Fi Gl Manualaccruals

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© SAP AG 1

Accrual Engine&

Applications

Introduction for ConsultantsDanny Pannicke & Thomas Schachner, SAP



© SAP AG 2

Note:

Some of the basic features of the Accrual Engine are explained with the help of an example in the chapter

‘Manual Accruals’.

SAP AG 2002

Content

Introduction: Accruals

Overview: Accrual Engine / Accrual Engine Architecture

Customizing the Accrual Engine

Customizing: Customer-Defined Accrual Methods

Customizing: Account-Determination

Debit and Credit Indicators

Applications that Use the Accrual Engine

Manual Accruals

z Example with screen shots

z Excursus: Status of Accrual Objects

z Reversal of Accrual Subobjects

z Working with Derived Accrual Types

z Customer-Defined Parameters

z Assignment Number and Automatic Clearing

Provisions for Awardsz Example with screen shots

Lease Accounting(Part of Leasing Solution - Separate Course)



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Introduction:

Accruals



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SAP AG 2002

1000

What Are Accruals?

800 1200 700 1100 500 1400 1100 800 1100 1100 1200

12,000

P e r i o d 1

P e r i o d 2

P e r i o d 3

P e r i o d 4

P e r i o d 5

P e r i o d 6

P e r i o d 7

P e r i o d 8

P e r i o d 9

P e r i o d 1 0

P e r i o d 1 1

P e r i o d 1 2

Given: Value + time interval Task: Distribute value over time interval

Simple Example:



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SAP AG 2002

Simple Posting Example

D CP&L D C Accrual

12 000 (1)

800 (3) (3) 800

1 200 (4) (4) 1 200

1 000 (2) (2) 1 000

Accounting: Accruals = Periodic postings



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Accruals are necessary in many kinds of contracts, for example insurance contracts.

At the start of a year, the customer pays in advance the sum of 12,000 EUR as a premium for the whole year.

However, this value cannot be posted fully as revenue, as the insurance company has to “deliver” theinsurance during the course of the year.

Accordingly, a value of 1,000 EUR is posted as revenue each month.

At the end of the year, the full value of 12,000 EUR is then realized as revenue.

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Accrual Engine: Where Are Accruals Needed?

Contract business transactions:

Insurance, leasing etc.

Contract-like business transactions:

Bonds with fixed interests, magazine subscriptions etc.

Any periodic postings based on an amount or value:

Provisions for Awards



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Overview:

Accrual Engine / AccrualEngine Architecture



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Contract-like data is transferred to the Accrual Engine.

The Accrual Engine makes periodic postings to Accounting based on this data.

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Accrual Engine: What it does

Accrual

Engine

Input:

Contract-like informationOutput:

Periodic postings



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The Accrual Engine is an engine and as such is not visible to the end user.

The Accrual Engine is surrounded by applications that define the business content and use the Accrual

Engine.

This can be compared with the engine in a car:

The driver works with the car, not with the engine itself.

In release 4.70, three applications use the Accrual Engine.

Accrual Engine applications are defined and delivered by SAP.

They cannot be defined by customers.

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Accrual

Engine

SDP

Leasing

Manual

Accruals

CRM

(future) IBS

Media(future)

...

Provisions for

Awards

Accrual Engine: A Generic Tool

Input

I n p u t

I n p u t Input

I n p u t

I n p u t

Output:

Periodic postings



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Accrual Engine: Some Features

New component in MySAP Financials

Highly flexible tool

Storage of all relevant data

Input (contract-like information incl. history!)

Output (posted accruals)

Accrual Engine = ‘Accrual subledger’

Mass data processing, performance optimized



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SAP AG 2002

Accrual Engine: Benefits

Automated periodic calculation of accruals

No recurring entries with fixed values!

Automated periodic posting (self correcting!)

Simulation tools (e.g. future accruals)

Supports multiple GAAPs

Comprehensive reporting tools

Integration with BW (Business Information Warehouse)



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This diagram shows the interaction between the Accrual Engine (yellow) and the calling application (orange):

The calling application provides the user interface, which “speaks the business language of the end user”.

The Accrual Engine consists of 2 parts: Calculation and Posting

The Accrual Engine stores two types of data

y Basis Data

Contract-like master data (‘accrual objects’) and all information that is necessary for making accrual

postings is stored in the Accrual Engine as basis data.

Basis data is time-dependent.

y Posted Values

All accrual postings (opening posting, periodic accrual posting, closing posting) create documents in the

Accrual Engine that are known as Accrual Engine documents and update total records in the Accrual

Engine.The Accrual Engine documents are transferred to Accounting automatically .

In this transfer, different levels of summarization in Accounting are possible.

Of course, this kind of summarization has nothing to do with the total records in the Accrual Engine.

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Accrual Engine: Architecture

Basis Data (Accrual Objects)

AccrualMethod

Trigger Calculation of

Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create

Accounting Documents

Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values

(Accrual Engine Documents)

Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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There are two main processes in the Accrual Engine:

y Process A: Creating accrual objects

The contract-like master data is stored as basis data (accrual objects) in the Accrual EngineThis basis data contain all relevant information that is necessary for making the accrual postings.

Depending on the settings in Customizing, it might be possible to make an opening posting when the object

is created.

The opening posting would post the total amount to be accrued to an accrual account.

y Process B: Starting a periodic posting run for a key date

Accrual objects are selected and the accruals are calculated for the relevant key date.

For example, 1,000 EUR is calculated as periodic accruals for key date 31 Jan. 2002.

In the posting part of the Accrual Engine, the delta to the accruals already posted is calculated and the delta

is posted as an Accrual Engine document to the Accrual Engine. This document is then transferred to

Accounting. In the first run, the value already posted is zero, meaning that 1,000 EUR is posted from the

accrual account to, say, a revenue account.

This delta logic means makes the Accrual Engine ‘self-correcting’ when changes are made to the basis data.

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Accrual Engine: Processes


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting

Process A:

Create/

Change

Basis Data

Process B:

Calculate

and Post

Accruals



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The accrual method calculates the periodic accrual value for a key date.

For example, if you want to accrue 12,000 EUR between 01 Jan. 2000 and 31 Dec. 2000, the

‘Linear/periodically’ method would calculate the following values:y Key date = 31 Jan. 2000: 1,000 EUR

y Key date = 28 Feb. 2000: 2,000 EUR

y Key date = 31 July 2000: 7,000 EUR

y ...

SAP delivers several examples of accrual methods, including

y Linear/periodically

y Linear/daily

Customer can program their own accrual methods (more details later)

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Accrual Engine: Accrual Methods


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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The posting logic in the Accrual Engine is based on a delta logic:

y First periodic posting run with key date = 31 Jan. 2000:

Calculation yields 1,000 EUR. This full value of 1,000 EUR is posted

y Second periodic posting run with key date = 31 Mar. 2000:

Calculation yields: 3,000 EUR. As 1,000 EUR has already been posted, only the delta of 2,000 EUR is

posted

y Remark: If the first posting run was reversed before the second run, the full value of 3,000 EUR would be

posted. This ensures that exchange rate differences are avoided.

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Accrual Engine: Delta Logic


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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In the posting, two kinds of documents are created:

y Accrual Engine Document

This document is stored in the Accrual Engine

y Accounting Document

The Accrual Engine document is transferred to Accounting.

For creating the Accounting document, account determination is processed in the Accrual Engine

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Accrual Engine: Account Determination


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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The basis data (accrual objects) is contract-like master data.

It is time-dependent so that it can store a history of changes made.

The basis data is created with the purpose of storing all information about a contract that is needed for postingaccruals. For this reason, the basis data has an hierarchical structure that corresponds to contracts and contract

items. As the Accrual Engine is intended to be a generic tool, the basis data is not referred to as ‘contracts’.

Instead, it is described more abstractly as Accrual Objects. Contract items are called accrual subobjects.

Usually accruals are posted based on contract items. For this reason, the main information is contained in the

accrual subobjects.

An accrual object is uniquely identified in the Accrual Engine by a reference key.

This reference key is decoded in the user interface of the calling application, ‘Manual Accruals’ for example.

Accordingly, an accrual subobject is identified by a reference subkey

Example:

Manual Accruals defines the reference key to consist of the two dimensions:

y Accrual object type, such as ‘RENTING’ and

y Accrual object number, such as 00100.

The combination of these two fields, RENTING00100 is the reference key.

Note: The dimensions used to define an accrual object unique are dependent on the application. In the other

application, Provisions for Awards, the dimensions ‘award’, ‘granting date’ and ‘cost center‘ determine the

accrual object and not the accrual object type and accrual object number. The dimensions ‘accrual object

type’ and ‘accrual object number’ are therefore only used by the Manual Accruals .

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Accrual Engine: Structure of Basis Data


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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Accrual objects have the following hierarchy structure:

Accrual object

y Accrual subobject

- Accrual item

The accrual object itself only links accrual subobjects.

It does not carry any information. In Manual Accruals, there is a 1:1 relationship between accrual objects and

accrual subobjects. The two terms can therefore be used synonymously.

The accrual subobject (header) contains the start-date and end-date (time interval) in which the accruals have

to be created. Examples: contract start-of-term and end-of-term.

It also links the dependent accrual items.

The accrual item is defined by the combination of

y Accrual type

Costs and revenues are different accrual types.y Accounting principle

The accruals can be different according to IAS or US GAAP

y The accrual items contain

y The value to be accrued

y The quantity to be accrued

y The accrual method (linear/periodically, linear/daily, ...)

The number of accrual items in an accrual subobject is not restricted.

It is therefore possible, for example, to accrue costs and revenues for an accrual subobject in parallel.

