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SAP Online Help 08/19/02

Business Consolidation (SEM-BCS) 3.1B (GA), 2nd edition 2

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Business Consolidation (SEM-BCS)........................................................................................................8

Execution of Consolidation with the Consolidation Monitor ............................................................... 10

Consolidation Monitor .....................................................................................................................13

Task Sequence...............................................................................................................................18

Data Model .........................................................................................................................................22

Data Basis ......................................................................................................................................24

Role (Characteristic Role and Key Figure Role) ......................................................................... 27

Consolidation Area .........................................................................................................................29

Permanent Parameters ..................................................................................................................31

Local Currency and Group Currency..............................................................................................32

Periodicity .......................................................................................................................................33

Consolidation Frequency ............................................................................................................34

Period Category ..........................................................................................................................36

Master Data and Hierarchies..............................................................................................................37

Version............................................................................................................................................40

Dimension.......................................................................................................................................44

Organizational Unit .........................................................................................................................45

Consolidation Unit .......................................................................................................................46

Combinations of Consolidation Units..........................................................................................48

Consolidation Group ...................................................................................................................50

Financial Statement Item................................................................................................................51

Consolidation Chart of Accounts.................................................................................................52

Selected Items ............................................................................................................................53

Subassignment ...............................................................................................................................54

Breakdown Category...................................................................................................................56

Default Value...............................................................................................................................58

Workbench for Customizing ...............................................................................................................60

Saving and Locking Concept for the Workbench ...........................................................................63

Task ................................................................................................................................................ 65

Document Type ..............................................................................................................................68

Method Layout ................................................................................................................................69

Method............................................................................................................................................71

Data Collection ...................................................................................................................................74

Manual Data Entry ..........................................................................................................................75

Customizing Environment for Manual Data Entry.......................................................................76

Data Entry Layout .......................................................................................................................77

Definition of a Data Entry Layout ................................................................................................81

Flexible Upload ...............................................................................................................................83

Defining and Executing a Flexible Upload ..................................................................................85





Validation............................................................................................................................................87

Customizing Interface for Validation...............................................................................................88

Execution of Validations .................................................................................................................90

Example: Execution of Validation of Reported Financial Data ...................................................93

Validation Log .................................................................................................................................96Posting..............................................................................................................................................100

Posting Levels for Classifying Journal Entries .............................................................................103

Example: Selecting Data Records ............................................................................................105

Posting in Quantities.....................................................................................................................106

Posting in Transaction Currency ..................................................................................................107

Financial Statement Balancing Adjustments................................................................................108

Manual Postings: Fixed or Hidden Subassignments....................................................................110

Manually Posting an Entry............................................................................................................111

Currency Translation ........................................................................................................................112

Translation to a Target Currency..................................................................................................113

Selections for Currency Translation .............................................................................................115

Calculation and Recording of Currency Translation Differences .................................................116

Temporal Translation Differences ................................................................................................118

Execution of a Currency Translation ............................................................................................122

Example: Execution of a Currency Translation.........................................................................125

Rounding ..........................................................................................................................................127

Rounding Types............................................................................................................................128Execution of a Rounding...............................................................................................................131

Example: Execution of a Rounding...........................................................................................133

Interunit Eliminations and Reconciliations........................................................................................136

Selections for IU Eliminations and Reconciliations ...................................................................... 138

Differential Accounting Objects for Interunit Elimination ..............................................................140

Two-Sided Elimination ..................................................................................................................141

One-Sided Elimination ..................................................................................................................142

Strategy for Posting Differences...................................................................................................143

Splitting of Differences..................................................................................................................144

Limits for Elimination Differences .................................................................................................146

Reconciliations..............................................................................................................................148

Execution of Reconciliations and IU Eliminations ........................................................................ 149

Example: Elim. of IU Pay./Rec. with Splitting of Differences ....................................................151

Elimination of IU Profit/Loss in Transferred Inventory......................................................................154

Example: Elimination Logic ..........................................................................................................156

Product Group ..............................................................................................................................159

Posting Items ................................................................................................................................160Additional Financial Data..............................................................................................................161

Elimination of Interunit Profit/Loss................................................................................................163





Calculation of the Group Cost of Goods Manufactured............................................................164

Calculation and Posting of the IU Profit/Loss to be Eliminated.................................................165

Audit Trail of the Elimination of Interunit Profit/Loss .................................................................169

Treatment of the Prior Period Portion of Interunit Profit/Loss.......................................................170

Disclosure of Currency Translation Differences ...........................................................................171Transfer of Distribution Costs.......................................................................................................172

Execution of Elimination of IU Profit/Loss in Inventory.................................................................173

Reclassification ................................................................................................................................175

Elements of a Reclassification......................................................................................................176

Subassignments in Reclassification .............................................................................................180

Different Posting Levels in Reclassification.................................................................................. 181

Periodic Reclassification...............................................................................................................182

Conditions for Reclassifications....................................................................................................184

Repetition of a Reclassification ....................................................................................................186

Execution of a Reclassification.....................................................................................................187

Example 1: Reclassification of Finished Goods........................................................................ 189

Example 2: Standardization of Fixed Asset Depreciation.........................................................191

Example 3: Reclassification of Sales Revenue ........................................................................ 195

Example 4: Sign-triggered Reclassification ..............................................................................198

Example 5: Percentage Reclassification of Tax Income...........................................................200

Allocation .......................................................................................................................................... 203

Elements of an Allocation.............................................................................................................204Execution of an Allocation ............................................................................................................208

Example: Profit Planning in the Consolidation Group...............................................................211

Example: Distribution of Selling Expense .................................................................................213

Balance Carryforward.......................................................................................................................216

Execution of Balance Carryforward..............................................................................................217

Reporting ..........................................................................................................................................219

Reporting with BW Queries ..........................................................................................................220

Reporting with XBRL ....................................................................................................................222

Creation of XBRL Financial Statements ...................................................................................223

Assigning Items.........................................................................................................................224

General Functions ............................................................................................................................226

Authorizations for Master Data.....................................................................................................227

Transport ......................................................................................................................................230

Execution of an Allocation ............................................................................................................232

Example: Profit Planning in the Consolidation Group...............................................................235

Example: Distribution of Selling Expense .................................................................................237

Balance Carryforward.......................................................................................................................240Execution of Balance Carryforward..............................................................................................241

Reporting ..........................................................................................................................................243





Reporting with BW Queries ..........................................................................................................244

Reporting with XBRL ....................................................................................................................246

Creation of XBRL Financial Statements ...................................................................................247

Assigning Items.........................................................................................................................248

General Functions ............................................................................................................................250Authorizations for Master Data.....................................................................................................251

Transport ......................................................................................................................................254





The following sections contain the documentation on the BW-based component

The documentation on the R/3-based component is locatedelsewhere This documentation can be accessed, for example, by calling up ApplicationHelp in your R/3-based system

You can use the SEM component (Consolidation) to determine the resourcesof a group [Ext.] (or a similar enterprise or organizational unit), the claims by others to thoseresources, and the changes to those resources. Consolidation also provides the means for internaland external enterprise reporting.

You can consolidate on the basis of customer-defined consolidation units [Ext.]. Consolidation unitscan represent, for example, companies, plants, business areas, profit centers, and cost centers. Youcan also portray matrix organizations (for example, using a combination of companies and profitcenters).

You can standardize the financial data reported by individual consolidation units to adhere to theaccounting and valuation standards of the group. You then translate the standardized financial datafrom the various local currencies into the group currencies. Finally, you can eliminate the effects ofgroup-internal relationships (for example, from interunit trade and services). Thus, you calculate theconsolidated financial statements as if the group were a single entity.

You can use the analysis functions of SAP Strategic Enterprise Management (SEM) and those of SAPBusiness Information Warehouse (BW) to analyze and report on your consolidated financial statementdata.

The Consolidation component provides functions to collect master data and individual financialstatement data from data files from non-SAP systems as well as SAP systems.

All SEM components are based on BW. These are:

• Business Consolidation (SEM-BCS)

• Business Planning and Simulation (SEM-BPS)

• Corporate Performance Monitor (SEM-CPM)

• Stakeholder Relationship Management (SEM-SRM)

• Business Information Collection (SEM-BIC)

The data processed by Consolidation is written to the BW system. There you can share the databetween Consolidation and the other SEM components. For example, you can:

• Collect SEM-BPS planning data for use as reported financial data in consolidation

• Use consolidated actual data as the basis for further planning in SEM-BPS.

You can use versions [Ext.] to execute parallel consolidations with different categories of data (forexample, actual data, planning data, forecasting data), using different accounting principles (for

example, US GAAP, IAS, German HGB), using different valuations, and/or for simulations.





You can create hierarchies for almost all characteristics (for example, consolidation units and financialstatement items), where some hierarchies have special, consolidation-specific properties.

The component enables you to use different charts of accounts for consolidation. For example, thisallows you to generate several consolidated financial statements in parallel to accommodate differentaccounting principles.

You can use online data entry or flexible upload to collect individual financial statement data and otherconsolidation-relevant data into the consolidation system.

You can post manual entries, for example, to standardize the reported data to meet the accountingand valuation requirements of the group.

You can automatically execute the following consolidation tasks:

• Currency translation (which translates the financial data into the currency of the consolidationgroup)

• Validation

• Interunit eliminations (for example, for payables and receivables, revenue and expense, orinvestment income)

• Elimination of interunit profit/loss in inventory

• Consolidation of investments

• Reclassification

• Allocation

• Balance carryforward

The automated postings are controlled by the task settings you define once beforehand inCustomizing.

After performing the consolidation tasks, you can use BW reports to analyze your data. SAP providespre-defined BW business content (InfoCubes, queries, etc.) for this purpose.

You can use XBRL to create individual or consolidated financial statements.

You use the consolidation monitor to execute the consolidation tasks and to monitor the entire

consolidation process.

• The automated execution of the elimination of IU profit/loss in transferred assets is presently notavailable.

• The automated execution of consolidation of investments presently only covers the purchasemethod with the activities and .

You can use manual posting to perform the consolidation tasks that are not yet automated to meet thestatutory requirements for creating consolidated financial statements.





Consolidation in SEM Business Consolidation is designed for various consolidation purposes. Thisdepends on how you set up your data model and how you use the consolidation tasks.

• Statutory consolidation requires that the reported data [Ext.] of the group’s consolidation units beaggregated into a single set of consolidated financial statements. This requires that the reportedfinancial data:

− Is standardized to agree with the group’s balance sheet valuations

− Is translated into the currency of the consolidation group

− Is purged of the effects from interunit relationships

• Internal or managerial consolidations (such as profit center consolidation) are used for controllingdivisions of corporate enterprises. The main focus of the consolidation tasks is on the eliminationof the effects of the delivery of goods and services within such enterprise areas. Let’s take the"elimination of interunit sales of merchandise" as an example.

The consolidation units must report their financial data so that it can be collected in the Consolidationsystem.

Note the following important prerequisites needed for error-free data collection.

The Consolidation system needs account assignments, such as partner units, transaction types,

transaction currencies, etc., in order to perform the consolidation tasks. For example, automatedelimination of IU revenue and expense is only possible if the system knows which partner units causedthe revenues and expenses.

In FS item customizing, you define which subassignments each item requires. These subassignmentsmust be included in the reported financial data.

When implementing the SAP Consolidation component, legacy data concerning your consolidationunits usually already exists.

There is basically no difference between transferring legacy data and transferring the data of thecurrent period. When collecting data in SAP Consolidation for the first time, you enter the cumulative

value for the historical data.

You define your Customizing settings to meet your specific requirements in the Workbench [Page 60]of SAP Consolidation.

The standard SAP system includes default settings for many consolidation methods. Check eachmethod and decide whether you want to use the default settings as the are, or tailor them accordingly.There are copy functions to assist you.

There are tasks:

• For the collection and standardization of reported financial data





An alternative is to also execute this task after currency translation.

5. Prior to running interunit eliminations, you can use to determine any eliminationdifferences without having the system post elimination entries. By doing this, you can manuallycorrect erroneous entries in the reported financial data, or manually post standardizing entries.

6. If the reported financial data is valued in different local currencies, you .

This is usually the currency of the parent company when company consolidation is involved.

7. You can use an task, for example, to assess or distribute standardized data to multipleaccounting objects (such as financial statement items or accounts).

8. You the .

9. You use tasks for to eliminate group-internal receivables and payables, andgroup-internal revenues and expenses.

10. Interunit profits are incurred from the sale of inventory items within a consolidation group. You use

the task for to automatically eliminate theseinterunit profits or losses.

11. You use to eliminate the group-internal equity holdings. This taskeliminates the investment(s) of the higher-level units with their proportionate shares in thestockholders’ equity of the investee units that belong to the same consolidation group.

12. You use to reclassify data that has been consolidated.

The consolidated financial statements of a corporate group often need to disclose theretained earnings of the parent unit within the group.

You can use reclassifications to reclassify the retained earnings of subsidiaries as

appropriations.13. In a some instances it may be necessary to to the consolidated

financial data.

