Multiple accounting Principles assignment to Leading Ledger demerit

[former_member697408]

Dear Experts,

I found that it is ok to put many accounting principles in leading ledger.

What is the difference to do this, compare to create an non-leading ledger, and put one accounting principle into the non-leading ledger.

for example:

leading ledger: US GAAP, IFRS, Local GAAP

compare to

Leading ledger: local GAAP

non-leading ledger: US GAAP

non-leading ledger: IFRS

what is the difference between these two settings?

Thank you

Lei

[sanilbhandari]

Hello 1990leihang

You should assign one accounting principle to one ledger. The leading ledger should have the accounting principle which is used in all the countries for your external reporting. Eg, if you are an US based group, than ideally US GAAP should be assigned to the leading ledger and you should create non leading ledger each for IFRS and Local GAAP each.

Having this set up helps especially if you have different fiscal years for Local GAAP reporting and there are adjustments you need to do for local GAAP.

The below blog should be a good starting point for you

https://blogs.sap.com/2018/04/04/ledgers-ledger-groups/

Specifically on the difference, you cannot post a GAAP Specific accounting entry if you had all the accounting principles assigned to the same ledger. This goes against the very concept of Journal in the accounting sense. Technically, also it would cause issues for asset accounting as well

Thanks & Regards

Sanil Bhandari

[former_member697408]

Hello Sanil Bhandari

thank you very much !