For understanding the definition of fiscal years in SAP R/3, it is important to know the concept of variant principle. The variant principle is a three step method which is used in SAP R/3 to assign special properties to R3 objects. The three steps used in the variant principle are:

1. Define the Variant
2. Populate the Variant with values
3. Assign the variant to R3 objects

The variant principle in SAP is used in a number of areas such as field status, posting periods, and even in fiscal years. To explain readers with the help of an example, let us use the fiscal year variant concept. As a first step, one needs to define the variant. Lets say K2 is the fiscal year variant. Now we need to populate the variant with values, say we define that k2 will be a calendar year. Finally as the last step, we need to assign this variant to R3 objects. We can assign the fiscal year variant K2 to company codes which use the calendar. The variant principle helps in maintaining properties similar in SAP business objects.

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