How to Use the Extension Ledger Functionality in SAP

S/4HANA Finance
by Srinath Gogineni, SAP FI/CO Solution Architect
April 8, 2016

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Learn how to configure and implement the new Extension Ledger functionality in SAP S/4HANA Finance.
Find out how to deactivate a ledger in a company code.

Generally ledgers provide a specific view of financial data. SAP provides only one leading ledger in every
client. It is typically called the 0L ledger. This leading ledger is mainly used for the reporting of a company’s
consolidated financials. It is the only ledger in an SAP system that is integrated with all the submodules and
updated for all company codes. The non-leading ledger usually stores a lot of redundant data. All the
entries that are posted in the leading ledger (0L) also flow to the non-leading ledgers.
With the new concept of Extension Ledgers, you can add the Extension Ledger on top of another ledger.
That means you can add the Extension Ledger on top of either a leading ledger (0L) or a non-leading
ledger. Note that you cannot add an Extension Ledger on top of another Extension Ledger providing
different data views as needed; that is, you cannot have a Base Ledger as another Extension Ledger.
Thus, the Extension Ledger does not store the data that is posted in the leading ledger. It only stores the
delta entries that are posted specifically to the Extension Ledger. I describe scenarios that might require
Extension Ledgers and what the benefits are of using the Extension Ledger for each scenario.
(Note: Although in its configuration guidelines, SAP still refers to the Appendix Ledger, this functionality is
now called the Extension Ledger. Throughout this article I use the term Extension Ledger instead of
Appendix Ledger.)
Examples of creating specific Extension Ledgers can include an extension 1 ledger created for posting into
closed periods for restatement purposes, while the extension 2 ledger can used for adjustments for
consolidation purposes only.
SAP standard solutions provide you with tools to post and view data with different views. Each Extension
Ledger provides a specific view of the financial data since a ledger usually stores a lot of redundant data to
other ledgers.
Consider an example of the non-leading ledger concept in the SAP General Ledger. Once a non-leading
ledger is assigned to company codes, all the automated postings, including manual entries, flow to both the
leading ledger and non-leading ledger. However, you can use transaction code FB50L to post to a specific
ledger in the SAP New General Ledger. This transaction only posts to a specific ledger.
The system reads the data from the Extension Ledgers as shown in Figure 1.
Figure 1
Data retrieval for the Extension Ledger
When you use Extension Ledgers, you can see advantages, such as:
 The Extension Ledger stores delta values and points to another ledger, thereby providing a flexible
mechanism for adjustment and reporting.
 The Extension Ledger stores only delta values of the adjustments and while reporting it combines the
Base Ledger (whichever ledger you specify in the configuration as Base Ledger it could be leading
ledger [0L] or any non-leading ledger) with the values in the Extension Ledger. It is very easy to set up
the Extension Ledger as it requires very minimal configuration from a system perspective.
 In SAP S/4HANA Finance all the financial entries are stored in the Universal Journal table and even
the Extension Ledger entries are stored in the same table. Since the Universal Journal entry table
stores just the delta entries posted to Extension ledger, it reduces the reconciliation effort for the
manual entry posting specific to this Extension Ledger, unlike the non-leading ledger where every
entry is posted to all the assigned ledgers to the company code including the non-leading ledger.
Since the Extension Ledger is always based on the Base Ledger, all the postings made to the Base
Ledger (which could be leading ledger (0L) or non-leading ledger) also apply to Extension Ledger
while retrieving the balances for the SAP General Ledger.
Using Extension Ledgers provides you with the following benefits:
 The Extension Ledger stores delta values and points to another ledger, thereby providing a flexible
mechanism for adjustment and reporting.

 Besides creating a master record for the Extension Ledgers, there is no need for any additional
configuration.

 Reporting on the Extension Ledger always includes the data from the Base Ledger.

 Multiple Extension Ledgers can point to the same Base Ledger.

 A reduced data footprint.

 A reduced reconciliation as only manual delta postings are maintained in the Extension Ledger.
 Extension Ledgers are stored in the Universal Journal table just like the normal ledgers.

