Parallel accounting is becoming more widespread nowadays for various reasons. Some of these reasons include the need to report according to a parent company’s account standards, in situations where the parent company exists in a different country and requires the financial statements of their subsidiaries to be in a uniform standard; the need to produce financial statements according to International Accounting Standards (for companies in the US) to satisfy the pending (and imminent) requirement for US companies to comply with IFRS standards; and for other reasons which are a consequence of continued globalization due to mergers and acquisitions.
The two common approaches to parallel accounting in SAP are by using the accounts-based approach and using the ledger approach. In my point of view, the more superior approach is the ledger approach, and this method works nicely if you have implemented SAP General Ledger (New GL) and have activated leading and non-leading ledgers. However, the reality is that not everyone has migrated to New GL yet (amazingly!), and even if they have, the account-based option may be more preferable for their system setup. For that reason, and the fact that I think there is already sufficient information out there on using the ledger approach, I thought I would mention a few things that are necessary to set up the accounts-based approach.
The good thing about using the accounts-based approach is that it is easier because it simply involves creating a different set of accounts that are used for the alternative GAAP method. For example, if you are a US company and you need to report according to IFRS standards, you need to create a set of accounts that will be used for IFRS adjustments. You can distinguish these accounts by using a separate account group (created in transaction OBD4) and call this account group “IFRS”. One of the recommendations by SAP is that you may want to add an extra digit to this account group which distinguishes it from its corresponding US GAAP account. For example if you have a Leasing expense account which is 640000 in your operating chart of accounts, you can make the IFRS version of this account 9640000. Once you have set up all the relevant IFRS accounts, simply include them in a separate financial statement version (transaction OB58), which is different from the US GAAP financial statement version which should exclude these accounts.
You can define a separate retained earnings account for the IFRS accounts. To do so, you would need to go to transaction OB53, and enter a P&L stamen type of Y, and enter a retained earnings account in which you add a “9” (same IFRS prefix used above) to your normal retained earnings account (obviously you would need to set up this account first). Once you have done this, then you would need to go to all the IFRS P&L accounts you set up and enter “Y” in their master data (transaction FS00 – “Type Description” tab). You will notice that all your other accounts automatically show an “X” P&L statement type in their master data. Note that you can use the mass update transaction (MASS) to update your IFRS accounts with the P&L Statement type.