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Accrual Engine: Structure of Basis Data

Accrual Object

Accrual Subobject

Accrual Subobject

Accrual Subobject

Accrual Item

Assignment

Parameters

Cost center, business area, profit center, ...

Customer-defined fields like ‘Product Group’, ...

Start-date and end-date of time interval for accrual

Does not carry any information; links accrual subobjects

Each combination of

- Accrual Type (costs, revenues,...) and

- Accounting Principle (IAS, US GAAP, ...)

defines an Accrual Item:

The total value to be accrued, the total quantity to

be accrued and the Accrual Method

(linear/periodically, linear/daily) can be entered at

this level.

Header

...

Accrual Item

Accrual Item

...



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In addition to time-dependent master data, the Accrual Engine also stores the posted values, i.e. the accrued

values.

These posted values consist of

y Accrual Engine documents and

y Summary records

The Accrual Engine Documents are transferred to Accounting when they are posted.

Reconciliation with FI values is possible.

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Accrual Engine: Posted Values


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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A reporting tool is available for Accrual Engine summary records and Accrual Engine documents.

It is possible to simulate future values.

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Accrual Engine: Reporting of Posted Values


AccrualMethod


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



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Technical Details:

Database Tablesin the

Accrual Engine



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This slide provides an overview of the database tables in the Accrual Engine.

The calculation part of the Accrual Engine had tables which contain the time-dependent master data for the

Accrual Objects. This data is also called basis data.

The the posting part of the Accrual Engine has tables for storing the posted values:

y The Accrual Engine documents

y Total values which contain the summarized values from the Accrual Engine documents.

The total values are stored for each fiscal year, but not at period level.

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Database Tables in the Accrual Engine

Accrual Objects

Basis Data Posted Values

Cutomizing Tables

Customizing Tables Customizing Tables

Accrual Engine (general)

Calculation Posting

T i me - De pe nde n t Ma s te r

Da ta ( ‘ Ba s i s Da ta ’ ) Acc r ua l

E n g i ne Doc u me n t s a nd

To ta l Va l ue s



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Overview of the database tables that contain transaction data (not: Customizing data).

ACEOBJ: Accrual Objects,

y GUID: Internal view of the Accrual Object

y REF_KEY: External view of the Accrual Object

Basis Data (time dependent):

y ACEDSOH: Accrual subobject header data

y ACEDSOI: Accrual subobject items

y ACEDSOP: Parameters of the accrual subobject

y ACEDSASSGMT: Assignment of the accrual subobject

Posted Values:y ACEPSOH: Copy of the header from the Accrual Engine basis data.

Contains technical information needed for posting.

y ACEPSOI: Total values at fiscal year level.

y ACEPSOIT: Accrual Engine documents.

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Database Tables in the Accrual Engine

ACEOBJACEDSOH

ACEDSOI

ACEPSOH

ACEPSOI ACEPSOIT

ACEDSASSGMT

Field Name Key

MANDT X

COMP X

BUKRS X

OBJID X

SUBID X

ACRTYPE X

ACCRULE X

DATE_TO X

DATE_FROM

AMOUNT

CURRENCY

QUANTITY

UNIT

ACRMETHOD

TIMESTMP

Field Name Key

MANDT X

COMP X

BUKRS X

OBJID X

REF_KEY

STATUS

Field Name Key

MANDT X

COMP X

BUKRS X

OBJID X

SUBID X

DATE_TO X

DATE_FROMVALITY_FROM

VALITY_TO

UNAME

CPUDT

CPUTM

REF_SUBKEY

STATUS

TIMESTMP

Field Name Key

MANDT X

COMP X

BUKRS X

OBJID X

SUBID X

UNAME

CPUDT

CPUTMDEACTDATE

REF_SUBKEY

STATUS

FIRSTYEAR

LASTYEAR

TIMESTMP

Field Name Key

MANDT X

COMP X

BUKRS X

GJAHR X

OBJID X

SUBID X

ACRTYPE X

ACCRULE X

CUMVALCAP

CUMVALACCR

VALCAPVALACCR

VALRETIRE

LASTEFFDATE

CURRENCY

TIMESTMP

Field Name Key

MANDT X

COMP X

BUKRS X

GJAHR X

OBJID X

SUBID X

ACRTYPE X

ACCRULE X

DOCNR X

VALCUM

VALTBPCURRENCY

TRANSTYPE

EFFDATE

POPER

RUNID

AWTYP

AWKEY

AWSYS

TIMESTMP

COMP X

BUKRS X

OBJID X

SUBID X

DATE_TO X

DATE_FROM

BUS_AREA

DATE_FROM

PROFIT_CTR

COSTCENTER

ORDERID

WBS_ELEMENT

ACEDSOPField Name Key

MANDT X

COMP X

BUKRS X

OBJID X

SUBID X

DATE_TO X

PARAM_NAME X

CONTENT

DATE_FROM

TIMESTMP



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Customizing theAccrual Engine



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SAP Easy Access does not contain an application menu for the Accrual Engine, as it is always used in the

context of the calling application (Manual Accruals, Provisions for Awards or Lease Accounting).

However, there is a Customizing menu for the Accrual Engine.

The major Accrual Engine Customizing activities are also available in the Customizing menu for the calling

applications.

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Accrual Engine: Customizing



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Some Customizing settings in the Accrual Engine are made separately for each calling application.

When users start Customizing activities in this way, a popup appears asking them to specify the calling

application. The calling applications are called ‘Application Component of the Accrual Engine’.

In release 4.70, there are three application components:

y ACAC: Manual Accruals

y FILA: Lease Accounting

y SOA: Provisions for Awards

These Applications components are described in the following slides.

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Accrual Engine: Customizing

F 4

S t a r t



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There are quite many customizing activities for the Accrual Engine, but only a few of them are really

interesting for most customers.

In addition to the customizing activities of the Accrual Engine, there are usually also some customizingactivities to be done in the corresponding application (Manual Accruals, Provisions for Awards, etc.).

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Accrual Engine: Important Customizing Activities

Assign company codes to the Accrual Engine

Define accounting principles and

Assign accounting principles to company codes

Define accrual types (costs, revenues etc.)

Define accrual methods (linear etc.); separate chapter!

Define posting control (summarization etc.)

Define number ranges for accrual postings (4 different number

ranges!)

Define account determination; separate chapter!

Additionally: IMG activities specific for the application

component of the Accrual Engine, e.g.:

Manual Accruals:z Define accrual object types (Insurance, Renting etc.)

z Define number ranges for accrual objects

Provisions for Awards:

z Define RFC destination for data transfer from HR system



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Red: Important customizing activities of the Accrual Engine.

Most of the customizing activities of the Accrual Engine are also available in the customizing of the

application components like “Manual Accruals” or “Provisions for Awards”.

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Accrual Engine: Important Customizing Activities



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Many messages which can occur in applications, offer a direct link to the corresponding customizing

transactions.

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Accrual Engine: Customizing, Link from Messages

L o n

g t e x t



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Customizing:Customer-DefinedAccrual Methods



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SAP delivers a number of accrual methods:

Linear, periodically

Linear, daily with 365 days

Linear, daily with 360 days

...

Accrual methods are ordinary function modules

Customers can define (program) their own accrual

methods



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Accrual method ‘Linear’ is assigned to function module ACE_DS_METHOD_LINEAR_P1.

This function module calculates the periodic Accruals at posting period level using the fiscal year variant of

the company code.

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Customers can develop (program) their own accrual methods by creating corresponding function modules.

These new function modules should be entered in IMG activity ‘Develop Function Modules for Accrual

Methods’.After this has been done, these new function modules are available in F4 help for the ‘Function Module’ field

in IMG activity ‘Define Accrual Methods’.

These customer-defined function modules can read data from other SAP modules to get information needed

to calculate accruals.

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Customizing: Customer-defined Accrual Methods



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The function modules that are used as accrual methods must have a certain interface. This interface is the same for all accrual

methods.

The function module (accrual method) is called during the periodic accrual run for each accrual item (combination of accrual type and

Accounting principle) separately

Description of the interface:y Import parameters:

- Import structure IS_ACE_KEY

Unique key of the accrual item.

- Import table IT_GENERAL_PARAMS

Complete history of the accrual item including accrual object header data.

- Import table IT_PARAMS

Complete history of the parameters of the accrual subobject (ACEDSOP table entries).

- Import table IT_COMP_SIMUPARAM_RANGES

In simulation mode (possible in reporting e.g. in application component ‘Provisions for Awards’) this table can contain

parameters for simulation that were entered by the user.

E.g. User can enter a simulation version which can then be evaluated by the function module.

y Change parameters:

- Change table CT_PERIOD_VALUE

In this table, the fields

valact (value that has to be accrued from DATE_FROM until DATE_TO)

vaLcum (value for the time before DATE_FROM)

valremain (value that remains to be accrued after DATE_TO)

have to be filled. The values have to be calculated in the currency key that is given (filled by the system) in this table!

It is also possible to display interim results in the final list of the periodic accrual run by creating the customer include

CI_ACCRUAL_CALC_VARIABLES with fields for the interim results. These fields can then be filled too and are

automatically displayed in the results list of the periodic accrual run.

y Export parameters:

- Export table ET_RETURN

If messages occur in the function module, they should be stored in this table.

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Customizing:Account Determination



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The meaning of Start Account and Target Account depends on the process in the Accrual Engine, e.g.:

y Opening posting

In the opening posting, the target account is the accrual account.The start account is any account.

y Periodic recognition

In the periodic accrual posting, the start account is the accrual account, the target account is usually a profit

and loss account.