14. When the consolidation tasks are finished, you .

You can generate SAP BW reports on the consolidated data. You can also transfer the data to otherSEM components, such as Business Planning and Simulation (SEM-BPS).





The consolidation monitor provides a graphic presentation of the consolidation units and/orconsolidation groups, as well as tasks.

It provides a central working environment:

• Execute tasks (for collecting, standardizing, and consolidating all reported financial data)

• Monitor the progress of the tasks for each individual consolidation unit or group

The customizing settings for consolidation are complete except for the settings concerning theconsolidation monitor. In particular, you defined the following customizing settings:

• The consolidation units and consolidation groups with their hierarchies

• The tasks with their hierarchies (including task groups)

The consolidation monitor has a matrix-like structure. In general, the hierarchies of organizational unitsand the hierarchies of tasks are arranged as follows:

• The rows of the consolidation monitor display the hierarchies of the organizational units.

• The columns of the consolidation monitor show the task hierarchy (which includes task groups andtasks).

• The status for the task groups and the tasks is shown for each node of the organizational unithierarchy.

A legend (located in the menu of the monitor) explains the meanings of the colors and the symbols ortexts.

Test Update Status

Hierarchies xxxxxxxxxxxx xxx xxxx xxxxxx xxx

Task Group Task

Status Display

Permanent Parameters





Alternatively, you can change the layout of the monitor to display the hierarchies of organizationalunits in the columns and the hierarchy of tasks in the rows. To do this, choose:

• in the context menu of the header row

→ or

• in the context menu of the header column

→

To display the status detail for organizational units or tasks, in the context menu of the header row orcolumn choose →

The consolidation monitor displays the hierarchies of organizational units down to the level ofconsolidation units (the end nodes of the hierarchy). This means that you can run the tasks for theconsolidation groups as well as the consolidation units.

For a better overview of the organizational units to be processed, consolidation monitor provides thefollowing functions (listed in the menu and the standard function bar):

• The end nodes of a hierarchy of organizational units (that is, the consolidation units) are onlyvisible when the task is relevant. For example, only the consolidation groups are shown if you arenot displaying the tasks for data collection, standardization of financial data, and currencytranslation – the consolidation units remain hidden.

• You can show or hide the columns for lower-level hierarchy nodes of the task hierarchy, and youhave the option of displaying the higher-level column.

• You can the organizational units in the hierarchy.

• You can set the on a hierarchy, a consolidation group, or a consolidation unit, allowing youto only see these organizational units with their lower-level units.

You can reset the focus by double-clicking on the hierarchy column heading (or choosing the

function in the menu).

You can display all tasks you defined in Customizing.

You can determine whether any given task group is hidden in the consolidation monitor;then only the lower-level tasks of that group are displayed.

The matrix in the consolidation monitor can become very large and somewhat unwieldy, depending onyour corporate structure and consolidation requirements. Therefore, the consolidation monitor includes

the following functions to modify the layout of the monitor:

• In the hierarchy of the organizational units you can:

− set a focus

− hide the names of the organizational units, and thus only show the IDs.

• You can manipulate the columns of the task hierarchy by:

− expanding or collapsing the hierarchy

• partially expanding or collapsing

• fully expanding or collapsing

• showing/hiding higher-level columns− manually setting the width or automatically optimizing the width





You can run the tasks in the following ways:

• Test mode

You can execute test runs regardless of a task’s status at any time.

• Update mode

You can run a task in update mode if the task has been opened and the preceding tasks havebeen blocked (see the section on Status Management).

• Update mode with pendent tasks

When you run a task in update mode and preceding tasks are still pending (that is, not yetblocked), the system runs the task only tentatively (see the section on Status Management).

When you run a task group or a task, the system indicates this in the status bar.

You can open and close the periods of a fiscal year for all tasks to ensure that documents are always

posted in the correct period. This is always done for a selected consolidation group (including itslower-level organizational units) or for a consolidation unit.

• Periods are generally kept open.

• You need special authorization to open and close periods.

To only close task processing from data collection to currency translation (inclusively), choose →

→ .

If the period (with all tasks) is already closed, you can reopen task processing for the consolidationgroups by choosing → → .

The consolidation monitor displays the status for each organizational unit:

• with regards to each task

• aggregated by task groups

Initial StageIncompleteWith ErrorsPending Completion of Preceding Task

Without Errors, With WarningsWithout Errors, Without WarningsBlockedBlocked by UserUnblockedNot ApplicableReset

Initial StageIncompleteWith ErrorsComplete

Task Status

Aggregated Status

You can double-click any status to see more detail (for example, Last Changed By, On, and At).





• When you run a task in update mode, the system updates the status for the relevantorganizational units.

• A task can only be blocked (in the menu) if it completed without any errors and was not runtentatively (pending completion of a preceding task).

An exception is made for the tasks and . Thesecan be blocked without having been run.

• A task must be unblocked before it can be rerun after being blocked. Note that this alsoautomatically unblocks all downstream tasks. For example, if you unblock the task ,the system simultaneously unblocks the task and so forth.

• The system uses the same update logic for higher-level and lower-level organizational units, andfor the overall status.

• In certain situations you can reset the status to (in the menu). The system then resetsthe statuses of the organizational units for the selected task as follows:

− the status of the selected consolidation unit or group

− the statuses of the lower-level consolidation units and groups

− the statuses of the higher-level consolidation groups

• Another function for certain situations is the function for deactivating status management (seeCustomizing of the consolidation area, tab ).





You use this function to determine the sequence of tasks in which they are executed in theconsolidation monitor [Page 13].

The sequence of tasks is dependent on the consolidation area [Page 29]: Each consolidation area canhave only one task hierarchy and, therefore, only one sequence of tasks.

You have already defined the tasks to be used in the task sequence and inserted them in the taskhierarchy.

The system enforces a required sequence of certain tasks, thereby creating an initial, raw structure oftasks. This ensures that these tasks are executed in the correct sequence as required by the systemand/or accounting rules.

Internally, the tasks are divided into several blocks. The numbers of these blocks dictate the requiredsequence. A set of tasks belonging to any given block can be executed in any order.

The following table illustrates the internal blocks and their tasks:

1 Balance carryforward

2 Data entry

Validation of reported financial data

Reconciliations

Manual posting

Reclassification

3

Allocation

Manual posting

Reclassification

4

Allocation

Currency translation

Manual posting (in group currency)

Reclassification

5

Allocation

Reclassification6

Allocation

7 Validation of standardized financial data

Manual posting8

Interunit elimination





Elimination of interunit profit/loss in transferred inventory

Consolidation of investments

Reclassification

9 Validation of consolidated data

The collection of reported financial data must be complete before you can translate the(standardized) data into group currency.

Blocks can have multiple occurrences of tasks for manual posting, reclassification, and allocation.Multiple tasks are distinguished by their document types.

For accounting or organizational reasons you may want to determine a sequence of tasks within ablock. Therefore, Customizing lets you determine a required sequence at this deeper level.

If a second task absolutely depends on the results of a first task, you can assign the first task as thepreceding task to the second task.

If you want to standardize the reported financial data to meet corporate policy, you candecide whether a given task is to be run before or after currency translation.

You can assign two preceding tasks to a task, which then executes the two preceding tasks in parallel.

CarryforwardsValidate

Reported Data

Data Entry Task 2

Data Entry Task 1

Also compare the example shown later.

The following conditions must be met when you define the task sequence.

• You need to adhere to the required sequence.

• Only one task of the following task categories can be assigned per task hierarchy:

− Balance carryforward

− Validation of reported financial data

− Validation of standardized financial data

− Validation of consolidated data

− Currency translation

• Each document type you use can only occur once within a task group. However, there is anexception: The same document type can be used by the reconciliation task and its associated taskfor interunit elimination.

• Recursions of tasks are not allowed in the task sequence – that is, multiple tasks may not point toeach other. This can happen if the first task is defined (directly or indirectly) as the preceding taskof the second task, and the second task is defined as the preceding task of the first task.





The following task definition is not permitted:

(preceding task of task A)

To make the customizing settings for the sequence of tasks, proceed as follows:

1. To determine the individual task sequence, go to the process view of the workbench and choose → .

2. Modify the task hierarchy to meet your requirements. To structure the tasks, you can combine

tasks in task groups [Ext.] (which represent nodes in the hierarchy). You can then refer to thetask groups in the consolidation monitor (for example, to display them in columns and forsummarizing the tasks for the task status display).

Save the changes.

The system uses this sequence for the definition of preceding tasks.

3. To determine preceding tasks, go to the process view of the workbench and choose

→ .

Run in change mode.

The work area of the workbench shows the task sequence as previously defined in the taskhierarchy.

4. In the hierarchy, select the task that is the preceding task. Then Drag&Drop it to the task itprecedes.

Save your changes.

If the task sequence meets the conditions mentioned earlier, then the system inserts thepreceding task. If a condition is not met, an error message is displayed.

The task sequence is reflected in the display of the tasks and in the status management in theconsolidation monitor [Page 13].

Once you have started executing the consolidation process for a period, you should the underlying sequence of tasks.





Here is an example of a possible sequence of tasks.

The symbols have the following meanings:

- at the top level: consolidation area

- at the second level: Task without a preceding task

- Task with a preceding task

- Preceding task

XY Consolidation area

BCF Balance carryforward

DE 1 Data entry task 1

BCF Balance carryforward (precedes data entry task 1)


BCF Balance carryforward

Val RFD Validation of reported financial data



Recl CU Reclassifications for consolidation units

SE Man Manual standardizing entries

Recl CU Reclassifications for consolidation units

CT Currency translation

Val SFD Validation of standardized financial data

Pay/Rec Elimination of IU payables and receivables

Rev/Exp Elimination of IU revenue and expense

Inv Inc Elimination of investment income

P/L Inv Elimination of IU profit/loss in transferred inventory

C/I Consolidation of investments

C/I Man Manual consolidation of investments

Recl CG Reclassifications for consolidation groups

C/I Man Manual consolidation of investments

Recl CG Man Manual reclassifications for consolidation groups

Val CFD Validation of consolidated financial data

Recl CG Man Manual reclassifications for consolidation groups





Defines the prerequisites for consolidation.In the data model you define the master data and Customizing data, for example tasks, methodlayouts, methods and document types.

Before you can use the Consolidation functions, you must define the data model in Customizing.

The data model is characterized by

• Its data basis [Page 24], which is based on the InfoCubes in BW that are relevant to Consolidation

• The consolidation area [Page 29]

The following graphic shows the dependencies between data streams, the data basis and theconsolidation area:

Type: Totals Data

For example,Management Consolidation,

Statutory Consolidation

Type: Inventory Data(f. Elim.IU P/L in Inv.)

Type:

Type: Documents The totals data stream primarily defines the data basis

Defines which characteristicsand key figures are available

• Consolidation areas are subsets of the data basis

• Tasks & methods are attached to each consolidation area

• A unique chart of accounts per consolidation area

• Structure of a pool of characteristics and key figures

• Role assignments to characteristics and key figures

The data model is further characterized by:

• Currencies [Page 32]

• Versions [Page 40]

• Tasks [Page 65], document types [Page 68] and methods [Page 71]





• Financial Statement Items [Page 51], and – if desired – the consolidation chart of accounts [Page52], subassignments [Page 54] and breakdown categories [Page 56]

• Organizational units (consolidation units [Page 46] and consolidation groups [Page 50])





Defines the data model for consolidation, which consists of the characteristics and key figures withtheir respective roles [Page 27] for consolidation.

There is precisely one RFC destination into BW that contains the transaction data of consolidation. Ifyou do not specify an RFC destination, then the client of the SEM system is the RFC destination.

The data streams identify the location for storing the transaction data in Consolidation.

Data can be read from and written to all data streams.

The following types of data streams are available:

Totals records Required This data stream primarily defines the data basis. It defines thecharacteristics and key figures available in the data model.

Documents Optional

Inventory data Optional For the elimination of interunit profit/loss in inventory

Supplier data Optional For the elimination of interunit profit/loss in inventory

Goodwill Optional For the consolidation of investments

Activity numbers Optional For the consolidation of investments

You need to allocate or generate the following to each data stream type:

• A data target [Ext.]

• A virtual InfoCube (if you want to use BW Reporting [4])

Internally, the system uses the following:

• InfoCubes are used for the totals records. Only the addition of new records is possible. Only thekey figures can be updated.

• ODS objects [Ext.] are used for the documents (journal entries) and other data streams. Here youcan also update characteristics (for example, this is needed for reversal entries).

To the user it does not matter whether the system uses InfoCubes or ODS objects. Once you select

the indicator in the data basis for generating a data stream, the system generates either the InfoCubeor the ODS object automatically.

For ODS objects, you can display lists of journal entries in the consolidation system (as you can withInfoCubes).

You have already created the InfoCube for the totals records prior to defining the data streams.

Proceed as follows to define the data streams:

1. You allocate the InfoCube for totals records to the data basis by entering its name and saving thedata basis.

2. You let the system automatically generate the ODS objects (for the other data streams).a. Enter the name or leave the name field empty.

b. Select the indicator





c. Generation is started when you save the data basis.

