FI Configuration-06: Maintain Fiscal Year Variant and Assign it to Company Code




The fiscal year is a period for which company produces financial statement, such as one year (from January 1st to December 31st; or April 1st to March 31st; or other period) that can be divided into 12 shorter periods, such as months.

In a company, usually there is a need to record the business transactions in a certain period that might be separated with similar business transactions in other period. For example, for internal purpose, a company usually generates a report that summarizes the Cost of Goods Sold (COGS), operational expenses, or sales revenue on a monthly basis, so it can be used by management to make business decisions.

In SAP FI module, to separate business transactions into different periods, we must define a fiscal year with its posting periods.

The fiscal year is defined as a variant. With variant principle in SAP R/3, we can assign special properties to one or more R/3-objects. For example we can define a fiscal year variant, define properties to that variant (such as the number of the posting periods), and assign it to multiple company codes.

A fiscal year consists of several posting periods (“normal” posting periods) and if necessary, some special periods (posting periods used to divide the last “normal” posting period) that can be posted to after a temporary year-end closing.

We can maintain fiscal year variant with “OB29” t-code or through the menu from “SPRO t-code: Financial accounting – Financial Global Setting – Fiscal Year – Maintain Fiscal Year Variant.


The above image is © SAP AG 2010. All rights reserved
The fiscal year variant contains the definition of:

  1. Beginning and end of fiscal year.
  2. Number of “normal” posting periods (1-16).
  3. Number of special periods (remaining periods up to 16 after selection of “normal” periods).
  4. Posting period length.

The system derives the posting period from the posting date.
When the posting date falls within the last normal posting period, the transaction may be posted into one of the special periods. Example: a fiscal year with 12 posting periods and 4 special periods. If the posting date falls in the 12th period, the transaction can instead be posted in one of the four special periods.

The fiscal year variant can be defined as one of the following:

  1. Year independent
    The fiscal year variant is called year-independent: if each fiscal year of a fiscal year variant uses the same number of periods, and the posting periods always start and end at the same day of the year.
    Example: a fiscal year variant that always has 12 posting periods and 4 special periods which start at January 1st and end at December 31st every year.

A year independent fiscal year variant can be defined as

  • the calendar year
    The posting periods are equal to the months of the year. Therefore a calendar year variant must have 12 posting periods, and we can not define the beginning and end of period because it always begins on January 1st and ends on December 31st every year. In SAP there some standard fiscal year variants which use calendar year, such as: K0, K1, K2, K3, and K4.
  • a non-calendar year
    The posting periods are not equal to the months of the year. The posting periods need to be defined by assigning ending dates to each period. A non-calendar year can have between 1 and 16 posting periods. If the non-calendar year does not start at January 1st the periods of the year which belong to the former or the coming fiscal year must get an annual displacement indicator (-1, +1).
    If the fiscal year differs from the calendar year, but the posting periods correspond to calendar months, the day limit for February should be 29 to be prepared for leap years.
    In SAP there some standard fiscal year variants which use non-calendar year, such as: V3, V6, and V9.The above image is © SAP AG 2010. All rights reserved

 

  • Year-dependent
    A fiscal year variant has to be defined as ”year-dependent” if the start and the end date of the posting periods of some fiscal years will be different from the dates of other fiscal years, and/or if some fiscal years shall use a different number of posting periods.If all of the years of a year-dependent fiscal year variant have the same number of periods, only the different period dates for the different years have to be defined.If one year of a fiscal year variant has less posting periods than the others, it is called a ”shortened fiscal year”. This could be required if closing has to be made before the end of the normal fiscal year; (e. g. if the beginning of the fiscal year should be changed or if the company was sold). The shortened fiscal year and its number of posting periods have to be specified before definition of the period dates. For this year only a lesser number of posting periods can be assigned. Example:The above image is © SAP AG 2010. All rights reserved

 

Fiscal years are normally year-independent.

For every company code, we must assign a fiscal year variant to be used. We can do it with “OB37” t-code or through the menu from “SPRO t-code: Financial accounting – Financial Global Setting – Fiscal Year – Assign Company Code to Fiscal Year Variant.

You can download video training of How to maintain fiscal year variant and Assign company code to fiscal year variant.

The fiscal year variant does not include the information as to whether a period is open or closed; this is maintained in another table. The fiscal year variant only defines the amount of periods and their start and finish dates.

In the next article we will explain how to Define Posting Periods, so stay visiting us. You could get the latest update of this blog by subscribing here.


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