SAP AG 2002

Customizing: Account Determination

When posting Accruals, Accrual Engine documents are created in the

Accrual Engine. These documents consist of only one line item without

GL accounts and without CO assignments like cost center etc.

When the Accrual Engine documents are transferred to Accounting

(which is usually done automatically when they are posted), an

Accounting document with two line items is created from the Accrual

Engine document.

At this point in time, the Accrual Engine account determination is

executed to get the following information:

Start account

Target account

Document type



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SAP AG 2002


The customizing of the account determination is done in two steps:

Define the customizing tables for the account determination

The customer can define himself, which dimensions determine the accounts

and document type!E.g. the ‘Process in the Accrual Engine and accrual type determine the start

and target account

Create customizing entries in these self-defined customizing tables!



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Defining the customizing tables of the account determination.

In this example, the start and target accounts depend on the ‘process in the Accrual Engine’ and on the

‘accrual type’. The account determination can consist of more than one step:

For each step a separate customizing table can be defined.

In this example, two steps are used:

y In the first step ‘Document Type’ the document type is determined.

y In the second step ‘Accounts’ the start and target accounts are determined.

Additionally, for each step conditions and attributes can be defined. Please read the F1-helps on the

corresponding fields to get more information.

The account determination uses a generic tool, the so-called ‘derivation tool’.

In this tool, the single steps (customizing tables and conditions and attributes) are called ‘derivation rules’ andthe entries in the customizing tables are called ‘rule values’.

Please don’t be confused about this.

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The entries in the customizing tables can be created in the same transaction using the button ‘Maintain Rule

Values’.

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SAP AG 2002

Customizing: Extended Account Determination

In addition to the ordinary account determination, there exists also a so-

called ‘extended account determination’.

Both of these account determinations use the same derivation tool!

Only difference: The extended account determination offers more

features than the simple account determination.

Basis idea of the extended account determination is explained in the

following example:

Accruals have to be done in a lot of company codes.

In all companies, the same logic is to be used to derive the accrual accounts.

Problem: The accounts depend on the chart of accounts, but the chart of

account is different in each company code.

Solution:

z Do not derive the accounts directly, but derive only account symbols.

z In a second step of the account derivation, derive the account from account symbol

and chart of accounts!

z This two-step logic can be done in the extended account determination.



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Debit and CreditIndicators



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The value of the Accrual Engine document is posted to the target account.

The value with opposite sign is posted to the start account.

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Debit and Credit Indicators in Accrual Postings

Postings which are done by the Accrual Engine create at least two kind

of documents:

Accrual Engine documents

Accrual Engine documents are stored in the Accrual Engine and eachdocument consists of one line item only: This line item contains the

information which value was accrued for which accrual object in which

period.


The Accrual Engine document is automatically transferred to Accounting.

During this transfer from each Accrual Engine document two line items are

created in the Accounting document.

The account determination yields the necessary two accounts: Start and

target account:

Accrual Engine document: 100 EUR

- 100 EUR to start account

100 EUR to target account

Accounting document



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This example could be the periodic accrual posting for accrual of costs:

The target account would be a cost account and the credit account would be the accrual account.

For accrual of revenues, the debit and credit indicators should be opposite!This can be achieved in two ways:

y Enter a negative value as ‘total amount to be accrued’, instead of a positive value or

y Enter the opposite accounts in the account determination, e.g. for the periodic postings:

Enter the accrual account as target account and the revenue account as start account.

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Debit and Credit Indicators in Accrual Postings

The debit and credit indicators are determined from the sign of the

Accounting line item:

If the value is > 0, then the debit indicator is set,

If the value is < 0, then the credit indicator is set.

Accrual Engine document: 100 EUR - 100 EUR to start account

100 EUR to target account

Accounting document

Credit: 100 EUR to start account

Debit: 100 EUR to target account

Accounting document



© SAP AG 44

Applications that Usethe Accrual Engine



© SAP AG 45

In release 4.70, three applications use the Accrual Engine.

SAP AG 2002

Applications that Use the Accrual Engine

Manual Accruals


Lease Accounting



© SAP AG 46

‘Manual Accruals’ is a simple application that provides a user interface for working with the Accrual Engine.

Note:

Most features shown in the following slides are features of the Accrual Engine and are therefore validfor all application components in the Accrual Engine, not just for ‘Manual Accruals’.

Manual Accruals



© SAP AG 47

SAP AG 2002

Manual Accruals: Overview

Purpose: Post accruals for contract-like data

Create ‘contract data’ (accrual objects) manually in the Accrual Engine

Start periodic accrual posting runs



© SAP AG 48

The user interface for ‘Manual Accruals’ enables the end user to create accrual objects manually in the

Accrual Engine.

Note: Users can also create and change accrual objects in batch jobs using function modules. These functionmodules are:

y ACAC_OBJECT_CREATE_EXT for creating an accrual object and

y ACAC_OBJECT_MODIFY_EXT for changing an accrual object. If the Accrual Object does not yet exist,

it is created.

y Customers can generate a report that selects contract-like data from any DB table and calls on the above-

mentioned function modules to create the accrual objects.

SAP AG 2002


Accrual

MethodTrigger Calculation of

Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

ReportingReporting

Manual Accruals

Create

Accrual Objects

Manually



© SAP AG 49

SAP AG 2002

Manual Accruals: Interface for Creating AccrualObjects

In the application component ‘Manual Accruals’, accrual objects are

created manually, but SAP also deliveres an interface for creating

accrual objects.

Customer can develop a report to create accrual objects using thisinterface. The report would have to work in the following way:

Select contract-like data which have to be accrued.

The data can be selected from any source!

Transform the selected data into the format that is needed by the interface.

Save the transformed data as accrual objects in the Accrual Engine.

SAP is planning to deliver an example report.

The interface is the function module ACAC_OBJECT_MODIFY_EXT.



© SAP AG 50

SAP AG 2002

Manual Accruals: Basis Data Structure

Accrual Object

Accrual Subobject

Accrual Item

Assignment

Parameters

Cost center, business area, profit center, ...

Customer-defined fields like ‘product group’, ...

Start-date and end-date of time interval for accrual

Defined by the Accrual Object Type / Accrual Object Number combination

Each combination of

- Accrual Type (Costs, Revenues,...) and


defines an accrual item.

The total value to be accrued, the total quantity to

be accrued and the Accrual Method(linear/periodically, linear/daily) can be entered at

this level.

Header

Accrual Item

Accrual Item

...

1:1

In Manual Accruals, an accrual object is uniquely defined by the following two dimensions:

y Accrual object categoryExample: Insurance, Renting, ...

y Accrual object number

This number is automatically set by the system.

Actually, the Accrual Engine supports a two-level hierarchy in the basis data: accrual objects and accrual

subobjects.

y Manual Accruals does not use this hierarchy. In this sense, the accrual object and the accrual subobject

are identical: When an accrual object is created, the system creates exactly one accrual subobject. Hence

in the context of Manual Accruals the terms ‘accrual object and accrual subobject’ are synonyms. In

some of the following slides and examples we will use the term ‘accrual object’ instead of ‘accrual

subobject’.

y Remark: Provisions for Awards uses the two-level hierarchy: Each vesting period (the vesting date)

defines an accrual subobject.



© SAP AG 51

The application menu for Manual Accruals consists mainly of the following transactions:

Accrual object maintenance.

Create/change/display basis data.

Start periodic posting run.

Reporting: Display summary records or line items in the Accrual Engine (Accrual Engine documents). Either

posted values or simulated values can be displayed.

Corrections:

y Reverse periodic posting run:

If the user wants to post full values for each period - instead of deltas - the last periodic posting run can be

reversed. This technique can be used to avoiding exchange rate fluctuations.

y Transfer Accrual Engine documents to Accounting:

If errors occur, for example in the periodic posting run, due to locked cost centers or errors in accountdetermination, only Accrual Engine documents are created and these cannot be transferred to Accounting.

These Accrual Engine Documents have to be transferred to Accounting using a separate transaction.

SAP AG 2002

Manual Accruals: Application Menu



© SAP AG 52

Further functions in the Accrual Engine:

Reconciliation

Reconciliation between the Accrual Engine and Financial Accounting (General Ledger)

Carryforward

The summary records in the Accrual Engine are stored for each fiscal year separately. Fiscal years can be

locked in the Accrual Engine: Only two fiscal years are usually open for accrual postings. At the end of each

fiscal year, the summary records must be carried forward within the Accrual Engine. This carryforward does

not create postings in Accounting.

SAP AG 2002

Manual Accruals: Application Menu



© SAP AG 53

Manual Accruals Customizing consists mainly of Customizing activities from Accrual Engine Customizing.

Only the activities

y Define Accrual Object Categories and

y Define Number Ranges for Accrual Objects and

y Assign Accrual Object Category Parameters

The meaning of the first two activities is clear: The accrual object category and the accrual object number

define an accrual object uniquely.

The third activity enables the end user to enter freely defined characteristics (fields) when an accrual object is

created. These fields can then be used in account determination when Accrual Engine documents are

transferred to Accounting and they can also be used in the accrual method for calculating the accrual value in

the periodic posting runs. Manual Accruals Customizing is not a replica of Accrual Engine Customizing. However, it does contain the

major Customizing activities from Accrual Engine Custommizing. For special features, Accrual Engine

Customizing has to be used.

SAP AG 2002

Manual Accruals: Customizing



© SAP AG 54

Manual Accruals:Examples



© SAP AG 55

Data from this example will be entered as an accrual object (see next slide).