3. You should also have the system generate all virtual InfoCubes (including the one for the totalsrecords).

(Follow the same steps as for generating the ODS objects.)

Defining data streams

Totals records SEM_BCS_TOTALS SEM_BCS_TOTALS_V

Documents SEM_BCS_DOCS SEM_BCS_DOCS_V

Inventory data SEM_BCS_INVDTA SEM_BCS_INVDTA_V

Supplier data SEM_BCS_SUPDTA SEM_BCS_SUPDTA_V

The data model must have one field for each of the following roles:

• Version

• Group Currency Key

• Consolidation Unit

• Consolidation Group

• Partner Unit

• Item

• Document Type

• Posting Level

• Time Characteristics (fiscal year and period)

• Value in Group Currency

Each characteristic with the role also requires characteristics with the followingroles:

• A partner unit

• An investee unit, if you will be using consolidation of investments

• A consolidation group

You may need other characteristics and key figures depending on which consolidation functions you

want to use.

Currency Translation • in general:

local currency and/or transaction currency (inaddition to the group currency)

• for recording temporal translation differences:

the translation indicator

Interunit Eliminations and Reconciliations • for the splitting of transaction currency:

key figure

• for the elimination of quantities:

key figure





Allocation • for recording sender and receiver objects:

the clearing characteristic





The semantics of characteristics or key figures on which consolidation functions are based.The characteristics and key figures used in consolidation each have particular role. For example, onecharacteristic in consolidation has the role .

For the sake of simplicity, the following sections often refer to a “characteristic with therole ” simply as a “financial statement item”. (The same applies toother roles, such as the or .)

Each characteristic and each key figure in a data basis has precisely one role. In more than one data

basis, a characteristic or key figure can have more than one role.

The characteristic has the role in data basis DATA_BASIS_1.

The consolidation system has the following roles:

(thecharacteristicalways has a valuein the transactiondata)

Version between 1 and n X See detailed documentation onversions [Page 40]

Group Currency Key 1 X You can insert the groupcurrency key as a variable intothe data model.

Currency-BearingConsolidation Unit

1 X

Consolidation Unit 1 or 2 X

Consolidation Group 1 or 2

See detailed documentation onconsolidation units [Page 46]

Financial Statement Item 1 X See detailed documentation on

financial statement items [Page51]

Subassignment between 0 and n

Partner Unit 1 or 2

Transaction Type 0 or 1

Fiscal Year/Period 0 or 1

Transaction Currency Key 0 or 1 X

Unit of Measure 0 or 1

See detailed documentation onsubassignments [Page 54]

Document Type 1

Posting Level 1

Translation Indicator 0 or 1





(thecharacteristicalways has a valuein the transactiondata)

Clearing Characteristic(for Allocations)

between 0 and n Allocations require thecharacteristic with the role . It containseither the sender object or thereceiver object. Each clearingcharacteristic needs acorresponding characteristic thatis cleared.

Fiscal Year Variant 1 X

Fiscal Year 1 X

Period 1 (X)

Value in Group Currency 1

Value in Local Currency 0 or 1

Value in Transaction Currency 0 or 1

Quantity 0 or 1





A subset of the characteristics and key figures available in the data basis [Page 24].A consolidation area is characterized by its methods [Page 71], tasks [Page 65] and breakdowncategories [Page 56].

You can use consolidation areas to:

• consolidate the financial statements of subsidiaries according to generally accepted accountingprinciples (for example, the first consolidation area)

• consolidate data for management purposes, for example based on profit centers (for example, thesecond consolidation area)

See also the example shown later.

In customizing, you create one or more consolidation areas for a data basis [Page 24]. When doingthis, you select a subset of the characteristics and key figures available in the data basis.

You can declare characteristics as permanent parameters [Page 31]:

• Only the version and the time characteristics – fiscal year variant, fiscal year and period – must be

used as permanent parameters.• You can also define the consolidation unit and the consolidation group as permanent parameters.

• Characteristics that are not status relevant cannot be used as permanent parameters – forexample, financial statement item, subassignment, transaction type.

For each characteristic used as a permanent parameter you can define whether it is displayed in theheader of all consolidation screens.

You can define a single value or a range of values for each permanent parameter that needs to have aunique value. When doing this, you select a “data slice” from within the data streams (for example,within the totals data) which the consolidation area can use to read and write data. When you assign a

single value to a permanent parameter, the value of that characteristic can no longer be modified.

The following exceptions apply for the roles and the :

• If you define the characteristic with the role as being dependent on theconsolidation chart of accounts, you must define the consolidation chart of accounts in theconsolidation area as being unique (that is, with a single value).

• If you define the characteristic with the role as being dependent on thedimension, you must define the dimension in the consolidation area as being unique (that is, witha single value).

You want to perform both of the following types of consolidation:

• according to GAAP (statutory consolidation)

• for internal purposes (management consolidation)





To do this, you create two consolidation areas, each with its own data model, both of which are basedon the same InfoCube.

For both consolidation areas you use the same data stream for the totals records; both consolidationareas use the same characteristics (dimension, consolidation chart of accounts, version, fiscal year,period, consolidation group, consolidation unit, partner unit, financial statement item), and both areasuse the same characteristics and key figures for the local currency and group currency.

You use the characteristic to segregate the consolidation areas in the same data stream.This is why you specify a condition for the dimension in the form of a single value when defining eachconsolidation area.

Now, the consolidation system shows the consolidation area (not the dimension) in the header ofevery screen.

You fully segregate the two consolidation areas as follows:

Statutory Consolidation single value “LC”

(legal consolidation)

• Transaction Type

• Year of Acquisition

• Period of Acquisition

Management Consolidation single value “MC”(management consolidation)

• Product Group

• Customer Group

• Sales Region





Parameters that are definitive for the subsequent activities for the user in the consolidation system.Permanent parameters include the version, the fiscal year and the period. You also can define otherpermanent parameters.

In customizing of the consolidation area [Page 29], you define the characteristics that act aspermanent parameters:

• The version, fiscal year and period are required permanent parameters.

• You can define additional permanent parameters, for example the consolidation unit and

consolidation group.

You can choose whether each permanent parameter is displayed in the screen header.

On the tab page, you can define whether the consolidation area is displayed in the permanentparameters.

Characteristics that are not status relevant are valid as permanent parameters, for example,financial statement item, subassignment, transaction type.

You can use temporary parameters to temporarily override permanent parameters, that is, for theduration of a system transaction.

In the menu, you can change both permanent and temporary parameters.





Local currency for a consolidation unit.

If the local currency is not the same as the group currency, translation from the local currency to thegroup currency is required.

Currency for a consolidation group.

The local currency is a property of the primary consolidation unit [Page 46]. The local currency is

• version dependent

• effective year dependent

The group currency key is a characteristic in the data basis.

You can have multiple group currencies in a version.

You must always enter the group currency key in reporting. This also applies to reports in the localcurrency.

The group currency is not a property of the consolidation group.





In Consolidation, you can create consolidated financial statements periodically.

In the consolidation area you have specified a single fiscal year variant.

The fiscal year variant links the calendar year with the fiscal year. It defines how many periods andspecial periods comprise a fiscal year. For each calendar time period, the fiscal year variant alsoassigns the accounting periods in which the system normally can make postings.

All other details relating to the periodicity of financial statements are defined by

• The consolidation frequency [Page 34] and

• The period category [Page 36]





Determines the number of consolidated financial statements to be generated during a fiscal year..In the consolidation system, the ranges of accounting periods to be included for each set ofconsolidated statements are assigned to consolidation frequencies.

• Annual consolidation

• Semi-annual consolidation

• Quarterly consolidation

• Monthly consolidation

The consolidation frequency arranges the periods without gaps into - beginningwith 001.

For quarterly consolidation, the consolidation intervals are 001-003, 004-006, 007-009 andso on.

You can only post in the closing periods of consolidation intervals. These periods are known as .

For quarterly consolidation, the consolidation periods are 003, 006, 009 and so on.

Periodic and cumulative processing in the system are distinguished as follows:

• For the system includes in the calculation all periods of the consolidationinterval that were posted in the consolidation period.

• For the system also includes all previous periods of the consolidationinterval. The exception is automatic reversal: These entries are posted in the adjoiningsubsequent period.

When defining consolidation frequencies, you must select the valid consolidation periods.





Consolidation frequency

1 Yearly2 Semi-yearly3 Trimester4 Quarterly5 Monthly

- - - - - - - - - - - x- - - - - x - - - - - x- - - x - - - x - - - x- - x - - x - - x - - xx x x x x x x x x x x x

The maintenance screen shows the periods in which you can make postings. You can insert additionalperiods if required (for example, if you want to perform weekly consolidation).





Simplifies the period-dependent assignment of attributes to consolidation objects (for example,consolidation units).

You assign currency translation methods to consolidation units. Consolidation unit A is tobe translated with method T1 in periods 006 and 012, and with method T2 in periods 002,004, 008, and 010.

To avoid making six assignments, you define two period categories: P1 = {006, 012}, andP2 = {002, 004, 008, 010). You assign the translation methods to the consolidation unit byperiod category (rather than by period). This reduces the number of assignments from 6 to

2.

To avoid overlapping between period categories, there are .

If you want to assign properties to consolidation units with dependency on the period category, youcan use only the period categories that belong to the same period category group (per and ).

You assign a period category to one period category group. The period categories within a periodcategory group may not overlap each other.

Quarters and Year End1 Quarters2 Year End

Periods and Quarters

3 Periods4 Quarters

Quarters5 Quarters

- - x - - x - - x - - -- - - - - - - - - - - x

x x - x x - x x - x x -- - x - - x - - x - - x

- - x - - x - - x - - x

The work area shows the periods in which you can make postings. You can insert additional periods ifrequired (for example, if you want to perform weekly consolidation).





You use master data and hierarchies to portray your corporate structure in the consolidation system.

SAP Strategic Enterprise Management (SEM) is a distributed system. In SEM, the storage of themaster data for a characteristic is distributed. The following options are available:

• Master data is stored in the SAP Business Information Warehouse (BW)

• Master data is stored in SEM

• Master data is stored partially in BW and partially in SEM

You can maintain the master data and hierarchies for consolidation centrally in the SEM system. TheSEM system writes the master data directly to the BW system.

Saving and Locking Concept for the Workbench [Page 63]

You can create hierarchies for almost all characteristics.

• A prerequisite for creating a hierarchy for a characteristic in SEM-BCS is that the

characteristic in BW must support hierarchies (that is, the hierarchy indicator in BW isselected for the characteristic).

• No hierarchies can be created for certain characteristics, such as methods and breakdowncategories.

Node assignments are valid across different hierarchies: When one node is linked to other nodes andend nodes, this definition also applies to other hierarchies in which the one node is used.

A characteristic value can belong to one or more hierarchies (for example, under and/or), or it is listed under “Nodes Not Allocated”.





Link is dependent onversion and effectiveyear and period

New in period 012/2000





Enables parallel consolidation for different:

• Data categories (for example, actual, plan, target)

• Accounting principles (for example, US GAAP, IAS, German HGB)

• Valuations

• Simulations (for example, for the effects of different exchange rates on the consolidatedstatements; or for the effects of a divestiture of a consolidation unit on the consolidatedstatements)

A consolidation area can have one or more characteristics with the role .

• Say, you define one characteristic with the role : Version

The version segregates the different accounting principles (GAAPs) as well as thedata categories. The characteristic values for the version might be called:

− US GAAP - Actual

− US GAAP - Plan

− HGB - Actual

• Say, you define three characteristics with the role : Data category, valuation, and

GAAP− The characteristic values for the data category might be called

− The characteristic values for the valuation might be called and

− The characteristic values for GAAP might be called and

Some customizing settings are dependent on versions. Internally, such settings are stored underspecific

Special versions themselves are assigned to each valid combination of (ordinary) versions. In thisway, settings made only once become available to other versions.

Thus, special versions enable you to set up different versions without the need for redundant settingswhen such versions merely differ in a few areas and otherwise point to the same special versions (andthus the identical customizing settings).

The following overview shows which customizing data is stored with dependency on special versions(this list is incomplete).





Hierarchy Hierarchies of characteristics – such as consolidation groups, financialstatement items

Items Definition of selected items; assignment of breakdown categories

Consolidation units Assignment of the fiscal year variant

Per task category (e.g. datacollection, interunit elimination)

Assignment of document type and method to the task

Exchange rates Assignment of exchange rate type to exchange rate indicator

In customizing, you assign the special versions that apply to a particular combination of versions tothat combination of versions.

When you execute a task in a version combination, the system reads the associated special versionsand uses them to access the relevant customizing settings.

The following illustration shows the scheme for accessing the totals data:

V1

V2

SV1SV2SV3SV4SV5

When customizing the version combinations, you select the versions you want to use in SAPConsolidation.

If you use two or more characteristics with the role , you define the combinations you want towork with. This way, you limit the number of valid combinations.

You maintain the special versions for each value combination.





Cons Area 01 Companies and Profit Centers

US GAAPCorporateActual

German HGBCorporateActualUS GAAPCorporatePlanUS GAAPProfit CenterPlanUS GAAPProfit CenterForecast.........

