules to create the accrual objects.
SAP AG 2002
Basis Data (Accrual Objects)
Accrual
MethodTrigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
ReportingReporting
Manual Accruals
Create
Accrual Objects
Manually
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SAP AG 2002
Manual Accruals: Interface for Creating AccrualObjects
In the application component ‘Manual Accruals’, accrual objects are
created manually, but SAP also deliveres an interface for creating
accrual objects.
Customer can develop a report to create accrual objects using thisinterface. The report would have to work in the following way:
Select contract-like data which have to be accrued.
The data can be selected from any source!
Transform the selected data into the format that is needed by the interface.
Save the transformed data as accrual objects in the Accrual Engine.
SAP is planning to deliver an example report.
The interface is the function module ACAC_OBJECT_MODIFY_EXT.
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SAP AG 2002
Manual Accruals: Basis Data Structure
Accrual Object
Accrual Subobject
Accrual Item
Assignment
Parameters
Cost center, business area, profit center, ...
Customer-defined fields like ‘product group’, ...
Start-date and end-date of time interval for accrual
Defined by the Accrual Object Type / Accrual Object Number combination
Each combination of
- Accrual Type (Costs, Revenues,...) and
- Accounting Principle (IAS, US GAAP, ...)
defines an accrual item.
The total value to be accrued, the total quantity to
be accrued and the Accrual Method(linear/periodically, linear/daily) can be entered at
this level.
Header
Accrual Item
Accrual Item
...
1:1
In Manual Accruals, an accrual object is uniquely defined by the following two dimensions:
y Accrual object categoryExample: Insurance, Renting, ...
y Accrual object number
This number is automatically set by the system.
Actually, the Accrual Engine supports a two-level hierarchy in the basis data: accrual objects and accrual
subobjects.
y Manual Accruals does not use this hierarchy. In this sense, the accrual object and the accrual subobject
are identical: When an accrual object is created, the system creates exactly one accrual subobject. Hence
in the context of Manual Accruals the terms ‘accrual object and accrual subobject’ are synonyms. In
some of the following slides and examples we will use the term ‘accrual object’ instead of ‘accrual
subobject’.
y Remark: Provisions for Awards uses the two-level hierarchy: Each vesting period (the vesting date)
defines an accrual subobject.
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The application menu for Manual Accruals consists mainly of the following transactions:
Accrual object maintenance.
Create/change/display basis data.
Start periodic posting run.
Reporting: Display summary records or line items in the Accrual Engine (Accrual Engine documents). Either
posted values or simulated values can be displayed.
Corrections:
y Reverse periodic posting run:
If the user wants to post full values for each period - instead of deltas - the last periodic posting run can be
reversed. This technique can be used to avoiding exchange rate fluctuations.
y Transfer Accrual Engine documents to Accounting:
If errors occur, for example in the periodic posting run, due to locked cost centers or errors in accountdetermination, only Accrual Engine documents are created and these cannot be transferred to Accounting.
These Accrual Engine Documents have to be transferred to Accounting using a separate transaction.
SAP AG 2002
Manual Accruals: Application Menu
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Further functions in the Accrual Engine:
Reconciliation
Reconciliation between the Accrual Engine and Financial Accounting (General Ledger)
Carryforward
The summary records in the Accrual Engine are stored for each fiscal year separately. Fiscal years can be
locked in the Accrual Engine: Only two fiscal years are usually open for accrual postings. At the end of each
fiscal year, the summary records must be carried forward within the Accrual Engine. This carryforward does
not create postings in Accounting.
SAP AG 2002
Manual Accruals: Application Menu
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Manual Accruals Customizing consists mainly of Customizing activities from Accrual Engine Customizing.
Only the activities
y Define Accrual Object Categories and
y Define Number Ranges for Accrual Objects and
y Assign Accrual Object Category Parameters
The meaning of the first two activities is clear: The accrual object category and the accrual object number
define an accrual object uniquely.
The third activity enables the end user to enter freely defined characteristics (fields) when an accrual object is
created. These fields can then be used in account determination when Accrual Engine documents are
transferred to Accounting and they can also be used in the accrual method for calculating the accrual value in
the periodic posting runs. Manual Accruals Customizing is not a replica of Accrual Engine Customizing. However, it does contain the
major Customizing activities from Accrual Engine Custommizing. For special features, Accrual Engine
Customizing has to be used.
SAP AG 2002
Manual Accruals: Customizing
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Manual Accruals:Examples
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Data from this example will be entered as an accrual object (see next slide).
SAP AG 2002
Manual Accruals: Sample ‘Insurance Contract’
Contract data:
Valid from 01 Jan. 2000 until 31 Dec. 2004 (5 years)
Annual premium (to be paid by customer): 3,600 EUR
Revenues: Customer pays 5 x 3,600 EUR = 18,000 EUR
Costs: Salesman gets 6,000 EUR bonus
Costs and revenues must be accrued over 5 years
Monthly revenues: 300 EUR = 18,000 EUR / (5 x 12)
Monthly costs: 100 EUR = 6,000 EUR / (5 x 12)
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Screenshot of the transaction for creating accrual objects.
On the left, a tree displays acrual objects that have already been created.
On the right, details are displayed for the accrual object.
The four frames in the detail screen have the following meaning:
y The accrual object type and accrual object number define the accrual object / subobject
y The assignment for the posting in Accounting
y The start-date and end-date of the time interval
y Two items: revenues according to IAS and costs according to IAS.
Both will be accrued using the linear method.
y Not visible: Parameters. No parameters are used in this example.
Parameters like ‘product group’ could be entered for use in account determination, for example.
If an opening posting has to be made (Customizing accrual types), the system displays a popup to enter
posting parameters when saving.
SAP AG 2002
Manual Accruals: Create Accrual Object
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At saving, the system sets the accrual object number.
It is also possible to define an external number range in the customizing of the accrual object number.
Then the user has to enter the accrual object number manually!
Remark: Actually, the right screen displays the data of the accrual subobject , but in the context of Manual
Accruals, there is always only one subobject and hence we are using the terms ‘accrual object’ and ‘accrual
subobject’ as synonyms, as already said before.
SAP AG 2002
Manual Accruals: Accrual Object and Subobject
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The accrual object (not: subobject) itself does not contain any information. It only links the accrual subobjects
(exactly one in the case of Manual Accruals).
The accrual object is a link only and it can be displayed by ‘Goto -> Display Technical Data’: A popup withtechnical information for the accrual subobject appears. It displays also the corresponding accrual object:
An accrual object is uniquely defined by a so-called reference key (‘External reference of the accrual object’).
In the case of Manual Accruals, the reference key consists of the combination of
y accrual object type and
y accrual object number.
