| Status | |
|---|---|
| Owner | Anil Para |
| Stakeholders |
Purpose
The purpose of this document is to define the conversion approach for RE-FX Contract and Lease Management (CLM) master data and balances in S/4 HANA.
The main object of RE-FX migration is Lease contract master and balances. Due to the technical structure of RE-FX, there are also several tightly connected migration objects such as Business Partners (i.e., Vendors), Right of Use (RoU) Assets & their balances, and GL Liability balances. The scope of this conversion specification is the Lease contract master records. Migration of Lease contracts are however dependent on the other objects mentioned above to migrate Lease contracts and their balances completely and accurately.
Group entities currently using SAP ECC solution shall use S/4 HANA CLM for IFRS 16 Lease Accounting in SyWay. S/4 HANA CLM provides a standardized framework, single source of truth and processes for a streamlined management of lease contracts across all Syensqo group entities directly in S/4 HANA
Conversion Scope
The scope of this document covers the approach for converting active IFRS 16 Lease Contracts from Legacy Source Systems into S/4HANA following the RE-FX Contracts MDS Standard. The BPML process for RE-FX contracts will be followed as below
| Level-1 | Level-2 | Level-3 | Level-4 |
9. Finance | 9.5 Perform Transactional Accounting | 9.5.6 Perform Lease Accounting | 9.5.6.2 Manage Finance Lease Contracts |
| 9.5.6.3 Manage Lease Contract Adjustments | |||
| 9.5.6.4 Manage Lease Contract Terminations | |||
| 9.7 Perform Financial Close | 9.7.1 Period-End Close | 9.7.1.11 Manage Real Estate Close | |
| 9.12 Perform Financial Reporting | 9.12.1 Perform Operational Reporting | 9.12.1.4 Perform Operational Reporting for Lease Accounting |
The following ROU Asset Classes from legacy are applicable for this conversion. Corresponding S/4 HANA asset classes will be added later.
| System | Asset Class | Description |
| WP2 | AC231001 | Leasing - Real Estate - Land |
| WP2 | AC233001 | Leasing - Real Estate - Office Building |
| WP2 | AC233002 | Leasing - Real Estate - Employee Lease Apartments |
| WP2 | AC233003 | Leasing - Real Estate - Storage Space |
| WP2 | AC234001 | Leasing - Real Estate - Cars |
| WP2 | AC234002 | Leasing - Real Estate - Railcars |
| WP2 | AC234003 | Leasing - Real Estate - Containers / Trailers |
| WP2 | AC234004 | Leasing - Real Estate - Other Vehicles |
| WP2 | AC235001 | Leasing - Real Estate - IT Hardware |
| WP2 | AC235002 | Leasing - Real Estate - Computers |
| WP2 | AC235003 | Leasing - Real Estate - Office Equipment |
| WP2 | AC235004 | Leasing - Real Estate - Others Tangible |
| WP2 | AC237001 | Leasing - Real Estate - Industrial Equipment |
| PF2 | ZLE23101 | Leasing - Real Estate - Land |
| PF2 | ZLE23301 | Leasing - Real Estate - Office Building |
| PF2 | ZLE23302 | Leasing - Real Estate - Employee Lease Apartments |
| PF2 | ZLE23303 | Leasing - Real Estate - Storage Space |
| PF2 | ZLE23401 | Leasing - Real Estate - Cars |
| PF2 | ZLE23402 | Leasing - Real Estate - Railcars |
| PF2 | ZLE23403 | Leasing - Real Estate - Containers / Trailers |
| PF2 | ZLE23404 | Leasing - Real Estate - Other Vehicles |
| PF2 | ZLE23501 | Leasing - Real Estate - IT Hardware |
| PF2 | ZLE23502 | Leasing - Real Estate - Computers |
| PF2 | ZLE23503 | Leasing - Real Estate - Office Equipment |
| PF2 | ZLE23504 | Leasing - Real Estate - Others Tangible |
| PF2 | ZLE23701 | Leasing - Real Estate - Industrial Equipment |
The data from legacy system includes:
- IFRS 16 Lease contracts - Lease contract master data and balances
- ROU Assets - Right of Use Assets and Balances
- Lease Liabilities - Short Term and Long Term Lease Liability Balances
- Accrued Lease Liability - Intermediatory Lease liability balance
- Business Partners - Vendor Business Partner master data with a specific RE-FX role
- Purchase Order - Need a further check on the Lease POs strategy?