Specialversionsdefined

per valuecombination

Suppose you have two characteristics for your versions:

− with the values and

− with the values and

You use both accounting principles for planning, but you use only US GAAP for creatingconsolidated statements with the actual data. Therefore, you define the following threecombinations (out of four possible combinations):

− Actual / US GAAP

− Plan / US GAAP

− Plan / IAS

You specify the special version for each valid combination of versions.

You can create default settings for multiple version combinations under → contextmenu: .

The system has a predefined default of 100 for the special version for all versioncombinations. You can set up your own rules to change this default.

US GAAP*Actual **PlanGerman HGB*Actual.........

100100200...

Cons Area 01 Companies and Profit Centers

You can overwrite the values inherited from the rule with single values. To do this, you mark thesymbol for inheritance, choose in the context menu, and enter the desired specialversion.

You can assign a name if the special version is new.





A certain characterization of a corporate group’s financial accounting in the Consolidation system.

The system can have several dimensions running parallel. For example, you can define onedimension for company consolidation, another dimension for business area consolidation, and yetanother for profit center consolidation.

Each dimension reflects your corporate structure as a hierarchy of consolidation units andconsolidation groups.

The use of a dimension in the data model is .

Instead of using the dimension in the data model, you can use multiple characteristics withthe role . For example, you could then have the characteristics and with the role .

See also the section on consolidation unit [Page 46].

The dimension is not dependent on any data except the client. Instead, many master data fields andcustomizing settings are dependent on the dimension – that is, they are only valid for the dimension inwhich they were created.

If you use a dimension in the data model, you have a characteristic with the role .The consolidation unit is the characteristic that is dependent on the dimension.

Also dependent on the dimension are customizing settings, such as tasks and methods.

Some objects not dependent on the dimension are:

• Consolidation Chart of Accounts

• Version





A superordinate term for consolidation units [Page 46] and consolidation groups [Page 50].





The smallest element in a corporate structure that is used as a basis for consolidation.

You can use the characteristic role [Page 27] for the characteristics and so forth.

Internal accounting transactions that are to be eliminated by consolidation are processed between theconsolidation units. In an accounting transaction, a consolidation unit can be the triggeringconsolidation unit or the partner unit.

A data basis can have one or two characteristics with the role .

There are two ways to portray an organizational matrix in the consolidation system (for example, onewith companies and profit centers):

• You can use the characteristic dimension [Page 44] and the characteristic with the role . In this compound, the dimension is the independent and the consolidation unitis the dependent characteristic. The characteristic values of the dimension distinguish betweencompany consolidation, profit center consolidation, and so on.

• Alternatively, you can have two characteristics with the role . For example, youcould then have the characteristics and with the role .

If you want to use more characteristics with the role , then, in customizing of the data

basis, you must define which consolidation unit is (that is, determines the localcurrency).

The currency-bearing (or primary) consolidation unit and the other consolidation units aredistinguished as follows:

The role is not dependent onversions and timeframes.

X X

The characteristic always carries avalue in the transaction data (the

value is never initialized).

X X

The characteristic determines thelocal currency (it is ).

X

Methods for currency translationare assigned to the characteristic.

optional(recommended)

optional

The characteristic is statusrelevant.

X X

The total of all balance sheet andincome statement items must be

equal to zero.

X X

The characteristic has asubassignment for .

X X





Transaction data can besummarized for this characteristic

– totaled values are useful.

X X

For each characteristic there is a characteristic – see example:

Company Subgroup

Profit Center Profit Center Group

Furthermore, the following characteristics must exist for each characteristic with the role :

• Partner unit

• Investee unit (if you are using consolidation of investments)You can create hierarchy of consolidation units for the characteristic with the role .





The joining of consolidation units [Page 46] (such as Company and Profit Center) in a matrixorganization.

In your consolidation area you have created two characteristics with the role [Page 27] so that they can be portrayed in a matrix organization.

In customizing you define the valid combinations of consolidation units; that is, you determine whichcombinations of characteristic values can be used for posting consolidation entries and for reporting.

The customizing screen for combinations of consolidation units lists all hierarchies with the

consolidation unit characteristics (thus, for example, the characteristics and ).Specifically, the system shows the following:

• The hierarchies for the one characteristic are listed vertically.

• A list of characteristic values of the other characteristic (listed in alphabetic order) is displayedhorizontally.

To establish a valid combination (for example, of profit center A and company 1), you select theappropriate indicator in the matrix.

The following functions are available in the toolbar:

The system displays all hierarchies in theirentirety.

The system only displays the end nodes ofthe hierarchies – not the entire hierarchies.

The system only displays the hierarchy youselected.





To make assignments for multiple rows in thematrix, select the rows and choose thissymbol.

Then the system sets the indicator for theassignments.

To reset assignments for multiple rows in thematrix, select the rows and choose thissymbol.

The system deselects the assignment.

The system swaps the two axes so that thehorizontal consolidation unit is shown at thevertical axis, and vice versa.

For example, you can use this function to be

able to run the function later on. (It is notpossible to create assignments for selectedcolumns.)





The basis for entering, posting, and analyzing amounts and quantities in consolidation.The financial statement item is the central account assignment object in consolidation. It is equivalentto an “account” in general ledger accounting.

A financial statement item is valid only for the consolidation chart of accounts in which it was created.

A financial statement item cannot only be used for accounting-related amounts or quantities in thebalance sheet or the income statement, but can also be used to post statistical amounts and keyfigures/ratios.

A financial statement item has the following properties:

• Item type

− Balance sheet

− Income statement

− Statistical: Balance

− Statistical: Flow

• Debit/credit sign

• Breakdown Category [Page 56]





Financial statement items that are used in consolidation postings to ensure that the balance:

• per consolidation unit equals zero ( )

• across all consolidation units equals zero ( )

The following selected items exist:

This clearing item in the balance sheet enables consolidation entries to produce a total of zero for thebalance sheet of a consolidation unit.

This clearing item in the income statement enables consolidation entries to produce a total of zero forthe income statement of a consolidation unit.

Consolidation entries use this selected item to ensure that the balance sheets and/or incomestatements consolidation units remain in balance. Its balance is always zero within adocument.





Characteristic used to further differentiate (break down) the values of the characteristic .

Any characteristic can be used as a subassignment.

SAP delivers standard, pre-defined subassignments.

The following subassignments use special consolidation logic – that is, these characteristics haveroles with special properties:

•

A partner unit is a consolidation unit that has a business relationship with a (primary)consolidation unit.

Each characteristic with the role must have an identical partnercharacteristic .

A financial statement item (or simply ) is either broken down by all existing partnercharacteristics or by no partner characteristics at all. (Bear in mind that when an item has abreakdown, this can be either required or optional.)

The characteristic with the role is needed, in particular:

− for interunit elimination and reconciliation [Page 136]− for the elimination of interunit profit/loss in inventory [Page 154]

•

The investee unit is used for recording values at investment holding items.

•

You can use the transaction type to see the changes to financial statement items over time.

− Changes to assets – from the opening balance to ending balance

− Changes to appropriations

− Changes to investee equity

You need the transaction type, for example, to create an asset history sheet.

•

The transaction currency key is stored in the data basis whenever a transaction currency [Ext.]is used.

•

The unit of measure is stored in the data basis whenever quantities are used. It must be fixedin the breakdown category [Page 56].





•

The year and period of an acquisition are analogous to the fiscal year and period. The currentfiscal year and period are used as defaults. The period of acquisition requires that the year ofacquisition is contained in the data basis.

In addition, you can also add the fields and to the data basis of consolidation.

Finally, you can use any additional characteristics as subassignments.

You use the breakdown category [Page 56] to determine which subassignments a financial statementitem has.





Determines which subassignments a given financial statement item has.The following subassignments [Page 54] are pre-defined:

• Partner Unit

• Transaction Types

• Transaction Currency

• Unit of Measure

• Investee Unit

• Year and Period of Acquisition

You can define other subassignments as well.

The items for accounts payables and accounts receivables must have the subassignment to be able to perform the elimination of interunit payables/receivables.

In customizing of the breakdown category, you specify the breakdown type for each subassignment of

every item. The system uses the breakdown category to allocate the breakdown type to the item.

The breakdown type determines whether or not the item values are broken down by thesubassignment when the item value is entered or posted, and how rigorously the assignment ischecked for the given subassignment.

The following breakdown types are available:

0 No breakdown

1 Optionalbreakdown

Initialized value allowed

2 Requiredbreakdown

If no entry is made, the default value isset.

3 Requiredbreakdown

The value must be entered; the defaultvalue may be entered.

4 Requiredbreakdown

The value must be entered; the defaultvalue may not be entered.

A fixed value determines the value of the subassignment, that is, for all FS items with this breakdowncategory. You enter a fixed value for the following subassignments:

• Unit of Measure• Possibly for custom subassignments (those not pre-defined by SAP) which you have declared as

requiring a fixed value in the breakdown category





You can use the default selection of a given characteristic in manual data entry.

If a lead column is defined as data-driven in a data entry layout, the system accesses the defaultselection you specify here during data entry.

Thus, the default selection determines the default values for the breakdown of a characteristic for theitems that have this breakdown category.

You create a maximum selection for the subassignment in the breakdown category if you want to onlyallow a subset of all possible values of that subassignment for the items concerned.

The maximum set determines the permitted values for a given subassignment of those items that usethe breakdown category.

The list of possible values (F4) then shows the reduced subset, and the system checks all entriesagainst the maximum selection.

By using maximum sets for the characteristic , the item would only be postable for service-type products.

The following rules apply when creating maximum sets:

• Default selections must reflect a subset of the maximum selection.

• You cannot define a maximum selection for dependent characteristics whose correspondingindependent characteristic does not have a fixed value in the breakdown category.





In general, default values operate the same way for all consolidation tasks that permit default values.

The operation of default values is explained using as an example:

If the IU elimination method provides a breakdown of the differential item by subassignments, the

system needs to know which value is to be posted per subassignment. You can specify one value pereach subassignment in method customizing. You can also select the indicator The systemuses the following posting logic:

If the default indicator is selected, you must enter a value for the subassignment. The systemalways posts the difference with this value.

Exception: If the breakdown is optional, you do not have to enter the value. In this case, the systemleaves the subassignment initialized.

If you select the default indicator, the system attempts to derive the subassignment from the data

being eliminated.

If you selected the default indicator and the system is unable to derive the subassignment from thedata, the system proceeds as follows:

• If you selected the default indicator and specified a value for the subassignment in methodcustomizing, the system posts this value.

• If you did not specify a value, the system posts the general default that was defined in customizingof .

• If no general default was defined and the subassignment is a required breakdown, the systemdisplays an error message.

When subassignments belong to a compound of characteristics, keep in mind thefollowing additional constraints for selecting the default indicator:

• You should uniformly select or deselect the default indicator for all characteristics in acompound (for example, country and region).

• The following applies to interunit elimination in particular:

If the independent subassignment has a fixed value in the breakdown category, thenthe default indicator for the dependent characteristic can only be selected if:

− all FS items in both selections are broken down by these subassignments, and

− the fixed value of the independent subassignment for the items being eliminated, and

the fixed value of the differential accounting objects are identicalOtherwise, errors may occur or useless entries may be posted.





Central work environment for configuring the consolidation system.

You use the workbench at the following times:

• During the implementation phase

• During live processing for sizeable or critical changes to the Customizing settings

In the workbench, you can change and display Customizing settings for:

• The permanent parameters [Page 31]

• The data bases [Page 24] and consolidation areas [Page 29] with the characteristics and keyfigures provided

• The master data version [Page 40]

• The master data that can have hierarchies

− Organizational units (consolidation groups [Page 50] and consolidation units [Page 46])

− Financial statement items [Page 51] and consolidation chart of accounts [Page 52]

− Subassignments [Page 54] and their default values [Page 58]

• The breakdown categories [Page 56]

• The tasks [Page 65] in the consolidation monitor

• The method layouts [Page 69] and the methods [Page 71] themselves

• The document types [Page 68]

Furthermore, mainly for testing you can do the following:

• Post manual entries

• Execute methods

• Execute tasks

− Without a selection screen (here, the task uses the current parameter settings)

− With a selection screen (this lets you restrict the task to specific consolidation units or groups,versions, and so forth)

By contrast, when consolidation is being run live (in a production environment) you use theconsolidation monitor [Page 13] to execute tasks.

The system checks your Customizing settings for consistency. If inconsistencies are discovered, thesystem issues an error message. You can then access detailed information on the errors.





The following illustration shows the layout of the workbench:

Here you can choose between two views of the Customizing objects: the process view and thetechnical view. Both views contain the same Customizing objects, but the objects are displayed indifferent layouts.

• The hierarchical structure of the process view represents a logical sequence for your Customizing

steps.

• The technical view focuses on the types of Customizing objects (characteristics, methods, tasks,and so on).

In this area, the system displays the navigation hierarchy of the customizing objects in the technical orprocess view, depending on which view is selected. For detailed information on a Customizing object,double-click on the object (end node).

