NewGL-JVA integration - Documentation

INTRODUCTION
Historical Background
In the original design of Joint Venture Accounting, the FI accounting data are derived from the entry
view of the FI document that is saved in the database tables BKPF and BSEG. When NewGL was
introduced, this handling was not changed. As a result, NewGL and JVA prepare the FI data posted in
the respective ledgers in parallel processes without any interrelations and connections. Moreover, in
the original NewGL design it is not possible to define the JVA accounting data as split criteria
(venture, equity group, recovery indicator), while the NewGL customizing does not influence the JV
doc split in any way.

For these reasons, it was not possible to reconcile the split results of the NewGL splitter with the split
results of JVA. In other words: JVA reporting was only possible based on the JVA tables. No JVA
reporting could be done in NewGL. (For more details, see note 966000.)

Main Features
The main objective of the NewGL-JVA integration is to introduce the possibility of JVA reporting in
NewGL and to ensure better reconciliation between the NewGL data and the JVA data.

Basically, this is achieved by three technical changes:

1. The JV FI data are not derived from the entry view data any longer, but from the split
document prepared by NewGL during the split process.
2. In NewGL, the JVA entities (venture, equity group and recovery indicator) are added as split
criteria, and special JVA derivation logic is added to the NewGL split process, including
venture balancing and CO/FI reconciliation.
3. In the relevant cases, the JVA reports that used to post pure JVA document are adapted to
post FI documents, instead (equity change, equity adjustment, farm in/farm out,
suspense/unsuspense).

As a result of these changes, the NewGL data are reconciled with the JVA data regarding venture,
equity group and recovery indicator. Moreover, several month end processes are changed:

1. Transaction GJ90 (Transfer automatic postings to CO) does not have to be run anymore in
the most cases, because through the NewGL split all relevant information is posted online to
FI and CO, especially RXD accounts (realized exchange rate differences).
2. Transaction GJ91 (Unrealized exchange differences) is replaced by the FI report
FC_FAGL_VALUATION.
3. Transaction GJNO (Valuation for foreign curr. balances of GL accounts at a posting period) is
replaced by the FI report FC_FAGL_VALUATION.
4. The JVA intercompany reconciliation for CO documents is replaced by the NewGL CO/FI
online reconciliation.
Restrictions
While NewGL and JVA will be reconciled in several dimensions, the reconciliation is not complete in
several respects, that is, the data in the JVA ledgers will not fully match the NewGL data. There are
both technical and accounting reasons for this, as explained in the following.

Parallel accounting
The JVA module does not and will not support parallel accounting. Only the leading ledger is
reflected in the JVA ledgers. So, if a customer needs to introduce parallel accounting, he either has to
accept the fact that the non-leading ledgers are not available in the JVA ledgers, or he must not use
parallel ledgers and use the old account approach to parallel accounting (i.e. different accounts for
different valuations).

Cost objects
Because JVA is based on the Special Ledger technology and because special ledgers are not subject to
the FI accounting restrictions, in JVA any combination of accounting data is possible whereas this is
not so in FI. In especially, in JVA there is no restriction regarding the combination of cost object and
account type. Whereas in FI an account that is not a cost element have a cost object, in JVA this
combination is possible. In fact, in JVA any account can also have a cost object. This is required to
meet the reporting needs of JVA customers that run reports on the level of cost object + venture
(esp. working capital).

A further restriction is imposed by the fact that some types of lines are not split in the entry view (as
in the case of exchange rate gains/losses or discounts), but at a later stage in the NewGL document.
This is especially relevant for tax lines that are usually not defined as cost elements. As explained
above, in the JVA document the tax lines can nevertheless have cost objects, whereas the cost object
information on tax accounts will not be available in the CO and in FI/NewGL.

The cost object information in JVA can therefore be more detailed than in NewGL, and no
reconciliation can be achieved on cost object level for accounts that are not configured as cost
elements.

CUSTOMIZING

To enable the JVA-NewGL integration, first the business function must be activated. Then settings
need to be made both in NewGL and in JVA.

Business Function
To switch on the JVA-NewGL integration you need to activate the business function
‘JVA_GL_INTEGRATION ‘ via transaction SFW5. Note that this business function is not reversible.