 The Extension Ledger provides different management views without touching the underlying data from
the Base Ledger.

(Note: As part of SAP S/4 HANA Finance, SAP has provided the concept of the Universal Journal.
Universal Journal means there is only one accounting document that is a single source, and by doing this
SAP has eliminated the other documents like Controlling (CO), Profitability Analysis (CO-PA), and the
material ledger. In a Universal Journal only one line item table (ACDOCA) stores full details of all other
applications, such as the SAP General Ledger, CO, Asset Accounting (FI-AA), CO-PA, and the material
ledger. Thus, SAP has provided a single line item table as a source for all the financial data. I am not going
to cover this topic, but this is just for understanding since later I am going to access this Universal Journal
(ACDOCA) table to verify how data is stored while posting to the different ledgers.)
For my examples, I show how to create two ledgers: one G4 as the Extension Ledger and one GZ as a
non-leading or standard ledger.
Step 1. Create the Extension Ledger
In explaining how to set up the Extension Ledger, I assume that you are already familiar with the SAP
General Ledger concept of ledgers and leading ledger 0L is already defined.
To set up the Extension Ledger, follow IMG menu path Financial Accounting (New) > Financial Accounting
Global Settings (New) > Ledgers > Ledger > Define Settings for Journal Entry Ledger.
In the initial screen that appears (Figure 2), click the New Entries button. The Ledger Type column has two
options. One is the Standard Ledger and the other is the Extension Ledger, which is new with SAP
S/4HANA Finance.

Figure 2
The initial screen to define settings for the Journal Entry Ledger
In the next screen (Figure 3), select A Appendix Ledger from the drop-down list of options in the field under
the Ledger Type column. In the field under the Ledger column, enter G4. Under Ledger Name, enter the
name of the ledger (e.g., G4 Extension Ledger for GS04), and under Base Ledger, select 0L for the leading
ledger.

Figure 3
Configure the Extension Ledger and assign the Base Ledger

After entering your data, press Enter to confirm your entries and then click the save icon .
In the screen that opens (Figure 4), select the row for the company code GS01. Expand the Company
Code Settings for the Ledger folder.
Figure 4
Ledger assignment to the company code screen
Double-click the Accounting Principles for Ledger and Company Code folder. Click the New Entries button
in Figure 5, and in the Accounting Principles for Ledger and Company Code section, enter G4 in the
Ledger field, IAS in the field under the Accounting Principle column, and a description in the field under the
Name/Description of Accounting Principle column, as shown in Figure 6. Typically, you assign an
accounting principle to any ledger you create for reporting purposes. An accounting principle can have
multiple ledgers assigned to it, which consolidate for reporting purposes.

Figure 5
Accounting Principles for Ledger and Company Code new entries screen

Figure 6
Ledger assignment to the Accounting Principles for Ledger and Company Code
screen

After you click the save icon, a pop-up screen (not shown) displays the following message: Ledger group
G4 is created only with ledger G4. Click the enter icon (the green checkmark) to continue. Now click the

exit icon shown in Figure 6.

Step 2. Define a Document Type for Creating an Entry View in the Extension Ledger
In this step you define document types for the entry view in the Extension Ledger. The purpose of this step
is to have different document types so that when you post a journal entry in the specific ledger, it has a
unique document type and number range that is easy for identification.
To complete this step, follow menu path Financial Accounting (New) > Financial Accounting Global Settings
(New) > Document > Document Types > Define Document Types for Entry View in a Ledger. The system
now prompts you for a ledger as shown in Figure 7. In this screen enter G4 in the Ledger field and then
click the enter icon.

Figure 7
Enter a ledger name
After you click the enter icon, the screen shown in Figure 8 appears. Click the New Entries button and then
enter G4 in fields under the Type and Number range columns as shown in Figure 9.

