Managing corporate accounting and reporting

This document explains how to specify settings, and create and review transactions, related to corporate accounting and reporting. The functionality is normally used when a global company reports financial data according to different accounting and reporting frameworks across the organization.

For example, rules related to fixed asset depreciation may differ between the parent company and a subsidiary depending on the accounting framework used in each entity. This in turn affects the profit and loss differently. As a result, the subsidiary needs to report according to both its local reporting framework and the reporting framework used at the corporate level.

Outcome

General ledger transactions are updated and reported using multiple accounting ledgers.

Before you start

Before you start, you must meet these prerequisites:

  • You must specify the overall settings for corporate accounting per division or company in 'Settings - Corporate Accounting' (GLS080). If no specific settings exist for a division, the settings on company level are used. On (GLS080/E), these settings are specified:
    • Whether to enable the functionality. When enabled, you can use multiple accounting ledgers. This creates the possibility of having different balances on the same account, thereby reporting different amounts for each accounting ledger.
    • Balance keys used specifically for the corporate, additional 1, and additional 2 accounting ledgers. See the bullet point below which describes voucher types on how the balance keys are updated depending on the selected voucher type.
    • Period types used specifically for the corporate, additional 1, and additional 2 accounting ledgers. This enables the possibility to use a period type other than the one specified in 'Company. Connect Division' (MNS100) for the non-local accounting ledgers in case the fiscal year calendar is different between them.
  • The voucher type, which is updated in the general ledger and decides into which accounting ledgers a transaction is updated, is specified in 'Voucher Number Series. Open' (CRS410). These voucher types are available:
    • 0 - Common. When processing a transaction with this voucher type, all balance keys and accounting ledgers are updated.
    • 1 - Local. When processing a transaction with this voucher type, all balance keys except the ones defined in (GLS080) are updated. Therefore, only the local accounting ledger is updated.
    • 2 - Corporate. When processing a transaction with this voucher type, only the corporate balance key specified in (GLS080) is updated. Therefore, only the corporate accounting ledger is updated.
    • 3 - Additional 1. When processing a transaction with this voucher type, only the additional 1 balance key specified in (GLS080) is updated. Therefore, only the additional 1 accounting ledger is updated.
    • 4 - Additional 2. When processing a transaction with this voucher type, only the additional 2 balance key specified in (GLS080) is updated. Therefore, only the additional 2 accounting ledger is updated.
  • For inventory valuation performed in 'Inventory Value. Open' (CAS180) and currency revaluation performed in 'Unrealized Exch Rate Variance. Update' (GLS160), you must specify replacing voucher number series and voucher name in 'Corporate Accounting. Specify Vo Nbr Ser' (GLS085). The replacing values are specified per FAM function and accounting ledger. You can only specify non-local accounting ledgers since for the local accounting ledger, the normal values are retrieved from the FAM function in 'FAM Function. Open Details' (CRS406). The allowed FAM functions are CA60 (CAS180) and GL20 (GLS160).
  • To perform inventory valuation when corporate accounting is activated, you must specify the settings in 'Settings - Inventory Valuation' (CAS025) for each accounting ledger. These settings are selected when creating an inventory proposal in (CAS180).

General information about creating transactions

When you create transactions using FAM functions CA60, FA10, GL01, GL20, and GL99, the accounting ledger being updated depends on the selected voucher type on the voucher number series. For other FAM functions, the voucher type is always set to 0-Common.

The non-local balance keys specified in (GLS080) are updated according to the period type selected per accounting ledger. This enables the handling of different fiscal years between different accounting ledgers. The local balance keys are updated according to the period type specified in 'Company. Connect Division' (MNS100).

