Solution Management
Financials
SAP AG
Accrual Engine
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Given: Value + time interval Task: Distribute value over time interval
Simple Example:
What Are Accruals?
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D CP&L D CAccrual
12 000 (1)
800 (3) (3) 800
1 200 (4) (4) 1 200
1 000 (2) (2) 1 000
Accounting: Accruals = Periodic postings
Simple Posting Example
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Contract business transactions:Insurance, Leasing etc.
Contract-like business transactionsBonds with fixed interests,
Magazine Subscriptions etc.
Any periodic postings based on an amount or value Provisions for Awards
Accrual Engine: Where Are Accruals Needed?
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Accrual
Engine
Input:Contract-like information Output:
Periodic postings
Accrual Engine: What it does
Contract-like data is transferred to the Accrual Engine.
The Accrual Engine makes periodic postings to Accounting based on this data.
The Accrual Engine is an engine and as such is not visible to the end user
The Accrual Engine is surrounded by applications that define the business content and use the Accrual Engine. This can be compared with the engine in a car: The driver works with the car, not with the engine itself.
Accrual Engine applications are defined and delivered by SAP. They cannot be defined by customers.
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Accrual
Engine
SDP
Leasing
Manual Accruals
Real Estate
IBS
Media
(future)
Provisions forAwards
Input
Input
Input Input
Input
Output:Periodic postings
Accrual Engine: A Generic Tool
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Highly flexible tool
Storage of all relevant data Input (contract-like information incl. history!)
Output (posted accruals)
Accrual Engine = ‘Accrual sub-ledger’
Mass data processing, performance optimizedParallel processing available (via server group)
Accrual Engine: Some Features
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Accrual Engine: Processes
Basis Data (Accrual Objects)
AccrualMethod
Trigger Calculation ofAccruals
Periodic:Calculate Accruals
Calculation
Create/Change
Basis Data
R
Posting
R
CreateAccounting Documents
Transfer Datato Accrual
Engine
R
Build Delta toalready posted
values
Posted Values(Accrual Engine Documents)
PostDocument
R R
Calling Application
R
Accrual Engine
Reporting Reporting
Process A:Create/Change
Basis Data
Process B:Calculateand PostAccruals
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Accrual Engine: Structure of Basis Data
Accrual Object
Accrual Subobject
Accrual Subobject
Accrual Subobject
Accrual Item
Assignment
Parameters
Cost center, business area, profit center, ...
Customer-defined fields like ‘Product Group’, ...
Start-date and end-date of time interval for accrual
Does not carry any information; links accrual sub-objects
Each combination of
- Accrual Type (costs, revenues,...) and
- Accounting Principle (IAS, US GAAP, ...)
defines an Accrual Item:
The total value to be accrued, the total quantity to be accrued and the Accrual Method (linear/periodically, linear/daily) can be entered at this level.
Header
...
Accrual Item
Accrual Item
...
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Accrual Methods
SAP delivers a number of accrual methods: Linear, periodically Linear, daily with 365 days Linear, daily with 360 days ...
Accrual methods are ordinary function modules
Customers can define their own accrual methods
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Accounting Docs
The accrual engine creates accrual postings: If the corresponding accrual type is customized accordingly the accrual engine executes one, several or all of the following type of postings:
Opening postings The full amount which is to be accrued is posted, usually to an accrual account. This posting is executed, when the accrual object is created.
Periodic accrual postings These postings post a certain value which is calculated by the accrual method. This value is usually a part of full value (which is to be accrued). It is usually posted from the accrual account to a P&L account. These postings are executed by the periodic accrual run which is usually started at the end of each period.
Final postingsIf the posting of accrual has to be terminated before the full value has been (periodically) accrued, then the remaining value is posted to a certain account.
Other types of postings which are less important
Each posting creates an accrual engine document and this document is transferred automatically to accounting.
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Account Determination
When posting Accruals, Accrual Engine documents are created in the Accrual Engine. These documents consist of only one line item without GL accounts and without CO assignments like cost center etc.
When the Accrual Engine documents are transferred to Accounting (which is usually done automatically when they are posted), an Accounting document with two line items is created from the Accrual Engine document.
At this point in time, the Accrual Engine account determination is executed to get the following information:
Start account Target account Document type
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Parallel Accounting
The Accrual Engine supports parallel accounting in two ways
Parallel accounts The account determination can be customized in a way that different accounts are used depending on the accounting principle.