Also the accrual subobject is defined by a reference key (‘External reference of the accrual subobject’).
In the case of Manual Accruals this reference key is alsways set to ‘1’
For both reference keys there is also an internal format which is used for internal purposes in the Accrual
Engine.
SAP AG 2002
Technical Background: Accrual Object and Subobject
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Red indicates the corresponding data.
The Basis Data is time-dependent master data!
SAP AG 2002
Manual Accruals: Architecture
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of Accruals
Periodic:
Calculate Accruals
Calculation
Create/Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already postedvalues
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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Red indicates the corresponding data.
The ‘Postings’ tab strip contains the Accrual Engine documents.
The ‘Totals’ tab strip contains Accrual Engine totals that are the summarized Accrual Engine documents.
SAP AG 2002
Manual Accruals: Architecture
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of Accruals
Periodic:
Calculate Accruals
Calculation
Create/Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already postedvalues
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Calling Application
R
Accrual Engine
Reporting Reporting
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When displaying an accrual object, the system automatically calculates the periodic accruals and displays
them.
SAP AG 2002
Manual Accruals: Create Accrual Object
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The system displays the opening posting (Accrual Engine document).
There are usually also follow-up documents in Accounting.
They can be displayed by double-clicking on the Accrual Engine document (see later). Note that the Accrual Engine document (Entry in database table ACEPSOIT) does not contain any
Accounting-relevant information: CO assignment and Accounts are derived by the system when the Accrual
Engine document is transferred to Accounting:
y CO Assignment:
The CO Assignment is part of the master data of the accrual object
y Accounts
The Accrual Engine has an account determination that determines the accrual account and the cross-
account
During transfer of an Accrual Engine document to Accounting, a two-lined Accounting document is createdfrom the Accrual Engine document (entry and cross entry).
Summarization:
The Accounting document is created by a BAPI. Before the BAPI is called by the Accrual Engine, a
summarization of a bunch of two-lined Accrual Engine documents is possible (Customizing).
SAP AG 2002
Manual Accruals: Opening Postings
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The preceding slides display postings and calculated values for accrual type ‘RVNUES’ were displayed.
This slide shows how to switch the display of postings and calculated values from RVNUES to COSTS.
After double-clicking on accrual type ‘COSTS’, the user can click on the ‘Calculated Values’ or ‘Postings’
tab strips: The system will display the corresponding data for accrual type ‘COSTS’.
SAP AG 2002
Manual Accruals: Navigation
Place cursor
in ‘COSTS’ line
and double-click
or
press ‘Transfer
Accrual Item’
button
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The opening posting for Accrual Type COSTS.
SAP AG 2002
Manual Accruals: Opening Postings
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By double-clicking on the Accrual Engine document, you can display a popup with the Accounting
documents that were created from this Accrual Engine document.
Note that the Accounting document might contain summary values from many Accrual Engine documents if asummarization was active in the Accrual Engine when the Accounting document was created.
SAP AG 2002
Manual Accruals: Documents in FI
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For accrual types RVNUES and COSTS, opening postings are made.
The accounts are determined by Accrual Engine account determination when Accrual Engine documents are
transferred to Accounting. Note: The Accrual Engine cannot post to customer or vendor accounts. It can only to post general ledger
accounts. Opening postings cannot therefore be made directly to receivables or payables. They have to be
made to correction accounts, which are general ledger accounts.
SAP AG 2002
Manual Accruals: Opening Postings
D C Accrued Revenues
18,000 (I.1)
D C Accrued Costs
(I.2) 6,000
D CReceivables
(I.1) 18,000
D CPayables
6,000 (I.2)
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Screenshot of the entry screen for the periodic posting run.
The key date is the end of period 1/2000.
SAP AG 2002
Manual Accruals: Start Periodic Accrual Run
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Screenshot of the results list of the periodic posting run.
Since in every single period the values
y Revenues: 300 EUR
y Costs: 100 EUR
have to be posted, exactly these values are posted in 1/2000.
Two Accrual Engine documents were created, but one Accrual Engine document could not be transferred to
Accounting, as account 810010 has incorrect settings. This Accrual Engine document can be transferred to
Accounting subsequently using the following function in the application menu:
Manual Accruals -> Corrections -> Transfer of Accrual Engine Documents to Accounting.
SAP AG 2002
Manual Accruals: Result of Periodic Accrual Run
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This screenshot displays the accrual object after the periodic accrual run.
In addition to the opening posting, the periodic posting of 100 EUR is also displayed.
Not displayed: The periodic posting for the revenues of 300 EUR.
SAP AG 2002
Manual Accruals: Display Accrual Object after Periodic Accrual Run
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I.1 is the opening posting
P.1 is the posting made during the first accrual run for the revenues in 1/2000.
SAP AG 2002
Manual Accruals: Documents in FI
D C Accrued Revenues
18,000 (I.1)
(P.1) 300
D CReceivables
(I.1) 18,000
D CRevenues
300 (P.1)
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Now continue with the example: Skip one period.
In 3/2000 the values for 2/2000 and 3/2000 are posted.
SAP AG 2002
Manual Accruals: Posting Deltas
In each period, the following accruals are calculated:
Revenues (Accrual Type RVNUES): 300 EUR
Costs (Accrual Type COSTS): 100 EUR
In the first period (1/2000) these values were posted correctly.
Now let us assume that the customer forgets to carry out the accrual run in
2/2000.
The next accrual run is carried out in 3/2000.
The Accrual Engine then calculates that in 3/2000 the accrued values should
be:
Calculated Revenues: 3 x 300 EUR = 900 EUR
Calculated Costs: 3 x 100 EUR = 300 EUR
In 3/2000, the Accrual Engine then posts the difference between the
calculated values and the values already posted:Posted Revenues: 3 x 300 EUR - 300 EUR = 600 EUR
Posted Costs: 3 x 200 EUR - 100 EUR = 200 EUR
This is displayed in the next slide
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The system posts the delta of calculated value and previously posted values.
The delta is calculated using the total values which can be displayed in the ‘totals’ tab strip in the accrual
object master data. Possible problem: Exchange rate fluctuations.
Example (costs): Transaction currency is EUR. In Accounting all values are also stored in USD:
1/2000: Exchange rate EUR:USD = 1:1; Posted value: 100 EUR = 100 USD.
3/2000: Exchange rate EUR:USD = 1:2; Posted value: 200 EUR = 400 USD.
Conclusion: 300 EUR and 500 USD that do not reflect the current exchange rate 1:2. Instead of 500 USD it
should be 600 USD.
Solution: Reverse the accrual run from 1/2000 before the next accrual run is started. The system would then
post the full value of 300 EUR in 3/2000 with the exchange rate of 1:2.
