Ledger account and dimension structure

In Financials, ledger accounts and dimensions are used to track assets, liabilities, equity, profits, and losses. Separate ledger accounts are required to record the day-to-day transactions of businesses and the resulting changes on the balance sheet or profit and loss financial statements. Dimensions are optional. You can use dimensions to further classify the transactions within a ledger account.

For the accounts and dimensions, you can define parent-child relations for subtotaling and for consolidating the amounts on reports and inquiries. On a financial report, the amount on a parent account consists of the sum of the balances of the child accounts.

For ledger accounts, you can use 99 levels of subtotals. For dimensions, you can use 10 levels of subtotals.

Sublevels

The sublevel of a ledger account is defined in the Chart of Accounts (tfgld0508m000) session. Accounts with sublevel zero are posting-level accounts. Accounts with a sublevel higher than zero are parent accounts. Once the balances have been updated in the child level accounts, the parents are automatically updated. You can display or print reports by child accounts or by parent ledger accounts.

When you define the structure, these fields are important:

In the Chart of Accounts (tfgld0508m000) session:

Statutory Parent Account
Complementary Parent Account
Account Sublevel
Print Sequence

In the Dimensions (tfgld0510m000) session:

Parent Dimension
Dimension Sublevel
Print Sequence

How to define the totals for ledger accounts is described below. The same procedure applies to each of the dimensions.

You can define the structure for updating the totals by using the Complementary Parent Account and Statutory Parent Account fields in the Chart of Accounts (tfgld0508m000) session. In these fields you can specify the parent account in the parent-child structure.

The amounts posted to the lower-level accounts are totaled in the higher-level parent account. Parent accounts must have a sublevel greater than zero.

Example

Ledger Account		Statutory Parent Account	Account Sublevel
4	Total costs	-	5
400	Total of salaries	4	1
400101	Monthly salaries	400	0
400102	4-weekly salaries	400	0
400103	Weekly salaries	400	0
411	Total of social charges	4	1
411101	Social charges monthly	411	0
411102	Social charges 4-weekly	411	0
411103	Social charges weekly	411	0

You can only enter transactions in ledger accounts and dimensions with sublevel zero. You can define 99 levels for ledger accounts and 10 levels for dimensions.

The ledger account's sublevel is not used for totaling the amounts. The general ledger's parent-child structure defines in which accounts the amounts of other accounts are totaled. The sublevel is only used for printing balance sheets and trial balances, for example by using the following sessions:

Print Trial Balance (tfgld3402m000)
Print Trial Balance - Dimensions/Ledger Accounts (tfgld3406m000)

Print sequence

The Print Sequence field defines the order in which balance sheets and trial balances are printed. If the Print Sequence field is empty, the ledger accounts are printed in alphanumeric order.

To print the ledger accounts in a specific order other than the alphanumeric order, enter a print sequence number. For example, you can use the print sequence number to print the child accounts followed by their parent account. Ledger accounts for which you define a print sequence are printed at the end of the reports, in the order of their print sequence numbers.

Example

Ledger Account		Print Sequence
40000	costs 1	10
48000	costs 2	5
50100	revenues 1	empty
50200	revenues 2	empty
TOT4	Total costs	1

LN prints the ledger accounts in the following order:

50100	revenues 1
50200	revenues 2
TOT4	Total costs
48000	costs 2
40000	costs 1

Dual accounting

In Financials, you can use dual accounting. You can define two separate structures of ledger accounts and dimensions. One of these structures is used for fiscal reporting to the government. The other one can be used for commercial reporting to your company's management.

When you define a ledger account, you can indicate to which structure it belongs in the Dual Accounting Indicator field of the Chart of Accounts (tfgld0508m000) session:

Statutory accounts are used for the legal reporting structure, for example, to the tax authorities.
Complementary accounts can be used for the management reporting structure.

You can link a statutory account and a complementary account to a parent account. If you print the management report based on the parent accounts, on the report LN adds the amounts in the complementary account to the amount in the statutory accounts.

Example

Fixed asset:		123
Purchase value:		USD 400,000
Market value:		USD 500,000 (to be reported to the management)
Statutory account:	001231	USD 400,000 (as legally required)
Complementary account:	001232	USD 100,000 (the difference)
Parent account:	001200	USD 500,000 (the total amount)

The amount reported to the tax authorities will be: USD 400

The amount reported to the Management will be: USD (400 + 100) = USD 500

Dimensions

If you enter and process transactions in ledger accounts to which you link one or more dimensions, you can view the history of the ledger account classified by each of the dimensions. The ledger account at sublevel zero is displayed, which is classified to the dimensions at level zero.

Note

For ledger accounts with a sublevel greater than zero you cannot view the classification into dimensions.
When you view the history of a dimension of any sublevel, you can also view it classified into ledger accounts. Only the ledger accounts with sublevel zero are displayed.