SAP FINANCIAL & CONTROLLIG GLOSSARY.

Finance Part1.
Client: In commercial, organizational and technical terms, a self-contained unit in an R/3 System with separate master records and its own set of tables. Company Code: The smallest organizational unit of Financial Accounting for which a complete self-contained set of accounts can be drawn up for purposes of external reporting. Business Area: An organizational unit of financial accounting that represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated. Enterprise structure: A portrayal of an enterprise's hierarchy. Logical enterprise structure, including the organizational units required to manage the SAP System such as plant or cost center. Social enterprise structure, description of the way in which an enterprise is organized, in divisions or user departments. The HR application component portrays the social structure of an enterprise Fiscal Year Variant: A variant defining the relationship between the calendar and fiscal year. The fiscal year variant specifies the number of periods and special periods in a fiscal year and how the SAP System is to determine the assigned posting periods. Fiscal Year: A period of usually 12 months, for which the company produces financial statements and takes inventory. Annual displacement/Year shift: For the individual posting periods various entries may be necessary. For example, in the first six periods the fiscal year and calendar year may coincide, whereas for the remaining periods there may be a displacement of +1. Chart of Accounts: Systematically organized list of all the G/L account master records that are required in a company codes. The COA contains the account number, the account name and control information for G/L account master record. Operating chart of accounts. The operating chart of accounts contains the General Ledger accounts that you use for posting in your company code during daily activities. Financial Accounting and Controlling both use this chart of accounts. You have to assign an operating chart of accounts to a company code.

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Group chart of accounts. The group chart of accounts contains the General Ledger accounts that are used by the entire corporate group. This allows the company to provide reports for the entire corporate group. The assigning of an corporate group chart of accounts to a company code is optional.

Country-specific chart of accounts. The country-specific chart of accounts contains the General Ledger accounts needed to meet the country's legal requirements. This allows you to provide statements for the country's legal requirements. The assigning of an country-specific chart of accounts to a company code is optional.

Financial statement version: A hierarchical positioning of G/L accounts. This positioning can be based on specific legal requirements for creating financial statements. It can also be a self-defined order. Account group: An object that attributes that determine the creation of master records. The account group determines: The data that is relevant for the master record A number range from which numbers are selected for the master records. Field status group: Field status groups control the additional account assignments and other fields that can be posted at the line item level for a G/L account. Posting Key: A two-digit numerical key that determines the way line items are posted. This key determines several factors including the: Account type, Type of posting (debit or credit),Layout of entry screens . Open item management: A stipulation that the items in an account must be used to clear other line items in the same account. Items must balance out to zero before they can be cleared. The account balance is therefore always equal to the sum of the open items. Clearing: A procedure by which the open items belonging to one or more accounts are indicated as cleared (paid). Reconciliation account: A G/L account, to which transactions in the subsidiary ledgers (such as in the customer, vendor or assets areas) are updated automatically. Special G/L indicator: An indicator that identifies a special G/L transaction. Special G/L transactions include down payments and bills of exchange. Special G/L transaction: The special transactions in accounts receivable and accounts payable that are shown separately in the general ledger and sub-ledger.

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They include: Bills of exchange. Down payments. Guarantees.

House Bank: A business partner that represents a bank through which you can process your own internal transactions. Document type: A key that distinguishes the business transactions to be posted. The document type determines where the document is stored as well as the account types to be posted. Account type: A key that specifies the accounting area to which an account belongs. Examples of account types are: Asset accounts. Customer accounts. Vendor accounts. G/L accounts.

Dunning procedure: A pre-defined procedure specifying how customers or vendors are dunned. For each procedure, the user defines Number of dunning levels. Dunning frequency. Amount limits. Texts for the dunning notices.

Dunning level: A numeral indicating how often an item or an account has been dunned. Dunning key: A tool that identifies items to be dunned separately, such as items you are not sure about or items for which payment information exists. Year-end closing: An annual balance sheet and profit and loss statement, both of which must be created in accordance with the legal requirements of the country in question. Standard accounting principles require that the following be listed: All assets. All debts, accruals, and deferrals. All revenue and expenses.