SAP AG 2002
Manual Accruals: Posting Deltas
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This example is described in detail in the following slides.
SAP AG 2002
Manual Accruals: Changing the Accrual Object
Let us make the example more complex: Change to total costs which are to be
accrued:
On 31 March 2000, the following costs had already been accrued: 3 x 100 EUR =
300 EUR
On 15 Feb. 2000 the premium for the salesman is raised from 6,000 EUR to
9,000 EUR
When changing the total costs to be accrued from 6,000 EUR to 9,000 EUR, the
opening posting of 6,000 EUR is reversed and a new opening posting of 9,000
EUR is posted. Periodic costs are now calculated to be 9,000 EUR / (5 x 12) = 150
EUR
In the next periodic accrual run on 30 April 2000, Accrual Engine calculates thefollowing costs: 4 x 150 EUR = 600 EUR
On 30 April 2000, the Accrual Engine posts the delta of 600 - 300 = 300 EUR
automatically.
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The change of the costs to be accrued (from 6,000 EUR to 9,000 EUR) is valid from 15 Feb. 2000. The new
opening posting is made using this keydate for currency translation.
SAP AG 2002
Manual Accruals: Changing the Accrual Object
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When the user changes the total costs to be accrued from 6,000 to 9,000 EUR, the system reverses the
opening posting of 6,000 EUR and posts the new value of 9,000 EUR.
The reversal is carried out using the same currency exchange rate as in the original opening posting. The newopening posting is made using the exchange rate which is valid on the date of change.
SAP AG 2002
Manual Accruals: Changing the Accrual Object
D C Accrued Costs
(I.1) 6 000
D CCosts
6 000 (I.1)
(I.3) 9 0009 000 (I.3)
(I.2) - 6 000- 6 000 (I.2)
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The Accrual Engine documents which were posted as a result of the change of the total costs to be accrued
can be displayed in the master data of the Accrual Object.
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It is possible to display the history of the accrual object using menu function
Goto -> History.
Remark concerning changes:The last change is always valid until 31 Dec. 9999.
Example:
y 01 Jan. 2000 - 14 Feb. 2000: 6,000 EUR
y 15 Feb. 2000 - 31 Dec. 2000: 9,000 EUR.
If there was an additional change of the value on 10 Feb, 2000 to 7,000 EUR, this change would overwrite the
9,000 EUR completely. The result would be:
y 01 Jan. 2000 - 09 Feb. 2000: 6,000 EUR
y 10 Feb. 2000 - 31 Dec. 9999: 7,000 EUR
To adjust posted accruals in period 2 and/or 3/2000, the periodic accrual run had to be started again with run
type ‘repeat’.
It is therefore not advisable to carry out changes with a keydate in the past!
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Manual Accruals: Display History of Accrual Object
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The system calculates the periodic values based on the master data that is valid at the corresponding key dates
(last day of periods in this case).
The system calculates the values using the following algorithm:
y 1/2000 (31 Jan. 2000)
Valid master data: 6,000 EUR distributed over 5 x 12 periods gives 100 EUR in each period.
At the end of period 1/2000 100 EUR should be accrued.
y 2/2000 (29 Feb, 2000)
Valid master data: 9,000 EUR distributed over 5 x 12 periods gives 150 EUR in each period.
At the end of period 2/2000 2 x 150 EUR = 300 EUR should be accrued.
Since 100 EUR was accrued in period 1/2000, only the delta of 200 EUR is to be accrued in 2/2000.
y 3/2000 (31 Mar. 2000)
Valid master data: 9,000 EUR distributed over 5 x 12 periods gives 150 EUR in each period.
At the end of period 3/2000 3 x 150 EUR = 450 should be accrued.Since 300 EUR was already accrued in periods 1-2/2000, only the delta of 150 EUR is accrued in period
3/2000.
Note that the ‘Calculated Accruals’ tab strip displays calculated values only.
These values are independent of posted values.
Remember: No posting was made in period 2/2000.
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Manual Accruals: Changing the Accrual Object
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Next periodic run in 4/2000:
Calculated value (costs): 4 x 150 EUR = 600 EUR.
Already posted in 1+2/2000: 100 EUR + 200 EUR = 300 EUR.
The system now posts the difference of 600 EUR - 300 EUR = 300 EUR.
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The new postings in period 4/2000 are also displayed in the master data of the Accrual Object.
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Postings to Accounting in 4/2000 due to the periodic accrual run.
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Manual Accruals: Changing the Accrual Object
D C Accrued Costs
D CPayables
(I.1-3) 9,000
9,000 (I.1-3)
D CCosts
300 (P.3)(P.3) 300
200 (P.2)(P.2) 200
100 (P.1)(P.1) 100
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SAP AG 2002
Manual Accruals: Totals
The Accrual Engine stores Accrual Engine documents and totals.
One total record exists for each year.
Accrual Engine Customizing: Only 2 years can be open for periodic
accrual postings.
Usually, only the currentyear is open, while the
previous year might also still
be open for closing entries
Creating an accrual object:
A total record is created
for each year that is open.
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In the example: Years 2000 and 2001 are open.
A summary record is therefore created for each of these years.
The opening posting is made year 2000.The posted value of 9,000 EUR is automatically carried forward to the next year 2001 in the Accrual Engine.
This carryforward has nothing to do with the carryforward in Accounting.
SAP AG 2002
Manual Accruals: Totals
Automatic
carryforward
to year 2001
Openingposting in year
2000
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The carryforward program can be found in the application menu in the folder Accounting -> Financial
Accounting -> General Ledger -> Periodic Processing -> Closing.
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Manual Accruals: Carryforward
At the end of the year, a fiscal year change program (carryforward) must
be started in the Accrual Engine.
This program creates total records for the new fiscal year for all accrual
objects for which a corresponding record does not yet exist.
This carryforward does not lead topostings in Accounting
The carryforward also increases
the ‘current year’ in Accrual Engine
Customizing.
In the example: The carryforward
program need not to be started at the
end of fiscal year 2000, since a
total record already exists for 2001.
However, it does have to be started at the
end of 2001. Of course, it is advisableto execute the carry forward at the end
of each fiscal year.
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SAP AG 2002
Manual Accruals: Deactivating an Accrual Subobject
Let us assume that a customer quits an insurance contract before it
ends.
The contract was supposed to run from 1/2000 until 12/2004, but
customer quits in 6/2001.
To stop accrual postings in 6/2001, the accrual subobject is deactivatedon 06/30/2001.
The total costs to be accrued were 9,000 EUR.
At the end of 6/2001, 150 EUR x (12 + 6) = 2,700 EUR had been accrued.
