Preparatory Settings for IFRS Compliance in SAP Capital Asset Management

  • by Harsh Mathur, Senior Consultant, Infosys Limited
  • January 16, 2012
Adjustments must be made to SAP’s Asset Accounting (FI-AA) component to make it compliant with International Financial Reporting Standards (IFRS). Learn what preparatory settings are required in an SAP system to facilitate these adjustments and how to use parallel reporting to ensure IFRS compliance.
Key Concept

International Financial Reporting Standards (IFRS) are globally accepted accounting principles that are issued by the International Accounting Standards Board (IASB).

The Preferred Approach for IFRS Compliance in an SAP System

Before any specific adjustments can be made in the SAP Asset Accounting (FI-AA) component to make it compliant with International Financial Reporting Standards (IFRS), you need to make some preparatory settings that provide a foundation for various adjustments in SAP capital asset management. These settings need to be carried out in both SAP FI-GL and SAP FI-AA.

As a first step toward compliance with IFRS using parallel reporting in an SAP system, the following are prerequisites. The solution I discuss for IFRS compliance (creating leading and nonleading ledgers) can be achieved only with SAP General Ledger functionality made available by SAP ERP Central Component 6.0 (SAP ECC 6.0):

  • A technical upgrade to an SAP ECC 6.0 platform
  • Migration from the classic GL to SAP General Ledger

You can establish parallel reporting functionality in SAP ECC 6.0 using the following options:

  • Account solution: Single ledger, common, and legal reporting requirements for specific GL accounts are used.
  • Special Purpose Ledger: Additional special ledgers are set up for each accounting principle.
  • Parallel ledger: Several parallel ledgers (general ledgers) are set up for different accounting principles. These ledgers are based on the standard totals table FAGLFLEXT delivered by SAP. During posting, data can be posted to all ledgers, to a specified selection of ledgers, or to a single ledger (leading and nonleading ledgers).
For more information about IFRS, attend the panel discussion titled Real-world lessons for IFRS transitions and compliance at Financials 2013 in Las Vegas March 19-22. For information on all the sessions and to register for this conference, click here.

Harsh Mathur

Harsh Mathur is a senior consultant at Infosys Limited, a consulting and IT services major. By qualification he is a chartered accountant and a member of the Institute of Chartered Accountants of India. He carries 10 years of experience with expertise in SAP financials and controlling. He has worked on implementation, upgrade, and support projects for clients primarily in the high-tech industry.

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