General Ledger Accounting

Unit Overview
We will begin our study of financial accounting with General Ledger.
We will first study key organizational elements in financial accounting. Then we,
will study GIL master records, and learn how to create postings, using both the
Enjoy and Complex document entry screens.
Many of the concepts learned in this unit will apply to other units in the course.

Unit Objectives
After completing this unit, you will be able to:

Describe the purpose of company codes and business areas

Describe the options for assigning company code(s) to a controlling area
Display a chart of accounts
Display the GIL account directory
Create GIL accounts
Describe the special role of reconciliation accounts
Maintain a financial statement version
Execute GIL postings using the Enjoy transaction screen and the traditional
screen for complex posting
Explain the structure of an accounting document
Query a GIL account.
Run the balance sheet
View cost elements

Unit Contents
Lesson: Organizational Structures for Financial Reporting. , ,. " .. 32
Exercise 5: Organizational Structures for Financial Reporting. , .,., " 39
Lesson: GIL Master Records , , ", ,., .. ,., 42
Exercise 6: General Ledger Account Master Data .. ,. ,, . ,,., ,, , ..... ," 51
Lesson: Accounting Transactions - Processing in the General Ledger" 64
Exercise 7: Accounting Transactions in the General Ledger, ..... , ... 71
Lesson: Organizational Structures for Financial
Reporting

Lesson Overview
Organizational structures occur in all important functional areas of the SAP
system. The most important organizational elements in Financial Accounting are
the company code and the business area. They are introduced here. The most
important organizational element of the Controlling application is the controlling
area. We will study the options for assigning one or several company codes to a
controlling area .

Lesson Objectives
_, After completing this lesson, you will be able to:
Describe the purpose of company codes and business areas
Describe the options for assigning company code(s) to a controlling area

Business Example
IDES consists of nine companies all over the world. Each company must fulfill
national reporting requirements and is, therefore, represented by a company code.
IDES includes a very diversified group of companies. The various companies
work in three different business segments, which are represented by business
areas in SAP ERP.

Company Code
A company code is an independent accounting entity (the smallest organizational
element for which a complete self-contained set of accounts can be drawn up).
Example: a company within a corporate group. A company code has a unique,
four-character key, which can be alphanumeric .

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. ~.()r.nP.iny
code:

Figure 8: Company Code

 The general ledger is kept at the company code level and is used to create the
legally required balance sheets and profit-and-Ioss statements for the company
code.
A company code is specified on every financially based transaction of mySAP
ERP. This is done either manually or by deriving the company code from other
data elements.

IDES International
IDES operates worldwide and has subsidiaries in North America, Europe and
Asia. Each affiliate (company code) is a legal entity that is required by law to
provide financial records according to country-specific regulations.

IDES lnternafional conslsts 'of nine:companies, in N.orthAmerica,

Europe and Asia.

Figure 9: IDES International

IDES Company Codes

The affiliates of IDES are set up as company codes in the SAP ERP system and
are uniquely identified by four-character codes. Each company code has a local
currency. The local currency of IDES AG is EUR. Amounts posted in foreign
currencies are automatically converted to the local currency. '
 The: companies of IDES International-are created .as company codes
in mySAP ERP.

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Figure 10: IDES Company Codes

Business Area

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Figure 11: Business Area

The business segments, or branches, in which a group operates can be set up in the
SAP system as business areas. Business areas provide an additional evaluation
level for segment reporting, for example. Use of business areas is optional.
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tDES Business Areas

Business areas are generally company-code independent. You can post to them
from any company code. The Business area field shows up as an additional
account assignment when posting to an account as long as the field is turned on in
configuration. The field can be made a required entry during posting.

Figure 12: IDES Business Areas

In the lower part of the figure, you can see the three business areas of the IDES
group. If certain company codes are not active in specific business areas, you
can use a validation to prevent postings to this business area from the company
codes specified.
Inour course, we will use additional business areas when completing our exercises
(BA##, where ## represents a student's group number). This will allow us to
separate one student group's work from another when posting to the same account.
We will see the Business area field when we create postings in the next lesson.

Controlling Area
The Controlling Area is the most important organizational element in the
Controlling application. The latter is used for internal Accounting. A controlling
area identifies a self-contained organizational structure for which costs and
revenues can be managed and allocated. (t represents a separate unit of cost
accounting.
 -
Controlling
area

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'Company code. A
Figure 13: Controlling Area

More than one company code can be assigned to one or more controlling areas.
This enables a cross-company code costing between the assigned company codes.
However, assigning more than one company code to the same controlling area is
possible only if all the assigned company codes use the same operating chart
of accounts and fiscal calendar year.

IDES Controlling Areas

The IDES group uses five controlling areas:
1000 for Germany, the United Kingdom, Portugal and Spain
2200 for France
2000 for the USA and Canada
5000 for Japan
6000 for Mexico