Ledgers are used to record financial transactions in general accounting by account. In general accounting, several ledgers can be used in parallel.
Using several ledgers allows you to produce financial statements according to different accounting principles. SAP has two types of ledgers.
- Leading Ledger
- Non-Leading Ledger
Leading ledger
- The leading ledger is based on the accounting principles that are of the consolidated financial statements.
- Only one leading ledger can be defined and sap provides leading ledger ‘0L’ by default.
- The leading ledger is integrated with all subsidiary ledgers and is updated in all company codes.
- Leading ledger is integrated with all non-leading ledgers.
- The leading ledger automatically assigned to all company codes.
- The leading ledger 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
- The non-leading ledgers are parallel ledgers to the leading ledger in non-local countries.
- Non-leading ledgers can be based on a local accounting principle.
- Non-lading ledgers needs to be activated manually for the individual company codes.
- Non-leading ledgers can have different fiscal year variants and different posting period variants per company code.
- The second and third currency of the non-leading ledger picked from currencies assigned to leading ledger.
- Separate document number range can be assigned to document types in non-leading ledger.
Let us assume a company is established in three countries India, USA and UK where the company is registered in India. These three locations should maintain three separate financial statements based on the legal requirements in the specific country. To create those financial statements, transactions needs to be separated based on the accounting principles.
The ledgers in financial statements created for the country where the company registered are called as Leading Ledgers (LL). The ledgers in financial statements created for the other countries are called as Non-Leading Ledgers (NLL).