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Month-end closing: The work that is performed at the end of a posting period. Functional area: An organizational unit in Accounting that classifies the expenses of an organization by functions such as: Administration. Sales and distribution. Marketing. Production. Research and development.

Classification takes place to meet the needs of cost-of-sales accounting. Noted item: A special item that does not affect any account balance. When you post a noted item, a document is generated. The item can be displayed using the line item display. Certain noted items are processed by the payment program or dunning program - for example, down payment requests. Accrual and deferral: The assignment of an organization's receipts and expenditure to particular periods, for purposes of calculating the net income for a specific period. A distinction is made between: Accruals -

An accrual is any expenditure before the closing key date that represents an expense for any period after this date. Deferral -

Deferred income is any receipts before the closing key date that represent revenue for any period after this date. Statistical posting: The posting of a special G/L transaction where the offsetting entry is made to a specified clearing account automatically (for example, received guarantees of payment). Statistical postings create statistical line items only. Valuation area: An organizational unit in Logistics subdividing an enterprise for the purpose of uniform and complete valuation of material stocks. Chart of depreciation: An object that contains the defined depreciation areas. It also contains the rules for the evaluation of assets that are valid in a specific country or economic area. Each company code is allocated to one chart of depreciation. Several company codes can work with the same chart of depreciation. The chart of depreciation and the chart of accounts are completely independent of one another.

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Asset class: The main criterion for classifying fixed assets according to legal and management requirements. For each asset class, control parameters and default values can be defined for depreciation calculation and other master data. Each asset master record must be assigned to one asset class. Special asset classes are, for example: Assets under construction. Low-value assets. Leased assets. Financial assets. Technical assets.

Depreciation area: An area showing the valuation of a fixed asset for a particular purpose (for example, for individual financial statements, balance sheets for tax purposes, or management accounting values). Depreciation key: A key for calculating depreciation amounts. The depreciation key controls the following for each asset and for each depreciation area: Automatic calculation of planned depreciation. Automatic calculation of interest. Maximum percentages for manual depreciation.

The depreciation key is defined by specifying: Calculation methods for ordinary and special depreciation, for interest and for the cutoff value. Various control parameters.

Period control method: A system object that controls what assumptions the system makes when revaluating asset transactions that are posted partway through a period. Using the period control method, for example, you can instruct the system only to start revaluating asset acquisitions in the first full month after their acquisition. The period control method allows different sets of rules for different types of asset transactions, for example, acquisitions and transfers. Depreciation base: The base value for calculating periodic depreciation. The following base values are possible, for example: Acquisition and production costs.

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Net book value. Replacement value.

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SAP FI- CO.

Finance Terms. Part2.
Business Area. An organizational unit that requires audited financial statements for external use. Often this corresponds to a separate operational or responsibility area in the organization at the highest level. Chart of Accounts. A chart of accounts provides a framework for the recording of values to ensure an orderly rendering of accounting data. The chart of accounts is the operative chart of accounts and is used in both financial accounting and cost accounting. Client. In commercial, organizational and technical terms, a self-contained unit in an R/3 System with separate master records and its own set of tables. Commitment Item. Commitment Items represent budget classifications of revenues and expenditures in the Funds Management Module. Commitment items are linked to the GL account in FI and the revenue and cost elements in CO. With this linkage, transactions posted to the GL account or revenue or cost elements are automatically posted to FM. Commitment items can also be arranged in a multi-level hierarchy where the top nodes are defined for reporting and/or controlling levels. Company Code. The highest organizational unit of financial accounting for which a complete self-contained set of accounts can be drawn up for purposes of external reporting. Controlling Area. An organizational unit within a company, used to represent a closed system for cost accounting purposes. Cost Center. An organizational unit within a controlling area that represents a clearly delimited location where revenue and costs occur. Organizational divisions can be based on functional requirements, allocation criteria, physical location and/or responsibility for costs. Cost centers will be used for certain current S L accounts. Cost Center Group. A hierarchical group of cost centers defined and organized according to selected criteria. (also see Funds Center Group). It can be any group of cost centers used for reporting aggregated data.