SAP AG 2002

Manual Accruals: Sample ‘Insurance Contract’

Contract data:

Valid from 01 Jan. 2000 until 31 Dec. 2004 (5 years)

Annual premium (to be paid by customer): 3,600 EUR

Revenues: Customer pays 5 x 3,600 EUR = 18,000 EUR

Costs: Salesman gets 6,000 EUR bonus

Costs and revenues must be accrued over 5 years

Monthly revenues: 300 EUR = 18,000 EUR / (5 x 12)

Monthly costs: 100 EUR = 6,000 EUR / (5 x 12)



© SAP AG 56

Screenshot of the transaction for creating accrual objects.

On the left, a tree displays acrual objects that have already been created.

On the right, details are displayed for the accrual object.

The four frames in the detail screen have the following meaning:

y The accrual object type and accrual object number define the accrual object / subobject

y The assignment for the posting in Accounting

y The start-date and end-date of the time interval

y Two items: revenues according to IAS and costs according to IAS.

Both will be accrued using the linear method.

y Not visible: Parameters. No parameters are used in this example.

Parameters like ‘product group’ could be entered for use in account determination, for example.

If an opening posting has to be made (Customizing accrual types), the system displays a popup to enter

posting parameters when saving.

SAP AG 2002

Manual Accruals: Create Accrual Object



© SAP AG 57

At saving, the system sets the accrual object number.

It is also possible to define an external number range in the customizing of the accrual object number.

Then the user has to enter the accrual object number manually!

Remark: Actually, the right screen displays the data of the accrual subobject , but in the context of Manual

Accruals, there is always only one subobject and hence we are using the terms ‘accrual object’ and ‘accrual

subobject’ as synonyms, as already said before.

SAP AG 2002

Manual Accruals: Accrual Object and Subobject



© SAP AG 58

The accrual object (not: subobject) itself does not contain any information. It only links the accrual subobjects

(exactly one in the case of Manual Accruals).

The accrual object is a link only and it can be displayed by ‘Goto -> Display Technical Data’: A popup withtechnical information for the accrual subobject appears. It displays also the corresponding accrual object:

An accrual object is uniquely defined by a so-called reference key (‘External reference of the accrual object’).

In the case of Manual Accruals, the reference key consists of the combination of

y accrual object type and

y accrual object number.

Also the accrual subobject is defined by a reference key (‘External reference of the accrual subobject’).

In the case of Manual Accruals this reference key is alsways set to ‘1’

For both reference keys there is also an internal format which is used for internal purposes in the Accrual

Engine.

SAP AG 2002

Technical Background: Accrual Object and Subobject



© SAP AG 59

Red indicates the corresponding data.

The Basis Data is time-dependent master data!

SAP AG 2002

Manual Accruals: Architecture


AccrualMethod

Trigger Calculation of Accruals

Periodic:

Calculate Accruals

Calculation

Create/Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already postedvalues

Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



© SAP AG 60

Red indicates the corresponding data.

The ‘Postings’ tab strip contains the Accrual Engine documents.

The ‘Totals’ tab strip contains Accrual Engine totals that are the summarized Accrual Engine documents.

SAP AG 2002

Manual Accruals: Architecture


AccrualMethod


Periodic:

Calculate Accruals

Calculation

Create/Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to


Posted Values


Post

Document

R R

Calling Application

R

Accrual Engine

Reporting Reporting



© SAP AG 61

When displaying an accrual object, the system automatically calculates the periodic accruals and displays

them.

SAP AG 2002

Manual Accruals: Create Accrual Object



© SAP AG 62

The system displays the opening posting (Accrual Engine document).

There are usually also follow-up documents in Accounting.

They can be displayed by double-clicking on the Accrual Engine document (see later). Note that the Accrual Engine document (Entry in database table ACEPSOIT) does not contain any

Accounting-relevant information: CO assignment and Accounts are derived by the system when the Accrual

Engine document is transferred to Accounting:

y CO Assignment:

The CO Assignment is part of the master data of the accrual object

y Accounts

The Accrual Engine has an account determination that determines the accrual account and the cross-

account

During transfer of an Accrual Engine document to Accounting, a two-lined Accounting document is createdfrom the Accrual Engine document (entry and cross entry).

Summarization:

The Accounting document is created by a BAPI. Before the BAPI is called by the Accrual Engine, a

summarization of a bunch of two-lined Accrual Engine documents is possible (Customizing).

SAP AG 2002

Manual Accruals: Opening Postings



© SAP AG 63

The preceding slides display postings and calculated values for accrual type ‘RVNUES’ were displayed.

This slide shows how to switch the display of postings and calculated values from RVNUES to COSTS.

After double-clicking on accrual type ‘COSTS’, the user can click on the ‘Calculated Values’ or ‘Postings’

tab strips: The system will display the corresponding data for accrual type ‘COSTS’.

SAP AG 2002

Manual Accruals: Navigation

Place cursor

in ‘COSTS’ line

and double-click

or

press ‘Transfer

Accrual Item’

button



© SAP AG 64

The opening posting for Accrual Type COSTS.

SAP AG 2002




© SAP AG 65

By double-clicking on the Accrual Engine document, you can display a popup with the Accounting

documents that were created from this Accrual Engine document.

Note that the Accounting document might contain summary values from many Accrual Engine documents if asummarization was active in the Accrual Engine when the Accounting document was created.

SAP AG 2002

Manual Accruals: Documents in FI



© SAP AG 66

For accrual types RVNUES and COSTS, opening postings are made.

The accounts are determined by Accrual Engine account determination when Accrual Engine documents are

transferred to Accounting. Note: The Accrual Engine cannot post to customer or vendor accounts. It can only to post general ledger

accounts. Opening postings cannot therefore be made directly to receivables or payables. They have to be

made to correction accounts, which are general ledger accounts.

SAP AG 2002


D C Accrued Revenues

18,000 (I.1)

D C Accrued Costs

(I.2) 6,000

D CReceivables

(I.1) 18,000

D CPayables

6,000 (I.2)



© SAP AG 67

Screenshot of the entry screen for the periodic posting run.

The key date is the end of period 1/2000.

SAP AG 2002

Manual Accruals: Start Periodic Accrual Run



© SAP AG 68

Screenshot of the results list of the periodic posting run.

Since in every single period the values

y Revenues: 300 EUR

y Costs: 100 EUR

have to be posted, exactly these values are posted in 1/2000.

Two Accrual Engine documents were created, but one Accrual Engine document could not be transferred to

Accounting, as account 810010 has incorrect settings. This Accrual Engine document can be transferred to

Accounting subsequently using the following function in the application menu:

Manual Accruals -> Corrections -> Transfer of Accrual Engine Documents to Accounting.

SAP AG 2002

Manual Accruals: Result of Periodic Accrual Run



© SAP AG 69

This screenshot displays the accrual object after the periodic accrual run.

In addition to the opening posting, the periodic posting of 100 EUR is also displayed.

Not displayed: The periodic posting for the revenues of 300 EUR.

SAP AG 2002

Manual Accruals: Display Accrual Object after Periodic Accrual Run



© SAP AG 70

I.1 is the opening posting

P.1 is the posting made during the first accrual run for the revenues in 1/2000.

SAP AG 2002

Manual Accruals: Documents in FI

D C Accrued Revenues

18,000 (I.1)

(P.1) 300

D CReceivables

(I.1) 18,000

D CRevenues

300 (P.1)



© SAP AG 71

Now continue with the example: Skip one period.

In 3/2000 the values for 2/2000 and 3/2000 are posted.

SAP AG 2002

Manual Accruals: Posting Deltas

In each period, the following accruals are calculated:

Revenues (Accrual Type RVNUES): 300 EUR

Costs (Accrual Type COSTS): 100 EUR

In the first period (1/2000) these values were posted correctly.

Now let us assume that the customer forgets to carry out the accrual run in

2/2000.

The next accrual run is carried out in 3/2000.

The Accrual Engine then calculates that in 3/2000 the accrued values should

be:

Calculated Revenues: 3 x 300 EUR = 900 EUR

Calculated Costs: 3 x 100 EUR = 300 EUR

In 3/2000, the Accrual Engine then posts the difference between the

calculated values and the values already posted:Posted Revenues: 3 x 300 EUR - 300 EUR = 600 EUR

Posted Costs: 3 x 200 EUR - 100 EUR = 200 EUR

This is displayed in the next slide



© SAP AG 72

The system posts the delta of calculated value and previously posted values.

The delta is calculated using the total values which can be displayed in the ‘totals’ tab strip in the accrual

object master data. Possible problem: Exchange rate fluctuations.

Example (costs): Transaction currency is EUR. In Accounting all values are also stored in USD:

1/2000: Exchange rate EUR:USD = 1:1; Posted value: 100 EUR = 100 USD.

3/2000: Exchange rate EUR:USD = 1:2; Posted value: 200 EUR = 400 USD.

Conclusion: 300 EUR and 500 USD that do not reflect the current exchange rate 1:2. Instead of 500 USD it

should be 600 USD.

Solution: Reverse the accrual run from 1/2000 before the next accrual run is started. The system would then

post the full value of 300 EUR in 3/2000 with the exchange rate of 1:2.

SAP AG 2002

Manual Accruals: Posting Deltas



© SAP AG 73

This example is described in detail in the following slides.

SAP AG 2002

Manual Accruals: Changing the Accrual Object

Let us make the example more complex: Change to total costs which are to be

accrued:

On 31 March 2000, the following costs had already been accrued: 3 x 100 EUR =

300 EUR

On 15 Feb. 2000 the premium for the salesman is raised from 6,000 EUR to

9,000 EUR

When changing the total costs to be accrued from 6,000 EUR to 9,000 EUR, the

opening posting of 6,000 EUR is reversed and a new opening posting of 9,000

EUR is posted. Periodic costs are now calculated to be 9,000 EUR / (5 x 12) = 150

EUR

In the next periodic accrual run on 30 April 2000, Accrual Engine calculates thefollowing costs: 4 x 150 EUR = 600 EUR

On 30 April 2000, the Accrual Engine posts the delta of 600 - 300 = 300 EUR

automatically.



