Core Design (Segments/Profit Centers/Document Splitting/Parallel Accounting)
New General Ledger functionality includes Document Splitting, Segmental Reporting, Parallel Ledgers, and Valuations. Whether upgrading in ECC from Classic General Ledger to New General Ledger, upgrading to S/4HANA in a brownfield implementation, or performing a greenfield implementation, the journey to the final financial accounting should never be considered a technical upgrade but as an opportunity to perform an overhaul on how the company’s financial statements are produced.
In General Ledger Accounting, parallel accounting is used to run several parallel ledgers (general ledgers) for different accounting principles (e.g., IFRS and local GAAP). During posting, you can post data to all ledgers, to a specific selection of ledgers, or to a single ledger.
A segment can be used according to the business’s reporting needs and can reflect a product/product line and/or a geographical region. If we take a common approach example where each geographical region is represented by way of legal entity, the focus is then moved to a management accounting viewpoint. With S/4HANA, we understand that the core master data elements have now been incorporated into the S4 General Ledger (Segment and Profit Centre Accounting) which allows us to post both to the correct legal entity and adopt the segmental approach. The below diagram illustrates the postings both to legal entity and how the postings sit within the reporting structure to provide the required financial statements (Legal view and a view for the segment, in this case, the Pharmaceuticals Segment).