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Cost Element. A cost element classifies the organizations expenses within a cost object (Examples: cost center, internal order, WBS). A cost element corresponds to a commitment item in FM and the GL account in FI. Cost Object. A generic term referring to both cost centers and internal orders. Customer Aging. An aging schedule of accounts receivable invoices is used to review customer accounts for delayed payments. (Also see Dunning) Customer (A/R and S/D). A business partner from whom receivables are due for, among other things, goods delivered, services performed and rights transferred, and/or a business relationship exists, involving the issue of goods or services. Used for grant sponsors, employees for direct benefit billing and county appropriations. Derivation Rule. A rule defined by IF-THEN logic which controls how certain target characteristic values are derived automatically from source characteristic values. This rule will be used to minimize entry of the account string to only those elements that vary or for which entry is required. Dunning (A/R). Provides the ability to evaluate accounts receivable and send notifications of invoices that are past due. Dunning incorporates many parameters, but normally the length of time an invoice is overdue is key to determining which notices to send. (also see Customer Aging) Financial Management Area. SAP defines a financial management area in R/3 as the organizational unit within an institution used to represent budgeted and actual revenues and expenses. Functional Area. SAP defines the functional area as a master data element that is maintained within the Funds Management (FM) Module. It is used in FI to classify revenues and expenditures of an organization by function. Functional area is often referred to as mission. The functional area will be derived from the cost center. Fund. A separate and distinct fiscal/accounting object containing a self-balancing set of accounts used to budget and control costs and to identify source and use of funding. Financial data will be separated by Funds so that certain activities can be performed or objectives achieved in accordance with special regulations, restrictions, or limitations. Fund is not hierarchical. The Fund is the lowest level at which a balance sheet can be created. Funds Center. An organizational unit within the Funds Management (FM) Module. It represents the lowest level area of responsibility for budgetary monitoring and controlling costs by area of responsibility. Fund centers are arranged in a multilevel hierarchy where a parent-child relationship is defined for reporting and/or controlling levels. F

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Funds Center Group. Funds Centers can be grouped together to form funds center groups (not necessarily hierarchical). Funds Center groups will be used to provide the organizational structure for reporting information from the SAP system. Budgeting will be done at the Funds Center level. General Ledger (GL) Account. A structure that records values and represents assets, liabilities, revenues, expenses and fund balances. A G/L account has transaction figures that record changes to the account during a posting period. These figures are used for financial reporting. Internal Order. Similar to a cost center, an internal order is used to record and monitor costs and, in some cases, revenues. A guiding principle is that internal orders should be set up for programs that are short-term or finite in nature. Land Grant. Agricultural Research and Cooperative Extension programs in which funds are distributed by the U.S. Department of Agriculture on an annual basis according to a statutory administrative formula (non-competitive funding). Eligibility is limited to cooperating land grant institutions. Awarded on a federal fiscal year basis (October 1 September 30). Master Data. Master data form a pool of information stored on a long-term basis in the SAP system and can be incorporated into individual transactions. Master data are entered once and can be modified as needed. Revenue Element. A revenue element classifies the organizations revenue within a fund center. A revenue element corresponds to a cost element in CO and the GL account in FI. Special Purpose Ledger (SPL). A special purpose ledger provides the ability to produce balance sheets based on fund accounting. Most of the financial activities updating general ledger accounts will be posted to the special purpose ledger simultaneously as transactions are processed. It uses the split processor functionality to create entries to balance transactions among funds. The SPL shares the same GL accounts as FI. The difference between the two is that the SPL will break the transaction down even further to allow the correct split by fund and business area. Statistical Internal Order. An internal order created and maintained by a department user to accumulate costs and revenues for internal reporting purposes. These orders are created using master data functionality and may be short- or long-term in nature. The user may enter the statistical internal order number on a posting transaction to make a real posting to a cost center and simultaneously make a statistical posting to the internal order to track department specific activity. Work Breakdown Structure (WBS) Element. A cost object, similar to an internal order, used to represent grants, land grants and capital projects in the Controlling Module of SAP. When used for grants, the WBS element represents a grant in the Controlling Module and is used to post transactions to the grant in the Grants Module (GM). When used for capital projects, the WBS

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element represents a Project in the Controlling Module (CO) and is used to post transactions to the capital project in Project Systems (PS). Workflow. The sequence and evaluation of conditions needed to complete a business process. This is an electronic function monitored by the workflow manager within SAP.

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