© SAP AG 74

The change of the costs to be accrued (from 6,000 EUR to 9,000 EUR) is valid from 15 Feb. 2000. The new

opening posting is made using this keydate for currency translation.

SAP AG 2002




© SAP AG 75

When the user changes the total costs to be accrued from 6,000 to 9,000 EUR, the system reverses the

opening posting of 6,000 EUR and posts the new value of 9,000 EUR.

The reversal is carried out using the same currency exchange rate as in the original opening posting. The newopening posting is made using the exchange rate which is valid on the date of change.

SAP AG 2002


D C Accrued Costs

(I.1) 6 000

D CCosts

6 000 (I.1)

(I.3) 9 0009 000 (I.3)

(I.2) - 6 000- 6 000 (I.2)



© SAP AG 76

The Accrual Engine documents which were posted as a result of the change of the total costs to be accrued

can be displayed in the master data of the Accrual Object.

SAP AG 2002




© SAP AG 77

It is possible to display the history of the accrual object using menu function

Goto -> History.

Remark concerning changes:The last change is always valid until 31 Dec. 9999.

Example:

y 01 Jan. 2000 - 14 Feb. 2000: 6,000 EUR

y 15 Feb. 2000 - 31 Dec. 2000: 9,000 EUR.

If there was an additional change of the value on 10 Feb, 2000 to 7,000 EUR, this change would overwrite the

9,000 EUR completely. The result would be:

y 01 Jan. 2000 - 09 Feb. 2000: 6,000 EUR

y 10 Feb. 2000 - 31 Dec. 9999: 7,000 EUR

To adjust posted accruals in period 2 and/or 3/2000, the periodic accrual run had to be started again with run

type ‘repeat’.

It is therefore not advisable to carry out changes with a keydate in the past!

SAP AG 2002

Manual Accruals: Display History of Accrual Object



© SAP AG 78

The system calculates the periodic values based on the master data that is valid at the corresponding key dates

(last day of periods in this case).

The system calculates the values using the following algorithm:

y 1/2000 (31 Jan. 2000)

Valid master data: 6,000 EUR distributed over 5 x 12 periods gives 100 EUR in each period.

At the end of period 1/2000 100 EUR should be accrued.

y 2/2000 (29 Feb, 2000)


At the end of period 2/2000 2 x 150 EUR = 300 EUR should be accrued.

Since 100 EUR was accrued in period 1/2000, only the delta of 200 EUR is to be accrued in 2/2000.

y 3/2000 (31 Mar. 2000)


At the end of period 3/2000 3 x 150 EUR = 450 should be accrued.Since 300 EUR was already accrued in periods 1-2/2000, only the delta of 150 EUR is accrued in period

3/2000.

Note that the ‘Calculated Accruals’ tab strip displays calculated values only.

These values are independent of posted values.

Remember: No posting was made in period 2/2000.

SAP AG 2002




© SAP AG 79

Next periodic run in 4/2000:

Calculated value (costs): 4 x 150 EUR = 600 EUR.

Already posted in 1+2/2000: 100 EUR + 200 EUR = 300 EUR.

The system now posts the difference of 600 EUR - 300 EUR = 300 EUR.

SAP AG 2002




© SAP AG 80

The new postings in period 4/2000 are also displayed in the master data of the Accrual Object.

SAP AG 2002




© SAP AG 81

Postings to Accounting in 4/2000 due to the periodic accrual run.

SAP AG 2002


D C Accrued Costs

D CPayables

(I.1-3) 9,000

9,000 (I.1-3)

D CCosts

300 (P.3)(P.3) 300

200 (P.2)(P.2) 200

100 (P.1)(P.1) 100



© SAP AG 82

SAP AG 2002

Manual Accruals: Totals

The Accrual Engine stores Accrual Engine documents and totals.

One total record exists for each year.

Accrual Engine Customizing: Only 2 years can be open for periodic

accrual postings.

Usually, only the currentyear is open, while the

previous year might also still

be open for closing entries

Creating an accrual object:

A total record is created

for each year that is open.



© SAP AG 83

In the example: Years 2000 and 2001 are open.

A summary record is therefore created for each of these years.

The opening posting is made year 2000.The posted value of 9,000 EUR is automatically carried forward to the next year 2001 in the Accrual Engine.

This carryforward has nothing to do with the carryforward in Accounting.

SAP AG 2002

Manual Accruals: Totals

Automatic

carryforward

to year 2001

Openingposting in year

2000



© SAP AG 84

The carryforward program can be found in the application menu in the folder Accounting -> Financial

Accounting -> General Ledger -> Periodic Processing -> Closing.

SAP AG 2002

Manual Accruals: Carryforward

At the end of the year, a fiscal year change program (carryforward) must

be started in the Accrual Engine.

This program creates total records for the new fiscal year for all accrual

objects for which a corresponding record does not yet exist.

This carryforward does not lead topostings in Accounting

The carryforward also increases

the ‘current year’ in Accrual Engine

Customizing.

In the example: The carryforward

program need not to be started at the

end of fiscal year 2000, since a

total record already exists for 2001.

However, it does have to be started at the

end of 2001. Of course, it is advisableto execute the carry forward at the end

of each fiscal year.



© SAP AG 85

SAP AG 2002

Manual Accruals: Deactivating an Accrual Subobject

Let us assume that a customer quits an insurance contract before it

ends.

The contract was supposed to run from 1/2000 until 12/2004, but

customer quits in 6/2001.

To stop accrual postings in 6/2001, the accrual subobject is deactivatedon 06/30/2001.

The total costs to be accrued were 9,000 EUR.

At the end of 6/2001, 150 EUR x (12 + 6) = 2,700 EUR had been accrued.

The rest: 9,000 EUR - 2,700 EUR = 6,300 EUR may not be accrued any

more. Accordingly, the remaining revenues of 18,000 EUR - 300 EUR x

(12 + 6) = 12,600 EUR may not be accrued any more.

In Customizing for the accrual types (COSTS and RVNUES), customers

can determine what happens with the remaining values. They have two

options:

Do nothing with the remaining values after deactivation. Simply stop postingperiodic accruals.

When deactivating the accrual subobject, perform a closing posting and post

the remaining costs and revenues to a different account.



© SAP AG 86

Deactivating the accrual subobject changes the status of the accrual object to ‘Finished’. This means that no

more accrual postings will be made for dates after the deactivation date.

A key date always has to be entered for the deactivation, since he status of the Accrual Object will be changedto ‘finished’ on this date.

Remember: The master data of the Accrual Object (Basis Data) is time-dependent.

A period and fiscal year only have to be entered if a closing posting is made.

SAP AG 2002




© SAP AG 87

Display the closing posting (transaction rype ‘F’ - Final).

The remaining costs of 6,300 EUR are posted.

It is advisable to customize Accrual Engine account determination depending on the transaction type.

This example is complicated, as the total costs to be accrued are 9,000 EUR and at the date of deactivation

2,700 EUR = 150 EUR x (12+6) should have been accrued.

But in our example, the last periodic accrual run was done for 4/2000 instead of 6/2001. Therefore, instead of

2700 EUR, only 150 EUR x 4 = 600 EUR was accrued.

Solution: When the next accrual run is carried out with a key date > deactivation date, the missing value of

2,700 EUR - 600 EUR = 2,100 EUR is posted.

SAP AG 2002




© SAP AG 88

Displaying the history of the header shows the change of the status.

SAP AG 2002




© SAP AG 89

Periodic accrual run for 5/2001.

This date is before the deactivation date 30 Jun. 2001.

This is a ‘normal’ accrual run: Deactivation has no effect, since it lies in the future. Total costs to be accrued: 9,000 EUR.

Already accrued: 600 EUR.

Delta: 150 EUR x (12+5) - 600 EUR = 1,950 EUR.

Total revenues to be accrued: 18,000 EUR.

Already accrued: 1,200 EUR.

Delta: 300 EUR x (12+5) - 1,200 = 3,900 EUR.

SAP AG 2002




© SAP AG 90

Accrual run for 31 Jul. 2001.

This date is after the deactivation date 30 Jun. 2001:

The accruals stop on 30 Jun. 2001: Total costs to be accrued: 9,000 EUR.

The last periodic accrual run was in 5/2001.

Accrual calculation stops in 6/2001. Because of this, only the delta of 150 EUR is posted.

If there was no deactivation, the delta for 2 periods 6/2001 and 7/2001 would be posted, i.e. 150 EUR x 2 =

300 EUR.

Accordingly, 300 EUR are posted for revenues.

SAP AG 2002




© SAP AG 91

Totals and their meaning after deactivation of the accrual object:

Year 2000

9,000 EUR was posted as the opening posting600 EUR was accrued in periodic accrual runs

Year 2001:

The two amounts 9,000 EUR and 600 EUR were carried forward to year 2001

A further 2,100 EUR was accrued in 2100

At the time of deactivation, 6,300 EUR was posted as a final posting.

Summary:

Total value of accrued costs: 2,100 EUR + 600 EUR = 2,700 EUR

The sum of the total value of accrued costs and the final posting of 6,300 EUR is the total value to be accrued

(9,000 EUR):

2,700 EUR + 6,300 EUR = 9,000 EUR.This indicates that no further postings will be made for this accrual subobject

SAP AG 2002


Final posting at

deactivation



© SAP AG 92

Excursus:Status of Accrual

Objects



© SAP AG 93

SAP AG 2002

Status of Accrual Objects and Subobjects

D i s p. Tec h Da ta

The processing status can be set on two levels in the Accrual Engine:

on level of accrual object and

on level of accrual subobject .