To display all consolidation areas in the technical view, double-click on the

end node. The system then lists all available consolidation areas in the lower left-hand area of the screen.

This area contains either a flat structure or a hierarchical structure with navigation targets. Double-clicking on a navigation target displays the corresponding object (such as the consolidation area) inthe work area. The context menu for the screen area provides functionssuch as and .

This area displays the Customizing object that you previously selected in the area .

Here you can access detailed information on the Customizing settings, or change the settings.





This area displays messages (information messages, warning messages, and error messages) onmethods.

This area displays documentation on the Customizing activities for method layouts and methods.

Screen areas 2, 3, and 4 are linked to each other. That is, what you select in screen area 2 controlswhat is displayed in screen area 3. Likewise, what you select in screen area 3 controls what isdisplayed in screen area 4.

The Customizing object displayed in the work area does not necessarily match what isdisplayed in screen areas 2 and 3. For example, if you display an object in the work area(4) and then select a different Customizing object in screen area 2, the two areas will nolonger match.





The system writes transaction data directly to BW.

Master data is saved as follows:

Changes you make to the customizing settings are written to the database only after you choose.

When you perform multiple operations in sequence (for example, you created document type 1,created method 4, and changed method 3), the system “collects” these changes in a buffer and saves

them all at once when you choose .

(create doc. type 1)

(create method 4)

(change method 3)

If you performed multiple operations since the last time you saved, you can reverse the changes made

in the last operation by choosing .





(create doc. type 1)

(create method 4)

(change method 3)

However, after performing two or more operations, it is not possible to only reverse the changes madeduring the first operation.

If you performed multiple operations since the last time you saved, you can reverse all of thoseoperations by choosing and then exiting the workbench without saving.

All customizing objects you work on while performing a series of operations are locked for other usersuntil you save the changes of those operations.

If several people work on the same customizing objects at the same time, they shouldsave their changes in regular intervals.





Consolidation step in the system from the accounting perspective.

You can define tasks for the different business consolidation processes in your company.

For statutory consolidation, you specify that interunit elimination is to be executed usingthe following tasks:

• Elimination of IU payables and receivables

• Elimination of IU revenue and expense

• Elimination of investment income

The following task categories [Ext.] are available:

05 Balance Carryforward

10 Data Collection

25 Reconciliations

35 Manual Posting

40 Currency Translation

55 Interunit Elimination

60 Elimination of Interunit Profit/LossIn Inventory

70 Consolidation of Investments

75 Reclassification

80 Allocation

85 Validation

You can assign tasks to task groups. You can execute task groups in the consolidation monitor [Page13].

You can define a task group with the following tasks:

• Balance carryforward

• Data collection

• Manual standardizing entries

• Currency translation





For the characteristic there is only one hierarchy with links that depend on the version, effectiveyear, and effective period. That is, there is exactly one root node on which the overall status of thetask is managed in the consolidation monitor. The end nodes of the hierarchy are tasks, while thenodes are task groups.

(root node)

(node)

(node)

(end node)

(end node)

(end node)

Link:dependent on version andeffective year/period

You can execute all tasks of a task hierarchy in the consolidation monitor.

A task can be executed if the specified period is a consolidation period. When a task is executed, thesystem determines the associated method and document type.

In Customizing, you can assign one or more document types [Ext.] to a task if you want. A documenttype can be used in no more than one task.

The following table shows the relationships between:

• Tasks and document types• Tasks and methods

Balance carryforward - -

Manual data entry 1 0 or 1 -

Data collection with theupload feature

1 0 or 1 1 n,

assignment through consolidation unit

Manual posting 1 n -

Currency translation 1 0 or 1 1 : n


Validation 1 n 1 n,






Interunit elimination 1 1 1 1

Reconciliations 1 1 -

Elimination of interunitprofit/loss in inventory

1 1 -

Reclassification 1 1 n 1

Allocation 1 1 n 1

Consolidation of investments 1 n 1 n,


The tasks (and methods) are linked to a consolidation area.

For information on this topic, see the section on methods [Page 71].





Classifies the posting data using certain attributes.You can use the document type to assign certain properties to consolidation entries, such as thosepertaining to updating the database and processing currencies.

The document type specifies the following attributes that are required for posting, currency translation,and data evaluation:

• Posting level

• Balance check

• Business application

• Automatic or manual posting

• Key figures to be posted (transaction currency, local currency, group currency and/or quantity)

• Number range

• Control of subassignments for manual postings

• Selected items

You can only use a particular document type in one task (with a given version, fiscal year, and so on).

For information on the relationship between tasks and document types, see also Task [Page 65].





Customizing tool in consolidation. In a method layout, you establish the prerequisites under which allmethods [Page 71] can be defined that are based on that method layout.

A method layout determines the following:

• The appearance of the step hierarchy for the methods that are based on that particular methodlayout

• Which characteristics and key figures from the consolidation area are used in the methods

• At which point in the methods these characteristics are visible and/or ready for input

• Specify which characteristics you want to use for the methods that are based on the methodlayout you are defining:

− Select the target column.

− Drag the characteristics to the desired position in the target column. (You can select multiplecharacteristics with or .)

• Specify whether you want the method to have steps. If you want the method to have steps, drag atleast one characteristic to . If you want to create substeps, proceed in a similar mannerby dragging a characteristic to at the step level.

• If you want to maintain the values of certain characteristics in the detail screen of the method, drag

those characteristics to

.You can add additional characteristics in the detail screen of the method.

• Specify the level (method level or any step level) from which you want the individual componentsof the method to be visible (for example, in allocation: sender and receiver). To do this, move thearrows to the desired position.

To remove a characteristic from the method layout when it is no longer needed, drag thecharacteristic to the list of available characteristics or to the trash can symbol.





The following illustration shows the definition of a method layout in allocation:

Define in ... Sender Receiver Trigger Distribution

Cons Group Cons Unit Subitem Category Investee Unit FS Item Subassignment Group Currency Local Currency Unit of Measure

Trash

... the Method

Visibility

Detail Screen

Fast Entry

... All Steps

Visibility

Detail Screen

Fast Entry

Cons Unit

FS Item

Cons Unit

Cons Unit





Customizing tool in consolidation. You use methods to control how the system calculates and postsautomatic consolidation entries.

Some methods are based on method layouts [Page 69].

To be able to execute the tasks, assign the methods to the appropriate tasks or consolidation units.

The assignments are always based on the version and time:

The version dependency is established by task versions. There is a separate task version for eachtask category for which version-dependent assignments are required (such as the method ordocument type). In customizing, you must assign a task version to the version.

The following types of method assignments are available:• Assignment of methods to tasks

• Assignment of methods to consolidation units

• Assignment of methods to consolidation units and consolidation groups

• Assignment of data transfer methods to tasks

You assign the methods to tasks with the following task categories:

• Interunit elimination

• Reclassification• Allocation

You assign a method and document type when you create a new task:

Task MACO

Mkt Costs

Cons Area LC Version 100 Period/Year 003 / 2002

Name

Period Cat. Quarter

Assign Doc. Type

MC

Assign Method

MACO2Method

Medium

Short

Marketing Costs

Doc. Type Marketing Cost Assess.

Marketing Costs 2

Frequency Quarterly





You assign the methods to consolidation units with the following task categories:

• Validation


• Data collection with flexible upload and manual data entry

You assign a method to a consolidation unit when creating a new task:

Task CTR1

Translation1

Cons Area LC Version 100 Period/Year 003 / 2002

Name

Period Cat. Year

Assign Period Category

Assign Methods

HIST1 Historical Transl.1Method

Medium

Short

Currency Translation 1

Method Dependent on Cons Unit √

Assign Cons Frequency

Frequency Yearly

This type of assignment applies to:

• Accounting techniques [Ext.] for consolidation of investments

• Consolidation of investments methods [Ext.]

To simplify the customizing for data collection (especially for data collection tasks), data collection

methods are available in addition to data entry layouts and methods for flexible uploads.

These let you combine different data entry layouts and methods for flexible uploads, and assign theseto data streams.

You assign the data collection method itself to a task for data collection (see earlier).





Totals records Manual entry Grp01Totals records Flex. upload FlexUpl01 X C:\temp\upl2.txt

Inventory data Manual entry

Supplier data ... ... ...

(no documents)

Upload method X (X) X

(no additional financial data)

Data entry group

Explanations:

• X = required

• (X) = optional

• Data stream type and data collection procedure:

You need to assign a data collection procedure to a data stream type to be able to save the

data for the data stream type.• Data collection method/data entry group::

You do not need to specify anything for the manual entry of additional financial data. This isbecause the data input screens are hard-coded.

• Presentation server; logical file; file name

− Presentation server: Here you determine whether you specify a path on the presentationserver or on the application server.

− Logical file: Here you determine whether you specify a logical or a physical file name.

− File name: Here you specify the name of the logical or physical file (that is, the path + filename).





Consolidated financial statements are created on the basis of financial data reported by individualconsolidation units. The Consolidation system needs to collect this data before you can perform theother consolidation tasks.

With this component you can collect the following types of data:

• Reported financial data [Ext.]

• Additional financial data [Ext.]

• Master data [Ext.]

You assign a data transfer method to each consolidation unit in customizing for the data collection

task.

You execute the data collection task in the consolidation monitor. You can execute the task for asingle consolidation unit or for an entire consolidation group.

You have the following options for collecting data:

Manual data entry [Page 75]

with data entry layouts

X X

Flexible upload [Page 83] X X X

You can use manual posting [Page 111] :

• To adjust the reported financial data (with posting level 01)

• To post standardizing entries to the (adjusted) reported financial data (with posting level10)

You can run manual posting from within the data entry task.





This component enables you to manually enter reported financial data with the aid of data entrylayouts [Page 77].

Apply this component if you want to enter reported financial data online for one or more consolidationunits or for a combination of consolidation units (for example, combinations of company and profitcenter).

Whether you implement manual data entry or another method of data collection [Page 74] depends onthe organization of your corporate group and the systems it uses.

Manual data entry is linked to status tracking in the consolidation monitor [Page 13].

Manual data entry enables you to input (key in) reported financial data (posting level 00) and additionalfinancial data into the Consolidation system.

The data entry layout plays the most prominent role in manual data entry.

The definition of the data entry layout is flexible: You can define whether its structures are predefinedand fixed, or are determined by the transaction data or the master data. You can use hierarchies ofcharacteristics when defining a layout.

The layout definition adheres to the WYSIWYG principle.

All elements of a data entry layout can be reused in other data entry layouts.When defining a data transfer method, you choose manual data entry and assign a data entry groupwith one or more data entry layouts. You assign the data transfer method to a consolidation unit. Thedata entry layout then appears when you run the data entry task for the consolidation unit.





A user interface for defining data entry layouts.

You use this customizing environment to define the objects needed for manual data entry: data entrygroups, data entry layouts, forms, and so forth.

The customizing environment for manual data entry has the following composition:

......Data entry

...

...Data entry layout

...

...

Data entry group AD/E layout "A/P"D/E layout ......

Data entry group B...

D/E layout "Accounts Payable"

• Form "Accounts Payable"• Column structure

• ...• ...

• Row structure• Predef. fxd structure

•

• ...

Version 100 ActualYear 2002Cons unit C1000 GreeceLocal crcy EUR Euro

1231 C2000 CAD 150 100

USD 90 100

JPY 350 100

Available Objects• Data entry grid• Column structure

• Row structure• Lead column• Characteristic• ...

You can create and display the following objects in the lower left section of the workbench screen:

• Hierarchies for data entry groups

• Data entry groups for grouping data entry layouts from an accountingperspective (for example, data entry groups for the balance sheet and othersfor the income statement)

• Data entry layouts

The object tree displays the structure of your data entry layout [Page 77] along with:

• Form

• Row structure

• Column layout

See the sections that follow.





A user interface for entering financial data reported by consolidation units and combinations ofconsolidation units.

You use data entry layouts for the manual entry of reported financial data in the Consolidation system.You can define and use different data entry layouts, depending on which type of data and which levelof detail is involved.

This illustration shows the relationships between the objects in manual data entry:

Data Entry Hierarchy

Data Entry Group

Data Entry Layout

Form

Column Structure Row Structure

1 : n

1 : n

1 : 1

1 : 1 1 : 1

Structure

1 : n

Structure

1 : n

Each data entry layout has a form. (At present, the form is the same as the data entry layout.)

Once a form has a name, it can be used in other data entry layouts.

In turn, a form consists of:

• Column structures

• Row structures

When you create a form, the system automatically creates nodes for the row and column structures inthe object tree.

Underneath these nodes you can:

• Create new row or column structures

• Link existing row and column structures

You need these row and column structures to establish a data entry grid with data rows and data

columns (see the following illustration).





• You decide whether the characteristic values are displayed in a hierarchy and, if so, whethersubtotals are displayed.

• You determine how the characteristic values are presented – text and/or keys.

• You decide whether the characteristic values are merely displayed, or whether data can beentered for the characteristic. columns are shown directly next to lead column.

This column type always consists of two or more columns. Each column’s structure can either bepredefined fixed, data-driven, or also combined.

