Leading Ledger Vs Non-Leading Ledger
General accounting relies on ledgers to systematically record financial transactions, account by account. It allows use of several ledgers in tandem. Using several ledgers allows you to produce financial statements accounting to different accounting principles.
SAP has two types of ledgers:
Leading Ledger
Non-Leading Ledger
Leading Ledger:
Based on the accounting principles that are of the consolidated financial statements.
Used for reporting and analysis.
SAP allows you to designate only one ledger as the leading ledger, which is predefined as '0L'.
All other ledgers are secondary to the leading ledger.
Integrated with all Non-Leading Ledgers.
Automatically assigned to all company codes.
Receives the currencies, the fiscal year variant and the variant of the posting periods settings that are applied to that company code.
Second and third parallel currency can be defined for leading ledger for each company code.
Non-Leading Ledger:
Is a secondary ledger that is used for specific purposes.
Used to store additional information or to provide a different view of the financial date.
Are parallel ledgers to the leading ledger in non-local countries.
Can be based on a local accounting principle.
Needs to be activated manually for the individual company codes.
Can have different fiscal year variants and different posting period variants per company code.
Second and third currencies of the Non-Leading Ledger picked from currency’s assigned to leading ledger.
Separate account number range can be assigned to document types in Non-Leading Ledger.
Examples of non-leading ledgers include:
Tax ledger
Cash ledger
Accounts payable ledger
Accounts receivable ledger
For Example:
Consider a company with operations in India, USA, and UK, with its registration in India. To comply with local legal requirements, each location must maintain separate financial statements. To achieve this, transactions must be segregated based on the accounting principles specific to each country.
In this scenario, the financial statements prepared for the country where the company is registered (India) are referred to as the leading ledger. Meanwhile, the financial statements prepared for the other countries (USA and UK) are termed as non-leading ledgers.
