Balance sheet valuation

Balance sheet valuation:
You can valuate stocks for the balance sheet in two ways: Lowest value
determination according to current market prices (RMNIWE00) and lowest value
determination according to rate of movement/range of coverage (RMNIWE10/20).
You can use both methods separately (single-level procedure) or in combination
(multi-level procedure).

standard procedure for posting procurement transactions in Financial Accounting

The three-step reconciliation is the standard procedure for posting procurement
transactions in Financial Accounting. The procedure involves the following three
steps:
• Purchase order
This is carried out exclusively in MM. No data is posted in Financial
Accounting.
• Goods receipt
To update the inventory, a material document is created in MM. At the same
time, a document is created in FI, which is used to post the value of the
goods to the material stock account or the consumption account (debit) and
to the goods receipt/invoice receipt account (credit).
• Invoice receipt
The vendor invoice is posted in MM and a document is created in FI at the
same time. This FI document contains the invoice amount that is posted to
the goods receipt/invoice receipt account (debit) and to the vendor account
(credit).
The last two steps can be completed in reverse order, depending on the order in
which the goods and the invoice are received.
The goods receipt/invoice receipt account ensures that goods were received for
each invoice and vice versa.

Cycle counting method:

Cycle counting method: This also involves a physical inventory count.
The material stocks are counted at regular intervals during the fiscal year.
The interval or cycle in which a material is counted depends on the cycle
counting indicator set for the material.

Periodic inventory method:

Periodic inventory method: All stocks are physically counted on the
balance sheet key date. Every material has to be counted on this date. During
the count, the entire warehouse is blocked from any material movements.

Continuous inventory method

Continuous inventory method: Stocks are counted throughout the entire
fiscal year. Every material has to be physically counted at least once during
the course of the year.

Fixed Assets FICO Certification Example

Business Example
In preparation for year-end closing, you need to review the closing activities for
Asset Accounting.
For month-end closing, you need to execute a depreciation posting run to record
depreciation expenses for the current period and to post the results to the general
ledger.

Task 1:
Carry out the following task.
1. Execute the “Fiscal Year Change” program for your company code AC## IN
TEST MODE only. Check the documentation that is displayed.
Hint: If the “Limitation online” message appears, choose “Yes”
to continue processing.

Task 2:
Process an unplanned depreciation run for the current period in your company
code. Check the effects of this closing process on your financial statements from
the general ledger.
1. Use the report variant VAR## that you created earlier to check the financial
statements (RFBILA00) before posting depreciation. At this point in time,
you will see the asset acquisition value only.
2. In a second session, execute an unplanned depreciation posting run for your
company code AC## for the current period. Execute the update run (deselect
the Test Run indicator). Use printer LP01.
Hint: Remember that you have to execute a depreciation posting run
in the background. Choose Immediate Processing.
Now take a look at the log and the documents for the depreciation run in
your company code AC## for the current period.
4. You use the Asset Explorer to check the depreciation (under Posted Values)
for the depreciation areas 01 (book depreciation) and 20 (cost accounting
depreciation).
5. Return to your original session to recreate the financial statements. Now
you will see the depreciation posting in the balance sheet (accumulated
depreciation) and in the P&L (ordinary depreciation).

Task 3:
Answer the following questions about year-end closing activities in Asset
Accounting.
1. Name the year-end activity that has to be performed within FI-AA in order
to be able to post to asset accounts in the new fiscal year. When should
this activity be performed?
2. Name the checks that are performed before the previous year is closed with
the year-end closing program in Asset Accounting.

Task 1:
Carry out the following task.
1. Execute the “Fiscal Year Change” program for your company code AC## IN
TEST MODE only. Check the documentation that is displayed.
Hint: If the “Limitation online” message appears, choose “Yes”
to continue processing.
a) Carry out the fiscal year change in test mode
Menu path for fiscal year change:
Accounting → Financial Accounting → Fixed Assets → Periodic
Processing → Fiscal Year Change
Enter the following data:
Company code(s): AC##
New Fiscal Year: Current year + 1
Test Run: Set indicator
Execute the report.
Hint: If the “Limitation online” message appears, choose
“Yes” to continue processing.
Once you have checked the report, return to the main menu.

Task 2:
Process an unplanned depreciation run for the current period in your company
code. Check the effects of this closing process on your financial statements from
the general ledger.
1. Use the report variant VAR## that you created earlier to check the financial
statements (RFBILA00) before posting depreciation. At this point in time,
you will see the asset acquisition value only.
a) Call up the report (RFBILA00)
Menu path for report:
Information Systems → Accounting → Financial Accounting →
General Ledger → Balance Sheet
Select a variant:
Goto → Variants → Get... . Enter VAR##.
Choose Execute to select the variant.
Execute the report.
After you have checked the report, return to the Balance Sheet/P+L
Statement screen.