The rest: 9,000 EUR - 2,700 EUR = 6,300 EUR may not be accrued any
more. Accordingly, the remaining revenues of 18,000 EUR - 300 EUR x
(12 + 6) = 12,600 EUR may not be accrued any more.
In Customizing for the accrual types (COSTS and RVNUES), customers
can determine what happens with the remaining values. They have two
options:
Do nothing with the remaining values after deactivation. Simply stop postingperiodic accruals.
When deactivating the accrual subobject, perform a closing posting and post
the remaining costs and revenues to a different account.
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Deactivating the accrual subobject changes the status of the accrual object to ‘Finished’. This means that no
more accrual postings will be made for dates after the deactivation date.
A key date always has to be entered for the deactivation, since he status of the Accrual Object will be changedto ‘finished’ on this date.
Remember: The master data of the Accrual Object (Basis Data) is time-dependent.
A period and fiscal year only have to be entered if a closing posting is made.
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Manual Accruals: Deactivating an Accrual Subobject
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Display the closing posting (transaction rype ‘F’ - Final).
The remaining costs of 6,300 EUR are posted.
It is advisable to customize Accrual Engine account determination depending on the transaction type.
This example is complicated, as the total costs to be accrued are 9,000 EUR and at the date of deactivation
2,700 EUR = 150 EUR x (12+6) should have been accrued.
But in our example, the last periodic accrual run was done for 4/2000 instead of 6/2001. Therefore, instead of
2700 EUR, only 150 EUR x 4 = 600 EUR was accrued.
Solution: When the next accrual run is carried out with a key date > deactivation date, the missing value of
2,700 EUR - 600 EUR = 2,100 EUR is posted.
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Manual Accruals: Deactivating an Accrual Subobject
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Displaying the history of the header shows the change of the status.
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Manual Accruals: Deactivating an Accrual Subobject
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Periodic accrual run for 5/2001.
This date is before the deactivation date 30 Jun. 2001.
This is a ‘normal’ accrual run: Deactivation has no effect, since it lies in the future. Total costs to be accrued: 9,000 EUR.
Already accrued: 600 EUR.
Delta: 150 EUR x (12+5) - 600 EUR = 1,950 EUR.
Total revenues to be accrued: 18,000 EUR.
Already accrued: 1,200 EUR.
Delta: 300 EUR x (12+5) - 1,200 = 3,900 EUR.
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Manual Accruals: Deactivating an Accrual Subobject
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Accrual run for 31 Jul. 2001.
This date is after the deactivation date 30 Jun. 2001:
The accruals stop on 30 Jun. 2001: Total costs to be accrued: 9,000 EUR.
The last periodic accrual run was in 5/2001.
Accrual calculation stops in 6/2001. Because of this, only the delta of 150 EUR is posted.
If there was no deactivation, the delta for 2 periods 6/2001 and 7/2001 would be posted, i.e. 150 EUR x 2 =
300 EUR.
Accordingly, 300 EUR are posted for revenues.
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Manual Accruals: Deactivating an Accrual Subobject
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Totals and their meaning after deactivation of the accrual object:
Year 2000
9,000 EUR was posted as the opening posting600 EUR was accrued in periodic accrual runs
Year 2001:
The two amounts 9,000 EUR and 600 EUR were carried forward to year 2001
A further 2,100 EUR was accrued in 2100
At the time of deactivation, 6,300 EUR was posted as a final posting.
Summary:
Total value of accrued costs: 2,100 EUR + 600 EUR = 2,700 EUR
The sum of the total value of accrued costs and the final posting of 6,300 EUR is the total value to be accrued
(9,000 EUR):
2,700 EUR + 6,300 EUR = 9,000 EUR.This indicates that no further postings will be made for this accrual subobject
SAP AG 2002
Manual Accruals: Deactivating an Accrual Subobject
Final posting at
deactivation
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Excursus:Status of Accrual
Objects
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Status of Accrual Objects and Subobjects
D i s p. Tec h Da ta
The processing status can be set on two levels in the Accrual Engine:
on level of accrual object and
on level of accrual subobject .
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SAP AG 2002
Status of Accrual Objects
The status of an accrual object can have the following values:
‘In Process’
‘To Be Archived’.
The status of the accrual object usually is ‘In Process’.
The status ‘To Be Archived’ can be set by the transaction ‘Prepare
Archiving Session’:
The archiving session will archive only those accrual objects which
have the status ‘To Be Archived’.
Please refer to the documentation in the customizing and to the F1 help
for further information.
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SAP AG 2002
Status of Accrual Subobjects
The status of an accrual object can have the following values:
‘In Process’
‘Completed’
‘Stopped’
The status of the accrual object usually is ‘In Process’.
The status ‘Completed’ is set when the user executes the function
‘Deactivate Accrual Subobject’ (see chapter before).
The status ‘Stopped‘ means that no accrual postings are done as long
as this status is active. Setting this status is -up to now- supported only
by the Leasing application.
The history of changes of the status of the accrual object is recorded in
the basis data of the accrual engine.Exception: Setting the status ‘Stopped’ is not recorded in the basis
data.
Please refer to the F1 help of the status for further information.
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Reversal of AccrualSubobjects
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SAP AG 2002
Reversal of Accrual Subobjects
Let us assume that a customer wants to delete an accrual subobject.
As documents are normally created in Accounting for an accrual
subobject, the original documents (Accrual Engine documents) cannot
be deleted, since they are needed for the Audit trail, i.e. for explainingthe Accounting Documents. It is therefore not possible to delete accrual
subobjects.
Instead, customers have the option of ‘reversing’ accrual subobjects.
This reversal does the following:
All Accrual Engine documents that were posted for this accrual subobject
are reversed.
The total value and quantity to be accrued are set to zero for all accrual
items. The zero values are valid from the reversal date.
Consequence: No more accrual postings will be made for dates subsequent
to the reversal date.
Features of the reversal:
It is not possible to reverse accrual subobjects that have been deactivated.
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The reversal date (key date for reversal) must be entered in the popup.
If a period/fiscal year is entered manually - as displayed in the popup - the reversal postings in Accounting
will then be made in this period. This might be necessary if Accrual Engine documents are reversed, whichwould be posted in old - usually closed - periods.
Without entering a period manually, the system posts the reversal postings using the original key dates of the
Accrual Engine documents. It does not use the reversal date to post the reversal postings. This way, exchange
rate differences are avoided.
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Reversal of Accrual Subobjects
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Reversal Postings in the Accrual Engine
It is possible to reverse certain Accrual Engine documents
Reversal of periodic accrual runs
Reversal of complete accrual subobjects including all corresponding Accrual
Engine documents.
There is no ‘true’ reversal of Accrual Engine documents:
Reversals are new postings with reversed +/- signs.