© SAP AG 94

SAP AG 2002

Status of Accrual Objects

The status of an accrual object can have the following values:

‘In Process’

‘To Be Archived’.

The status of the accrual object usually is ‘In Process’.

The status ‘To Be Archived’ can be set by the transaction ‘Prepare

Archiving Session’:

The archiving session will archive only those accrual objects which

have the status ‘To Be Archived’.

Please refer to the documentation in the customizing and to the F1 help

for further information.



© SAP AG 95

SAP AG 2002

Status of Accrual Subobjects

The status of an accrual object can have the following values:

‘In Process’

‘Completed’

‘Stopped’

The status of the accrual object usually is ‘In Process’.

The status ‘Completed’ is set when the user executes the function

‘Deactivate Accrual Subobject’ (see chapter before).

The status ‘Stopped‘ means that no accrual postings are done as long

as this status is active. Setting this status is -up to now- supported only

by the Leasing application.

The history of changes of the status of the accrual object is recorded in

the basis data of the accrual engine.Exception: Setting the status ‘Stopped’ is not recorded in the basis

data.

Please refer to the F1 help of the status for further information.



© SAP AG 96

Reversal of AccrualSubobjects



© SAP AG 97

SAP AG 2002

Reversal of Accrual Subobjects

Let us assume that a customer wants to delete an accrual subobject.

As documents are normally created in Accounting for an accrual

subobject, the original documents (Accrual Engine documents) cannot

be deleted, since they are needed for the Audit trail, i.e. for explainingthe Accounting Documents. It is therefore not possible to delete accrual

subobjects.

Instead, customers have the option of ‘reversing’ accrual subobjects.

This reversal does the following:

All Accrual Engine documents that were posted for this accrual subobject

are reversed.

The total value and quantity to be accrued are set to zero for all accrual

items. The zero values are valid from the reversal date.

Consequence: No more accrual postings will be made for dates subsequent

to the reversal date.

Features of the reversal:

It is not possible to reverse accrual subobjects that have been deactivated.



© SAP AG 98

The reversal date (key date for reversal) must be entered in the popup.

If a period/fiscal year is entered manually - as displayed in the popup - the reversal postings in Accounting

will then be made in this period. This might be necessary if Accrual Engine documents are reversed, whichwould be posted in old - usually closed - periods.

Without entering a period manually, the system posts the reversal postings using the original key dates of the

Accrual Engine documents. It does not use the reversal date to post the reversal postings. This way, exchange

rate differences are avoided.

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Reversal of Accrual Subobjects



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SAP AG 2002

Reversal Postings in the Accrual Engine

It is possible to reverse certain Accrual Engine documents

Reversal of periodic accrual runs

Reversal of complete accrual subobjects including all corresponding Accrual

Engine documents.

There is no ‘true’ reversal of Accrual Engine documents:

Reversals are new postings with reversed +/- signs.

Consequences:

The corresponding FI documents are not reversed. Instead, new FI

documents are created with reversed values.

The reversal documents are always created based on the basis data for the

accrual subobject that is valid at the key date of the posting.

Changes to the basis data should therefor be made for dates in the past.



© SAP AG 100

SAP AG 2002

Example of Reversal Posting

Carry out accrual posting (run) on 31 Jan. 2000.

The cost center in the basis data of the accrual object on this date is

CC01. In Accounting, the posting is made to cost center CC01.

The cost center is changed to CC02 on 15 March 2000 in the Basis Data.The next accrual posting run is carried out on 31 March 2000.

The corresponding posting in Accounting is made to this new cost

center CC02 as this cost center is valid on key date 31 March 2000.

Now reverse the two accrual postings:

The reversal posting for the first posting on 31 Jan. 2000 is posted to

cost center CC01, since cost center CC01 is still valid on key date

31 Jan. 2000. The reversal posting for the second posting on 31 March

2000 is posted to cost center CC02.

If the cost center had been changed on a different date, say 15 Jan.

2000,, the reversal posting on 31 Jan. 2000 would be posted to new cost

center CC02 instead of CC01.

Reason: In this case, the new cost center CC02 would be valid on 31

Jan. 2000.



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Working with DerivedAccrual Types

New Example



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SAP AG 2002

Manual Accruals: Derived Accrual Types

Derived accrual types can be used for calculating accruals from

other accruals types.

(New) Example:

Customer gets a discount of 10 %

Discount: 18,000 EUR x 10% = 1,800 EUR

The discount must be treated differently according to IAS and HGB (German

GAAP):

HGB: Discount is posted once when the contract is created

US GAAP: Discount has to be accrued during the life of the contract.

The monthly accrual value is 1,800 EUR / (5 x 12) = 30 EUR



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SAP AG 2002

Manual Accruals: Example of Derived Accrual Types

According to US GAAP, additional accrual postings have to be made for the

discount.

These additional postings can be made with the help of derived accrual types using

the following rule:

“In US GAAP, the discount is calculated by taking 10 % of the revenues in HGB”.

The following activities have to be performed in Accrual Engine Customizing:

Create the new accrual type “DISCNT”

The above rule is entered in activity “Define Calculation rules for Derived Accrual

Types”.



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Derived accrual types are a special feature of the Accrual Engine.

Manual Accruals Customizing does not contain the corresponding Customizing activities. These can be found

in Accrual Engine Customizing.

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Manual Accruals: Customizing Derived Accrual Types



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Accrual type DSCNT is to be used as the derived accrual type.

This accrual type therefore has to be marked as ‘derived’ in Customizing activity ‘Define Accrual Types’.

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Now the rule must be defined in order to specify how accrual values for accrual type DSCNT are to be

calculated.

In this example the rule stipulates:‘The discount according to accounting principle US GAAP is calculated from the revenues according to

accounting principle HGB by taking a certain percentage of of these revenues.’

The percentage itself is specified in a separate Customizing activity (see next slide).

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When saving, derived accrual types are automatically added by the system.

The ‘derived’ flag indicates that is is a derived accrual type.

The total value to be accrued and the accrual method are not filled, as they are automatically adjusted if, for

example, the customized rule for calculating the derived values is changed.

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© SAP AG 109

The opening posting for derived accrual type DSCNT is made:

The posted value of 1,800 EUR is 10 % of the 18,000 EUR of the accrual type RVNUES.

SAP AG 2002




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Concerning the use of parameters in BAdIs:

The Accrual Engine document is transferred to Accounting in two steps:

y Firstly, a two-line Accounting (preliminary) Document is created from the (one-line) Accrual Engine

document.

y Afterwards, these preliminary documents are summarized according to the Customizing settings in the

Accrual Engine.

In each of the two steps, a BAdI (user-exit) is available to modify the document (use transaction SE19 for

implementation):

y ACEPS_BAPIPREDOC_MOD

y ACEPS_BAPIDOC_MODIFY

In these BAdIs, the parameters can be read from the database and can be used for modifying the document.

SAP AG 2002

Customer-Defined Parameters

Customer-defined parameters are additional fields that can be entered

by users when creating or changing accrual objects

Customer-defined parameters are entered at the accrual subobject level

The values entered here can be used in

Accrual Methods

The parameters can contain additional information that can be used in customer-

defined accrual methods

Account Determination

The parameters can also be used in Accrual Engine account determination

BAdIs

Parameters can be used in BAdIs for modifying documents before they are

transferred to Accounting.



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In this example, the customer defined the parameter ‘Product Group’.

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Where Do Customer-Defined Parameters Appear in theUser Interface?



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SAP AG 2002

How to Define Parameters

Parameters are fields in DDIC structure ACAC_PARAMETERS.

This structure contains only one parameter, named ‘EXAMPLE’.

Additional (customer-defined) parameters can be created by adding the

corresponding fields to this DDIC-structure.

For this purpose, SAP has added the customer includeCI_ACAC_PARAMETERS to this DDIC-structure.

To create additional parameters, start transaction SE11 for data type

CI_ACAC_PARAMETERS and choose the ‘Create’. A popup now

appears, where you have to choose ‘Structure’ radio button.

Enter the parameters as fields. Note that the field names must start with

‘Z’ or ‘Y’.

Save and activate your entries.



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After the field ‚ZPR_GROUP‘ was added to DDIC-structure ACAC_PARAMETERS, it must now be

assigned to the OBJECT types where this parameter is to be entered when creating/changing accrual objects.

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F 4



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Parameter ZPR_GROUP is assigned to accrual object type ‘INSURANCE’. This means the following:

When an accrual object is created with object type ‘INSURANCE’ a value can be entered for the ‘Product

Group’ field (parameter).

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On the ‘Parameters’ tab strip press the ‘Enter Parameters’ button.

The parameters then appear and can be entered.

An F4-help is also available for the new parameter if a foreign key relationship or a search help is defined for the new field (ACAC_PARAMETERS-ZPR_GROUP) in structure ACAC_PARAMETERS.

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Entering Parameters

Choose

‘Enter Parameters’



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In this accrual (sub-)object, the value ‘HARDWARE’ is entered for parameter ‘ZPR_GROUP‘ (Product

Group).

Technically, the value of this parameter is stored in database table ACEDSOP.

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Entering Parameters



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Screenshot: A breakpoint has been set in the accrual method, i.e. in the Function Module that is assigned to

the Accrual Method in Customizing activity ‘Define Accrual Methods’.

The import table IT_PARAMS contains the parameters and their values. Note: The parameter values are time dependent (fields DATE_FOM and DATE_TO).