In a second session, execute an unplanned depreciation posting run for your
company code AC## for the current period. Execute the update run (deselect
the Test Run indicator). Use printer LP01.
Hint: Remember that you have to execute a depreciation posting run
in the background. Choose Immediate Processing.
a) Execute an unplanned depreciation posting run
Hint: Remember that you must execute a depreciation posting
run in the background.
Choose Immediate Processing.
Menu path to create a new session:
System – Create Session
Menu path for the depreciation program:
Accounting → Financial Accounting → Fixed Assets → Periodic
Processing → Depreciation Run → Execute
Enter the following data:
Company Code: AC##
Fiscal Year: Current year
Posting Period: Current period
Select Unplanned Posting Run. Deselect the Test Run indicator.
Choose Program → Execute in Background.
Enter LP01 as the output device.
Choose Enter.
Choose start time: Immediate.
Save.


Now take a look at the log and the documents for the depreciation run in
your company code AC## for the current period.
a) Menu path for the log:
Accounting → Financial Accounting → Fixed Assets → Periodic
Processing → Depreciation Run → Display Log
Enter the following data:
Company Code: AC##
Fiscal Year: Current fiscal year
Posting period: Current period
Set the List Assets indicator.
When the assets have been listed, double-click on Document Number
to branch to the accounting document (documents in Accounting).
Take a look at the accounting document and then go back to the main
Asset Accounting menu.
4. You use the Asset Explorer to check the depreciation (under Posted Values)
for the depreciation areas 01 (book depreciation) and 20 (cost accounting
depreciation).
a) Menu path for the Asset Explorer:
Accounting → Financial Accounting → Fixed Assets → Asset →
Asset Explorer
Enter the following data:
Company Code: AC##
Asset: TACMACH##
Fiscal year: Current fiscal year
For this asset, choose the depreciation area 01 book depreciation and
go to the Posted Values tab page to display the depreciation amounts.
Repeat this step for depreciation area 20, cost accounting depreciation.
5. Return to your original session to recreate the financial statements. Now
you will see the depreciation posting in the balance sheet (accumulated
depreciation) and in the P&L (ordinary depreciation).
a) Create financial statements (RFBILA00)
Execute the report again from the Balance Sheet/P+L Statement screen.




Task 3:
Answer the following questions about year-end closing activities in Asset
Accounting.
1. Name the year-end activity that has to be performed within FI-AA in order
to be able to post to asset accounts in the new fiscal year. When should
this activity be performed?
a) Questions on the year-end closing activities in Asset Accounting
Name the year-end activity that has to be performed within FI-AA in
order to be able to post to asset accounts in the new fiscal year. When
should this activity be performed?
The fiscal year change program displays fields for entering a new
annual value for each asset. The earliest you can start this program
is in the last posting period of the 'old' year.
2. Name the checks that are performed before the previous year is closed with
the year-end closing program in Asset Accounting.
a) The check report for year-end closing checks:
• Whether all the assets accrued in the fiscal year have been
activated.
• Whether the fiscal year change has been completed for all assets
• Whether depreciation was fully posted
• Whether errors exist (such as an incorrectly defined depreciation
key for the depreciation calculation)
• Whether the asset balances from depreciation areas for periodic
posting have been posted in full to the general ledger.

FICO Certification topics

Identify where in the system you execute the financial statement program
• Describe the purpose of the financial statement version
• Create, change, and display financial statement versions
• Create financial statements using a drilldown report

Fixed and Current Assets FICO Certification material

Outline the impact of posting book and tax depreciation within Asset
Accounting on periodic closing activities within General Ledger Accounting.
• Explain how the physical inventory procedure can lead to a G/L posting
• Describe the monthly maintenance of the GR/IR clearing account in MM
• Carry out the analysis of the GR/IR account for year-end closing
• Identify the various year-end valuation methods for work in process and for
material that is procured internally and externally

Drilldown Reporting Solutions

Create a new session.
1. Create financial statements using the Actual/Actual Comparison for Year
drilldown report. Run the report for your company code AC## and the
current fiscal year. Use the financial statement version that you created
(FS##). Within the output list of the report, drill down to the line items
which make up the account “Salaries”.
a) Call up drilldown report
Menu path to create a new session:
System → Create Session
Menu path for the report: Accounting → Financial Accounting →
General Ledger → Information System → General Ledger Reports →
Balance Sheet/ Profit and Loss Statement / Cash Flow → General →
Actual/Actual Comparisons→ Actual/Actual Comparison for Year
Enter the following data:
Company Code: AC##
FIS Annual Rep.Struc: FS##
Fiscal Year: Current year
Execute the report.
Expand the profit and loss statement by clicking the “+” to the left of
the Profit and loss statement line.
Continue to expand the following:
+ Staff costs
+ Wages and salaries
+ Salaries
+ Salaries
→ Salaries
Place the cursor on the selected row in the column for the current
fiscal year.
Choose Goto → Line Items
Check the line items for this account.
(Optional) Display the line items by double-clicking them. In the
document display, choose the Document Overview icon to view the
other line items for this document.

