1. Company is consolidation of financial statement. Group is always called company in SAP.

It is
always optional. Each company is called object & also 6 characteristics with alpha & numeric code.

2. Every separate legal entity is called company code. It’s containing 4 digit numeric & alpha code.
It’s mandatory for every organisation. It is used to prepare financial report in legal requirement.
Individual company is called company code.

3. Business area is used to prepare the financial statements for internal reporting purpose.
Geographical area is called business area. Business area can’t assign to any company code. Because
it is always optional.

4. Purpose of Enterprise structure to prepare financial statement like Balance sheet & Profit & Loss
account to legal law & requirement.

5. We assign company code to company because the system knows that, this particular company is
the particular company code.

6. Fiscal year (OB29, OB37) is also called accounting year/Financial year. Accounting year is a period
of 12 month for which the organisation generally prepared the financial statement. The accounting
year may be the calendar year non calendar year. Sifting of non defined calendar year to the defined
calendar year is called year sift.

*Fiscal year variant is used to supply information to company code, like:

 Start date and end date of financial year.

 Number of normal posting periods and special posting periods.
 Number of days in each posting period

Four types of fiscal year variant

 Year dependent – A year dependent fiscal year that is applicable for a particular year.
 Year independent – A year independent fiscal year is a year that is applicable for all
subsequent year.
 Calendar year fiscal year – A calendar fiscal year is a fiscal year that starts on the first day of
year that is January & ends on last day of the year December. A Calendar year always year
independent.
 Short end fiscal year – this is fiscal year variant that has fewer normal periods/less than
normal periods. A short end fiscal year always year dependent.

7. In India, income tax act/companies act ask that every organisation/business entity start from April
to march. In SAP each month is called posting period.

8. Special period – At the time of preparing balance sheet we valuate closing stock, provision,
doubtful debts it is called adjustment. When we carry on adjustment it will take some time, so after
the close of the fiscal year we need to take another 4 months which is called special period. It is
always optional.

9. Normal posting period – it is used for daily business transaction. It is mandatory.

10. If one company code has one subsidiary company in out of country (carry more than 51% share),
then for specific legal requirement they prepare Country COA.

11. Retained earnings account (OB53) – in that we create n no. of PL account & after the end of the
year these balance are carry forward to next fiscal year.
Retained Earnings Account is used to carry forward the balance from one fiscal year to the next fiscal
year. You can assign a Retained Earning Account to each P&L account in the chart of accounts (COA)
as per requirement. (its automatically carry forwarded)

12. Posting period variant is a variant that defined only for posting the transaction for a company
code. It’s controls/restricts to the end user for any accounting document posted in any period or not.
(OBBO, OBBP)
Special posting period always opens at the end of fiscal year.

 Open item management means, a line item need to be cleared against another open item.
 Generally, we make these setting in GL master for all clearing accounts, such as goods
receipts & invoice receipts which is GR/IR accounts (whether goods receipt or not as per
invoice when after receipt its automatically tally), sale of asset a/c, and payable account
from balance sheet.

Open item

 Balance sheet GL accounts are open item.

 Pending balances either received or to be paid (vendor/customer).
 Any transaction which is not completed 100% is called open item.

Open item management should be selected for balance sheet item like

 Clearing accounts: GR/IR account, sale of asset account

 Bank clearing account
 Payable GL account
 Cash discount clearing account
Accounts that are not managed on an open item basis:
 Bank accounts
 Tax accounts
 Raw material accounts (stock/inventory)
 Reconciliation accounts
 Revenue account

13. In open & close posting period (+) means all account types open for posting like A, D, K, M, S.

14. Document type – the business transaction are posted in to the system through an accounting
process which is called posting. As an evidence of these posting, a record is generated & stored in
the data base this is called document type in SAP. Also you can say

 It is a one type of voucher, it is also use for different types of format for different types of
transaction, Such as
 SA- GL a/c posting
 DZ- customer invoice
  DR-incoming payment
 KZ- vender invoice
 KR-outgoing payment

It‘s mainly controlled

 No ranges of GL account
 Header part of document
 Line item level of document

15. Two types of Document in SAP. Original document – this is including the vouchers, cheque book,
purchase invoice, sale invoice & receipts. These are the basis for entering business transaction into
the system. Processing document – these includes the recurring document, sample document &
accounting documents.

16. Each accounting document contains two parts – Document header – this part contains the data
such as document date, posting date, posting period, currency, company code, document types etc.
(BKPF)

Document line item – the document line item part contains the data such as posting key, GL account
no, & amount etc. for every line item. The document types are defined client level & therefore valid
for all company code. (BSEG)

17. Based on size of organisation & based on client requirement we create no ranges for all
document type.

18. NR status – every transaction posted the system automatically give progressive no, what
assigned. It is also identify next document no, also showing what are document already generated.

19. Client level – At the time defining the objects if the system doesn’t asked for the company code
then we assume that the object is created at client level. It can be used by all the company code of
the client.

Company code level – At the time of creating the object if the system asked for company code then
we can assume that the object is company code level in that case that is applicable to particular
company code only.