Consequences:
The corresponding FI documents are not reversed. Instead, new FI
documents are created with reversed values.
The reversal documents are always created based on the basis data for the
accrual subobject that is valid at the key date of the posting.
Changes to the basis data should therefor be made for dates in the past.
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SAP AG 2002
Example of Reversal Posting
Carry out accrual posting (run) on 31 Jan. 2000.
The cost center in the basis data of the accrual object on this date is
CC01. In Accounting, the posting is made to cost center CC01.
The cost center is changed to CC02 on 15 March 2000 in the Basis Data.The next accrual posting run is carried out on 31 March 2000.
The corresponding posting in Accounting is made to this new cost
center CC02 as this cost center is valid on key date 31 March 2000.
Now reverse the two accrual postings:
The reversal posting for the first posting on 31 Jan. 2000 is posted to
cost center CC01, since cost center CC01 is still valid on key date
31 Jan. 2000. The reversal posting for the second posting on 31 March
2000 is posted to cost center CC02.
If the cost center had been changed on a different date, say 15 Jan.
2000,, the reversal posting on 31 Jan. 2000 would be posted to new cost
center CC02 instead of CC01.
Reason: In this case, the new cost center CC02 would be valid on 31
Jan. 2000.
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Working with DerivedAccrual Types
New Example
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Manual Accruals: Derived Accrual Types
Derived accrual types can be used for calculating accruals from
other accruals types.
(New) Example:
Customer gets a discount of 10 %
Discount: 18,000 EUR x 10% = 1,800 EUR
The discount must be treated differently according to IAS and HGB (German
GAAP):
HGB: Discount is posted once when the contract is created
US GAAP: Discount has to be accrued during the life of the contract.
The monthly accrual value is 1,800 EUR / (5 x 12) = 30 EUR
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SAP AG 2002
Manual Accruals: Example of Derived Accrual Types
According to US GAAP, additional accrual postings have to be made for the
discount.
These additional postings can be made with the help of derived accrual types using
the following rule:
“In US GAAP, the discount is calculated by taking 10 % of the revenues in HGB”.
The following activities have to be performed in Accrual Engine Customizing:
Create the new accrual type “DISCNT”
The above rule is entered in activity “Define Calculation rules for Derived Accrual
Types”.
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Derived accrual types are a special feature of the Accrual Engine.
Manual Accruals Customizing does not contain the corresponding Customizing activities. These can be found
in Accrual Engine Customizing.
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Manual Accruals: Customizing Derived Accrual Types
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Accrual type DSCNT is to be used as the derived accrual type.
This accrual type therefore has to be marked as ‘derived’ in Customizing activity ‘Define Accrual Types’.
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Manual Accruals: Customizing Derived Accrual Types
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Now the rule must be defined in order to specify how accrual values for accrual type DSCNT are to be
calculated.
In this example the rule stipulates:‘The discount according to accounting principle US GAAP is calculated from the revenues according to
accounting principle HGB by taking a certain percentage of of these revenues.’
The percentage itself is specified in a separate Customizing activity (see next slide).
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Manual Accruals: Customizing Derived Accrual Types
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Enter the percentages which are used for calculating the values for accrual type DSCNT.
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Manual Accruals: Customizing Derived Accrual Types
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When saving, derived accrual types are automatically added by the system.
The ‘derived’ flag indicates that is is a derived accrual type.
The total value to be accrued and the accrual method are not filled, as they are automatically adjusted if, for
example, the customized rule for calculating the derived values is changed.
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Manual Accruals: Derived Accrual Types
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The opening posting for derived accrual type DSCNT is made:
The posted value of 1,800 EUR is 10 % of the 18,000 EUR of the accrual type RVNUES.
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Manual Accruals: Derived Accrual Types
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Customer-DefinedParameters
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Concerning the use of parameters in BAdIs:
The Accrual Engine document is transferred to Accounting in two steps:
y Firstly, a two-line Accounting (preliminary) Document is created from the (one-line) Accrual Engine
document.
y Afterwards, these preliminary documents are summarized according to the Customizing settings in the
Accrual Engine.
In each of the two steps, a BAdI (user-exit) is available to modify the document (use transaction SE19 for
implementation):
y ACEPS_BAPIPREDOC_MOD
y ACEPS_BAPIDOC_MODIFY
In these BAdIs, the parameters can be read from the database and can be used for modifying the document.
SAP AG 2002
Customer-Defined Parameters
Customer-defined parameters are additional fields that can be entered
by users when creating or changing accrual objects
Customer-defined parameters are entered at the accrual subobject level
The values entered here can be used in
Accrual Methods
The parameters can contain additional information that can be used in customer-
defined accrual methods
Account Determination
The parameters can also be used in Accrual Engine account determination
BAdIs
Parameters can be used in BAdIs for modifying documents before they are
transferred to Accounting.
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In this example, the customer defined the parameter ‘Product Group’.
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Where Do Customer-Defined Parameters Appear in theUser Interface?
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SAP AG 2002
How to Define Parameters
Parameters are fields in DDIC structure ACAC_PARAMETERS.
This structure contains only one parameter, named ‘EXAMPLE’.
Additional (customer-defined) parameters can be created by adding the
corresponding fields to this DDIC-structure.
For this purpose, SAP has added the customer includeCI_ACAC_PARAMETERS to this DDIC-structure.
To create additional parameters, start transaction SE11 for data type
CI_ACAC_PARAMETERS and choose the ‘Create’. A popup now
appears, where you have to choose ‘Structure’ radio button.
Enter the parameters as fields. Note that the field names must start with
‘Z’ or ‘Y’.
Save and activate your entries.
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In this example, the additional parameter ZPR_GROUP (product group) is created.
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How to Define Parameters
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The new field ZPR_GROUP now exists in DDIC structure ACAC_PARAMETERS.
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How to Define Parameters
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After the field ‚ZPR_GROUP‘ was added to DDIC-structure ACAC_PARAMETERS, it must now be
assigned to the OBJECT types where this parameter is to be entered when creating/changing accrual objects.
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How to Define Parameters
F 4
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Parameter ZPR_GROUP is assigned to accrual object type ‘INSURANCE’. This means the following:
When an accrual object is created with object type ‘INSURANCE’ a value can be entered for the ‘Product
Group’ field (parameter).
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How to Define Parameters
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On the ‘Parameters’ tab strip press the ‘Enter Parameters’ button.
The parameters then appear and can be entered.
An F4-help is also available for the new parameter if a foreign key relationship or a search help is defined for the new field (ACAC_PARAMETERS-ZPR_GROUP) in structure ACAC_PARAMETERS.
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Entering Parameters
Choose
‘Enter Parameters’
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In this accrual (sub-)object, the value ‘HARDWARE’ is entered for parameter ‘ZPR_GROUP‘ (Product
Group).
