USGAAP vs Local GAAP

Hi Everyone,
I have the following issue:
Situation: We are doing an SAP rollout project for a US based company. The rolluot covers Central European subsidiaries as well. Currently, GL postings take place as of local GAAP, and there is a US GAAP related closing phase at each month end (statutory statements (BS, PL per profit centers) are prepared for HFM).
As of the implementation of SAP, the process will alter: GL postings take place according to US GAAP, and there will be a local GAAP related closing phase at each month end (statutory statements (BS, PL, inventory valuation, AP,AR valuation).
Question:
Does anyone have any experience in such a project? I need a so/called closing `runbook` which lists a.) the former closing procedure i.e. prior to SAP implementation, b.) the new closing procedure.
What kind of SAP solutions, tools (if any) support dual (simultaneous) book-keeping? How do these affect the period-end closing ?
Thank you.

Hi
Hope you are well..
I have the same issue rightnow. Could you please send me the clear doc / description which will help me to proceed further.
Much appreciated.
cheers
kris
[email protected]
+44 (0) 7791 807 402

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Different planed depreciation in Areas 01 (usgaap) an 02 (local gaap)

Hi Experts,
I have serached for infomration on this problems but Iwas not succsseful.
Asset was acquired. We have Depreciation are for USGAAP (01), Local Gaap (02). Fiscal year is from ajnuary to december.
Problem is: Assets acquired now (july) have depreciation planned correctly in area 01 (it plans to post 50% of depreciation value of all the year from july to december). But, in Local GAAP (02) it plans to post the the whole anual value.
Example:
Acquisition value: 12000
Acquisiton date: july
Area 01: plannmed deprecaiton 6000 (1000 per month)
Area 02: planned derpecation 12000 (7000 in july and per month until december).
Pese, could you help me ont this,
Regards,

Hi,
Is the period control for both depreciation areas the same?
From when on depreciation is calculated depends on the period control in the depreciation key.
Regards,
Brigitte

LOCAL GAAP and IFRS

Hello Experts,
My client had dep area 01 for local gaap(posts leading ledger) and 30 as IFRS(posts non leading ledger), Delta dep area 31(31-01) post to non leading GL posting setup as below
Dep 01: Real depreciation GL Posting indicator as 01 ledger group as leading ledger
Dep 30: real Depreciation area GL Posting indicator as 03( Posts Depreciation only) ledger group as non leading ledger
Dep 31: Derived Depreciation (delta between 01 and 30) GL posting indicator as 06( Posts APC directly) ledger group as non leading ledger
The above set is as per the SAP standard setup.
Questions:
1. Delta Depreciation is not posting any difference depreciation to non leading ledger where client want to post the differences to non leading ledger.
how to achieve this, is any set up am I missing
Your advise would be greatly appreciated.
Thanks
Mohini

Hi Mohini
You need to run ASKBN so that the Delta dep posts to Ledger
br, Ajay M

WIP according local GAAP vs IFRS - only one result analysis key

Dear experts,
I am faced with the following issue. We use WBS-elements for long running activities. We set result analysis key on WBS-element for periodic WIP calculation. The actual result analysis key is set up according local GAAP.
Now we want to implement parallel accounting according IFRS. Here we can use percentage of completion for valuation of our project(s).
How can we handle two methods of WIP calculation? We can only set one resulat analysis key on WBS element?
How do you handle this issue.
Thanks for your reply in advance
Regards,
Butch

Thanks for the quick feedback.
Maybe some additional information:
01 - IFRS (real time link with FI)
02 parallell currency deprec area
20 - LOCAL GAAP
50 - Grants IFRS value (investment measure support area) linked realtime to FI
51 parallel currency deprec area of 50
60 - Grants Local GAAP
I already checked the SAP library and the SDN forum, but could not find anywhere how to set up the depreciation area(Grants LOCAL GAAP) to which the investment measure is not directly linked to (not the support area (50) in Tr ANVEST).
Is it possible with only one investement key to fill the IFRS (50) & Local GAAP (60) value investment depreciation area and still depreciate them in different ways?
Thanks again!
Kr,
Roeland