The data from legacy system excludes:
- Inactive Lease Contracts
- Deactivated ROU Assets
- Lease contracts will be ended equal to go-live date
| Source | Scope | Source Approx No. of Records | Target System | Target Approx No. of Records |
|---|---|---|---|---|
| PF2 | RE-FX Lease Contracts and ROU Assets | 1,781 | S/4 HANA | Will be same as Source, unless any new contracts and/or deactivation before Go-live |
| WP2 | RE-FX Lease Contracts and ROU Assets | 2,022 | S/4 HANA | Will be same as Source, unless any new contracts and/or deactivation before Go-live |
Additional Information
Multi-language Requirement
IFRS 16 Lease Contracts will primarily be managed in English
Document Management
N/A
Legal Requirement
There are no legal requirements relevant to data migration of IFRS 16 Lease Contracts
Special Requirements
Target Design
The technical design of the target for this conversion approach.
| Table | Field | Data Element | Field Description | Data Type | Length | Requirement |
|---|---|---|---|---|---|---|
| VICNCN | BUKRS | Company Code | CHAR | 4 | Mandatory | |
| VICNCN | RECNNR | Contract Number | CHAR | 13 | Mandatory | |
| VICNCN | RECNTYPE | Contract Type | CHAR | 4 | Mandatory | |
| VICNCN | RECNTXT | Contract Description | CHAR | 80 | Optional | |
| VICNCN | RELEVANTEVAL | Valuation Relevance | CHAR | 10 | Optional | |
| VICNCN | Purchasing Document | |||||
| VICNCN | RECNTXTOLD | Number of Old Contract | CHAR | 20 | Optional | |
| VICNCN | RECNCNCURR | Currency | CHAR | 5 | Optional | |
| VICNCN | KEY_ID | Line ID | CHAR | 2 | Mandatory | |
| VICNCN | TERM_NO | Term Number | CHAR | 4 | Optional | |
| VICNCN | OBJTYPECN | Business Object Type of Contract | CHAR | 2 | Optional | |
| VICNCN | OBJDCN | ID Part of Contract Object | CHAR | 45 | Optional | |
| VICNCN | XCNSUBJECT | Name for Contract Term | Text | 60 | Optional | |
| VICERULE | ACCTOBJNR | Account Assignment Object | CHAR | 45 | Mandatory | |
| VICERULE | CNSUBJECTTYPE | Type of Contract Object | CHAR | 6 | Optional | |
Data Cleansing
| ID | Criticality | Error Message/Report Description | Rule | Output | Source System |
|---|---|---|---|---|---|
| DC-1 | Medium | Terminated or concluded lease contracts must be closed and all related postings need to be completed. | Data cleansing to deactivate and exclude terminated or concluded contracts | SAP ECC | |
| DC-2 | Medium | Lease - Suspense account balances to be cleared | The balances are to be closed to 0 for any terminated or concluded contracts. Open items are to be cleared as much as possible. | SAP ECC |
Conversion Process
The high-level process is illustrate by the diagram below:
Data Privacy and Sensitivity
Extraction
The IFRS 16 Lease contract master data records shall be extracted from SAP ECC and shall be migrated using the Syniti Migrate / lease migration template. There are 2 possibilities:
- The data exists. Syniti Migrate connects to the source and loads the data into Syniti Migrate. There are 3 methods:
- Perform full data extraction from relevant tables in the source system(s).
- Perform extraction through the application layer.
- Only if ; cannot connect to the source, data is loaded to the repository from the provided source system extract/report.