The content of table IT_PARAMS is not evaluated (used) by the accrual methods that are delivered by SAP,

but customers can program their own accrual methods and use the information provided in IT_PARAMS.

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Evaluating Parameter Values in Periodic Accrual Runs



© SAP AG 121

Parameters can also be used in Accrual Engine account determination.

To make the parameters available in the account determination, call up Customizing activity ‘Define

Customer Settings for Components’ and enter a DDIC structure that contains all parameters that you want tohave available in account determination. In our example we use the customer include

CI_ACAC_PARAMETERS.

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Parameters in Account Determination



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Once a DDIC-structure with the parameter has been entered in Customizing activity ‘Define Customer

Settings for Components’, this parameter can be used in defining Customizing tables for Accrual Engine

account determination.

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Parameters in Account Determination

F 4



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SAP AG 2002

Parameters for Other Components

The preceding slides described the procedure for creating additional

parameters for Manual Accruals.

For other applications (components) in the Accrual Engine, such asProvisions for Awards or Lease Accounting , the procedure for creating

additional parameters is almost identical to the procedure described for

Manual Accruals.

However, you should note the following differences:

The name of the DDIC structure is different to ACAC_PARAMETERS

Assignment of parameters to accrual object types is only necessary

in Manual Accruals



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The name of the DDIC structures to which the new parameters have to be added can be found in Customizing

activity ‘Make settings for components’.

This activity is not actually a Customizing activity, since it should be used in display mode only, for exampleto get the names of the DDIC structures mentioned above.

As can be seen in the screenshot, the name of the DDIC-structure for Provisions for Awards is not

ACAC_PARAMETERS, but ACE_SOP_PARAMETERS.

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Parameters for Other Components: DDIC Structure



© SAP AG 126

SAP AG 2002

Assignment Number: General

The assignment number in FI documents is usually needed to carry out

clearing automatically.

The assignment number can be useful for clearing postings to accrual

accounts if open item management is active for the accrual account.

Open posting (I.1) and periodic

postings (P.2 - P.4) should be

cleared after the last periodic

posting (P.4).

For this reason, the automatic

clearing (report SAPF124) is run

after posting (P.4).

Condition: All documents (I.1),

(P.2), ... (P.4) must contain the same

assignment number.

Problem: The Accrual Engine does not add the assignment number to

the Accounting documents.

D C Accrual Account

3,000 (I.1)

(P.3) 1,000

(P.4) 1,000

(P.2) 1,000



© SAP AG 127

Example:

y Customizing:

Create a customer-defined parameter ‘ASSGMT_NUMBER’.

y Creating an accrual object:

Enter the assignment number manually.

y Periodic posting run:

In the BAdI, read the parameter from database table ACEDSOP and add the value to field

CS_BAPI_PREDOC-LINEITEMS-ALLOC_NMBR.

SAP AG 2002

Assignment Number: How it can be entered

The Assignment Number is not entered in postings made by the Accrual

Engine, as this number should in principle be unique for each accrual

item, but then no summarization would be possible during transfer of

Accrual Engine Documents to Accounting.

As a result, the Accrual Engine does not enter the assignment number.

However, it is possible to fill the assignment

number using the BAdI (Business Add In)

ACEPS_BAPIPREDOC_MOD:

The customer has to define an implemation for

this BAdI in Customizing.

Parameter CS_BAPI_PREDOC-LINEITEMS

contains field ALLOC_NMBR (‘Assignment

Number’). This field can be filled by thecustomer when implementing the BAdI.



© SAP AG 128

‘Provisions for Awards’ is an application that uses the Accrual Engine.

This application can be used for posting provisions for granting stock options and such like:

The company grants stock options to selected employees.When the stock price of the company’s shares rises, the stock options gain value.

This value multiplied by the number of outstanding stock options leads to expected costs.

These costs are calculated using the Accrual Engine. They can then be posted as provisions.

Provisions for Awards uses the following applications:

y HR System

From HR, information concerning the number of outstanding stock options is transferred to the

y Accounting System (Accrual Engine),

where the provisions are calculated and posted. Customers can define their own methods (accrual methods)

for calculating provisions. SAP delivers two examples for calculating accruals according to US GAAP.

rules APB25 and FASB123.The APB25 method uses the share prices to determine the provisions. It selects the share prices from

y Treasury.

Provisionsfor

Awards



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The number of granted stock options is stored in HR.

‘Provisions for Awards’ is the Accounting part of the complete solution that also comprises the HR

application ‘Long-Term-Incentives’, which is part of Compensation Management in HR.

It is possible to use ‘Provisions for Awards’ without the HR part by transferring the number of outstanding

stock-options or other awards to the Accrual Engine using a customer-specific transfer program. Contact SAP

development for further information.

SAP AG 2002

Provisions for Awards: Overview

A company grants a number of stock options to selected employees

Purpose: Post provisions (= accruals) for the outstanding options.

To do this: Transfer information about outstanding optoins from HR

system to Accounting system (Accrual Engine)

Afterwards: Calculate and post provisions using the Accrual Engine

Different calculation (=accrual) methods are possible for calculating the

provisions: SAP delivers two examples as accrual methods:

APB 25 Provisions based on stock prices

FAS 123 Provisions based on Black & Scholes Model



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This slide shows how the different applications in the HR system and the Accrual Engine interact.

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Provisions for Awards: Architecture


Accrual


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Transfer Data

to Accrual

Engine

R

Build Delta to

already posted

values

Posted Values


Post

Document

R RR

Accrual Engine

Reporting Reporting

HR-System

Outstanding Awards

Read HR DataR




© SAP AG 131

The provisions are posted periodically. This means that two processes have to be carried out:

Process A

Transfer the number of outstanding awards from the HR system to the Accrual Engine. This must done atleast once, but it is advisable to do this periodically in order to update the number of outstanding awards in the

Accrual Engine.

The only difference to ‘Manual Accruals’ is that the accrual objects are not created manually, but are

transferred from the HR-System to the Accrual Engine.

Process B

Calculate and post accruals. In this case, the accruals are provisions.

SAP AG 2002

Provisions for Awards: Processes


Accrual


Accruals

Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Process A:

Transfer Data

from HR-

System

R

Build Delta to

already posted

values

Posted Values


Post

Document

R R


R

Accrual Engine

Reporting Reporting

HR-System

Outstanding Awards

Read HR DataR

Process A:

Create/

Change

Basis Data

Process B:

Calculate

and Post

Accruals



© SAP AG 132

This slide shows the accrual method according to APB25 (delivered by SAP as a sample). This method calls

Treasury to get current stock prices.

SAP AG 2002

Provisions for Awards: Processes


AccrualMethod


Periodic:

Calculate Accruals

Calculation

Create/

Change

Basis Data

R

Posting

R

Create


Process A:

Transfer Datafrom HR-

System

R

Build Delta to


Posted Values(Accrual Engine Documents)

Post

Document

R R


R

Accrual Engine

Reporting Reporting

HR-System

Treasury

Stock Rates

Outstanding Awards

Read StockRates

Read HR DataR

R

Process A:Create/

ChangeBasis Data

Process B:

Calculateand Post Accruals



© SAP AG 133

The Accrual Engine uses the 2-level hierarchy of Accrual Objects in the Accrual Engine:

The Accrual Object corresponds to an award grant.

The award grant is defined by the following dimensions:

y Award

y Grant date

y Cost center of the employees who received the awards

The cost center information is optional: Data can be summarized in HR during the transfer (Customized in

the HR-System).

This way, users in the Accounting-System can be prevented from having access to critical data.

An accrual subobject corresponds to a vesting.

There are therefore as many subobjects as there are vesting periods for an award grant.

The accrual items are created according to the Customizing settings made for data transfer from HR to theAccrual Engine.

SAP AG 2002

Provisions for Awards: Structure of Basis Data

Grant (=Accrual Object)

Vesting (=Accrual Subobject)



Accrual Item

Assignment

Parameters

Default: Cost Center

Basis Security ID, Exchange, Basis Value, ...

Vesting Date

Award, Grant Date and Cost Center (optional)

Each combination of

- Accrual Type (APB25, FAS123,... ) and


defines an Accrual Item.

The number of outstanding awards is stored

together with the accrual method at this level.

Header

Accrual Item

Accrual Item

...



© SAP AG 134

The application menu for Provisions for Awards is very similar to the application menu for Manual Accruals.

The only differences are:

y Accrual objects are called ‘award grants‘

y Such award grants cannot be created or changed manually in the Accrual Engine, but are transferred from

the HR system.

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Provisions for Awards: Application Menu



© SAP AG 135

Reconciliation with FI and carryforward work in the same way as they do in ‘Manual Accruals’.

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Provisions for Awards: Application Menu



© SAP AG 136

Provisions for Awards Customizing mainly consists of Customizing settings from Accrual Engine

Customizing. However, the transfer of award grants from HR system also has to be customized.

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Provisions for Awards: Customizing in Accounting



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Since the application ‘Provisions for Awards’ is only the accounting part of the ‘Long-Term Incentive’

application in HR, settings have to be made in the HR system. The administration of awards is mainly carried

out in the HR system, while the integration to accounting is only used for posting provisions.

SAP AG 2002

Provisions for Awards: Customizing in HR



© SAP AG 138

A comprehensice example of Provisions for Awards can also be found in the Online Documentation.

Provisions for Awards:Example



© SAP AG 139

SAP AG 2002

Provisions for Awards: Example

Prereqisites:

On 1 Jan. 2000, company code 0001 will issue 6,000 options (award OPTN) for company stock to the employees of cost center "Executive Board". The securityidentification number of the company stock is "0000000000001".The base price of the options is 100 EUR, meaning that these options will have an

inner value if the stock price rises above 100 EUR.