Local Gaap balance sheet unbalanced

Hello all,
I am after some hints to tackle so following problem:
The local GAAP balance sheet (obtained with S_ALR_87012284) is unbalanced. Most probably it comes from the FI-AA ledger.
I went through note 104567 but it only explains a fraction of the difference.
The US GAAP balance sheet is however fine.
We are on 4.6C.
Help greatly appreciated
Alex

Check FSV at OB58. Probably that FSV may have un assigned accounts
Srinivas

Leading ledger can be local GAAP? Pros and Cons. 1 company code scenario

My client /the company uses 2 GAAPs: local GAAP and IFRS.
I have read that "the leading ledger is based on the same accounting principle as that of the consolidated financial statement. It is integrated with all subsidiary ledgers and is updated in all company codes (if posting is not ledger specific)."
If we have only 1 company code can we have local GAAP as the leading ledger? What are the pros and cons?
Arjan

Hi,
Local GAAP must be a leading ledger because country you are operating your business will require wide reporting like financial statements, tax registers, stock registers. So, primary posting will be related to your local GAAP which will be directed to both leading and non leading ledger. If there are certain things which are required to be altered then you can post the differences exclusively to the non leading ledger using transaction FB50L.
Keeping Local GAAP as non leading ledger will require huge posting of adjustments.
Regards,
Chintan Joshi.

Reporting, local gaap and ifrs gl acc

hi
1) i would like to know why 2 sets of book? in the coa, there are main gl account, ifrs gl account and local gaap account. i am thinking 3 sets. please clarify.
2) double entry on DR/CR for main gl account, DR/CR for ifrs account, DR/CR for local gaap account. right?
3) can have mix of gl account in double entry? DR main gl CR local gaap or DR local gaap CR ifrs account.
3) what kind of transaction post to local gaap? can have example?
4) why need to have local gaap account although having main gl account? can have example?
thanks

Parallel account work like this:
1 In new GL u have the concept of leading ledger and non Ledger.
2 Leading ledger will inherit all the properties of the company code settings like currency, fiscal year variant etc.
3 you can define two additional currencies in addition to company code currency for each company code
4 Defining non leading ledger is optional for which u can assign depending upon the requirement different currency and fiscal year variant
5 When u are posting to the company ocde system will post for all ledgers assigned to the company code. (leading and non leading)
6 If u want to make posting only to a particular ledger for gap requirement u can make posting only to that ledger either leading or non leading ledger
7 U can define as many non leading ledgers as the need be
8 U can assign the non leading ledgers for each accounting principles
I think i have covered most of the points pl let me know u have any

IFRS/USGAAP/LOCAL LEDGER

Hi experts!
I have to configure 3 ledger.
I need to report in IFRS in 2011, and the other ledger and I have to define a leading ledger and non leading leadger, what is your recommendation, define a leadind ledger according IFRS or USGAAP or Local, which of the three option would be the best option as leading ledger and Why?

<<thanks!
I going to have:
a) the New GL is going to be active.
b) the same accounts for all companies
c) I don´t know in this moment, if I going to have different fiscal year for the non-leading ledger.
- what, would be happen if I have different fiscal year?
>>
Please refer to the following document pages 11 - 12
http://www.google.com/search?q=CONVERTINGTOTHEINTERNATIONALFINANCIALREPORTING+STANDARDS&sourceid=ie7&rls=com.microsoft:en-us:IE-SearchBox&ie=&oe=
This should answer most of your questions.
Some key points:
- Do you have CO-based reporting? If so, please note that only your Leading Ledger posts to CO.
- Do you need to change Leading Ledger accounting methods later? If so, this needs to be treated as a separate migration, and may require SAP SLO support + extra fees if depreciation area changes are involved.
- You can setup different fiscal years per each ledger...The leading ledger should be your home office/headquarter's fiscal year.
- What accounting method will be used in day-to-day business? This should be the leading ledger...
- I would strongly advise you not set up another country's specific statutory ledger as the leading ledger. You should narow down your choices between the international standard (IFRS) & the local GAAP of the corporate headquarters.

