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74 CHAPTER 3 Introduction to Accounting

posted values, which have been posted. Planned values must be periodically
posted to the general ledger. Companies accomplish this task by executing a
depreciation posting run, which posts the planned values for the specifi ed time
period for all depreciation areas to the appropriate general ledger accounts. In
addition, it charges the appropriate cost centers with the depreciation expenses
incurred.
Figure 3-24 is an example of the asset explorer. The top part of the fi g-
ure identifi es the asset and the fi scal year for which the data are displayed
(asset #100002, offi ce furniture, and 2010, respectively). The top left part lists
available depreciation areas. In the fi gure, two areas are available: book depre-
ciation and tax depreciation. Book depreciation has been selected. The tabs in
the middle part of the fi gure indicate the types of data that are maintained
in the asset explorer. Note that the posted values tab is selected. This tab
displays the acquisition value of the asset and depreciation values that were
posted by the depreciation run. The planned values tab includes planned
depreciation values for all the depreciation areas. The comparisons tab dis-
plays data for multiple years, and the parameters tab displays current settings
for the parameters associated with the asset, such as the useful life and the
depreciation method.

Demo 3.11: Review asset explorer

FINANCIAL STATEMENTS
Recall that the primary goal of fi nancial accounting is to report data needed
to meet legal and regulatory requirements. This reporting takes the form of
fi nancial statements, including the balance sheet and the profi t and loss state-
ment. The specifi c accounts that need to be included in these statements are
determined by the nature and purpose of the requirements.
Financial statements can be generated for different organizational
levels, including one or more company codes and business areas. Financial
statements are created from fi nancial statement versions. A financial state-
ment version is a hierarchical grouping of general ledger accounts that
must be included in the fi nancial statements. A company can defi ne multiple
fi nancial statement versions, tailoring each one to satisfy different reporting
requirements. Financial statements can be generated from either the opera-
tive chart of accounts or the country-specifi c chart of accounts. These state-
ments also specify additional characteristics such as currency, format, and level
of detail.
Figure 3-25 provides an example of a balance sheet. It is defi ned using a
fi nancial statement version that includes relevant balance sheet accounts. It is
grouped into two major categories, assets and liabilities/equity, which in turn
are divided into account groups such as short-term assets (e.g., raw materials
and fi nished goods) and long-term assets (e.g., land and depreciation).
Figure 3-26 displays a profi t and lost statement. It is grouped into rev-
enue accounts, expense accounts, and cost of goods sold accounts.

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