SAP FI CO (Financial Accounting & Controlling)
SAP FI CO (Financial Accounting & Controlling) Forum
I am looking for accounting steps for individual value adjustment program.
Please provide me the steps.
Thanks in advance.
Accounting Steps for individual value adjustment program:
Provision for bad debts as special gl transactions. Additional gl accounts used here are expense for individual value adjustment and expense for uncollectable receivables.
The first step is the invoice entry for the customer, here the accounting entry takes place where in the customer account is debited and the revenue account is credited.
When in the second step we are uncertain about the amount to be received from the customer the individual value adjustments (provisions for bad debts) are made during the year end closing, this program is run to show the bad debts provisions for the year end, which are to be shown separately in the balance sheet, the entry here is made without tax wherein the individual value adjustment expenses account is debited and the customer account is credited.
The third step is the reversal of the previous entry on the key plus one date, the entry made into the individual value adjustment expenses is reversed at key plus one date after the closing program for individual value adjustment is completed.
The fourth step is when we are sure that the payment from the customer will not be received and have to consider it as bad debts, here the accounting entry which takes place is expenses for uncollectable receivables is debited and the customer account is credited with the customer account value being (invoice plus tax) and the value of uncollectable receivables being only the invoice value, the another part of entry for output tax is the output tax will be debited.
(note: these are automatic postings made into the system when we run the program or the option batch input session can be used for the entries)
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