- The data does not exist (or cannot be converted from its current state). The data is manually collected by the business directly in Syniti Migrate. This is to be conducted using DCT (Data Collection Template) in Syniti Migrate
The agreed Relevancy criteria is applied to the extracted records to identify the records that are applicable for the Target loads
Extraction Run Sheet
| Req # | Requirement Description | Team Responsible |
|---|---|---|
| ERS-1 | Firstly, go to table ANLA (Asset Master Record Segment) and filter based on BUKRS (company code) and ANLKL (Asset Class) that are in scope during the deployment. Ensure that the DEAKT (deactivation date) is blank. After, retrieve the table results. | Data team |
| ERS-2 | Based on the result from ERS-1, proceed to table ANLZ (Time-Dependent Depreciation Terms). Filter the details based on BUKRS (company code), ANLN1 (main asset number) and ANLN2 (asset sub number). Next obtain the entries for asset master data time-dependent details. | Data team |
| ERS-3 | Based on the result from ERS-1, proceed to table ANLB (Depreciation terms). Filter the details based on BUKRS (company code, ANLN1 (main asset number) and ANLN2 (asset sub number). Next obtain the entries for asset master data depreciation areas details. Note: i. One asset will consist more than one line item depending on the number of depreciation areas that is setup in the legacy ECC system ii. Take note of NDJAR (planned useful life) and NDPER (planned useful life in periods) | Data team |
| ERS-4 | Based on the result from ERS-1 and ERS-3, proceed to table ANLC (Asset Value Fields). Filter based on BUKRS (company code), ANLN1 (main asset number), ANLN2 (asset sub number), GJAHR (Fiscal year) and AFABE (depreciation area). Take note of AFBLPE (Period for the last depreciation posting), then, retrieve the cumulative values. i. KANSW (Cumulative acquisition and production costs) ii. KNAFA (Accumulated ordinary depreciation)i ii. NAFAG (Ordinary depreciation) | Data team |
Selection Screen
| Selection Ref Screen | Parameter Name | Selection Type | Requirement | Value to be entered/set |
|---|---|---|---|---|
Data Collection Template (DCT)
Target Ready Data Collection Template will be created for data with exception of some fields which require transformation as mentioned in the transformation rule.DCT Rules
| Field Name | Field Description | Rule |
|---|---|---|
Extraction Dependencies
| Item # | Step Description | Team Responsible |
|---|---|---|
| ED-1 | RoU Assets of contracts that are retired will not be migrated | Data Team |
| ED-2 | Contracts which are already concluded and no longer valuated shall not be migrated however their assets shall only be migrated if the asset is still in use | Data Team |
| ED-3 | Total NBV of the RoU assets are to be compared with total RoU Asset GL balance for each of the ledgers | Data Team |
| ED-4 | Total lease liabilities of the downloaded list of contracts are to be compared that they match the total short and long term lease liabilities in GL for each of the ledgers | Data Team |
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 to make the data Target ready:
- Perform value mapping and data transformation rules.
- Legacy values are mapped to the to-be values (this could include a default value)
- Values are transformed according to the rules defined in
- Prepare target-ready data in the structure and format that is required for loading via prescribed Load Tool. This step also produces the load data ready for business to perform Pre-load Data Validation
Transformation Run Sheet
| Item # | Step Description | Team Responsible |
|---|---|---|
Transformation Rules
| Rule # | Source system | Source Table | Source Field | Source Description | Target System | Target Table | Target Field | Target Description | Transformation Logic |
|---|---|---|---|---|---|---|---|---|---|
List of Custom Target Reports for this object is maintained here: Conversion Specification - Custom Reports Register.
Transformation Mapping
| Mapping Table Name | Mapping Table Description |
|---|---|
Transformation Dependencies
List the steps that need to occur before transformation can commence| Item # | Step Description | Team Responsible |
|---|---|---|
Pre-Load Validation
Project Team
Completeness
| Task | Action |
|---|---|
Accuracy
| Task | Action |
|---|---|
Business
Completeness
| Task | Action |
|---|---|
Accuracy
| Task | Action |
|---|---|
Load
The load process includes:
- Execute the automated data load into target system using load tool or product the load file if the load must be done manually
- Once the data is loaded to the target system, it will be extracted and prepared for Post Load Data Validation
Load Run Sheet
| Item # | Step Description | Team Responsible |
|---|---|---|
Load Phase and Dependencies
Configuration
| Item # | Configuration Item |
|---|---|
| 1 | Company Code |
| 2 | Contract Types |
| 3 | Valuation Rules |
| 4 | Conditions and Condition Purpose |
| 5 | Contract Object Types |
| 6 | Tax Type and Tax Group |
| 7 | Valuation Relevance |
| 8 | ROU Asset Classes |
| 9 | Fixed Asset - Legacy Transfer Date |
| 10 | ROU Assets Number Ranges |
| 11 | Contract Number Ranges |
| 12 | Business Partners with specific Role |
| 13 | GL Accounts |
| 14 | Cost Centres, Profit Centres and Functional Area |
| 15 | Discounted Interest Rates |
Conversion Objects
| Object # | Preceding Object Conversion Approach |
|---|---|
| list the exact title of the conversion object of only the immediate predecessor – this will then confirm the DDD (Data Dependency Diagram) | |
Error Handling
| Error Type | Error Description | Action Taken |
|---|---|---|
Post-Load Validation
Project Team
Completeness
| Task | Action |
|---|---|
Accuracy
| Task | Action |
|---|---|
Business
Completeness
| Task | Action |
|---|---|
Accuracy
| Task | Action |
|---|---|
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.