Note further that merely activating the business function is only a precondition for the new
functionality, but will not trigger any new handling. To actually activate the JVA-NewGL integration
you need to execute several customizing steps both on client and company code level, as explained
in the following sections.
NewGL Settings
In order to use the JVA-NewGL integration, some adjustments in the in the NewGL customizing are
necessary.

Ledger Configuration
As a first step the ledgers need to be defined. To maintain the ledger configuration use the
customizing transaction SPRO –> SAP Reference IMG. The ledger customizing can be found in this
node: Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Ledgers -> Ledger.

To define a ledger, execute the customizing activity “Define Ledgers for General Ledger Accounting”.

You can define leading and non-leading ledgers. If the leading ledger is already defined, the Joint
Venture ledger must be defined as non-leading ledger. If the NewGL was not active yet, it is possible
to define the JV-ledger as leading ledger.

To ensure that the ledger is working for the JVA-NewGL integration, the totals table needs to contain
the JV-fields ‘VNAME‘, ‘EGRUP‘, and ‘RECID‘. This can be ensured by selecting JVGLFLEXT as totals
table. Alternatively, the table FAGLFLEXT can be used if it has been enhanced by the JV-fields.

To enhance the FAGLFLEXT, the “Include Fields in Totals Table” activity needs to be executed for
FAGLFLEXT.
In this transaction the additional fields can be selected via value-request. It is possible to include
customer fields and additional fields.

The JV-fields are available as additional fields. To ensure that the JV data are stored correctly, the
three JV-fields ‘ZZEGRUP‘, ‘ZZRECID‘, and ‘ZZVNAME‘ must be used.
 ! Caution: The addition of fields to existing tables can lead to inconsistencies if data were already
posted to these tables.

After having defined the ledger with JV data as non-leading ledger, the ledger needs to activated.
(“Define and Activate Non-Leading Ledgers”). When you have selected the JV-ledger different
company codes can be assigned. For each company code different currencies can be defined.

In the last step the correct JVA-Scenario needs to be assigned to the ledger. This is done via the
activity “Assign Scenarios and Customer Fields to Ledgers”.

After selecting the ledger and double-clicking scenarios the scenario assignment can be made.
The JVA-Scenario (FIN-JVA) can be selected in addition to other scenarios.

Document Splitting
When the ledger has been defined the document splitting needs to be customized for the NewGL-
JVA-Integration. The general document splitting customizing needs to be done according to the
business requirements. The general procedure is described in the KW documentation for NewGL. For
more detailed issues, please contact your NewGL consultant. In this chapter only the specific changes
for the NVA-NewGL integration are described.

The document splitting customizing can be found in Financial Accounting (New) ->General Ledger
Accounting (New) -> Business Transactions -> Document Splitting.

For the document splitting the characteristics for General Ledger Accounting need to be defined
(“Define Document Splitting Characteristics for General Ledger Accounting”). A new entry must be
added. In the field column the value “VNAME Joint venture” needs to be selected. This adds all Joint
Venture entities (VNAME, EGRUP, RECID) to the document splitting. This will trigger the splitting of
FI documents by the JV entities. Additionally, the flag “zero balancing” should be activated to ensure
that every document is balanced by venture/equity group and to allow for reporting on
venture/equity group level.
Optionally, the Joint Venture fields can be defined as mandatory.

It is important to note that the document type important for the way the documents are split.
Therefore, make sure that all document types used in your company are assigned to the correct
process.

CO-FI-Integration
For the customizing of the CO-FI-Real-Time Integration a new variant needs to be defined. This can
be done in Financial Accounting (New) ->Financial Accounting Global Settings (New) ->Ledgers ->
Real-Time Integration of Controlling with Financial Accounting -> Define Variants for Real-Time
Integration.

You can either adapt an existing variant, or create a new variant.

By double clicking a variant, the details for this variant are shown.
In this view the new flag “Cross-Venture” is available. If this flag is selected, all CO postings which are
cross-venture or cross-equity group trigger FI/CO reconciliation postings. (This handling replaces the
old reconciliation logic in the classic JVA.)

