SAP S/4HANA End-to-End Lab

Part 1 summarized IFRS 18 itself, Part 2 covered the Financial Statement Version (FSV) in SAP FI, and Part 3 covered the cost flow in SAP CO. All three answered the question of what the standard requires. This post changes the angle. Taking a practice case, it looks at what is actually touched in CO: which accounts are split, on what basis, how the categories are assigned to cost elements, and what follows in allocation, CO-PA and the income statement. Scope note: this is a generic practice note. Accounts are named, not coded, and no company-specific or system-specific information is included, only the structure and the order of the work. 1. IFRS 18 and CO Category Item Detail Requirement of the standard Three categories in the income statement IFRS 18 splits the income statement into three categories, operating, investing and financing, and requires two new subtotals: operating profit and profit before financing and income taxes. It applies to annual ...

Earlier posts covered IFRS 18 itself ( Part 1 ), the SAP FI side and the financial statement version ( Part 2 ), and the SAP CO cost flow behind operating profit ( Part 3 ). The previous post set the IFRS 18 work out in five stages and ended with a table of ten items to check before starting. This post expands those items into the queries that actually answer them. The same IFRS 18 project is not the same amount of work at every company. A company whose accounts are already split and one whose accounts are not, a company whose allocation cycles reference cost element groups and one that lists the cost elements individually, have a different scope to touch. That difference can be established by querying the system before starting. The T-Codes and tables below are SAP standard. What follows is the selection criteria, how to read the result, and how the scope of work splits depending on what comes back. No figures from any particular system are included. 1. Order of checks ...

Part 1 summarized IFRS 18 itself and Part 2 covered the SAP FI side, the Financial Statement Version (FSV). Part 3 is about SAP CO. It follows how the expenses that end up in the IFRS 18 operating category are built in CO (cost center → distribution and assessment → activity allocation → production order → product cost → cost of goods sold → CO-PA), read from an S/4HANA sandbox. Example system: S/4HANA sandbox with two controlling areas, CA10 (company code CC10, operating concern OC10) and JNC2 (company code JNC2, operating concern JNC2). It is a training system; the amounts are only there to show the structure. 1. What IFRS 18 asks of CO Item Topic Detail Operating category How expenses are classified Expenses in the operating category are presented by function (cost of sales, selling, administration) or by nature (materials, personnel, depreciation), whichever is more useful. If presented by function, the notes must disclo...

Part 1 summarized what IFRS 18 changes: the income statement is split into operating, investing and financing categories, and an operating profit subtotal becomes mandatory. Part 2 looks at SAP FI. In SAP the shape of the income statement is defined by the Financial Statement Version (FSV). This post reads the FSV of an S/4HANA sandbox as it is today and lists what has to change to present it the IFRS 18 way. Example system: S/4HANA sandbox, company code CC10, chart of accounts COA1, financial statement version FSV1. It is a training system, not a real company. 1. What IFRS 18 requires in the income statement (summary) Item Topic Detail Three categories Operating, investing, financing Every income and expense item goes into one of the three categories. Income taxes and discontinued operations are shown separately. Subtotal Operating profit or loss Income minus expenses in the operating category. Mandatory. Subtotal Profit before financ...