20. Tolerance group for of GL account – setting the maximum limits, equal to which the difference in
balance sheet, GL accounts are automatically taken to the profit & loss account. A tolerance group
can be assigned n no of GL account but not vice versa.

Tolerance group is a variant that restricts the user from posting certain transaction that they have
not authorised to do.(OBA0, OBA4)

Tolerance group of employs – here define company code upper limit posting procedure & permitted
difference (revenue or expenses) (1) amount per document – maximum permitted posting amount
per document for user. (2) Amount per open item account item – maximum posting amount
permitted per customer/vendor item. (3) Cash discount per line item
21. Blank tolerance group is applicable to all GL account which is not assigned with any tolerance
group.

22. Business area financial statement – By selecting this indicator the system allows to the user to
generate financial statements business area wise. If don’t select then the system not allow to
generate business area wise.

23. Propose of fiscal year – By selecting this indicator the system automatically defaults the current
fiscal year at the time displaying the document after posting the transaction.

24. Define default value date – By selecting this indicator the system automatically defaults the
current date (system date) as value date. This is also showing after posting the transaction.

25. Negative posting permitted – By selecting this indicator we can use the reversed function to
rectify wrong posting. It’s reduces the transaction figures of the G/L, customer, and vendor accounts.
It is also use for reversal posting. (FB08 (individual)/ FBRA (clear & reset)

26. Discount base amount is the net value – Always discount to the customer on base price.

27. GL accounting is called main ledger. Periodic processing means month end activities.

28. Master data – The data which is permanent in existence is called master data. The record which
contains the master data is called master records. The master data again & again used during
processing.

29. Transaction data – It is the data which is posted to the master record during the daily
management of the business. This is temporary in existence.

30. In GL account two segments, COA segment – it contains data such as accounts group, short text
& long text, GL a/c no., GL name.

Company code segment – it contains data such as account currency (in which currency GL account is
maintained), line item display, sort key, and open item management.

31. GL account is create in 2 way that is one step method – under this method we maintain the data
at the COA segment & Company code segment at a time. It is also called creation of GL account
centrally. (FS00)

2nd step method – under this method first we maintain the data COA segment (FSP0) & then in the
company code segment. (FSS0)

32. FI consultant in implementation project creates all the GL account creates in production server.

33. In COA segment short text contains maximum 20 characters & long text contains 50 characters.
34. Account currency – we define at time of company code creation is called company code
currency/ local currency also called account currency. We can post any type of currency in account
currency.

35. Only balance in local currency – by selecting this check box the system displays the balance in the
company code currency. The system automatically converts foreign currency transaction into local
currency when selected.

36. Line item display – the system displays details about the transaction whatever posted. If don’t
select then it pick up cumulative balance of every posting & display only one line.

First block the GL account for posting & select line item display then run use transaction code
FAGL_ACTIVATE_IT.

37. Sort key – by using sort key system pick up, data wise transaction. Sorting the data from data
base.

38. Relevant to cash flow check box – it is to be selected only for cash a/c & bank a/c with the help of
this indicator. Being selecting this indicator system can recognise the payment document.

39. PL account type in FS00, it is used when in retained earning accounts more than one PL account
create then this option reflected.

40. GL account display F.10 (COA list)

41. Once the GL account master record is created we can’t change the following fields – GL a/c no,
company code, account group, open item management.

42. In FS04 we know what we change in this GL account & data also.

43. Document date – it is the date on which the business transaction takes place. It is also the date
which is put on the original document. It’s may be past, future, present date.

Posting date – it is the date on which the account balances are updated in database. The document
date & posting date may be same or different based on the nature of the business transaction.

In one word we says Despatch date/ purchase date is document date & when it received/payment it
is posting date.

44. Trading business partner used for consolidation business area.

45. Posting key is specifies whether the line item is debit or credit.

46. Block for posting may be COA & Company code level. In COA – block for creation, block for
posting, block for planning & in company code level only for block for posting.

47. All report we can change the format use selection layout/ change layout.

48. In SAP net weaver we set country specific checks.

49. Parking Document – it is the activity of keeping the documents pending for posting due to want
of authorization. The need for parking arises due to operation of tolerance group for employees. The
documents are parked by the junior level employees & authorised by the senior level employees.
The parked document doesn’t update GL account. The GL account is update when that is authorised
that is posted by the senior employees. We can send a short massage in SAP – go to menu system –
give title – type request for approval – type massage – recipient/user name – then send.

50. Hold Document - it is the activity of keeping the documents pending for posting due to want of
information. When the information necessary to post the document is not completely available we
hold the document. The held document doesn’t update GL account. When the required information
is available then we can post it then only the GL account is update. When holding the document the
system will ask for the temporary document no. Document no. must be alphanumeric. Here only we
know 1st line item we don’t know 2nd line item. So we hold it.

51. Special document/reference document/posting document/template document – using the

special document we can reduce the posting burden on the employees. There are two types of
special document – sample document, recurring document.