Figure 8
Document type initial screen for the ledger
Figure 9
Assign the document type and number range for the ledger
(Note: Before you enter a new document type and number range in Figure 9, the document type needs to
be created in the regular standard way of setting up a new document type. I assume that you are aware of
this configuration and have not made this step part of the scope of this article.)
After you enter the data in Figure 9, press Enter to confirm your entries and then click the save icon. After
you have saved your data, click the exit icon.
Step 3. Create a Non-Leading Ledger
In this step I show you how to set up a non-leading ledger GZ. These non-leading ledgers are used as
parallel ledgers together with the leading ledger. Parallel ledgers are ledgers managed in parallel within a
general ledger. These can be used to apply different accounting standards, such as International Financial
Reporting Standards (IFRS) or US Generally Accepted Accounting Principles (GAAP).
You define GZ as a non-leading ledger in the section. You repeat the processes explained in steps 1 and 2
for this ledger also. While configuring, you can see the difference between how you define the non-leading
ledger as compared with defining an Extension Ledger that was defined in step 1. To complete this step,
follow menu path Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers >
Ledger.
The main difference between defining the Extension Ledger and the non-leading ledgers is that you choose
Standard Ledger from the drop-down list of options in the Ledger Type field. This means that this is a full
ledger rather than a delta ledger. It is created mainly for booking local or statutory requirements. The Base
Ledger is blank as shown in Figure 10. Click the save icon to save your data.

Figure 10
Configure the non-leading ledger
Next, assign accounting principle IFRS to the non-leading ledger GZ by following the same instructions as
outlined in step 1 (Figure 11).

Figure 11
Assign the accounting principle to the non-leading ledger
Step 4. Post Journal Entries
In this step you post journal entries using transaction code FB50 or following menu path Accounting >
Financial Accounting > General Ledger > Document Entry > FB50 - Enter G/L Account Document. Enter
the data as shown in Figure 12 and click the save icon.
By using this standard transaction, the system posts to all ledgers assigned to respective company codes
before the introduction of the Extension Ledger concept, which is only available from SAP S/4 HANA
Finance. The purpose of this posting is to validate that the system posts documents to all ledgers except
the Extension Ledger. As you can see in Figure 12, while you are inputting the values, no specific ledger is
mentioned.

Figure 12
G/L account document entry
The document is posted as shown in Figure 13.

Figure 13
Message that the document is posted
Step 5. Display the Universal Journal Table
In this step, you check the Universal Journal table ACDOCA for the above entry posted in step 4. Execute
transaction code SE16, and in the screen that opens, enter ACDOCA in the Table Name field as shown
in Figure 14. Click the enter icon.

Figure 14
Enter the table name
This action displays the screen shown in Figure 15. In the Company Code, Fiscal Year, and Document
Number fields, enter the data that you defined in step 4.

Figure 15
ACDOCA table selection screen

After you click the execute icon in Figure 15, the system displays the list shown in Figure 16.
Figure 16
ACDOCA table entries
As you can see in Figure 16, the document is posted to two ledgers: 0L Leading ledger and GZ non-
leading ledger. Note that there are no postings made to Extension Ledgers.
Step 6. Display the Balances
In this step I explain how to look at how the system displays the balances from various ledgers. I look at the
balances for the G/L accounts posted in step 4.
Follow menu path Accounting > Financial Accounting > General Ledger > Account > Display Balances
(New) or use transaction code FAGLB03 as shown in Figure 17. Input the Account Number, Company
Code, and Fiscal Year. The default ledger is shown as 0L.

