Issue

Large multinational organisations with a global footprint such as Syensqo are typically required to report Financial Statements out of their main operational accounting systems according to different accounting standards/principles order to meet group policy and regulatory compliance.

In the past, SAP legacy systems such as SAP ERP with classic General Ledger Accounting did not have a sophisticated solution to cater for parallel accounting requirements so as a best practice model an approach called account-based solution was widely adopted, amongst many other customers using classic G/L functionalities in SAP ERP also at Syensqo.

With the advent of the new General Ledger (later on referred to as new G/L) functionalities and the rise of globalization and IFRS as a commonly adopted reporting standard across the world, SAP has introduced the concept of ledgers to replace the outdated - and for many customers painful - account-based solution for parallel accounting to handle multi-GAAP reporting requirements for its customers.

Moving to S/4 HANA, the adoption of the new General Ledger is mandatory for all SAP customers. While not all features that new G/L Accounting offers are mandatory, the usage of at least one leading ledger is mandatory. Besides the leading ledger which is typically used for keeping the books in accordance with the company’s group reporting standards and policies (e.g. IFRS for listed companies), SAP now offers additional parallel non-leading ledgers which can be used instead of the outdated account-based solution to keep books according to different GAAP valuation rules. 

Introducing additional (standard) ledgers and/or currency types for a particular ledger is a time-consuming process requiring smaller-scaled data migration projects. Activating ledgers also has process implications especially with regards to period-end activities as certain closing activities are ledger-specific so introducing additional ledgers may create additional workload for business users with limited benefits. As such it is advisable to establish design principles upfront on the default ledger setup for Syensqo entities in S/4 HANA and put forth guidelines to follow for future roll-outs.

Recommendation

Background & Context

Assumptions

Constraints

Impacts

Business Rules

Options considered

Option A: 

Option B: 

Option C: 

Option D: 

Evaluation

	Option A	Option B	Option C	Option D
Criterion 1	Pro Con	Pro Pro	Pro Con	Pro Con
Criterion 2	Pro Con	Con	Pro Pro	Con Con
Criterion 3	Pro	Con	Con	Pro

See also

Change log

Workflow history