There are two options for displaying combined structures:

• You can show each column (contained in the structure) separately as a lead column.

• You can show the columns as a hierarchy of characteristics within one lead column. In otherwords, the characteristics are in one hierarchy. The first level of this hierarchy representsthe first column of the combined structure; and the second level reflects the second column.

The following illustration compares these two presentation methods:

You define data columns in the same way you define data rows:

You establish the data columns by defining the lead rows. Each lead row establishes a set of columns.This set of columns is determined by selection conditions, which you specify with one or morecharacteristics.

A form must have at least one lead row along with its row structure.

As with column structures, row structures also have the following types:

• Predefined fixed structure

• Data-driven structure

• Combined structure

Lead rows typically have the predefined fixed structure.





You use this process to create a data entry layout [Page 77].

You have completed customizing of the financial statement items and subassignments.

You have made your preliminary considerations regarding the structure of the data entry layout.

This flow discusses how you first create a data entry hierarchy, and then create a dataentry group and a data entry layout.

Alternatively, you can create a data entry layout first, and then assign it to a hierarchy anda data entry group later on.

Run the customizing environment for manual data entry by going to the process view in theworkbench and choosing → → .

2. Go to the lower left section of the screen and create a hierarchy for the data entry groups bychoosing in the context menu.

3. Create a data entry group, also by choosing in the context menu.

4. Create a data entry layout by selecting the data entry group and choosing in the contextmenu.

5. In the work area, assign a name for the data entry layout.

6. Create a form for the data entry layout by selecting the data entry layout in the object tree of thework area, and choosing in the context menu.

The form can be reused in other layouts if you give it a name.

7. Either apply existing column structures or create one or more new ones by selecting in the object tree in the work area, and choosing one of the following three options in thecontext menu:

− Create Predefined Fixed Structure

− Create Data-Driven Structure

− Create Combined Structure

The structure can be reused in other forms if you give it a name.

Define the structure.

8. Either apply existing row structures or create one or more new ones by selecting inthe object tree of the work area and choosing one of the following three options in the contextmenu:

− Create Predefined Fixed Structure

− Create Data-Driven Structure

− Create Combined Structure

The structure can be reused in other forms if you give it a name.

Define the structure.

9. Save your entries.





You can reuse the following elements of the data entry layout when defining other data entry layouts:

• Forms

• Column layouts

• Row structures

Now you can define a data collection method [Page 71].

You assign the data transfer method to a task for data entry. You execute the task in the consolidationmonitor.





You can use this function to upload reported financial data and master data from a file into theconsolidation system.

Customizing of the upload does not require a method layout.

You can use the flexible upload function to upload the following objects from a text file into theconsolidation system:

• Consolidation groups, including consolidation group hierarchies• Consolidation units

• Financial statement items, including long texts and item hierarchies

• Breakdown categories

• Reported financial data

• Other master data (for example, transaction types, functional areas)

You can select one of the following types of rows:

• A header row, followed by data rows

• Row type indicators

A row type indicator is a characteristic, situated at the beginning of a data row, whichdetermines the type of the row.

Valid or supported row types are header row, data row, row with long text, and row withhierarchy information. When row type indicators are used, every row (except for commentrows) must begin with a valid indicator. If field separators are used, the indicator must beseparated with such a characteristic from the first data field.

If no row type indicators are used, the function interprets the first non-comment row as theheader row, and all subsequent rows as data rows.

You use the update mode to determine how to treat existing data records when an upload is repeated.

You can choose one of the following update modes:

• Delete all existing data

Only the uploaded data (from the last upload) remains in the system.

• Delete existing uploaded data

The system deletes only the existing data pertaining to the objects (for example, consolidationunit) contained in the uploaded file. The data of these objects are fully replaced by the datathat is uploaded.

• Overwrite existing data

Existing data is overwritten, and new data is added.

• Do not change existing data





Data that belongs to objects that already exist in the system is not uploaded. Only new data isadded.

You include in the field catalog for the upload all fields you want to use in the upload file.

You have the option of using a . You can assign a to all field catalogs as often asdesired. The free field column in the file is not interpreted during the flexible upload. This way, thesystem can also process files that contain additional information that is not related to consolidation.

You can determine whether the collection of reported financial data is or :

• Periodic values reflect the values of the current accounting period. Thus, they represent thechanges since the last collection of reported financial data.

• Cumulative values reflect the accumulated values as of the current date. However, the systemstores the values as periodic values after automatically calculating the differences to the priorperiod balance.





You define an upload method to import data from a files into the consolidation system.The upload method specifies which data format the file has.

Define a task for data collection so you can execute the flexible upload in the consolidation monitor.

1. Create an upload method and give it a name.

2. Select the upload category (for example, reported financial data).

3. If more than one characteristic is available for the selected upload category, select thecharacteristic to be uploaded.

1. Specify whether the of the uploaded fields are fixed or variable.

2. Specify which is used to separate the columns (for example, the Tab character).

3. Define the . You can select one of the following:

− Header row with data rows

− Row type indicators

If you select the option, define a character to represent .

If you select the option, the system interprets all data rows without anindicator as comment rows.

4. Specify how digits are separated (for example, by periods or commas).

5. Choose the to determine how existing data is treated during subsequent uploads.For example, existing data can be overwritten.

6. For uploads of transaction data, determine whether the of financialstatement items and subassignments are to be taken into account.

7. Specify one of the input types, or .

Specify which the upload file has, and what sequence they are in. To do this, drag thedesired fields from list of available fields to the field catalog.

You can also use multiple free fields.

If transaction data is to be uploaded, go to the customizing of tasks for data collection and assign amethod to the respective consolidation unit.

The upload file must have the attributes you specified in method customizing.

The upload must have the file type . For example, you can create a text file in Microsoft Excel bysaving the workbook with the extension TXT or CSV.





You use this component ensure the consistency of the following data:

• Reported financial data

• Standardized financial data

• Consolidated data

You apply validation within the consolidation process as follows:

• Before any consolidation entries are posted you need to ensure that the financial data you havecollected is consistent.

• After posting standardizing entries, you need to check the consistency of the standardizedfinancial data.

• After posting the consolidation entries, you can check that the consolidated data is consistent.

You can define check expressions in the customizing settings for validation. To do this, you establishselection conditions (usually with items and subitems), which you then use in a formula. Then thesystem tests whether the check expression is true or false for a given data set.

You can also perform multilevel checks: First, as a precondition the data is tested with a Booleanexpression you have defined If the expression is true, the values are checked using another Booleanexpression (check expression).

• If the check expression is true, then the subsequent tasks may be executed.

• If the check expression is false, then the system displays a message (which was defined by thecustomer).

Whether subsequent tasks can be executed depends the type of the message displayed.

The validation is performed prior to the subsequent tasks to ensure that only valid data can be posted.

You cannot yet perform validation for additional financial data [Ext.].

You can check the reported and the standardized financial data of a given period to see if the followingexpressions are true:

• Total assets = total liabilities (see also the detailed example [Page 93])

• Net profit = appropriation of retained earnings

• Retained earnings on balance sheet = annual net income on income statement





In this section you select the characteristics used for the expression. For each characteristic, you thenspecify the characteristic values (for the selection condition).

You can copy selection conditions by choosing in the toolbar for the selection condition.

You can delete selection conditions by choosing in the toolbar for the selection condition.You can find out which other expressions use a certain selection condition. To do this, mark the

selection condition and choose in the toolbar for the selection condition.

This section contains frequently used operators (for example, +, -, =), functions, and also buttons forthe manual input of character strings, numbers, constants, and comments.

Plus, the button lets you create new selection conditions.

You can choose to tell the system which selections to use in the formula editor.

This section has more functions.

Constant

The function (see button with same wording), for example, lets you compare item values witha constant in local currency.

The function uses the following syntax: CONST( value, currency key, exchange rate indicator )

VAL_YTD( total assets ) > CONST( 1000, USD, 1 )

*VAL_*

There are also consolidation-specific functions, including the following:

• VAL_YTD to select cumulative values

• VAL_YTD to select periodic values

To select values from prior years, use the functions that start with P_VAL_* (for example,P_VAL_YTD). These functions use the following syntax (using the periodic function): P_VAL_PER(selection, period, fiscal year )

If you use generic functions, such as VAL_YTD, VAL_PER, or P_VAL_YTD, the system uses youcustomizing settings for the currencies in the task to select values in either the local or group currency.

That is, if necessary the system translates the values it finds into group currency.

In the formula editor you assemble the formulas for the check expressions from the availableselections, operators, and functions.

• Detailed documentation on the formula editor by choosing in the toolbar for theformula editor.

• The section Execution of Validations [Page 90] explains how to customize a method.





The result of the validation task is displayed in a log [Page 96].





You have collected the reported financial data and want to check the data before posting standardizingentries.

In doing this, you want to make sure that the assets side equals the liabilities side in the balancesheets of all consolidation units.

You consolidate once per year.

Method with check expression

1. To define a validation method, go to the process view of the workbench and choose

→ → .

2. Select the entry and choose in the context menu.

3. In the lower left screen area, choose from the context menu.

4. Create a method with:

− The technical name

− The name

5. Below the method, create the check expression : Total Assets = Total Liabilities.

Selection condition

1. Create a selection condition as follows:

e. Choose in the work area of the workbench in the selection area.

f. For the first selection, assign the title .

g. To select the characteristic , choose .

h. Select the item from the consolidation chart of accounts.

Proceed in the same manner for :

The system displays the selections in the work area.

2. Save your changes.

Formula

You create the formula

. (Total liabilities are added to total assets because the system stores liability items with a negativesign.) Proceed as follows:

1. Place the cursor in the formula editor.

2. In the function list, double-click the function .

3. If necessary, place the cursor inside the bracket, and double-click the selection in

the list of selections.

4. Select the operator "".





5. In the function list, double-click the function .

6. If necessary, place the cursor inside the second bracket, and double-click the selection

in the list of selections.

7. Select the operator "".

8. Choose and enter “” (zero)9. Save your changes.

Message

Go to (transaction SE91) and create a message class and the following twomessages:

• One message for when the expression is true. Specify the messagetext .

• One message for when the expression is false. Specify the messagetext .

Now return to the workbench and proceed as follows:

1. To create the message for the true expression, select the node and choose in the context menu.

The system creates a node for the message.

2. In the work area, specify the message number, the message class, and the message type (in thiscase, "Success" (S)).

3. Save the message.

4. Proceed in the same manner for the expression. In this case, use the message type “Error”(E).

1. To define a validation task, go to the process view of the workbench and choose

→ → .

2. Select the entry and choose in the context menu.

3. In the lower left screen area, choose from the context menu.

4. Specify a technical name, a short text, and a medium text for the task.

5. In the group field choose all of the following options:

− Reported financial data

− Local currency

6. Select the the represents annual consolidation.

7. Do select the indicator that states that the method is dependent on the organizational unit.This way, the method applies equally to all organizational units.

8. Assign the method (you previously created) to the task.

9. Save the task.

Prerequisite: The task is assigned in a task hierarchy.

Execute the validation task in the consolidation monitor.

1. Place the cursor at the intersection between the task for validating reported financial data and the

top consolidation group2. Choose .





Hierarchical list you can use to analyze the results of the validation task.

The header consists of the following elements:

• Permanent parameters

• Whether the task was run in test mode or update mode

• Task settings

• Method settings, if they apply equally to all organizational units

The body of the report shows a hierarchical list that is structured as follows:

+ Highest level: all consolidation units with the number of errors and warnings; the total result of thevalidation task

− Next level: all check expressions that belong to the highest level of the check hierarchy

• Further levels: details, messages, and lower-level check expressions

The number of errors and warnings is aggregated over the entire check hierarchy.





Net Profit = Appropriation of Retained EarningsTotal Assets = Total Liabilities

Total Assets = Total Liabilities





The main benefit of SEM Business Consolidation lies in the postings that are automatically generatedby the system. Automatic postings let you achieve a high degree of automation, enabling the efficientcreation of consolidated financial statements.

In isolated cases, you may want to enhance the automatic postings with manual postings. It is alsooften necessary to manually post adjustment entries to the financial data reported by the consolidationunits to meet corporate requirements.

For this reason, the consolidation system offers both automatic and manual posting functions forcarrying out your consolidation tasks.

The following tasks generate postings in the system (and thus update the totals records in the

corresponding InfoCube):• Adjustments to reported financial data

• Standardizing entries

• Interunit elimination

• Elimination of interunit profit/loss in inventory

• Consolidation of investments

• Reclassification

• Allocation

The following tasks do post entries, but rather update the values in the respectiveInfoCube:

• Collection of reported financial data


You can use reports to verify the value changes.

The following illustration shows the correlation between:

• the customizing settings required for the postings

• the journal entry itself

• the totals records generated by the posting





The following table explains the relationships shown in the illustration, with the distinction betweenautomatic postings and manual postings.

e.g., for interunit elimination e.g., for manualadjustment entries

Assignment of a consolidation frequency, a document type, anda method (if applicable)

indicator

indicatorSettings for posting level, balance check, business application,currency, number range, treatment of subassignments, and soon

Assignment of a number range for document numbers

The method settings control exactlyhow the system generates postings.