Technically, the value of this parameter is stored in database table ACEDSOP.
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Entering Parameters
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Screenshot: A breakpoint has been set in the accrual method, i.e. in the Function Module that is assigned to
the Accrual Method in Customizing activity ‘Define Accrual Methods’.
The import table IT_PARAMS contains the parameters and their values. Note: The parameter values are time dependent (fields DATE_FOM and DATE_TO).
The content of table IT_PARAMS is not evaluated (used) by the accrual methods that are delivered by SAP,
but customers can program their own accrual methods and use the information provided in IT_PARAMS.
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Evaluating Parameter Values in Periodic Accrual Runs
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Parameters can also be used in Accrual Engine account determination.
To make the parameters available in the account determination, call up Customizing activity ‘Define
Customer Settings for Components’ and enter a DDIC structure that contains all parameters that you want tohave available in account determination. In our example we use the customer include
CI_ACAC_PARAMETERS.
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Parameters in Account Determination
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Once a DDIC-structure with the parameter has been entered in Customizing activity ‘Define Customer
Settings for Components’, this parameter can be used in defining Customizing tables for Accrual Engine
account determination.
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Parameters in Account Determination
F 4
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SAP AG 2002
Parameters for Other Components
The preceding slides described the procedure for creating additional
parameters for Manual Accruals.
For other applications (components) in the Accrual Engine, such asProvisions for Awards or Lease Accounting , the procedure for creating
additional parameters is almost identical to the procedure described for
Manual Accruals.
However, you should note the following differences:
The name of the DDIC structure is different to ACAC_PARAMETERS
Assignment of parameters to accrual object types is only necessary
in Manual Accruals
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The name of the DDIC structures to which the new parameters have to be added can be found in Customizing
activity ‘Make settings for components’.
This activity is not actually a Customizing activity, since it should be used in display mode only, for exampleto get the names of the DDIC structures mentioned above.
As can be seen in the screenshot, the name of the DDIC-structure for Provisions for Awards is not
ACAC_PARAMETERS, but ACE_SOP_PARAMETERS.
SAP AG 2002
Parameters for Other Components: DDIC Structure
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Assignment Number andAutomatic Clearing
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SAP AG 2002
Assignment Number: General
The assignment number in FI documents is usually needed to carry out
clearing automatically.
The assignment number can be useful for clearing postings to accrual
accounts if open item management is active for the accrual account.
Open posting (I.1) and periodic
postings (P.2 - P.4) should be
cleared after the last periodic
posting (P.4).
For this reason, the automatic
clearing (report SAPF124) is run
after posting (P.4).
Condition: All documents (I.1),
(P.2), ... (P.4) must contain the same
assignment number.
Problem: The Accrual Engine does not add the assignment number to
the Accounting documents.
D C Accrual Account
3,000 (I.1)
(P.3) 1,000
(P.4) 1,000
(P.2) 1,000
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Example:
y Customizing:
Create a customer-defined parameter ‘ASSGMT_NUMBER’.
y Creating an accrual object:
Enter the assignment number manually.
y Periodic posting run:
In the BAdI, read the parameter from database table ACEDSOP and add the value to field
CS_BAPI_PREDOC-LINEITEMS-ALLOC_NMBR.
SAP AG 2002
Assignment Number: How it can be entered
The Assignment Number is not entered in postings made by the Accrual
Engine, as this number should in principle be unique for each accrual
item, but then no summarization would be possible during transfer of
Accrual Engine Documents to Accounting.
As a result, the Accrual Engine does not enter the assignment number.
However, it is possible to fill the assignment
number using the BAdI (Business Add In)
ACEPS_BAPIPREDOC_MOD:
The customer has to define an implemation for
this BAdI in Customizing.
Parameter CS_BAPI_PREDOC-LINEITEMS
contains field ALLOC_NMBR (‘Assignment
Number’). This field can be filled by thecustomer when implementing the BAdI.
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‘Provisions for Awards’ is an application that uses the Accrual Engine.
This application can be used for posting provisions for granting stock options and such like:
The company grants stock options to selected employees.When the stock price of the company’s shares rises, the stock options gain value.
This value multiplied by the number of outstanding stock options leads to expected costs.
These costs are calculated using the Accrual Engine. They can then be posted as provisions.
Provisions for Awards uses the following applications:
y HR System
From HR, information concerning the number of outstanding stock options is transferred to the
y Accounting System (Accrual Engine),
where the provisions are calculated and posted. Customers can define their own methods (accrual methods)
for calculating provisions. SAP delivers two examples for calculating accruals according to US GAAP.
rules APB25 and FASB123.The APB25 method uses the share prices to determine the provisions. It selects the share prices from
y Treasury.
Provisionsfor
Awards
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The number of granted stock options is stored in HR.
‘Provisions for Awards’ is the Accounting part of the complete solution that also comprises the HR
application ‘Long-Term-Incentives’, which is part of Compensation Management in HR.
It is possible to use ‘Provisions for Awards’ without the HR part by transferring the number of outstanding
stock-options or other awards to the Accrual Engine using a customer-specific transfer program. Contact SAP
development for further information.
SAP AG 2002
Provisions for Awards: Overview
A company grants a number of stock options to selected employees
Purpose: Post provisions (= accruals) for the outstanding options.
To do this: Transfer information about outstanding optoins from HR
system to Accounting system (Accrual Engine)
Afterwards: Calculate and post provisions using the Accrual Engine
Different calculation (=accrual) methods are possible for calculating the
provisions: SAP delivers two examples as accrual methods:
APB 25 Provisions based on stock prices
FAS 123 Provisions based on Black & Scholes Model
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This slide shows how the different applications in the HR system and the Accrual Engine interact.
SAP AG 2002
Provisions for Awards: Architecture
Basis Data (Accrual Objects)
Accrual
MethodTrigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Transfer Data
to Accrual
Engine
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R RR
Accrual Engine
Reporting Reporting
HR-System
Outstanding Awards
Read HR DataR
Provisions for Awards
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The provisions are posted periodically. This means that two processes have to be carried out:
Process A
Transfer the number of outstanding awards from the HR system to the Accrual Engine. This must done atleast once, but it is advisable to do this periodically in order to update the number of outstanding awards in the
Accrual Engine.
The only difference to ‘Manual Accruals’ is that the accrual objects are not created manually, but are
transferred from the HR-System to the Accrual Engine.
Process B
Calculate and post accruals. In this case, the accruals are provisions.
