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Difference between Non-Leading and Extension ledger

Updated: Aug 16, 2023

Non-Leading Ledger:

Due to different regulations and requirements in different areas of world, the companies publish parallel financial statements according to multiple accounting standards. where a separate ledger is created in the system for each accounting principle called as non-leading ledgers. It is always managed as complete ledgers. This means that all postings relevant to the specific valuations are always posted to this ledger. Parallel ledgers are supported fully in General Ledger and Fixed Asset Accounting.

For example, if Company need a different FYV or want to use different currency settings. it became necessary to create another standard ledger that acts as a non-leading ledger. for example, if the tax year or global reporting year differs from the local reporting year. In this case, you can’t use an extension ledger, which would inherit the underlying ledger's configuration settings, but have to create another standard ledger that acts as a non-leading ledger. This ledger receives all postings, including manual entries, from the leading ledger that are posted without a ledger group or that are posted to a ledger group assigned to the non-leading ledger. In other respects, it is kept separate with its own configuration settings. Can also create extension ledgers based on non-leading ledgers.

Nonleading ledgers is created Parallel to the leading ledger and no underlying ledger concept exist.

Extension Ledger:

If companies need additional views of their financial data, for example, according to another accounting principle, they can use the option of extension ledgers.

Extension ledgers is one of the powerful tools that can be used for Management reporting. These ledgers staple the data on top of Standard ledgers, so no data duplications in SAP.

Extension ledger always must have underlying ledger as a standard ledger.

Extension ledger can be setup to record:

• Internal Management reporting adjustments and Topside adjustments

• To adjust entries post books closing.

• Adjustments for tax purposes to reach a tax-adjusted profit or loss.

3 types of extension ledger can be defined:

Standard Journal Entries: – it stores journal entries with real document numbers and cannot be deleted and must be reversed when required. It is used for management adjustments, tax adjustments, realignments.

P - Line items with technical numbers /no deletion possible: – stores journal entries with technical numbers only, without document numbers. They cannot be deleted and must be reversed when required. Use cases – predictions, commitments, statistical sales conditions.

S - Line items with technical numbers/deletion possible: – stores journal entries with technical numbers only, without document numbers. They can be deleted. Use cases – simulation posting.

Note that the creation of multiple extension ledgers is restricted by the extension ledger type and follows this logic:

On top of an extension ledger with the standard journal entries type, can create an extension ledger of any type.

On top of a type P extension ledger, can create another type P or type S extension ledger.

On top of a type S extension ledger, can only create another type S extension ledger.

Summary of Difference between both Ledgers: -

1. Setting up new extension ledgers is easy, it is not necessary to perform any kind of data migration, only the configuration is needed., This is enabled by the extension ledger concept, as it just inherits the historical data of the underlying ledger. You can activate or deactivate the extension ledger in a productive system anytime during the year without having to migrate data as it is the case with the standard ledger. Probably the biggest advantage of an extension ledger.

But this is not the case with Non leading Ledger.

2. Reduced data footprint – as only delta values are kept in the extension ledger.

In Non-Leading ledger all value is kept so it consumes space and do not reduce data footprint

3. Differences of Non-Leading and Extension Ledger to Leading Ledger?


Different currency settings possible?

Different fiscal year variant (FYV) possible?

Different posting period variant possible?

Different accounting principle possible?

Different company code assignment possible?

Non-leading ledger (compared to leading ledger)






Extension ledger (compared to leading ledger)



Yes (This is one of function like Non-Leading Ledger)

Yes (This is one of function like Non-Leading Ledger)

Yes (This is one of function like Non-Leading Ledger)

A Non - leading ledger could have its own fiscal year variant, but in case of the extension ledger it should inherit from underlying ledger always, it inherits certain characteristics from its underlying ledger. The Posting period variant can be separately defined for extension ledger, it is very useful for controlling reposting’s especially so that postings can be done directly in extension ledger and it give option to not to disturb the standard ledger for such purposes.

4. Non-leading ledgers is integrated with Asset accounting and integrated with Parallel valuation of Actual COGM but not with Logistics & control.

Extension ledger cannot be integrated with Controlling & Asset Accounting & Material Ledger.

5. Postings to the Non leading ledger impact extension ledger if underlying ledger is Non leading Ledger.

Postings to the Underlying ledger also apply to Extension Ledger.

6. Data in Non-leading ledger is reported under non-leading ledger only

Data in the extension ledger is reported with Data from the underlying ledger. E.g., Delta posting to extension ledger is reported with posting from the underlying ledger.

7. Extension ledgers are non-disruptive, so can be created during any time of the year but non leading ledger can’t be. Unlike standard ledgers, Extension ledgers can be activated in S/4 HANA even if you were not on New-GL and not used Ledgers in ECC.

8. NEW GL Migration is required for non-leading ledger but not for extension ledger.

9. Nonleading ledgers have duplicate data from leading ledger, so it consumes the database while extension ledger get data from underlying ledger so no duplicate posting which reduce database consumption.

10. Ledger Group can be defined for Non-Leading Ledger but not possible for Extension Ledger.

11. In extension ledger can’t post to GL accounts with open item items management

12. Extension ledger is not a replacement of the non-leading ledger. It still has many limitations. Posting in extension ledger can be done via

• Transactions FB50L, FB01L, KB41 and KB1 etc.

• interfaces

• General ledger Allocations (FAGLGA15, FAGLGA11, FAGLGA31, FAGLGA35) work on top of the extension ledger. Only very few automatic processes work with extension ledger (GL allocations). However, in comparison to the standard ledger, the extension ledger is not integrated with subsidiary ledgers and many crucial finance processes such as asset processes and open items are not supported.

13. In extension ledger can’t post to vendor or customer reconciliation accounts.

14. Extension ledger is not integrated with Asset Accounting.

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