FASB 13 Functionality (IAS 17): Account determination

[Former Member]

Hi all,

Currently, we have got, for example, the 10-Basic Rent Office condition type for normal postings in a lease-out contract with the following  accounting schema for Billing and Transfer movements in RE:

• Billing posting:      1000 Customer (Tenant)     to     Revenue account (735XXX1) 1000

• Transfer posting:   1000 Revenue account (735XXX1)    to     Revenue account (735XXX1) 1000

This is OK. Now, we are implementing the FAS 13 functionality (using the BADI for it and following the SAP recommendations in Note 920772). Once implemented, the system adds, automatically, an additional condition type for the Straight Line in order to post the accrual. The accounting schema for this SL-Condition type is the following:

• Billing posting:      750 Accrued account     to     Revenue account (735XXX1) 750

• Transfer posting:   750 Revenue account (735XXX1)    to     Revenue account (735XXX1) 750

This is Ok as well. The issue is the following..., for the periods that it is necessary to post the special SL condition type and the normal condition, 10-Basic Rent Office (both of them), also it is necessary to trigger an additional posting as the following:

• 1000 Revenue account (735XXX1)    to     Accrued account  1000

In order to get this last one I would like that you confirm to me that this posting it´s got with the Transfer posting derived from the normal condition type 10-Basic Rent Office. Because, if the answer is yes then we need to DUPLICATE the normal condition type 10-Basic Rent Office because the account determination for the Transfer posting it is different when it is applicable the FAS 13 (IAS 17) or not.

• Transfer posting, in case FAS 13 it doesn´t apply:   1000 Revenue account (735XXX1)    to     Revenue account (735XXX1) 1000

• Transfer posting, in case FAS 13 it applies:              1000 Revenue account (735XXX1)    to     Accrued account  1000

At the end, it seems that we need to define the 10-Basic Rent Office, as now, for those postings don´t require the FAS 13 normalization; and additional condition type for the same purpose, for example Y10-Basic Rent Office but for those postings require the FAS 13 normalization, because the Account Determination for the Transfer movement it is different using the Accrued account.

Is it correct my understanding?.

Thanks in advance and best regards,

Fernando

[Former Member · Accepted solution]

Confirmed. The approach is correct.

Fernando

[efrainantonio_pacheco · Accepted solution]

Good day

Fernando, I would like to know if FASB 13 in similar to IAS17 regarding to the Finance Leases (recognize Rentaol Object as Asset as initial step and then make posting for amortization  of the asset adquisition and also interest calculation)

I´m doing IFRS adaptation to a customer that alreday have RE-FX, and now it required adapt the Finance Leases to IFRS, can you provide some email or contact to go in detail.

Thank you in advance

[Former Member · Accepted solution]

Hi Efrain,

First of all,keep in mind that the IAS 17/FASB 13 from an accounting point of view affects to:

- Finance leases (Asset acquisitions)

- Operative leases (Rental agreements)

As you know from RE-FX, we are managing rental agreements, so the current functionality that SAP provides is to recognise the cost/revenue over the contract duration based on a straight-lined calculation for lease out and lease in contracts.

As far as I know is that it is not possible to manage finance leases from RE-FX as you are requesting to calculate the amortization and interest. From a technical perspective, it is necessary specific flow categories and calculation methods for specific flow types like the flow types that SAP provides for TRM (Financial products) and CML (Loans). I mean, it seems that you are looking for a solution for a Finance leases in a SAP module for Operative leases, RE-FX. On the other hand, based on my experience there is no a standard Product type for Finance leases in TRM or/and CML.

Efrain, I'm on my annual leave and I have limited access to internet. I will come back on 19th, August. Please, provide me an e-mail to contact you in order to have a short conversation regarding this topic.

Best regards,

Fernando Díaz

[efrainantonio_pacheco · Accepted solution]

Fernando,

Thank you for reply and what you exposed is what I want to do: Having a Finance leases solution in RE-FX by using Operative Lease.

As far I know that FAS 13 sample code described in note 952432 is for calculate straight-line for Operative Lease, but my point now is if can I use above code (class and method) to enhance my own solution into RE-FX? or what is the best suggestion to have Finance-Lease solution, have you faced that ?

Below are my contacts:

My email is : Efrain_2000@yahoo.com or I think it is my SCN SAP bussines card

Skype: Efrain_2000

Best regards