The employees cannot exercise their stock options until expiry of the waitingperiod.The company decides to make the 6,000 stock options that it awards availablein three waiting periods.These waiting periods are as follows:

• 1 Jan. 2000 to 1 Jan. 2001: 3,000 options, vesting date: 1 Jan. 2001.



This means that 3,000 stock options can be exercised from 1 Jan. 2001, a further 2,000 can be exercised from 1 Jan. 2002, and the remaining 1,000 can be exercisedfrom 1 Jan. 2003.The waiting periods are also referred to as vesting periods.

The division of the 6,000 stock options into vesting periods of 3,000, 2,000 and 1,000 isreferred to as a vesting rule. If the stock price has a value of more than 100 EUR whenthe stock options are exercised, the company will have to meet the correspondingcosts. For this reason, provisions must be posted in good time in Accounting.



© SAP AG 140

SAP AG 2002

Provisions for Awards: Example

Data Transfer HR -> Accounting (Accrual Engine)

Provisions can be calculated and/or posted according to different rules.

For each desired rule, a separate accrual item has to be created.

Customizing has to be adjusted accordingly for the data transfer

program.

SAP delivers two accrual methods: ACC_APB25 and ACC_FAS123 for

calculating provisions according to APB 25 and FASB 123 respectively.



© SAP AG 141

Screenshot: Customizig data transfer from HR to the Accrual Engine

The RFC destination of the HR system must be defined.

The RFC destination must be assigned to Provisions for Awards.

When the data transfer program is started, the HR data will then be selected from this destination.

All data (award grants, their vestings and parameters such as basis value, exchange etc.) originating from HR

system are converted by the system into a format that can be saved in the Accrual Engine.

This conversion can be customized in the IMG activity ‘Convert HR Data During Transfer’ (see next slide).

Using a BAdI, the data can also be supplemented (or changed) after conversion but before it is saved in the

Accrual Engine.

There is also a deletion program for deleting any data in the Accrual Engine that has been transferred from

HR system for testing purposes.

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Provisions for Awards: Customizing Data Transfer



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Conversion of HR data into the Accrual Engine format can be customized.

This activity determines which accrual items are created in the Accrual Engine:

In this example, for grants of the award ‘OPTN’ in company code 0001, one Accrual Item is created with thefollowing properties:

y accounting principle IAS

y accrual type APB25

The accrual method for this accrual item is ACC_APB25.

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Provisions for Awards: Customizing the Data Transfer



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Screenshot: Data transfer program.

The radio button determines which currency the provisions will be calculated and posted in. Once a currency

is selected, the same currency must be used in later transfers.

The data is always selected for a key date.

The newly transferred data is valid in the Accrual Engine from this day on.

There is an info button that provides detailed documentation.

For each period, you are recommended to start the transfer of HR data before the periodic job for posting

(updating) the provisions is started. This ensures that the number of outstanding awards in the Accrual Engine

is updated.

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Provisions for Awards: Data Transfer



© SAP AG 144

In the example, provisions are posted according to APB25 (accrual method ACC_APB25).

SAP AG 2002

Provisions for Awards: APB 25 and FAS 123

To post the provisions, the company can choose between the two

methods APB 25 and FASB 123 .

Method APB 25 uses the current stock price to calculate the inner value

of the outstanding options.

With APB25, the provision amount fluctuates in the same way as the stock

price. If the company chooses the APB 25 method, it must add an additional

calculation of the provisions according to FASB 123 in the appendix of the

balance sheet.

Method FASB 123 calculates the provisions based on an average stock

price assumed by the historical volatility of the underlying stock.

This means that the provisions do not fluctuate as they would using method

APB 25.



© SAP AG 145

Using the weighted share might appear unnecessarily complicated, as the total amount does not differ to the

one that would be arrived at without using weighting.

y First waiting period: 3,000 options x 10 EUR x 8.33 % = 2,500 EUR

y Second waiting period: 2,000 options x 10 EUR x 4.17 % = 834 EUR

y Third waiting period: 1,000 options x 10 EUR x 2.78 % = 278 EUR

Total: 2,500 EUR + 834 EUR + 278 EUR = 3,612 EUR

However, weighting does make a difference under certain circumstances. An example could be the following:

400 options from the first waiting period are exercised - after a transfer from the HR system, the number of

outstanding options in the first waiting period is reduced by 400.With weighting, the provision amount for the first waiting period equals: (3,000-400) x 10 EUR x 6.02 % =

1,565.20 EUR

Without weighting: (3,000-400) x 10 EUR x 8.33 % = 1,992 EUR

As the provision amounts of the two other waiting periods remain unchanged, the two methods no longer

provide identical sums. Instead, difference arises of 1992 EUR - 1,565.20 EUR = 426.80 EUR.

SAP AG 2002

Provisions for Awards: APB 25

Accrual Method ACC_APB25 works as follows:

The value of the provisions is to be determined for 31 Jan. 2000. On this date, thestock price is 110 EUR. As the base price taken over from HR is 100 EUR, theoption has an inner value of 10 EUR.

For the first waiting period from 1 Jan. 2000 to 1 Jan. 2001 (vesting date), 1/12 - or 8.3 % has expired by 31 Jan. 2000. Accordingly, only this fraction has to bedepicted as a provision.The vested share for the second and third waiting periods is worked out in thesame way: 1/24 (= 4.17 %) and 1/36 (= 2.78 %).The system calculates the weighted vested share thus: (1/12 x 3,000 + 1/24 x2,000 + 1/36 x 1,000) / (3,000 + 2,000 + 1,000) = (250 + 83.33 + 27.78) / 6,000 =0.0602 = 6.02 %This provides the following provision amounts for the three waiting periods:

First waiting period: 3,000 options x 10 EUR x 6.02 % = 1806 EUR

Second waiting period: 2,000 options x 10 EUR x 6.02 % = 1204 EUR

Third waiting period: 1,000 options x 10 EUR x 6.02 % = 602 EUR

Total: 1,806 EUR + 1,204 EUR + 602 EUR = 3,612 EUR



© SAP AG 146

Accrual method ACC_APB25 uses stock prices.

Stock prices (security prices) have to be entered using transaction FW17.

To be able to enter scurity prices, some master data are necessary like

y Security ID

y Exchange.

In the customizing of ‘Provisions for Awards’, the procedure is described, how these master data can be

created: Please refer to the documentation in the Customizing activity ‘Provisions for Awards -> Calculation

of Provisions -> Accrual Methods -> Provisions According to Procedure ABP25: Make Settings in CFM’ .

In the example, only two stock prices were entered.

If the system needs stock prices for dates > 31 Jan. 2000, then the last available stock price is used. In this

case, this would be the stock price of 110 EUR from

31 Jan. 2000.

SAP AG 2002

Provisions for Awards: APB 25 (II) Enter Stock Prices



© SAP AG 147

Accrual method ACC_FAS123 is not used in the example.

SAP AG 2002

Provisions for Awards: FASB 123

Accrual method ACC_FAS123 works as follows:

In contrast to method APB 25, the value of an option is not calculated using theprice of the underlying stock. Instead, the value of an option is defined manually inIMG activity "Define Data for the Black & Scholes Model".

Here, values can be defined by waiting period.Example:

First waiting period: 9 EUR

Second waiting period: 10 EUR

Third waiting period: 11 EUR

The vested share is not used as a weighting of the three individual waiting periods.Instead, the last vesting date determines the vested share. In the example: 1/36 =2.78 %. This results in the following provision amounts:

First waiting period: 3000 x 9 EUR x 2.78 % = 750.60 EUR

Second waiting period: 2000 x 10 EUR x 2.78 % = 556.00 EUR Third waiting period: 1000 x 11 EUR x 2.78 % = 305.08 EUR

Total: 1612.40 EUR



© SAP AG 148

The values for the Black & Scholes Model can be entered manually in the Accrual Engine Customizing.

They are then used by accrual method ACC_FAS123 to calculate periodic provisions according to FASB 123.

SAP AG 2002

Provisions for Awards: FASB 123 (II) Enter Black &Scholes Values



© SAP AG 149

Screenshot: Data display in the Accrual Engine after data transfer from the HR System:

The first waiting period with vesting date 01.01.2001 is displayed.

The item data were created by the data transfer program according to the customizing defined in the IMGactivity ‘Convert HR Data During Transfer’.

Data can also be entered manually, if integration with the HR system is impossible or is not necessary.

Only a small modification is necessary: In view V_TACECOMP, the ‘manual changes possible’ flag must be

set for SOA entry in this view. This enables users to change entries manually.

After the HR data has been transferred to the Accrual Engine, the periodic job for calculating and posting

provisions can be started.

SAP AG 2002

Provisions for Awards: Display Transferred Data (I)



© SAP AG 150

The parameters have been transferred from the HR system and saved automatically in the Accrual Engine.

These parameters are used by accrual methods ACC_APB25 (and ACC_FAS123) to calculate the current

value of the awards that have been granted.

SAP AG 2002

Provisions for Awards: Display Transferred Data (II)



© SAP AG 151

Periodic accruals are calculated for this waiting period according to accrual method ACC_APB25.

For period 1/2000, the value 1,805.56 EUR is calculated.

The detailed calculation is described in one of the preceding slides (‘Provisions for Awards: APB 25’)

SAP AG 2002

Provisions for Awards: Display Transferred Data (III)



SAP AG 2002

Provisions for Awards: Periodic Posting Run

Fi Gl Manualaccruals

Documents

Transcript of Fi Gl Manualaccruals