Reviewing transactions in standard report and inquiry functions

When you select accounting ledger in standard report and inquiry functions, the general ledger transactions or balance values are retrieved accordingly. If you select the corporate accounting ledger, for example, common and corporate general ledger transactions, or values from the corporate balance key, are selected. You can select accounting ledger in these report and inquiry functions:

  • 'General Ledger. Display Transactions' (GLS210)
  • 'GL. Display Stmnt of Account' (GLS220)
  • 'General Ledger. Print Audit List' (GLS505)
  • 'General Ledger. Print Balance Lists' (GLS510)
  • 'Contra Account Entry. Print' (GLS515)
  • 'General Ledger. Print' (GLS525)
  • 'Account. Print Specification' (GLS535)
  • 'Trial Balance - GL. Print' (GLS605)
  • 'Inventory Books. Print' (GLS615)
  • 'General Ledger Book. Print' (GLS620)
  • 'Daily Ledger. Print' (GLS625)
  • 'Daily Ledger Official Number. Print' (GLS630)
  • 'Balance 8 Columns. Print' (GLS635)
  • 'Ledger. Print' (GLS640).

Analyzing and repairing the balance file

The balance keys you select in 'GL Balance File. Update with Outcome' (GLS915) or 'GL Balance File. Analyze' (GLS940) determine which general ledger transactions are selected for the comparison to, or repair of, the balance file.

When you select a local balance key, common and local transactions are selected according to the period type specified in (MNS100). When you select a non-local balance key specified in (GLS080), common and the accounting ledger specific transactions are selected according to the period type specified in (GLS080).
Note: Non-local balance keys must be processed separately, meaning that only one non-local balance key at a time is allowed in the balance key range.

Year-end processing

The accounting ledger you select in 'GL Balance File. Start Annual Run' (GLS905) determines which balance keys that are updated with the balances for the next fiscal year.

In 'General Ledger. Calculate Profit/Loss' (GLS995), the accounting ledger you select determines the balance key used for retrieving the applicable values. The voucher type connected to the FAM function you select decides into which accounting ledger the transaction is updated. Therefore, it is important that the voucher type connected to the selected FAM function corresponds to the selected accounting ledger.

Inventory valuation

When using corporate accounting and reporting, you can perform inventory valuation using different settings per accounting ledger. When you create a proposal in 'Inventory Value. Open' (CAS180), the accounting ledger you select determines which settings from (CAS025) that are retrieved.

When you update the proposal to the general ledger, the selected accounting ledger determines into which accounting ledger the transaction is updated. For the local accounting ledger, the voucher number series is retrieved from FAM function CA60. For the non-local accounting ledger, the voucher number series is retrieved from (GLS085). Therefore, it is important that the voucher type of the voucher number series connected to FAM function CA60 and specified in (GLS085) corresponds to the selected accounting ledger.

Currency revaluation

When using corporate accounting and reporting, you can perform currency revaluation for the same revaluation date using different settings per accounting ledger. When you create a proposal in 'Unrealized Exch Rate Variance. Update' (GLS160), the applicable general ledger transactions are retrieved according to the selected accounting ledger.

When you update the proposal to the general ledger, the selected accounting ledger determines into which accounting ledger the transaction will be updated. For the local accounting ledger, the voucher number series is retrieved from FAM function GL20. For the non-local accounting ledgers, the voucher number series is retrieved from (GLS085). Therefore, it is important that the voucher type of the voucher number series connected to FAM function GL20 and specified in (GLS085) corresponds to the selected accounting ledger.

Limitations

You can update transactions using the these FAM functions according to all voucher types:

  • CA60
  • FA10
  • GL01
  • GL20
  • GL99

All other FAM functions are processed as common voucher types, therefore updating all accounting ledgers.

You must only define the balance keys specified in (GLS080) with accounting dimension 1=’Account’. You must not enable 'Budget' as budget handling is supported only for the local accounting ledger.

You must enable 'Book of account' in 'Settings - General Ledger' (CRS750).

Multi-division selection using a range that includes a division using corporate accounting when operating from a blank division is not supported in the reports and inquiries where the accounting ledger can be selected. Divisions using corporate accounting must be processed separately.

When using the group consolidation functionality, all accounting transactions of a division are transferred to the consolidation division. There is no option to select only transactions belonging to a specific accounting ledger. Therefore, you should not use the group consolidation functionality in M3 if corporate accounting is activated for that division.

Country specifics

From a corporate accounting and reporting perspective, country-specific functionality is considered local. This means that only local general ledger transactions or balance keys are selected in country-specific financial reports.

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