Accounting of Accrual Deferral Posting

Accounting implication of accrual of expenses can be seen on the following example. Suppose
that we make a provision for rent on 23.11.2017 and reverse the same on 01.12.2017.

On 23.11.2017:

Provision for rent

Rent a/c dr 50000

to outstanding expenses a/c 50000

On 01.12.2017:

Reversal of provision

Outstanding expenses a/c dr 50000

to rent a/c 50000

Now, suppose the actual rent is paid on 05.12.2017.

On 05.12.2017:

Rent Payment

Rent a/c dr 50000

to bank a/c 50000

SAP Accrual Deferral Posting
1. Define reversal reason
2. Enter accrual/deferral document
3. Reverse accrual/deferral document

Step 1: Define Reversal Reason

Path: SPRO -> Financial Accounting -> G/L Accounts -> Business Transactions -> Adjustment
Posting/Reversal -> Define Reason for Reversal

Reasons for Reverse Posting – Initial Screen

Click New Entries button and define Reason 09 with the following parameters:

 Text: Accrual/deferral reversal for AZ10

 Negative posting: Check this indicator. When we reverse a transaction, it will be shown at the
same side instead of being shown on the other side. For example, if we reverse rent provision
on 01.12.2017, it will be shown as the negative balance on the debit side instead of credit
side, so that the net effect is zero.
 Alternative posting date: Check this indicator. If we do not select this, the system allows us to
reverse document only on the original posting date. If this check is selected, it allows reversal
entry on any date.
 New
Reason for Reverse Posting
Now save it.

Step 2: Enter Accrual/Deferral Document

Path: Accounting -> Financial Accounting -> General Ledger -> Periodic Posting -> Closing ->
Valuate -> Enter Accrual/Deferral Document

Transaction code: FBS1

We will post a normal provision for rent by using FBS1 transaction and we will give a reversal
reason and a reversal date. Document is posted on 23.11.2017 and is reversed on 01.12.2017. It
means that provision of rent is made on 23.11.2017 and the same is reversed on 01.12.2017.
This activity is a part of month end provisions in any company.
Enter Reversal Reason as 09.

Initial Screen Accrual/Deferral

In the next screen, enter the amount of provision to be made and text.

Next Screen Accrual/Deferral

Now, post the transaction. Below is the document posted. Rent account will be debited and
outstanding expenses account will be credited.
Accrual/Deferral Document Display
We will post one more transaction for provision of salaries on 30.11.2017.
Initial Screen Accrual/Deferral Document
Salaries account is debited and outstanding expenses account is credited.
Accrual/Deferral Document Display

Step 3: Reversal of Accrual/Deferral Document

Path: Accounting -> Financial Accounting -> General Ledger -> Periodic Posting -> Closing ->
Valuate -> Reverse Accrual/Deferral Document

Transaction code: F.81

Now, we will reverse the rent provision and salaries provision by entering transaction F.81 in the
command field. Then, we will enter company code, reverse posting date, check test run and click
on execute button.
Reverse Accrual/Deferral Document
Reverse Accrual/Deferral Document – Test Run Results
After this, we will click on button and the SAP system will show a message that
the document has been reversed like shown below.

Reverse Accrual/Deferral Document – Results

Document #2 (rent provision) is reversed with document #4, and document #3 (salaries
provision) is reversed with document #5.
We can also view the reversed document by using transaction FB03 (Display Document).

Initial Screen of FB03 Transaction

Reversed Document for Rent

The rent account is credited and the outstanding expenses account is debited.
Revered Document for Salaries
Similarly, the salaries account is credited and the outstanding expenses account is credited.