For example: In a method for interunitelimination you define which groups ofitems are cleared with each other.

(not applicable)

The system generates automatic line items for financialstatement balancing adjustments in both automatic and manualpostings.

You define selected items to be used for these automatic lineitems.

You execute the task in the consolidation monitor or in theworkbench.





The system creates and posts theentries automatically.

In the manual postingtransaction you enterthe document headerdata and the line

items, and youexecute the posting.

At the same time, the system writes data records

• to an InfoCube for journal entries (ODS object [Ext.])

• to an InfoCube for totals records

You can analyze both InfoCubes with BW reports.

You can also list journal entries in the workbench.

You should use automatic postings to perform the tasks whenever possible to take

advantage of the built-in features available for the consolidation process.





Posting levels classify journal entries in the consolidation system.Posting levels distinguish between the following types of entries:

• Adjustments to reported financial data

• Standardizing entries

• Entries for interunit elimination and the elimination of interunit profit/loss in transferred inventory

• Consolidation of investments entries

Reported financial data also has a separate posting level.

A document type [Page 68] is typically assigned to journal entries. The document type determines theposting level of the entry.

The system writes the posting level to the totals record.

Classifying entries with posting levels helps you in selecting data, and is also utilized by the system:

• By specifying posting levels when selecting data, you can evaluate individual portions of theconsolidation process in your consolidation reports.

You can evaluate the standardized financial data of a consolidation unit by selecting thedata with posting levels 00, 01, and 10 for this unit.

• The system uses the posting level:

− For internal consistency checks of the data

− For the selection of data to be processed

For interunit elimination, the system selects all data (of the consolidation units to beeliminated) with posting levels less than or equal to 20.

The available posting levels are predefined in the system. The following posting levels are available:

00 Reported financial data

01 Adjustments to reported financial data

10 Standardizing entries

20 Two-sided elimination entries

30 Consolidation of investments entries

• Reported financial data (00)

The posting level 00 is assigned to reported financial data.• Adjustments to reported financial data (01)





If, after collecting the reported data of the consolidation units, you want to make changes tothe data at corporate headquarters, we recommend doing this by posting adjustment entrieswith posting level 01.

• Standardizing entries (10)

You may need to standardize the reported data of consolidation units to comply with corporate

policies or corporate valuation rules.

In the data records with posting levels less than or equal to 10, the system posts only tothe consolidation unit – not to the consolidation group. Reporting takes into account thedata records for all consolidation groups.

• Two-sided elimination entries (20)

Interunit elimination, the elimination of interunit profit/loss in inventory, and reclassification areexamples of two-sided elimination entries. Here, the consolidation unit as well as the partnerunit are assigned in the data records.

Reporting takes into account the data records for all consolidation groups in which both the

consolidation unit and the partner unit are posted.

• Consolidation of investments entries (30)

In consolidation of investment postings, the consolidation unit, partner unit, and consolidationgroup are assigned to data records. Reporting only considers the data records with theassigned consolidation group and the higher-level consolidation groups.





The following illustration shows three consolidation groups: CG1 comprises all consolidation units (A – E) along with the lower-level groups CG2 and CG3. All consolidation units are included in their

entirety.

The system posts with different posting levels:

1 10 C - - Standardizing entry

2 20 A B - Elimination of IUpayables andreceivables

3 20 A D - Elimination of IUpayables andreceivables

4 30 E D CG3 Consolidation ofInvestments

5 30 E D CG1 Consolidation ofInvestments

The following table shows for which consolidation groups the postings are valid in consolidationreporting:

1 X X X

2 X X -

3 X - -

4 X - X

5 X - -





Posting of financial statement items in quantities is possible if:

• the document type allows posting in quantities

• the breakdown category of the item is defined with a breakdown by quantity

A fixed value is assigned to the unit of measure in the breakdown category, which means that thebreakdown category of the item determines the unit of measure.

In a journal entry you may want to post to items, which have been assigned differentbreakdown categories with different units of measure. In this case you would postquantities in several units of measure within a single journal entry. The system does notcheck for a zero balance – neither for each unit of measure nor for the entire journal entry.





Posting financial statement items with a breakdown by transaction currency is possible if:

• the document type allows posting in transaction currency

• the breakdown category of the item is defined with a breakdown by transaction currency

You can post several transaction currencies in a single journal entry. The system does not checkwhether the balance per transaction currency is zero.





Standardizing and consolidation entries can cause an imbalance in the balance sheet and the incomestatement. For example, an adjustment to depreciation of machinery involves posting in both theincome statement and the balance sheet. This causes an imbalance in both the balance sheet and theincome statement. The system calculates this imbalance and automatically posts balancingadjustments.

The system posts the balancing adjustment . This ensures that the balance sheet andincome statement are posted consistently. Once the adjustment is posted, the two statements balanceagain.

It may become necessary to post balancing adjustments for both and postings.The system checks every manual and automatic posting as to whether a balancing adjustment isnecessary and, if so, generates additional line items in the document.

In manual entries, these line items are referred to as because the systemautomatically adds them to your manually entered line items.

When an entry involving both balance sheet and income statement accounts leads to an imbalance inthe financial statements, the system generates additional line items to post balancing adjustments.

To enable the system to automatically generate line items for balancing adjustments, the followingcustomizing settings must be made beforehand: In the you specify which accounting

objects are posted with the balancing adjustments.The selected items [Page 53] for balancing adjustments can require a breakdown by subassignments[Page 54], depending on which breakdown category [Page 56] is being used.

Customizing offers several ways of controlling how the system determines the subassignments for theselected items:

For each selected item with one or more subassignments, you can select the Default [Page 58]indicator for each subassignment, and/or you can specify a value for the subassignment.

During each posting, the system checks if the income statement items are being posted with a non-zero balance. If so, the system computes and posts a balancing adjustment.

The balancing adjustment is also dependent on where the appropriation of retained earnings is stated.

• If the appropriations are stated at the end of the income statement, the system posts the balancingadjustment to items in the balance sheet as well as in the income statement.

• If the appropriations are stated in the balance sheet, the adjustment is posted to items in the balance sheet as well as the income statement.

Which items are posted is defined in customizing of the selected items for retained earnings andannual net income.

The posting remains in balance because the balancing adjustment takes both financial statements intoaccount.





When you enter a manual posting and save, the system generates the automatic line items and writesall line items to the database. You can simulate the posting prior to actually executing the entry. Thesimulation shows you the automatic line items. This lets you preview if and how the system will post

balancing adjustments.

You can suppress the automatic line items and manually enter your own line items. If you do this, thefollowing rules apply:

• When entering the line items manually, you must enter “automatic” line items.

• You must enter the , so that the balance of the balance sheet items and thebalance of the income statement items in the entire journal entry both equal zero.

You can also let the system simulate the automatic line items, and then modify these line items. Forexample, you might modify the subassignments, or distribute the simulated values to several lineitems.

Say, you want to post a standardizing entry to a balance sheet item. After the standardizing entry isposted, the balance sheet and the income statement are no longer in balance.

The following illustration shows you how the accounts are affected by the original entry and by theautomatic balancing adjustment. The automatic posting distinguishes between where theappropriations of retained earnings are stated.





The financial statement items you post manually sometimes require a breakdown by subassignments,depending on the item’s breakdown category. Journal entries posted with many items andsubassignments can become very confusing. For this reason, document type customizing provides anoption to declare each subassignment as being fixed or hidden.

• A subassignment means that the subassignment must be unique per journal entry, and thuscan only have one fixed value. A fixed subassignment can either be permanent or temporary.When you a subassignment temporarily, you are able to deactivate the fixing when entering thedocument.

You may want to fix the subassignment temporarily or permanently ifyou normally only enter documents in transaction currency. By making the transaction

currency subassignment fixed, you can prevent the erroneous entry of two differenttransaction currencies.

In the manual posting transaction the system displays the fixed subassignments. The systemshows the non-fixed characteristics for each line item.

• You can subassignments that only apply to very few financial statement items.

The system only shows a hidden subassignment in posting when you enter an item that isbroken down by that subassignment.





1. Run the consolidation monitor.2. Check the parameters.

3. Place the cursor at the intersection between the organizational unit to be posted and the task to beperformed, and choose .

If you did not assign the document type for manual posting to a task, the systemautomatically assigns the document type to the data collection task.

4. The tab shows that the document type is already filled. Enter the missing header data (forexample, the partner unit).

5. The tab displays the subassignments that were fixed with a permanent ortemporary default in the document type. You specify the fixed value for each subassignment. Youcan revoke the fixing of subassignments that are only temporarily fixed by removing thesubassignment from the tab page. If necessary, you can re-fix the subassignments that wereremoved later on when you enter the line items.

6. On the tab you post the necessary journal entries.

7. Run a simulation to ensure that the entry is complete, and to view the automatic line items that aregenerated by the program. To do this, choose .

The system checks, for example, if:

− the document balance is zero

− all required subassignments have been entered

− all required currencies have been entered

− Automatic line items have an indicator that shows whether the entry is a financial statementbalancing adjustment. If needed, you can modify the automatic line items. For example, youmight want to select a different subassignment for selected items (see also FinancialStatement Balancing Adjustments [Page 108]).

To reverse the simulation, choose . This removes the automatic line items.

8. Post the document by saving the data.





You can use this function to translate monetary amounts into a different currency.Notably, you can translate the financial data reported by consolidation units into the group currency ofthe consolidation group. The consolidation system typically collects the financial data reported byconsolidation units in local currency. You need to translate this data into group currency before youcan create consolidated financial statements. Thus, you use this function if the local currency of one ormore consolidation units differs from the group currency.

Furthermore, this function offers the following features:

• You can carry out reference translations and you can record translation differences.

On the one hand, this makes currency-related impacts transparent. And on the other hand,you can ensure the accounting consistency of the translated data (for example, the matchingof retained earnings in the balance sheet and annual net income in the income statement).

• You can use different currency translation keys (for example, periodic and cumulative), or you canrefrain from doing a specific translation if individual data records are already in the target currency.

• You can group together the accounting objects to be translated (for example, FS items) asselections in various ways, for example:

− where a selection represents exactly one combination of currency translation key andexchange rate type

− where for each selection you specify exactly one specific differential accounting object for thetranslation difference

− where the selections represent steps, which the system executes consecutively.

This currency translation function requires an account-based data model (that is, a chart of accounts).

You can implement this function as part of the components SEM-BCS as well as SEM-BPS.

As an extension of currency translation, you should use rounding [Page 127] to correct rounding errorsthat can occur during currency translation.





You can use this function to translate the data records from a (such as the localcurrency) to a (such as the group currency).

You can individually specify a source key figure for each selection, or a common one for the methodlayout. The target key figure is taken from the permanent parameters when the task is executed.

You may want to use different exchange rate types depending on which group of accounting objectsyou want to translate. Say, you want to translate long-term assets at historical exchange rates,

inventory at current rates, and income statement items at average rates.

You define the exchange rate types in the SAP Implementation Guide at →

→ and .

You may want to use different currency translation keys depending on which group of accountingobjects you want to translate. Say, you want to translate cumulative balances for stockholders’ equity,but periodic balances for retained earnings.

Currency translation supports the following currency translation keys:

Cumulative translation multiplied ... ... by the exchangerate of the currentperiod

Periodic translation multiplied ... ... by the exchangerate of the currentperiod

Periodic translation • if value increases:multiplied by thecurrent rate

• if valuedecreases:multiplied by theaverage rate forthe prior periodsof the fiscal year

(see Translation Rulecolumn)

If the values were recorded in the target currency:

• the system does not modify the values

• but the system performs a reference translation and records atranslation difference

Periodic translation uses data that belongs to the current period. By contrast, cumulative translationuses data that belongs to the entire fiscal year.





Group of accounting objects to which exactly one unique combination of currency translation key andexchange rate type is assigned.

You may want to use different exchange rate types and currency translation keys depending on whichgroup of accounting objects (for example, FS items) you want to translate. In a selection, you canassign exactly one combination of exchange rate type and currency translation key to a group ofaccounting objects. You can define a selection as a single value or as a ranges of values (if desired,including multiple sub-ranges).

Investments Range 170000-170399 • cumulative

• :historical rate

Stockholders’ Equity Range 250000-250899,290300-290700

• cumulative

• : currentrate

Furthermore, for each selection you can choose a differential accounting object to be posted withcurrency translation differences.





You perform reference translations and record translation differences at differential accounting objectsto make currency-related effects visible and to ensure the accounting consistency of the translateddata (for example, the matching of retained earnings in the balance sheet and annual net income inthe income statement).

For the specific translation you define the exchange rate type and the currency translation key for eachselection [Page 115].

The system carries out the reference translation in parallel with the specific translation. The referencetranslation is run globally for all accounting objects (independent of the selections) using a fixedexchange rate type (such as the current rate) and the currency translation key “cumulative”.

