How to Use the Extension Ledger Functionality in SAP S/4HANA Finance

  • by Srinath Gogineni, SAP FI/CO Solution Architect, Dynamic Enterprise Solutions Inc.
  • April 8, 2016
Learn how to configure and implement the new Extension Ledger functionality in SAP S/4HANA Finance. Find out how to deactivate a ledger in a company code.
Learning Objectives

Reading this article, you’ll learn:

  • The main concept of using the Extension Ledger, which is like an extension to another ledger that can be used for adjustments for consolidation purposes, for the closed periods for restatement purposes, or for entries companies only want to book in the Extension Ledgers
  • How useful the Extension Ledger is compared with the non-leading ledger, which already exists as a part of the SAP General Ledger. Non-leading ledgers are additional ledgers specially created when the leading ledger does not meet the needs for financial, statutory, and legal reporting.
  • The feature of deactivating the non-leading ledger in a company code 
Key Concept
The Extension Ledger, which is only available in SAP S/4HANA Finance, helps you to save space in the database. You can use it to avoid duplication of journal entries if many business transactions are valid for the Extension Ledger and for the non-leading ledger, which already exists as a part of the SAP General Ledger. Only a few adjustments are required in the Extension Ledger for management or realignments. Deactivation of a ledger is useful if you don’t want the non-leading ledger to be valid for all the fiscal years, but instead want to set it up to be valid only to a certain point in time.

Generally ledgers provide a specific view of financial data. SAP provides only one leading ledger in every client. It is typically called the 0L ledger. This leading ledger is mainly used for the reporting of a company’s consolidated financials. It is the only ledger in an SAP system that is integrated with all the submodules and updated for all company codes. The non-leading ledger usually stores a lot of redundant data. All the entries that are posted in the leading ledger (0L) also flow to the non-leading ledgers.

With the new concept of Extension Ledgers, you can add the Extension Ledger on top of another ledger. That means you can add the Extension Ledger on top of either a leading ledger (0L) or a non-leading ledger. Note that you cannot add an Extension Ledger on top of another Extension Ledger providing different data views as needed; that is, you cannot have a Base Ledger as another Extension Ledger. Thus, the Extension Ledger does not store the data that is posted in the leading ledger. It only stores the delta entries that are posted specifically to the Extension Ledger. I describe scenarios that might require Extension Ledgers and what the benefits are of using the Extension Ledger for each scenario.

Note
Although in its configuration guidelines, SAP still refers to the Appendix Ledger, this functionality is now called the Extension Ledger. Throughout this article I use the term Extension Ledger instead of Appendix Ledger.

Examples of creating specific Extension Ledgers can include an extension 1 ledger created for posting into closed periods for restatement purposes, while the extension 2 ledger can used for adjustments for consolidation purposes only.

SAP standard solutions provide you with tools to post and view data with different views. Each Extension Ledger provides a specific view of the financial data since a ledger usually stores a lot of redundant data to other ledgers.

Consider an example of the non-leading ledger concept in the SAP General Ledger. Once a non-leading ledger is assigned to company codes, all the automated postings, including manual entries, flow to both the leading ledger and non-leading ledger. However, you can use transaction code FB50L to post to a specific ledger in the SAP New General Ledger. This transaction only posts to a specific ledger.

The system reads the data from the Extension Ledgers as shown in Figure 1.

Srinath Gogineni

Srinath Gogineni is working as an SAP FI/CO solution architect at Dynamic Enterprise Solutions Inc., providing consulting services to various clients. He is an SAP-certified FICO consultant with more than 15 years of experience in SAP financials. Previously he worked as a full-time employee for Hospira Inc. and Fenwal Inc. His main areas of expertise are in FI/CO areas such as G/L, SAP General Ledger, New GL, AR, AP, intercompany, FSCM, taxes, integration with Vertex, profit  center, CO, CO-PC , CO-PA, SAP S/4HANA Finance, business process improvements and integration with other modules. He has worked on various complex projects and multiple global rollouts.

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