Reporting / inputting data for multiple GAAPs

In the past we would setup BPC to include reporting for multiple GAAPs (like IFRS, USGAAP and a local GAAP) by means of adding an extra datasource where you would be able to do remapping some of your entries from one GAAP to another.
SO for instance if you had pensions in IFRS on your IFRS pension account, you would then, in the USGAAP datasource that sits above TOTAL IFRS, remap that amount to the USGAAP account in this way leaving all others the same but just having the USGAAP changes reflected in a total datasource that includes all of your input according to IFRS plus the remaps for USGAAP to give you USGAAP in an alternative hierarchy for exmaple.
That is how it was done, but i was wondering if there were any other ideas, expecvially if you have more than 2 or 3 GAAPs
LEt me know if you have other ideas,
best regards,
Edwin

Hello - Using datasource would be a solution based on dimensionality u2013 this makes sense to me. Other options with dimensionality may include duplicate accounts per GAAP. I think there many possible ways to use dimensionality to achieve thisu2026.creating new user dim, categories, and surely others.
Another option would be to look at modeling this in separate applications.
Maybe using one application as the base then writing to others via destination app/look up type functionality. You might consider handling different apps per GAAP in the ETL phase. In modeling I would be hesitant to jump towards separate applications unless the complexity and or data volumes warranted thisu2026..shoot for the most simple elegant design when possible.
So depending on the complexity of the business case (what type of ASSETS alone could lead to a longer requirement discussion) and the data volumes look decide on the dimensionality vs. application approach. I would start with dimensional design until my prototype forced me to consider something else.
Hope this helps.
Cheers

Depreciate an asset in US GAAP (as it is a cost in US GAAP)

We have an asset that needs to be capitalized in local GAAP but it needs to be depreciated in full in US GAAP. The reason being it is considered a cost in US GAAP and asset in local GAAP. While creating the asset, user did not enter useful life as "0" in US GAAP for the asset. Depreciation for last 3 periods is already posted.
In this case, what would be the best approach to correct this scenario.
We tried changing the useful life of the asset in US GAAP to "0" but, the system is throwing an error message "Make required entry".
Is there any alternative approach that should be followed ?
Thanks !

Hi Somya
There are 2 ways you could have handled this
1. Enter useful life as 0 Yrs and 1 month.. With a dep key based on useful life, the entire asset gets depreciated in the 1st month itself..
You can change the useful life now in a way that only 1 month remains.. Example - If you maintained useful life as 1 year, change it to 4 months now (3 months already over).. With this, entire NBV will get charged off as depreciation in the next AFAB run
2. You can use depreciation key with Base Method 0017: Immediate Depreciation...
With this, the entire asset APC value in Dep Area for US GAAP gets charged off to Depreciation
Br. Ajay M

Reval for New GL - local ledger (Z5)/Leading Ledger (OL)

I would like to find out if it is possible to restrict someone access to only running reval on the local ledger, but not on the leading ledger. The purpose is that we would like the local accountants to run reval on the local book (Z5), but we do not want the local accountants to be able to run reval on the leading ledger. Is this is possible? If so, how?

TRy this method.
firsr create Accounting priciple and assign to the ledger group.
1) Financial Accounting (New)-Ledgers-Parallel Accounting-Define Accounting Principles
2)Assign Accounting Principle to Ledger Groups
3)then in General Ledger Accounting (New)-Valuate-Define Valuation Methods, Define Valuation Areas, Check Assignment of Accounting Principle to Ledger Group (here assign the principle that you have created in the first step.
4)Assign Valuation Areas and Accounting Principles
This should solve your problem.
You need to creare accounting principles for local gaap and global gaap and do accrodingly.
reward if useful.
sarma

Indian and US GAAP

Hello
My client raised a query for which i need your help
the query is we have got our compnay in India and if we want to show
our Balance Sheet to US company we need to show Balance sheet in US-GAAP
How to go about this can anyone suggest me any solution please.
Thanks in advance .
Nitin

Hi,
Good evening and greetings,
As per the Accounting Practice, it would be a single Financial Statement Version which would have US GAAP Account - Elimination Postings Account = Indian GAAP (Local GAAP Account) Value...When US would see your balance sheet the financial statement version would give only the US GAAP GL accounts and when reporting it in India, it would account the elimination postings and would gie the Indian GAAP value.
Please reward points if found useful
Thanking you
With kindest regards
Ramesh Padmanabhan

Legal Consolidation - A comparision between Indian AS, IFRS and US GAAP

Hi Experts,
Can any one shed light on the above subject? My Client is based out of India and has business spread across US and Europe. Are there any significant variations between these standards?
Thanks in Advance.
Points will be given.

