Accounting Of Accrual Deferral Posting.docx

Accounting of Accrual Deferral Posting

Accounting implication of accrual of expenses can be seen on the following example. Suppose that we make a provision for rent on 23.11.2017 and reverse the same on 01.12.2017. On 23.11.2017: Provision for rent Rent a/c dr 50000 to outstanding expenses a/c 50000 On 01.12.2017: Reversal of provision Outstanding expenses a/c dr 50000 to rent a/c 50000 Now, suppose the actual rent is paid on 05.12.2017. On 05.12.2017: Rent Payment Rent a/c dr 50000 to bank a/c 50000

SAP Accrual Deferral Posting 1. Define reversal reason 2. Enter accrual/deferral document 3. Reverse accrual/deferral document

Step 1: Define Reversal Reason Path: SPRO -> Financial Accounting -> G/L Accounts -> Business Transactions -> Adjustment Posting/Reversal -> Define Reason for Reversal

Reasons for Reverse Posting – Initial Screen Click New Entries button and define Reason 09 with the following parameters:  



Text: Accrual/deferral reversal for AZ10 Negative posting: Check this indicator. When we reverse a transaction, it will be shown at the same side instead of being shown on the other side. For example, if we reverse rent provision on 01.12.2017, it will be shown as the negative balance on the debit side instead of credit side, so that the net effect is zero. Alternative posting date: Check this indicator. If we do not select this, the system allows us to reverse document only on the original posting date. If this check is selected, it allows reversal entry on any date.

New Reason for Reverse Posting Now save it.

Step 2: Enter Accrual/Deferral Document Path: Accounting -> Financial Accounting -> General Ledger -> Periodic Posting -> Closing -> Valuate -> Enter Accrual/Deferral Document Transaction code: FBS1 We will post a normal provision for rent by using FBS1 transaction and we will give a reversal reason and a reversal date. Document is posted on 23.11.2017 and is reversed on 01.12.2017. It means that provision of rent is made on 23.11.2017 and the same is reversed on 01.12.2017. This activity is a part of month end provisions in any company.

Enter Reversal Reason as 09.

Initial Screen Accrual/Deferral

In the next screen, enter the amount of provision to be made and text.

Next Screen Accrual/Deferral Now, post the transaction. Below is the document posted. Rent account will be debited and outstanding expenses account will be credited.

Accrual/Deferral Document Display We will post one more transaction for provision of salaries on 30.11.2017.

Initial Screen Accrual/Deferral Document Salaries account is debited and outstanding expenses account is credited.

Accrual/Deferral Document Display

Step 3: Reversal of Accrual/Deferral Document Path: Accounting -> Financial Accounting -> General Ledger -> Periodic Posting -> Closing -> Valuate -> Reverse Accrual/Deferral Document Transaction code: F.81 Now, we will reverse the rent provision and salaries provision by entering transaction F.81 in the command field. Then, we will enter company code, reverse posting date, check test run and click on execute button.

Reverse Accrual/Deferral Document

Reverse Accrual/Deferral Document – Test Run Results After this, we will click on button and the SAP system will show a message that the document has been reversed like shown below.

Reverse Accrual/Deferral Document – Results Document #2 (rent provision) is reversed with document #4, and document #3 (salaries provision) is reversed with document #5.

We can also view the reversed document by using transaction FB03 (Display Document).

Initial Screen of FB03 Transaction

Reversed Document for Rent The rent account is credited and the outstanding expenses account is debited.

Revered Document for Salaries Similarly, the salaries account is credited and the outstanding expenses account is credited.