SAP AG 2002
Provisions for Awards: Processes
Basis Data (Accrual Objects)
Accrual
MethodTrigger Calculation of
Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Process A:
Transfer Data
from HR-
System
R
Build Delta to
already posted
values
Posted Values
(Accrual Engine Documents)
Post
Document
R R
Provisions for Awards
R
Accrual Engine
Reporting Reporting
HR-System
Outstanding Awards
Read HR DataR
Process A:
Create/
Change
Basis Data
Process B:
Calculate
and Post
Accruals
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This slide shows the accrual method according to APB25 (delivered by SAP as a sample). This method calls
Treasury to get current stock prices.
SAP AG 2002
Provisions for Awards: Processes
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation of Accruals
Periodic:
Calculate Accruals
Calculation
Create/
Change
Basis Data
R
Posting
R
Create
Accounting Documents
Process A:
Transfer Datafrom HR-
System
R
Build Delta to
already postedvalues
Posted Values(Accrual Engine Documents)
Post
Document
R R
Provisions for Awards
R
Accrual Engine
Reporting Reporting
HR-System
Treasury
Stock Rates
Outstanding Awards
Read StockRates
Read HR DataR
R
Process A:Create/
ChangeBasis Data
Process B:
Calculateand Post Accruals
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The Accrual Engine uses the 2-level hierarchy of Accrual Objects in the Accrual Engine:
The Accrual Object corresponds to an award grant.
The award grant is defined by the following dimensions:
y Award
y Grant date
y Cost center of the employees who received the awards
The cost center information is optional: Data can be summarized in HR during the transfer (Customized in
the HR-System).
This way, users in the Accounting-System can be prevented from having access to critical data.
An accrual subobject corresponds to a vesting.
There are therefore as many subobjects as there are vesting periods for an award grant.
The accrual items are created according to the Customizing settings made for data transfer from HR to theAccrual Engine.
SAP AG 2002
Provisions for Awards: Structure of Basis Data
Grant (=Accrual Object)
Vesting (=Accrual Subobject)
Vesting (=Accrual Subobject)
Vesting (=Accrual Subobject)
Accrual Item
Assignment
Parameters
Default: Cost Center
Basis Security ID, Exchange, Basis Value, ...
Vesting Date
Award, Grant Date and Cost Center (optional)
Each combination of
- Accrual Type (APB25, FAS123,... ) and
- Accounting Principle (IAS, US GAAP, ...)
defines an Accrual Item.
The number of outstanding awards is stored
together with the accrual method at this level.
Header
Accrual Item
Accrual Item
...
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The application menu for Provisions for Awards is very similar to the application menu for Manual Accruals.
The only differences are:
y Accrual objects are called ‘award grants‘
y Such award grants cannot be created or changed manually in the Accrual Engine, but are transferred from
the HR system.
SAP AG 2002
Provisions for Awards: Application Menu
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Reconciliation with FI and carryforward work in the same way as they do in ‘Manual Accruals’.
SAP AG 2002
Provisions for Awards: Application Menu
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Provisions for Awards Customizing mainly consists of Customizing settings from Accrual Engine
Customizing. However, the transfer of award grants from HR system also has to be customized.
SAP AG 2002
Provisions for Awards: Customizing in Accounting
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Since the application ‘Provisions for Awards’ is only the accounting part of the ‘Long-Term Incentive’
application in HR, settings have to be made in the HR system. The administration of awards is mainly carried
out in the HR system, while the integration to accounting is only used for posting provisions.
SAP AG 2002
Provisions for Awards: Customizing in HR
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A comprehensice example of Provisions for Awards can also be found in the Online Documentation.
Provisions for Awards:Example
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SAP AG 2002
Provisions for Awards: Example
Prereqisites:
On 1 Jan. 2000, company code 0001 will issue 6,000 options (award OPTN) for company stock to the employees of cost center "Executive Board". The securityidentification number of the company stock is "0000000000001".The base price of the options is 100 EUR, meaning that these options will have an
inner value if the stock price rises above 100 EUR.
The employees cannot exercise their stock options until expiry of the waitingperiod.The company decides to make the 6,000 stock options that it awards availablein three waiting periods.These waiting periods are as follows:
• 1 Jan. 2000 to 1 Jan. 2001: 3,000 options, vesting date: 1 Jan. 2001.
• 1 Jan. 2000 to 1 Jan. 2002: 2,000 options, vesting date: 1 Jan. 2002.
• 1 Jan. 2000 to 1 Jan. 2002: 1,000 options, vesting date: 1 Jan. 2003.
This means that 3,000 stock options can be exercised from 1 Jan. 2001, a further 2,000 can be exercised from 1 Jan. 2002, and the remaining 1,000 can be exercisedfrom 1 Jan. 2003.The waiting periods are also referred to as vesting periods.
The division of the 6,000 stock options into vesting periods of 3,000, 2,000 and 1,000 isreferred to as a vesting rule. If the stock price has a value of more than 100 EUR whenthe stock options are exercised, the company will have to meet the correspondingcosts. For this reason, provisions must be posted in good time in Accounting.
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SAP AG 2002
Provisions for Awards: Example
Data Transfer HR -> Accounting (Accrual Engine)
Provisions can be calculated and/or posted according to different rules.
For each desired rule, a separate accrual item has to be created.
Customizing has to be adjusted accordingly for the data transfer
program.
SAP delivers two accrual methods: ACC_APB25 and ACC_FAS123 for
calculating provisions according to APB 25 and FASB 123 respectively.
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Screenshot: Customizig data transfer from HR to the Accrual Engine
The RFC destination of the HR system must be defined.
The RFC destination must be assigned to Provisions for Awards.
When the data transfer program is started, the HR data will then be selected from this destination.
All data (award grants, their vestings and parameters such as basis value, exchange etc.) originating from HR
system are converted by the system into a format that can be saved in the Accrual Engine.
This conversion can be customized in the IMG activity ‘Convert HR Data During Transfer’ (see next slide).
Using a BAdI, the data can also be supplemented (or changed) after conversion but before it is saved in the
Accrual Engine.
There is also a deletion program for deleting any data in the Accrual Engine that has been transferred from
HR system for testing purposes.
SAP AG 2002
Provisions for Awards: Customizing Data Transfer
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Conversion of HR data into the Accrual Engine format can be customized.
This activity determines which accrual items are created in the Accrual Engine:
In this example, for grants of the award ‘OPTN’ in company code 0001, one Accrual Item is created with thefollowing properties:
y accounting principle IAS
y accrual type APB25
The accrual method for this accrual item is ACC_APB25.
SAP AG 2002
Provisions for Awards: Customizing the Data Transfer
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Screenshot: Data transfer program.
The radio button determines which currency the provisions will be calculated and posted in. Once a currency
is selected, the same currency must be used in later transfers.
The data is always selected for a key date.
The newly transferred data is valid in the Accrual Engine from this day on.