Hello Harikrishnan,
To start with, there is nothing like legal when it comes to consolidation. We prepare Group accounts to take into account the increase/decrease in the shareholders funds of the parent company. In doing so we follow rules which are generally accepted at local country level also known as GAAP or at an international level also known as IAS/IFRS.
Companies own companies and the parent company is required to pay taxes on the global profits and parent company's country of incorporation is used as tax base.
My understanding of Indian Standards are limited and therefore providing information only for US GAAP and IFRSs.
Accounting rules in the US is heavily controlled especially post-Enron collapse. The have legislation to govern and investigate anything that is not correct. While US GAAP is pretty much in line with overall impression of standards, some rules vary like treating the value of inventory and recognition and derecognition of property, plant & equipment also known as Tangile Non-Current Assets. It is not possible to give you full explanation but some rules varies.
With the full comprehensive development of International Standards, more and more countries are following IFRSs to local GAAPs. In many countries like Australia and New Zealand, they just added country names before the IFRSs and made that their local GAAP to avoid confusion and differential treatments.
Hope the above would be helpful.
CONMJI

US GAAP and IFRS

Hi,
my clients is Indian company. Now they wants implement SAP (ECC 6). They are asking, other than standard ledger they want US GAAP and IFRS reports also.
So can some one tell me how to configure this in SAP and what are the impacts on other modules if we activate Parallel Accounting.
Thanks
Rams N

Hi,
Parallel Accounting supports multible accounting principles. For your client Accounting principle reporting requirements could include local Generally Accepted Accounting Principles (GAAP), US GAAP and International Financial Reporting Standards (IFRS).
SAP Provides Additional Ledger feature from ECC 5.0 onwards. With this feature Data recorded in the general ledger is recorded in multiple ledgers. That means apart from the leading ledger you can maintain 2 additional ledger to fulfill your requirement i.e. Local GAAP and US GAAP. The ledgers are assigned to specific Accounting Principles and difference postings can be recorded to specific ledgers through a single user interface. Foreign currency valuation methods can be assigned to specific ledgers and fixed asset accounting for various accounting principles is managed through the use of depreciation areas and ledgers.
When it comes to impacts i worked on FCV, Asset Depreciation and Accrual Engine using the New GL with ECC 6.0. I have identified below changes during my workout. May be some more impacts might be there in other application areas with the introduction of parallel ledger.
1. In asset accounting ledger groups are assigned to the depreciation areas. Consequently, postings are made to separate ledgers in FI. The leading ledger has to be assigned to depreciation area 01.
2. Within the General Ledger Receivables / Payables / foreign currency balance sheet accounts may be valuated differently on the basis of different accounting principles. Accruals and deferrals need to be allocated to the relevant periods. The use of parallel accounting may mean that different accrual/deferral postings need to be made, depending on the accounting principle. This needs Assignment of the accrual method to the accounting principle (determination of the ledger group).
Hope it will give some inputs to your requirements.
Regards,
Krishna Kishore

US GAAP Notes

Experts,
Please forward US GAAP Notes for my understanding.
[email protected]
Thanks
Soni

You need a new company code regardless, to represent the legal entity in the US.
You can use either the new G/L with leading and non-leading ledgers, or the classic ledger with a special purpose ledger. You'll need two ledgers in any case; one will carry the values according to the parent company, the other will carry the alternative GAAP.
Best practices would be to use the parent company's perspective in the leading ledger, and the local GAAP in the non-leading or special-purpose ledger.
The business requirement is the same, regardless of the presence or absence of the new GL.

USGAAP vs Local GAAP

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