Purpose

The purpose of this document is to define the conversion approach to migrate GL line items relating to VAT (input / output) in S/4 HANA.

Conversion Scope

The scope of this document covers the approach for converting tax items with AP/AR open items from Legacy Source Systems into S/4HANA. 

The data from legacy system includes:

1. deferred tax items related to AP/AR open items as per object # 9006/9007/9008/9009

The data from legacy system excludes:

1. non deferred tax items

Relevancy rule :

• Initial extract all documents from BSET for deferred tax codes mapped in link with fiscal year =< 2 years from migration cutoff date
• refer to relevant data extracted from object # 9006/9007/9008/9009 (document number, fiscal year, company code)
• filter for same document number + fiscal year + company code from BSET table initial extracts 

Scope of the migration is based on deferred tax linked to migrated AP OPEN ITEMS (9006), AP SPECIAL GL OPEN ITEMS (9007), AR OPEN ITEMS (9008), AR SPECIAL GL OPEN ITEMS (9009). The deferred tax codes will be mapped in a table by country / company (refer link). If such tax codes are part of the 4 objects (AP/AR) scope ie same document number/year/company code combination, the respective BSET data will be extracted for migration together with each object. The extracted and transformed data will be used in load files of respective objects ie not loaded on its own. Example for AP open items, it will be used in the DEFERRED TAX tab sheet of the load file, the postings will auto generate tax line items.

Line items will contribute to the current year to-date balance of the respective tax gl accounts. For reconciliation, the line item totals will be excluded from trial balance migration totals (object # 9013 / 9014).

All currencies will be loaded accordingly unless there is a change in company design where local / group currency changes. Rates are as per the historical postings unless specific requirement calls for a fixed rate eg. group currency rate for consolidation purposes. Offsetting gl account is respective migration account for AP, AR migration objects (refer link). Legacy offsetting GL accounts in legacy documents will not be considered in this migration scope, they will be migrated in other objects scope eg. GL open item or GL balances.

There will be no migration of non-deferred tax items ie. history of input / output tax will remain in legacy system. Current year tax reports will be a combination of legacy system data and S4 system data after go-live.

Additional Information

Multi-language Requirement

Document Management

Legal Requirement

Special Requirements

Target Design

The technical design of the target for this conversion approach. 

Data Cleansing

Conversion Process 

The high-level process is as follows :

1. Extract from legacy systems
2. Transformation : Based on dependent objects (Open AP / AR) , check if tax codes are marked as deferred tax in mapping tables. If matched, the respective load data will be generated to respective load file outputs to be combined into respective OPEN AP / AR load files
3. Load process will be performed in respective OPEN AP / AR objects via respective tool eg. LTMC
4. There is no loading for this object on its own

Data Privacy and Sensitivity

Extraction

Extract data from a source into Syniti. There are 2 possibilities:

1. The data exists in legacy system. Syniti connects to the source and loads the data into Syniti.
   
2. The data does not exist (or cannot be converted from its current state).  The data is manually collected by the business directly in DCT. This is to be conducted using DCT (Data Collection Template) in Syniti.

The agreed Relevancy criteria is applied to the extracted records to identify the records that are applicable for the Target loads

Extraction Run Sheet

Selection Screen

Data Collection Template (DCT)

Data Collection Template will be prepared by business for VAT data for companies not in scope of Syniti as well as data correction scenarios. This is not automatically extracted from legacy and require transformation and direct load to target system.

Extraction Dependencies

Transformation

The Target fields are mapped to the applicable Legacy field that will be its source, this is a 3-way activity involving the Business, Functional team and Data team.  This identifies the transformation activity required to allow Syniti to make the data Target ready:

1. Perform value mapping and data transformation rules.
   1. Legacy values are mapped to the to-be values (this could include a default value)
   2. Values are transformed according to the rules defined in Syniti
2. Prepare target-ready data in the structure (refer TARGET DESIGN table above) and format that is required for loading via prescribed Load Tool (refer to LOAD section below).  This step also produces the load data ready for business to perform Pre-load Data Validation

Transformation Run Sheet

Transformation Rules

List of Custom Target Reports for this object is maintained here: Conversion Specification - Custom Reports Register.

Note on currencies :

Group Currency Calculation (reference from CS # 9013)

In legacy ECC, it was identified that group currency balances are missing. To address this, the plan is to derive group currency amounts by reading the relevant exchange rates from the BFC consolidation system for each period within the migration scope.

For each period:

• The local currency amounts will be extracted from ECC.
• The corresponding period’s exchange rate will be retrieved from BFC.
• The group currency balance will be calculated by converting the local currency amounts using the BFC exchange rates.
• The calculated group currency balances will then be loaded into S/4HANA as part of the migration process.

This approach ensures consistency between the group currency balances in S/4HANA and the consolidation system.

Exchange Rate Table: Local Currency to Group Currency (DCT page to be maintained to store this information for each cycle and to be used across Finance transactional objects ) 

Currency Adjustment During Migration (TCURX Consideration)
In SAP, the TCURX table defines the number of decimal places used for each currency.
This impacts how amounts are stored internally in database tables versus how they are displayed externally in user interfaces or reports.
Currencies such as JPY (Japanese Yen), KRW (Korean Won), or VND (Vietnamese Dong) are typically configured with no decimal places (TCURX-CURRDEC = 0).
Understanding and correctly applying the TCURX rules is essential during data migration to ensure financial consistency between ECC and S/4HANA.
Internal vs External Currency Representation example:

External Amount
The amount value as displayed to users in SAP screens and reports.
96015 JPY


Internal Amount
The amount value stored in database tables for computation.
960.15
Multiplied by factor = 10² if target has 2 decimals
 During data migration, these internal (technical) amounts must be converted to external amounts to ensure accuracy and consistency in the target S/4HANA system.
Conversion Formula:
External Amount =  Internal Amount * 10 to the power ( 2 - Number of decimal for the currency in TCURX table )

Transformation Mapping

Transformation Dependencies

Pre-Load Validation

Project Team

Completeness

Accuracy

Business

Completeness

Accuracy

Load

Loading will be done through migration cockpit at respective objects (AP OPEN ITEMS (9006), AP SPECIAL GL OPEN ITEMS (9007), AR OPEN ITEMS (9008), AR SPECIAL GL OPEN ITEMS (9009) and therefore, data from the transformation export view to be exported into the load file format.

3 export views to be prepared based on the field list from the XML load templates attached. 

1. Create export view for the DEFERRED TAX ITEMS of AP OPEN ITEMS (9006), AP SPECIAL GL OPEN ITEMS (9007)
2. Create export view for the DEFERRED TAX ITEMS of AR OPEN ITEMS (9008), AR SPECIAL GL OPEN ITEMS (9009)

Load Run Sheet

Load Phase and Dependencies

Configuration

 Conversion Objects

Error Handling

Post-Load Validation

Project Team

Completeness

Accuracy

Business

Completeness

Accuracy

Key Assumptions

• Master Data Standard is up to date as on the date of documenting this conversion approach and data load. 
• is in scope based on data design and any exception requested by business.

Change log

Workflow history