52. Sample document – these are business transaction which occur frequently every day. Using the
sample document we can reduce the posting burden on the users. This is the special type of
document so we create X2 document type for sample document.

53. Recurring document – there are some business transaction which occur regularly at fixed
interval. It is used whenever amount is fixed & date is scheduled for payment. This is also special
type of document then we create document type X1.

54. Transaction ratio for currency transaction – it is the relation between the minimum units of two
currencies in the commercial usage for the conversion purpose. For any pair of currency the
translation ratio is always 1:1 but in Japanese 1:100.

55. Balance interest calculation (s) – this type is used to calculate interest on GL account balances.
Ex-term loans. Used in commercial enterprise.

56. Item interest calculation (p) – this type is used to calculate the interest in vendor/customer
account balances. Used in commercial enterprise.

57. Penalty interest calculation (z) – this type is used to impose the penalty on the interest payment.
Used in financial institution.

58. Reference rate of interest – we can define any no. of reference rate of interest.

59. Balance plus interest – By selecting this indicator the system will display the total amount of loan
outstanding including the interest as on the date of interest calculation means cumulative amount.

60. Calendar type – it determine the no. of days to be considered for per period for which interest is
calculated.

61. 4 types of calendar, Bank calendar – it uses 30 days as basis for the month & 360 days as the
basis for the year. French calendar – it uses the actual no. of days in a month as the basis for the
month & 360 days as the basis for the year. Gregorian calendar it uses the actual no. of days in a
month as the basis for the month & 365 days as the basis for the year. Japanese calendar – it uses 30
days as the basis for the month & 365 days as the basis for the year.

62. Update master records – by selecting this indicator the system will update 2 fields every termed
loaned master record on which interest is calculated & posted.

63. Key date of last interest calculation – it is the date up to which the interest was calculated or
posted.

64. Date of last interest run – it is the date on which the interest is calculated.

65. Reversal – it is used to rectify or nullify wrong Document in wrong date. We can’t delete this
document for these purpose we reverse the document.

66. Individual Reversal – this function is used to reverse a single document. (FB08). When the
document is reversed the system reversed the posting key rules only.

67. Reversal of reversal – this function is used to reverse a document which was already reversed.

68. Mass reversal – this function is used to reverse a group of documents at a time. But once the
document is reversed it can’t be reversed directly. We can do it in the indirect way.

69. Accrual/deferral document reversal – this function is used to reversal the accrual & deferral
documents posted on the last day of month.

70. Cleared item reversal – this function is used to reset the open items which were created. At the
time of reversing the documents the user can give the date on which the reverse document is to be
posted. If the user doesn’t give any date the system posts the reverse documents as on the posting
date of the original document. While reversing the document the user has to specify the document
the reversal reason. We can define our own reversal reason in addition to the reversal reason which
was already defined in the system.

71. Open at key date – it is the date on which the status is to be displayed. In cash account always
status is green.

72. GL account group – the following function of the GL account groups - to control the number
ranges to be allotted to the general ledger master record created under the respective group. – to
control the display of fields to be maintained in the general ledger master records created whether
every field is required or optional or displayed or surpassed. – There is no limit to maximum no. of
GL account. But there should be minimum two GL account groups that are Balance sheet & P & l
account.

73. Field Status – there are two types of field status in SAP – Field status for document entry – it is
controlled by the field status variant through field’s status group. It is used at the time of posting the
transaction.

Field status for master records – it is controlled by account groups that is - the fields status for GL
master records is controlled by GL account group, the fields status for vendor master records is
controlled by vendor account groups, the fields status for customer master records is controlled by
customer account groups, the fields status for asset master records is controlled by asset class
through screen layout rules.

74. Fields status for GL master records – it is controlled by GL accounts groups. In all the GL master
records created under the account master records created under the account group current asset,
loans & advance we don’t required the following fields – exchange rate difference key – tax category
– reconciliation for account type – inflection key. – In that case we can suppress above keys/fields at
the account group level.

75. Reset with clearing open item F-07. Post also FB01L

76. Supplement auto. Posting check box select in FS00. Its indicate that line items which are
generated automatically by the system for this account can be supplemented manually. It must used
account assignment we apportion of cost like cost centre, company code

Example.......
When you receive payment from customer of Rs 12,000 which contains Rs 200 a bank charge then
accounting entry will be...
Bank Dr. 10,000
Bank Charges Dr 2,000
Customer Cr. 12,000
Bank Charges line item has been created automatically, so you have the option to insert cost centre
manually if field Indicator: Supplement for automatic postings? has been selected for Bank charges
GL Account,

While handling the SAP FICO for the first time, why it is necessary for the users to pay attention to the exchange rate?
The default exchange rate in the FICO is Average Rate. It is not always necessary that everyone needs to use the FICO in the
same manner. Therefore, it needs to be changed as per the requirement.

What is Financial Statement version in the SAP FICO?

It is basically a tool that is used for reporting. All the financial accounts can be extracted through it along with all the relevant
information required by the users. It is possible to deploy it for the purpose of generating the outcomes of different agencies
associated with a business. The same information can then be passed to the concerned authorities for the betterment.