Foreign Currency Valuation

In the customizing the ledger groups can be assigned to different accounting principles (Financial
Accounting (New) -> Financial Accounting Global Settings (New) -> Ledgers -> Parallel Accounting)

After the creation of different accounting principles the assignment to ledger groups need to be
done. It is important that the JV-ledger is assigned to the same accounting principle as the leading
ledger. Otherwise the CO tables are not updated.
The assignment of a ledger to an accounting principle is done via the ledger group. Therefore a
ledger group must be defined which contains at least the JV-ledger and the leading ledger.

The ledger groups can be maintained under Financial Accounting (New) -> Financial Accounting
Global Settings (New) -> Ledgers -> Ledger -> Define Ledger Group.

Here the ledger groups can be defined and different ledgers can be assigned to the group.

leading-Ledger
Financial
JV-Ledger
Accounting
Financial
(New) ->
Accounting
Financial
(New) ->
Accounting
Financial
Global Settings
Accounting
(New) -> Ledgers
Afterwards the assignment of accounting principle to Ledger group can be done (Financial
Accounting (New) -> Financial Accounting Global Settings (New) -> Ledgers -> Parallel Accounting ->
Assign Accounting Principle to Ledger Groups).

JVA Settings
Main settings
The JV settings for the NewGL integration are made via the table maintenance view ‘V_T8JZFAGL’.
(The settings are saved in the database table ‘T8JZ_FAGL’.) Like any other JVA customizing, the
integration settings valid per company code.

To maintain the NewGL-JVA integration settings, launch transaction GJGL. The following screen will
be displayed:
To add a new company code, click the New Entries button. The following screen will be displayed:

The elements of this dialog are explained in the following:

Company Code: Enter a new company code. (If you enter a company code that was already
configured before you will get an error message. So there is no danger of double customizing.)

Use NewGL splitter: This is the main setting in the JVA customizing for the JVA-NewGL integration. If
it is ticked, the JVA documents will be derived from the document created by the NewGL splitter
instead from the entry view.

Enrich NewGL with JV: This option is only relevant if the option User NewGL splitter is not active. It
enables JVA enriched splitting in NewGL, even if the JV document is still produced based on the entry
view of the FI document.

Warning at difference: If the ‘Use NewGL splitter’ option is active, the JV document will be derived
from the NewGL split document, but the “old” JVA integration manager will still be run in the
background, and the “old” JVA document derived from the FI document (entry view) is compared
with the “new” JV document derived from the NewGL split document. You have several options how
the system should react in cases when differences between the “old” and the “new” document are
detected:

- Do NOT display any message: No message is shown when differences are detected. The
process continues, and the documents are posted.
- Display information message: An information message is shown when differences are
detected. After the confirmation, the process continues, and the documents are posted.
- Display warning message: A warning message is shown when differences are detected. After
the confirmation, the process continues, and the documents are posted.
- Display error message: An error message is shown when differences are detected. After the
confirmation, the process is cancelled, and no documents are posted.
- Prompt user to proceed: A message is shown when differences are detected. The user is
prompted to decide if the process should be continued or not. If the user decides to
continue, the documents are posted.

In a production environment, the options Do NOT display any message or Display information
message seem most appropriate, while during customizing and expert testing the Prompt user to
proceed option can be helpful to identify customizing issues.

MM doc treatment: The treatment of FI documents created by MM transactions is a special issue in

JVA: Firstly, depending on valuation type/area, cost objects are be derived, if this has been defined
via transaction GJ55. Secondly, depending on the type of the document, different kinds of accounting
data projections are executed. In the “old” JV integration manager these derivations and projections
were only executed for the JV document, while the FI document remained unchanged. This approach
can no longer be followed because the reconciliation between FI/CO and JVA requires that the cost
object data are already given In the FI document at an early stage (before the CO integration) so that
both FI and CO are updated. Nevertheless, the JVA customizing allows you to steer the time when
the derivation and projection is executed:

- Derive CO object and execute projection for entry view: This is the recommended setting.
When this option is selected, both the cost object derivations and the projections for the FI
documents created by MM are executed for the entry view at an early stage. This way both
CO and the NewGL splitter are updated with the same accounting data.
- Derive CO object for entry view: When this option is selected only the cost object derivation
is executed for the entry view while the projection is left to the NewGL splitter. Select this
option only if you have configured the NewGL splitter in a way that the projection is correctly
executed.
- Derive CO object and execute projection during NewGL split: When this option is selected,
both the cost object derivation and the projection are executed during the NewGL split. This
means that the cost object information is not transferred to CO but only to the NewGL and to
the JVA ledgers.

