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Cash Flow Reporting With PSCD

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  Cash Flow Reporting – PSCD with New General Ledger Accounting 1 Cash Flow Reporting – Public Sector Collection and Disbursement (PSCD) with New General Ledger Accounting (FI-GL (New)) General Information:    Public Sector    Public Sector Accounting    Country-independent    Public Sector Collection & Disbursement    New General Ledger Accounting    Funds Management    Fund Accounting    Last Update: July 5, 2010 Language Editing: July 20, 2010  Cash Flow Reporting – PSCD with New General Ledger Accounting 2 Table of Contents Cash Flow Reporting – Public Sector Collection and Disbursement (PSCD) with New General Ledger Accounting (FI-GL (New)) ....................................................................................................1   Table of Contents ............................................................................................................................2   Glossary ..........................................................................................................................................2   1. Introduction to Cash Flow Reporting (CFR) ..................................................................................3   2. Architecture in a Nutshell .............................................................................................................3   3. Simple Invoice with Taxes ...........................................................................................................4   4. Invoice with Different Revenue Accounts .....................................................................................7   5. Invoices with Different Revenue Accounts and Different Funds ....................................................8   6. Report Template for Cash Flow Reporting ................................................................................. 10   7. Technical Information ................................................................................................................ 13   8. Customizing .............................................................................................................................. 14   8.1 Customizing in New General Ledger Accounting ...................................................................... 14   8.2 Customizing in Public Sector Management .............................................................................. 14   8.3. Customizing in PSCD ............................................................................................................. 15   9. Further Notes ............................................................................................................................ 16   Glossary Source-related cash flow = “Source-related” refers to the revenue or expense account RE_ACCOUNT = Account assignment object that contains the revenue or expense account IFRS = International Financial Reporting Standards IAS = International Accounting Standards  IPSAS 2 = Cash flow statements IAS 7 = Cash flow statement as an integral part of year-end closing Cash-Basis Accounting = Recognized standard of the IFAC (International Federation of Accountants) that can be used by organizations that are obliged by law to record their expenditures and revenues at the time of payment to fulfill the cash ledger requirements of the IPSAS (International Public Sector  Accounting Standards). Cash Ledger  = A non-leading ledger in SAP General Ledger Accounting that is specifically designed to provide the basis for cash-basis accounting. A cash ledger is updated only at the time of cash outflows and inflows and usually only on P&L accounts and cash accounts. A cash ledger cannot be integrated with PSCD. Cash Flow Reporting = A scenario in SAP General Ledger Accounting that facilitates reporting capital flow separately by source account (for example, expenditure, revenue, tax, and balance). Cash Flow Reporting can be activated as a scenario in the (leading) accrual ledger.  Cash Flow Reporting – PSCD with New General Ledger Accounting 3 1. Introduction to Cash Flow Reporting (CFR) The cash flow statement is one of the most important financial statements for a public sector organization. It is mentioned in IPSAS 2 and is based on IAS 7. The International Public Sector  Accounting Standards are recommendations of the IPSAS Board. These standards apply to all public sector entities other than government business enterprises. IPSAS are based on IFRS/IAS. Cash flow refers to revenues and expenses that are both income statement-related and affect payments in the same period. In general, either the direct method or the indirect method are known. With Cash Flow Reporting (CFR) , SAP supports the direct method. The direct method relates to the profit and loss statement but only considers payment-relevant transactions. With the SAP solution, cash flow-relevant data is recorded as part of everyday transactions in the operational system. No specific period-closing activities are necessary to derive the data displayed in the statement. In Public Sector Management , a source-related cash flow can be reported either by using CFR or by means of a separate cash ledger. CFR is used if a cash ledger is not legally required but when capital flows need to be displayed separately by source account (for example, regarding expenditures, revenues, taxes, or balances). Use  As a financial statement, CFR provides information about the purpose for which cash was used, about the sources of cash raised during a given period, and about the cash balance on the reporting date. The source-related cash flow becomes visible in new General Ledger Accounting (FI-GL (New))  as soon as the clearing of a cash-related process is forwarded from SAP Public Sector Collection and Disbursement (PSCD)  to SAP Financials (FI) . SAP delivers the Cash Flow  report template 4FCL-002  in transaction GRR3 . Incoming and outgoing payment amounts that contribute to this cash flow are structured by accounts or account assignments. CFR is available for revenue and expense accounts as well as for particular account assignments, such as fund or profit center. Prerequisites for Cash Flow Reporting   The function is only available when FI-GL (New) and PSCD are used for ECC 6.05 or higher   The SAP R/3 Enterprise Extension Set for Public Services (EA-PS) and the business functions PSM_FA_CASH and PSM_FA_CI_2 must be activated.   The Global Funds Management (PSM-FM)  functions must be activated.   Document splitting must be activated in FI-GL (New). For more information, see the online documentation. If document splitting is not activated, a separate migration project with migration scenario 6 Subsequent Implementation of Document Splitting  is necessary. For more detailed information, see the SAP Service Marketplace (alias /glmig). 2. Architecture in a Nutshell For cash flow to be reported, a new account assignment needs to be activated for source-related cash flow (field RE_ACCOUNT in FI, field REACC in PSCD). This account assignment object must be defined in document splitting as a document splitting characteristic with a zero-balance setting. Incoming cash obtains a default value for RE_ACCOUNT, whereby this cash is used to clear an invoice. As soon as this clearing is forwarded to FI, document splitting is used to generate clearing items on a zero balance account for cash. With EhP5, SAP introduced a new zero balance account for cash-related postings. Reporting of the source-related cash flow is based on this new zero balance clearing account.  Cash Flow Reporting – PSCD with New General Ledger Accounting 4 3. Simple Invoice with Taxes The customer (business partner in PSCD) receives an invoice of USD 1190 and makes the payment: Postings: Debit Business Partner USD 1190, credit Revenue USD 1000 credit VAT USD 190 FI posting record: Debit Bank USD1190, credit Bank Clearing Account USD 1190 PSCD posting record: Debit Bank Clearing A/c USD 1190, credit Business Partner (or Clarification A/c) USD 1190 Postings: Clearing in PSCD  All postings forwarded to FI-GL (New) Detailed Explanation Step 1: Posting of an invoice in PSCD Technical information: When the invoice is forwarded from PSCD to FI, the receivable line item from document (1) has only one  value for RE_ACCOUNT and the tax base amount. With document splitting in FI-GL (New), the receivable is separated into net amount and tax amount. The line (from table DFKKSUM) USD 1190, RE_ACCOUNT = Revenues 1 is split into USD 1000, RE_ACCOUNT = Revenues 1 USD 190, RE_ACCOUNT = VAT Business Partner Black: Balance sheet account Blue: Profit and loss account Revenues 1 VAT $ 190 (1) $ 1000 (1) RE_ACCOUNT = VAT (19%) RE_ACCOUNT = Revenues1 (1) $ 1190  
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