Drilldown Reporting

Business Example
The cross-application drilldown reporting function can also be used to create
financial statements. You will run a delivered balance sheet/profit and loss report
to explore the features provided by this reporting tool.

Task:
Create a new session.
1. Create financial statements using the Actual/Actual Comparison for Year
drilldown report. Run the report for your company code AC## and the
current fiscal year. Use the financial statement version that you created
(FS##). Within the output list of the report, drill down to the line items
which make up the account “Salaries”.

Creating Financial Statements Task 3

Carry out the following task.
1. Create financial statements (report RFBILA00) for company code AC## for
the current period to test your new financial statement version FS##. Also,
create a report variant to simplify reporting in subsequent exercises. Assign
the variant name VAR## and the description “CoCode AC## current period”.
a) Test financial statements (RFBILA00) and create variant
Menu path for report:
Information Systems → Accounting → Financial Accounting →
General Ledger → Balance Sheet
Enter the following data:
Company code: AC##
Tab page: Further Selections
Financial Statement Version:FS##
Reporting year: Current year
Reporting Periods: From current period to current period
Choose Goto → Variants → Save As Variant...…
Enter the following data:
Variant name: VAR##
Description: CoCode AC## current period
Save.
Execute the report.

Creating Financial Statements Task 2 step3

Reassign your financial statement items under “Staff costs” by moving your
new item 3063000 to the end.
a) Reassign items
On the Change Financial Statement Version screen:
Place your cursor on item 3063000.
Choose Edit → Select +/-
(Item is highlighted)
Place the cursor on the target item, 3062000.
Choose Edit → Reassign +/-
Confirm the “Same Level” setting.
Choose Enter.
(Item is moved)
Save.
C

Creating Financial Statements Task 2 step2

Check whether all the G/L accounts in your chart of accounts and company
code have been correctly assigned to the financial statement items in your
financial statement version.
a) Check the assignment of accounts
Choose Fin. Statement Items.
Choose Structure → Check.
Enter your company code (AC##) and set only the Nonassigned
Accounts Fr.Chart of Accts From Company Code indicator.
Choose Enter.
Once you have finished viewing the unassigned accounts, choose Enter
to close the dialog box and continue with the next exercise.
DO NOT EXIT THIS SCREEN
3. Create your own profit and loss item 3063000, Employee Training and
Education, under the “Staff costs” item.
a) Create profit and loss statement items
On the Change Financial Statement Version screen:
Drill down by clicking the folder to the left of the item “Profit and
loss statement”.
Place your cursor on the “Staff costs” item and choose Create Items.
Enter 3063000 as the item number and “Employee Training and
Education” as the description.
Choose Enter to add the new item to the structure.
DO NOT EXIT THIS SCREEN
4. Assign the account 476400, Training costs, to the new item “Employee
Training and Education”. The account will appear in this item whether it
has a debit or credit balance.
a) Assign account
On the Change Financial Statement Version screen:
Place the cursor on the “Employee Training and Education” item and
choose Assign Accounts.
Enter 476400 in the 'From act' column and set both the debit balance
(D) and credit (C) balance indicators.
Choose Enter.
DO NOT EXIT THIS SCREEN

Creating Financial Statements Task 2

Task 2:
Create your own financial statement version FS## by copying and modifying an
existing version.
1. Copy the financial statement version INT to create your own version FS##
and add as a description Financial Statement Version ##. Use the language
of the country where the course is taking place as the maintenance language.
a) Create the financial statement version
Copy financial statement version INT.
Menu path to configure financial statement version:
Tools → Customizing → IMG → Execute Project → SAP Reference
IMG → Financial Accounting → General Ledger Accounting →
Business Transactions → Closing → Document → Define Financial
Statement Versions
Select the row for financial statement version INT.
Edit → Copy as…
Enter the key FS## and the name Financial Statement Version ##.
Choose Enter.
Save.
Double-click the financial statement version you have just created
(FS##) to check the maintenance language.
If necessary, change this to the language of the country in which the
course is being held.
Save.
DO NOT EXIT THIS SCREEN

Creating Financial Statements

Task 1:
Carry out the following task.
1. Create financial statements (report RFBILA00) for your company code
AC## for the current period and fiscal year. Use the existing financial
statement version INT and the ALV tree control list output.
a) Create the financial statements (RFBILA00)
Menu path for report:
Information Systems → Accounting → Financial Accounting →
General Ledger → Balance Sheet
Enter the following data:
Company code: AC##
Tab page: Further selections
Financial statement version: INT
Reporting year: Current year
Reporting periods: From current period to current period
List output: ALV Tree Control
Execute the report.