FI/CO reconc. account: If FI/CO real-time reconciliation is active in NewGL, a JV document will also be
derived from the reconciliation document. If an account is specified here, it will be use for the JV
document instead of the FI reconciliation account.
Account determination
You need to define an offset account for equity change and equity adjustment in table T030. Use
transaction SE16 to add a new entry to table T030 with the following data: Chart of accounts
(KTOPL), transaction (KTOSL = ‘JVA’ - mandatory!), debit account (KONTS), credit account (KONTH).

Background information: When the NewGL-JVA integration is active, several transactions that used
to post to the JV tables directly in classical JV now need to post FI documents instead to ensure
consistency between FI, CO, and JVA. In some cases this means that reversal and reposting lines
cannot be in one single document anymore, but two documents need to be posted instead (one
reversal and one reposting document). Te ensure zero balances per document an offset account is
required.

Posting rules
With customizing transaction GJ49 maintain new postings rules for the existing functions ‘EQAD’ and
‘FARM’. Three new posting rules are needed: G1, G2, G3, as displayed in the screenshot below:

For each posting rule set the details as displayed in the following example, that is, do only define the
posting keys and leave all other settings empty:
Venture Settings
A substitute cost object must be defined for each venture/equity group combination via transaction
GJVV, as displayed in the following example:

Note, that the cost object defined as substitute cost object must be assigned to a profit center or
segment to allow for the derivation of profit center and/or segment at posting time.

Background information: When NewGL splitting is active, in the most cases the profit center and/or
the segment is defined as a mandatory field. For this reason, each FI document posted must have
accounting data that either includes the mandatory field, or that allows the derivation of the
mandatory field. The means to achieve this for FI documents created by JVA is the substitute cost
object.

Account Settings
To ensure correct splitting and consistence between FI, CO and JVA, the accounts used for posting
exchange rate gains/losses need to be defined as cost elements.
Background information: Regarding accounts, there is a fundamental difference between JVA and
NewGL. Where in JVA lines with accounts that are not defined as cost elements can have a cost
object nevertheless, this is not true in NewGL. A n line posted to an non-cost element account cannot
have a cost object. This needs to be taken into account when configuring the FI accounts.

DOCUMENT TRANSFER

This business function does not support the migration of data. You should create a new system
where you activate the business function and complete the necessary prerequisite customizing and
settings. After you have set up the new system, activated this business function and completed the
necessary settings in the new system, you can transfer the data from your old system to the new
system.

NEWGL REPORTING
For the NewGL reporting for table JVGLFLEXT a new report was created. This report can be accessed
via transaction FGI3. Report type 006 contains the report 0JVBLNCE-01 which is a balance report for
the totals table JVGLFLEXT. You can use this report for reporting or as a template for your own
report.

If you used the FAGLFLEXT with customer fields as totals table, you can use report type 002 for
reporting.

CHANGES IN JOINT VENTURE REPORTS

The following joint venture reports post FI documents rather than JV document (table JVSO1) when
the JVA-NewGL integration is active:

 Equity Change (GJEC)

 Equity Adjustment (GJ19)
 Farm in/out (GJFARM_1)
 Suspense/Unsuspense (GJ17, GJ18)
In company codes, where the NewGL integration is not active, the above JV reports will continue to
post directly to the JV tables because consistency with FI does not matter and consistency with CO is
kept because only venture and equity group are affected, whereas the balances by cost object
remain unchanged.

However, if the NewGL integration is active in company code, FI postings have to be created instead
of JVA postings to ensure consistency between JVA and FI regarding venture and equity group. As FI
postings are governed by stricter rules than direct postings to the JVA ledgers, the document
structure is more complex: Whereas in the classical JV postings reversals and re-postings can be
combined in one document, this is not possible the case of FI postings meaning that a reconciliation
account is needed for each FI posting to ensure a zero balance in the separate reversal and re-
postings.