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Overview

The DeltaERP alternate ledger is used in instances where regulatory accounting requirements are different to the accounting principles applied in the normal general ledger, for example where the primary ledger and financial statements are prepared based on international standards and the local reporting requirements are based on cash basis accounting.

 

The alternate ledger does not replace the primary general ledger but is supplementary to the primary ledger. In practice, all transactions in the primary general ledger are included in the alternate ledger. The alternate ledger can contain additional journal entries to adjust account balances to reflect the financial position based on an alternate set of accounting principles.

It is important to note that only income statement and balance sheet accounts are affected, the alternate ledger does not provide cost and management accounting functionality. Application functionality is similar to normal general ledger applications.

 

Setup

The alternate ledger is based on an alternate chart of accounts and is mapped to the standard chart of accounts. This mapping ensures all primary ledger balances are included in the alternate trial balances. If no entries are posted in the alternate ledger and an alternate trial balance is extracted, the balances will be exactly the same except for the different account numbers from the alternate chart of accounts being presented.

 

Example:

•Primary accounts 100, 101 and 102 are mapped to alternate account A78.

•The balances for the 3 accounts total R10 000 in the primary accounts.

•The alternate adjustment is R2 500 credit to bring it in line with alternate reporting requirements.

 

The following entry is posted in the alternate ledger:

 

Dr ZZZ R2 500

Cr A78 R2 500

 

When the alternate TB is extracted the alternate journal, entries are added to the primary ledger balances:

 

Primary TB balance +/- alternate ledger total = Alternate TB

 

In this case for account A78, R10 000 - R2 500 = R7 500.

 

Mapping Rules

•One or many primary ledger accounts can be mapped to ONE alternate ledger account of the same account type (i.e. Balance Sheet accounts must be mapped to Balance Sheet account, Income Statement account to Income Statement account)

•One primary ledger account may not be mapped to MANY alternate ledger accounts

•Unmapped primary ledger accounts with balances will be shown under O_BS_ADJ and O_IS_ADJ accounts in the alternate ledger TB, depending on account type, i.e.:
 
O_BS_ADJ – all unmapped Balance Sheet account balances

O_IS_ADJ – all unmapped Income statement account balances.

 

These accounts are required as some accounts might not exist in the alternate chart of accounts due to the differences in the accounting principles. Alternate ledger adjustments must be posted to offset O_BS_ADJ and O_IS_ADJ balances and transfer that balance to another alternate ledger account(s).

 

Summary

1.The alternate chart of accounts defined, represents the accounts in the alternate TB.

2.The primary chart of accounts is mapped to the alternate chart of accounts.   This mapping is used to 'convert' the primary ledger to the alternate TB.

3.The alternate ledger is only used to record adjustments from to primary to alternate reporting requirements. These adjustments, and only these, are recorded in the alternate ledger.

4.The alternate ledger is only used for financial accounting and not for cost and management accounting.

5.The alternate ledger works on the same financial calendar, but has its own open/closed periods, i.e. periods can be closed in the primary ledger but still open in the alternate ledger.

6.The alternate ledger uses the multi-currency accounting functionality as the normal ledger, i.e. transactions are recorded in a currency and reports are available in base 1 or base 2 reporting currencies.

7.Sub ledger, including accounts receivable, accounts payable, bank & cash, capital projects and stock are not available in the alternate ledger. Only the sub ledger control accounts are mapped and included in the alternate ledger.