Figure 17
The G/L account balance input screen
After you click the execute icon in Figure 17, the system displays the account balances. Figure 18 shows
the balance for ledger 0L.
Figure 18
G/L balances for ledger 0L
Repeat the process outlined in step 6. Select the ledger G4 Extension Ledger by following these steps.
Choose the ledger as shown in Figure 19.
Figure 19
The G/L account balance input screen with ledger selection option
After you click the execute icon, the system displays the account balance screen for Extension Ledger G4
as shown in Figure 20.
Figure 20
The G/L account balance screen for Extension Ledger G4
As you can see, even though the document did not post to the ledger Extension Ledger G4, the balance is
still showing because when you configured the ledger G4, you mentioned the Base Ledger as 0L, which is
the leading ledger.
Repeat the process again, but now select the ledger GZ non-leading ledger. Click the execute icon. The
balance for the non-leading ledger GZ is shown in Figure 21.
Figure 21
The G/L account balance for the non-leading ledger GZ
Step 7. Post Journal Entries in the Extension Ledger
In this step you post a journal entry only in the Extension Ledger G4 using transaction code FB50L. Follow
menu path Accounting > Financial Accounting > General Ledger > Document Entry > FB50L - Enter G/L
Account Document for Ledger Group.
In the screen that opens, use the same input fields as you used in step 4 except for the ones that are
highlighted in Figure 22. Enter G4 (for the G4 Extension Ledger) in the Ledger grp (ledger group) and
Document Type fields.
Figure 22
G/L document entry for the ledger group
After you click the save icon, the document is saved as shown in Figure 23.

Figure 23
Message that the document is posted
Step 8. Display the Universal Journal Table
In this step, you check the Universal Journal table ACDOCA for the above entry posted in step 4.
After you execute transaction code SE16, enter table ACDOCA in the Table Name field of the screen that
appears and click the enter icon (the same process described in step 5 shown in Figure 14). This action
displays the screen shown in Figure 24 in which you enter the Company Code, Fiscal Year, and Document
Number from step 7.

Figure 24
The Table ACDOCA selection screen
After you click the execute icon in Figure 24, the system displays the list shown in Figure 25.

Figure 25
Table ACDOCA entries
As you can see in Figure 25, the document is posted to the G4 Extension Ledger only. There are no
postings made to leading ledger (0L) and non-leading ledgers (GZ). In the next step I explain how the SAP
system displays the balances from various ledgers.
Step 9. Display the Balances
In this step you display the balances again because you have posted a document in step 8 to the ledgers.
Repeat step 6 to go to the selection screen for displaying the balances by account and ledger. Figure
26 shows the balances in leading ledger 0L. As you can see there is no change in the balances in leading
ledger 0L since you have only posted to the ledger G4 in step 7.

Figure 26
The G/L account balance for ledger 0L
Figure 27 shows the balances in the Extension Ledger G4. As you can see the new balance now is 800. It
contains both the balance posted in the leading ledger for 500 in step 4 and the document posted for 300 in
the Extension Ledger in step 7.
Figure 27
The G/L account balance for Extension Ledger G4
As you can see in Figure 27, the values posted to the Extension Ledger are added as a delta to the
underlying values already posted to the account. This is consistent with Figure 1, which shows how the
SAP system retrieves the balances from the Extension Ledger.
Deactivating a Ledger for a Particular Company Code
Sometimes it might be necessary to define multiple ledgers for different purposes such as local GAAP, tax,
US GAAP, and IFRS. You might not need one of the ledgers going forward. In this scenario before SAP
S/4 HANA Finance there was no option given by SAP to deactivate once the local ledger was assigned to a
company code. The system kept posting to all the ledgers assigned to the company codes even though
they may be redundant and the company does not want to use them. You cannot deactivate the leading
ledger (0L).
Step 1. Deactivate a Ledger for a Company Code
Now I cover how to deactivate a ledger for future fiscal years on a company code basis. You cannot do this
for a leading ledger. To deactivate a ledger the relevant ledger must have been already assigned to the
company code.
Follow menu path Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers >
Ledger > Deactivate a Ledger for a Company code. Click the execute icon, which gives you the option to
enter the ledger shown in Figure 28.
Enter the ledger you want to deactivate as shown in Figure 28 and click the enter icon.
Figure 28
Deactivation of ledger configuration ledger selection
Find the relevant company code for which you want to deactivate the ledger. Enter the fiscal year as shown
in Figure 29 and click the save icon.

Figure 29
Deactivation ledger assignment for the company code to ToFYear
(Note: You have the option to specify From FYear to To FYear as well as the Last fiscal year which is To
Fyear in which the ledger is updated by postings. Postings with a posting date after this fiscal year do not
update this ledger.)