There is an info button that provides detailed documentation.
For each period, you are recommended to start the transfer of HR data before the periodic job for posting
(updating) the provisions is started. This ensures that the number of outstanding awards in the Accrual Engine
is updated.
SAP AG 2002
Provisions for Awards: Data Transfer
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In the example, provisions are posted according to APB25 (accrual method ACC_APB25).
SAP AG 2002
Provisions for Awards: APB 25 and FAS 123
To post the provisions, the company can choose between the two
methods APB 25 and FASB 123 .
Method APB 25 uses the current stock price to calculate the inner value
of the outstanding options.
With APB25, the provision amount fluctuates in the same way as the stock
price. If the company chooses the APB 25 method, it must add an additional
calculation of the provisions according to FASB 123 in the appendix of the
balance sheet.
Method FASB 123 calculates the provisions based on an average stock
price assumed by the historical volatility of the underlying stock.
This means that the provisions do not fluctuate as they would using method
APB 25.
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Using the weighted share might appear unnecessarily complicated, as the total amount does not differ to the
one that would be arrived at without using weighting.
y First waiting period: 3,000 options x 10 EUR x 8.33 % = 2,500 EUR
y Second waiting period: 2,000 options x 10 EUR x 4.17 % = 834 EUR
y Third waiting period: 1,000 options x 10 EUR x 2.78 % = 278 EUR
Total: 2,500 EUR + 834 EUR + 278 EUR = 3,612 EUR
However, weighting does make a difference under certain circumstances. An example could be the following:
400 options from the first waiting period are exercised - after a transfer from the HR system, the number of
outstanding options in the first waiting period is reduced by 400.With weighting, the provision amount for the first waiting period equals: (3,000-400) x 10 EUR x 6.02 % =
1,565.20 EUR
Without weighting: (3,000-400) x 10 EUR x 8.33 % = 1,992 EUR
As the provision amounts of the two other waiting periods remain unchanged, the two methods no longer
provide identical sums. Instead, difference arises of 1992 EUR - 1,565.20 EUR = 426.80 EUR.
SAP AG 2002
Provisions for Awards: APB 25
Accrual Method ACC_APB25 works as follows:
The value of the provisions is to be determined for 31 Jan. 2000. On this date, thestock price is 110 EUR. As the base price taken over from HR is 100 EUR, theoption has an inner value of 10 EUR.
For the first waiting period from 1 Jan. 2000 to 1 Jan. 2001 (vesting date), 1/12 - or 8.3 % has expired by 31 Jan. 2000. Accordingly, only this fraction has to bedepicted as a provision.The vested share for the second and third waiting periods is worked out in thesame way: 1/24 (= 4.17 %) and 1/36 (= 2.78 %).The system calculates the weighted vested share thus: (1/12 x 3,000 + 1/24 x2,000 + 1/36 x 1,000) / (3,000 + 2,000 + 1,000) = (250 + 83.33 + 27.78) / 6,000 =0.0602 = 6.02 %This provides the following provision amounts for the three waiting periods:
First waiting period: 3,000 options x 10 EUR x 6.02 % = 1806 EUR
Second waiting period: 2,000 options x 10 EUR x 6.02 % = 1204 EUR
Third waiting period: 1,000 options x 10 EUR x 6.02 % = 602 EUR
Total: 1,806 EUR + 1,204 EUR + 602 EUR = 3,612 EUR
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Accrual method ACC_APB25 uses stock prices.
Stock prices (security prices) have to be entered using transaction FW17.
To be able to enter scurity prices, some master data are necessary like
y Security ID
y Exchange.
In the customizing of ‘Provisions for Awards’, the procedure is described, how these master data can be
created: Please refer to the documentation in the Customizing activity ‘Provisions for Awards -> Calculation
of Provisions -> Accrual Methods -> Provisions According to Procedure ABP25: Make Settings in CFM’ .
In the example, only two stock prices were entered.
If the system needs stock prices for dates > 31 Jan. 2000, then the last available stock price is used. In this
case, this would be the stock price of 110 EUR from
31 Jan. 2000.
SAP AG 2002
Provisions for Awards: APB 25 (II) Enter Stock Prices
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Accrual method ACC_FAS123 is not used in the example.
SAP AG 2002
Provisions for Awards: FASB 123
Accrual method ACC_FAS123 works as follows:
In contrast to method APB 25, the value of an option is not calculated using theprice of the underlying stock. Instead, the value of an option is defined manually inIMG activity "Define Data for the Black & Scholes Model".
Here, values can be defined by waiting period.Example:
First waiting period: 9 EUR
Second waiting period: 10 EUR
Third waiting period: 11 EUR
The vested share is not used as a weighting of the three individual waiting periods.Instead, the last vesting date determines the vested share. In the example: 1/36 =2.78 %. This results in the following provision amounts:
First waiting period: 3000 x 9 EUR x 2.78 % = 750.60 EUR
Second waiting period: 2000 x 10 EUR x 2.78 % = 556.00 EUR Third waiting period: 1000 x 11 EUR x 2.78 % = 305.08 EUR
Total: 1612.40 EUR
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The values for the Black & Scholes Model can be entered manually in the Accrual Engine Customizing.
They are then used by accrual method ACC_FAS123 to calculate periodic provisions according to FASB 123.
SAP AG 2002
Provisions for Awards: FASB 123 (II) Enter Black &Scholes Values
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Screenshot: Data display in the Accrual Engine after data transfer from the HR System:
The first waiting period with vesting date 01.01.2001 is displayed.
The item data were created by the data transfer program according to the customizing defined in the IMGactivity ‘Convert HR Data During Transfer’.
Data can also be entered manually, if integration with the HR system is impossible or is not necessary.
Only a small modification is necessary: In view V_TACECOMP, the ‘manual changes possible’ flag must be
set for SOA entry in this view. This enables users to change entries manually.
After the HR data has been transferred to the Accrual Engine, the periodic job for calculating and posting
provisions can be started.
SAP AG 2002
Provisions for Awards: Display Transferred Data (I)
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The parameters have been transferred from the HR system and saved automatically in the Accrual Engine.
These parameters are used by accrual methods ACC_APB25 (and ACC_FAS123) to calculate the current
value of the awards that have been granted.
SAP AG 2002
Provisions for Awards: Display Transferred Data (II)
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Periodic accruals are calculated for this waiting period according to accrual method ACC_APB25.
For period 1/2000, the value 1,805.56 EUR is calculated.
The detailed calculation is described in one of the preceding slides (‘Provisions for Awards: APB 25’)
SAP AG 2002
Provisions for Awards: Display Transferred Data (III)
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SAP AG 2002
Provisions for Awards: Periodic Posting Run