Parallel ledgers (Ledgers in mySAP ERP or Secial Ledgers) Ledgers are assigned to an accounting principle. Then postings in accounting will be performed per ledger.
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Automated periodic calculation of accruals - No recurring entries with fixed values
Automated periodic posting (self correcting!)
Simulation tools (e.g. future accruals)
Supports multiple GAAPs
Comprehensive reporting tools
Integration with BW (Business Information Warehouse)
Accrual Engine: Benefits
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Applications that use the Accrual Engine
Manual Accruals
Provisions for Awards
Lease Accounting
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Manual Accruals: Overview
Purpose: Post accruals for contract-like data
Create ‘contract data’ (accrual objects) manually in the Accrual Engine
SAP also delivers an interface for creating accrual objects
Start periodic accrual posting runs
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Manual Accruals: Example ‘Insurance Contract’
Contract data: Valid from 01 Jan. 2000 until 31 Dec. 2004 (5 years)Annual premium (to be paid by customer): 3,600 EUR
Revenues: Customer pays 5 x 3,600 EUR = 18,000 EUR
Costs: Salesman gets 6,000 EUR bonus
Costs and revenues must be accrued over 5 years Monthly revenues: 300 EUR = 18,000 EUR / (5 x 12) Monthly costs: 100 EUR = 6,000 EUR / (5 x 12)
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Manual Accruals: Application Menu
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Manual Accruals: Application Menu
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Manual Accruals: Create Accrual Object
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Manual Accruals: Create Accrual Object
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Manual Accruals: Opening Postings
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Manual Accruals: Navigation
Place cursor in ‘COSTS’ line
and double-click or
press ‘Transfer Accrual Item’
button
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Manual Accruals: Opening Postings
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Manual Accruals: Documents in FI
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Manual Accruals: Opening Postings
D CAccrued Revenues
18,000 (I.1)
D CAccrued Costs
(I.2) 6,000
D CReceivables
(I.1) 18,000
D CPayables
6,000 (I.2)
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Manual Accruals: Documents in FI
D CAccrued Revenues
18,000 (I.1)
(P.1) 300
D CReceivables
(I.1) 18,000
D CRevenues
300 (P.1)
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Manual Accruals: Posting Deltas
In each period, the following accruals are calculated: Revenues (Accrual Type RVNUES): 300 EUR Costs (Accrual Type COSTS): 100 EUR
In the first period (1/2000) these values were posted correctly. Now let us assume that by mistake the accrual run in 2/2000 was not carried
out. The next accrual run is carried out in 3/2000. The Accrual Engine then calculates that in 3/2000 the accrued values should
be: Calculated Revenues: 3 x 300 EUR = 900 EUR Calculated Costs: 3 x 100 EUR = 300 EUR
In 3/2000, the Accrual Engine then posts the difference between the calculated values and the values already posted:
Posted Revenues: 3 x 300 EUR - 300 EUR = 600 EUR Posted Costs: 3 x 200 EUR - 100 EUR = 200 EUR
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Manual Accruals: Example of Derived Accrual Types (1)
Derived accrual types can be used for calculating accruals from other accruals types.
Example:
Customer gets a discount of 10 % Discount: 18,000 EUR x 10% = 1,800 EUR The discount must be treated differently according to IAS and
HGB (German GAAP): HGB: Discount is posted once when the
contract iscreated
US GAAP: Discount has to be accrued during the life of the contract. The monthly accrual value is
1,800 EUR / (5 x 12) = 30 EUR
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Manual Accruals: Example of Derived Accrual Types (2)
According to US GAAP, additional accrual postings have to be made for the discount.
These additional postings can be made with the help of derived accrual types using the following rule:
“In US GAAP, the discount is calculated by taking 10 % of the revenues in HGB”.
The following activities have to be performed in Accrual Engine Customizing:
Create the new accrual type “DISCNT” The above rule is entered in activity “Define Calculation rules for Derived Accrual
Types”.
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Provisions for Awards: Overview
A company grants a number of stock options to selected employees
Purpose: Post provisions (= accruals) for the outstanding options.
To do this: Transfer information about outstanding options from HR system to Accounting system (Accrual Engine)
Afterwards: Calculate and post provisions using the Accrual Engine
Different calculation (=accrual) methods are possible for calculating the provisions: SAP delivers two examples as accrual methods:
APB 25 Provisions based on stock pricesFAS 123 Provisions based on Black & Scholes Model
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