Currency translation differences result when the selections use different translation keys andexchange rate types. When individual financial statements are translated two types of translationdifferences can occur: translation differences in the balance sheet and translation differences in theincome statement:

• Balance sheet differences occur, for example, if you translated investment and investee equityvalues using historical exchange rates and the remaining balance sheet items using the currentrate.

• Income statement differences occur, for example, if the appropriation of retained earnings isreported on the income statement, and you translate revenue and expense using an averageexchange rate and the appropriation of retained earnings values using the current rate.

Because it is not usually possible to identify the FS items from which currency translation differencesoriginate, the system translates all selections into the target currency using a reference exchange rate,in addition to the specific translation. The system uses the reference values to calculate the translationdifferences. These are then posted to the differential accounting objects. When the translationdifferences are recorded, the financial statement in the target currency is balanced again.

The system calculates translation differences as follows:

1. Reference translation of all selections with a fixed currency translation key and exchange rate type

2. Translation of the selections you specified (with a fixed currency translation key and exchangerate type per selection)

3. Calculation of the currency translation differences per selection

4. Posting of values in target currency

5. Posting of the currency translation difference to the differential accounting object per selection

Following is an example of a selection showing the reference translation and the calculation ofcurrency translation differences (CTD).

The following conditions are assumed for the translation:

• Specific translation: periodic, with the average exchange rate

• Reference translation: cumulative, with the current exchange rate





001 100 (100) 1.6 1.5 (100*1.5=150)

002 100 (200) 1.7 2.0 (200*2.0=400)

400-150=

003 100 (300) 2.0 1.8 (300*1.8=540)

540-400=





In your consolidated financial statements you may want to determine how exchange rate fluctuationshave an effect on the FS item values in group currency. You may like to display these effectsseparately.

A change in the group currency value, which occurs exclusively through a change in the exchangerate, is called temporal translation difference. On the other hand the change in the group currencyvalue, which occurs through a change in the local currency value, is called transaction difference.

An example for the requirement to display temporal translation differences is the assethistory sheet in group currency. In an asset history sheet, you present the changes of theasset values from the opening balance to the closing balance. At the fiscal year change,the closing balance of the old year is transferred to the opening balance of the new year. If

during this change, the exchange rate (current exchange rate) changes, then the openingbalance in the new year (calculated with the new exchange rate) does not agree with theclosing balance of the old year (calculated with the old exchange rate). In this case ituseful to display this temporal translation difference.

The temporal translation differences in an asset history sheet can be displayed in the subassignmentsof the FS items of the transferred assets. For FS items where this procedure is not possible (nobreakdown by subassignments), currency translation offers a separate disclosure of temporaltranslation differences in the totals records.

You must use the characteristic in the consolidation area.

Recording temporal translation differences is only feasible when doing cumulative translations.

In the Customizing of currency translation, in fact in the definition of translation entries, you can set theindicator The indicator has the following effect:

• The system calculates temporal translation differences between the periods, within a fiscal year

• The system displays the temporal translation differences under a translation indicator andgenerates separate totals records.

LC value of transaction Reference value of transaction

Value 0 Delta between specific value and reference value ofthe transaction

Value 0 Delta between old reference value and newreference value and for the prior period values

Therefore: the temporal translation difference on thebasis of the change in the reference exchange rate

Value 0 Change of the delta between specific value andreference value – that is, for the prior period values

Therefore: the temporal translation difference for the





delta between specific value and reference value

This results in the following values:

• 0 + 1 + 2 + 3: specific value

• 0 + 2: reference value

• 1 + 3: currency translation difference

• 2 + 3: temporal translation difference

The separated display of the temporal translation differences is reset for the balance carried forward,that means

• the totals records with translation indicator 2 go into the totals records with translation indicator 0.

• the totals records with translation indicator 3 go into the totals records with translation indicator 1.

Scenario: The reference exchange rate changes from 1.5 (period 000) to 1.6 (period 012)

123456 0 1,000 1,500 100 160 1,100 1,660

123456 2 0 0 0 100 0 100

The change of the reference exchange rate between period 000 and period 012, results in thetemporal translation difference of 100 (1000 LC x .1 GC/LC) for the value 1,000 from period 000.

The system calculates the difference as follows:

Reference value cumulative to period012

1,760

- Reference value cumulative to priorperiod

1,500

- Reference value of period 012 160

= Temporal translation difference at theprior period

100





123456 0 1,100 1,760 … …

123456 2 0 0 … …

For the balance carried forward, the temporal translation difference of 100 is written to the totalsrecord with translation indicator 0, so that the balance carryforward period contains the accumulatedspecific value of 1,760.

Scenario:

The reference exchange rate changes from 1.6 (period 000) to 2.0 (period 012). The exchange ratestays the same.

123456 0 1,100 1,760 100 200 1,200 1,960

123456 1 0 110 0 30- 0 80

123456 2 0 0 0 440 0 440

123456 3 0 0 0 440- 0 440-

As the exchange rate differs from the reference exchange rate, in period 000 a currency translationdifference of 110 is displayed under translation indicator 1.

The change of the reference exchange rate between period 000 and period 012 results in twotemporal translation differences.

• Temporal translation difference 1 under the translation indicator 2 is 440 (1,100 LC * 0.4 GC/LC).

• Temporal translation difference 2 under the translation indicator 3 is 440- (1,100 LC * 0.4 GC/LC-).

The system calculates the temporal translation difference 1 as follows:

Reference value cumulative to period012

2,400

- Reference value cumulative to priorperiod

1,760

- Reference value of period 012 200

= Temporal translation difference 1 440





The system calculates the temporal translation difference 2 as follows:

Specific value accumulated up to period012

2,040

- Specific value accumulated up to theprior period

1,870

- Specific value of period 012 170

- Temporal translation difference 1 440

= Temporal translation difference 2 440-

123456 0 1,200 2,400 … …

123456 1 0 360- … …

123456 2 0 0 … …

123456 3 0 0 … …

For the balance carryforward, the temporal translation difference 1 of 440 is written to the totals recordwith translation indicator 0, so that carryforward period contains the accumulated specific value of2,400. The temporal translation difference 2 of -440 is written to the totals record with translationindicator 1, so that the carryforward period contains the accumulated specific value of -360.





You apply this process to translate a consistent set of data to a target currency and to disclosecurrency translation differences – as compared with a reference translation.

In particular, this process enables you to:

- Translate individual financial statements of consolidation units into the common group currency

- Present in a common currency planning calculations performed in different currencies.

may comprise multiple steps, each of which can contain its own sub-steps – thatis, the steps can be defined in a hierarchy.

In order to execute currency translation, you first define its preliminary structure in the ;

that is, you define the following:• the number of levels the step hierarchy of this method layout contains

• which characteristics will appear in fast entry when defining a method (fast entry is discussedlater on)

• the first level of the step hierarchy in which you later during the definition of a method can viewand/or enter and .

In the definition of the you define the details of the currency translation. Fast entry features anoverview of the currency translation steps. Fast entry enables you to create steps and to navigateamong these steps. You define a global reference translation for the entire method. For each step youdetermine which currency translation key and exchange rate indicator are used, and how the currency

translation differences are posted. The system executes the steps in the desired sequence. Thismeans that the system takes into account the results of the preceding step when executing the nextstep.

The process flow in detail:

Define the exchange rate indicators, translation ratios, and exchange rates for the currency translation.

Define a task for the currency translation.

Create a new method layout with the type , or use an existing one.

Do the following when creating a new method layout:

1. In the screen for defining the currency translation, define the number of levels the step hierarchycontains.

In order to define a method later on, also specify:

− from which level of the step hierarchy you are able to see the as well as the . You change the visibility by dragging the arrows over to the desired row,

− from which level of the step hierarchy you are able to view and enter the the and the . You control this by draggingthe cross icons to the desired row;





The source key figure can only be defined globally for the entire method – that is, for allsteps.

− which characteristics will appear in fast entry when defining a method

• If you only want a single step for the currency translation, there is no need todesignate characteristics for fast entry.

• You can remove characteristics from the table by dragging them onto the trashfolder.

• You can delete a step by dragging it to the trash folder.

We recommend that you designate the characteristic for the accounting object (forexample, the financial statement item) for fast entry at the topmost level of the step

hierarchy for and . This later provides a goodoverview of the selections along with their differential accounting objects.

2. Save the method layout definition.

1. Create a method for the method layout.

2. First, globally define (at the top level) the for all steps including the following:

− You can define the currency key for the target currency either explicitly righthere, or you can copy it from the data record (if it exists in the record) without making an entryhere.

−

−

The reference translation is always “aggregated” with the currency translation key.

3. In fast entry, create a step for each combination of currency translation key and exchange ratetype. For example, when you create a step for the translation of stockholders' equity, you wouldspecify the equity items as range of item numbers from, say, 170000 to 170399.

If you also specified differential accounting objects for fast entry, for each step you enter theaccounting object, to which the translation differences are to be posted (for example, item250900 for the currency translation differences when translating the stockholders' equity).

For an item you can or must specify one or more subassignments; for each subassignmentyou can select the Default [Page 58] indicator and/or specify a characteristic value for thesubassignment.

The differential accounting object must be outside of the matching selection if you postvalues in the source currency to the accounting object.

4. Define the for each step (and thus, for each group of accounting objects to betranslated): Determine which currency translation key and exchange rate type is to be used in thespecific translation.


Assign the currency translation method to the task and the corresponding consolidation units.





Execute the currency translation by running the corresponding task in the consolidation monitor.

A confirmation message is displayed after successful execution of the currency translation. The

translated data is then available in the InfoCube for transaction data.





You want to translate the balance sheet and the income statement of a consolidation unit from localcurrency to group currency.

The consolidation area contains:

• the characteristics with the roles and

• the key figures and

Define the exchange rate indicators, translation ratios, and exchange rates for the currency translation.

Define a task for the currency translation.

1. Create a new method layout or use an existing one. The method layout must have steps:

2. Define the method layout as follows:

Visibility ↓ ↓

Detail Screen TType

Fast Entry Item Item

Visibility

Detail Screen

Fast Entry

This method layout definition has the following consequences for the definition of the method:

− You define the in fast entry.

− The are visible and specifiable globally (for the entire method).

− You define the and the for each step.

− The accounting object for the translation difference is defined in fast entry for each step;

however, the transaction type is determined globally for all steps in the detail screen.

3. Save the data.






2. First, globally define (at the top level) the for all steps:

a. Select the group currency as the .

b. Select the local currency as the for the reference translation.c. Select 1001 (current exchange rate) as the for the reference translation.

3. In fast entry, create a step for each combination of currency translation key and exchange ratetype.

Investments [ ] 170000-170399 = 250900 →

Stockholders’ Equity [ ] 250000-250899, 290300-290700 = 250900 →

Retained earnings(balance sheet)

= 290200 = 250900 →

Other balance sheet items [ ] 100000-169999, 170400-249999 = 250900 →

Income statement [ ] 300000-390000 = 321300 →

4. In the detail screen globally select (at the top level) the transaction type 100 (openingbalance) for all steps.

5. For each step, define which and are to be used:

Investments • cumulative

• : 1003 (historical rate)

Stockholders’ Equity • cumulative

• : 1001 (current rate)

Retained earnings(balance sheet)

• : periodic, average rate for reductions

• : 1002 (average rate)

Other balance sheet items • cumulative


Income statement • : periodic, average rate for reductions



Assign the currency translation method to the task and the corresponding consolidation units.

Execute the currency translation by running the task for currency translation in the consolidation

monitor.





You can use this function as follows:

• You can check if the data adheres to the customer-defined rounding rules.

• If and when the system discovers rounding differences, you can have the system either displayerror messages or post adjustment entries to clear the rounding differences.

These differences are usually very small, because they are purely the result of the inaccuraciesinvolved in rounding.

Here are a few examples of rules you can use to check and round your data:

• Balance sheet total = 0 (checks if the assets are equal to liabilities and equity)

• Total revenue + expense = annual net income

• Amortization entries in the balance sheet + amortization entries in the income statement = 0You typically use the rounding function as part of currency translation because rounding errors aresystemically incurred during the translation of currencies. In conjunction with currency translation, you:

• make sure that the rounding rules are observed (in the source currency), and you

• let the system clear the rounding differences in the target currency.

You also have the option of using the rounding function in areas other than currency translation.

The rounding function requires an accounting data model (that is, a chart of accounts).

You can implement this function as part of the components SEM-BCS as well as SEM-BPS.

If you use currency translation [Page 112] you should use the rounding function as an extension ofcurrency translation.

You use selections and key figures to see if the rounding rules are being adhered to.

• You need selections, for example to build the total of all assets and the total of all liabilities andequity in order to check the rule “Balance Sheet Total = 0”.

• There are two types of key figures:

− Key figures to be checked: The system checks the rounding rules for these key figures.

− Key figures to be rounded: For these key figures the system clears the differences usingadjusting entries.

The key figures to be checked and those to be rounded must be different because a key figurecannot be checked and rounded at the same time. For example, you can select the localcurrency as the key figure to be checked, and the group currency as the key figure to berounded.

You use rounding types [Page 128] when formulating the rounding rules.





A means of formulating checking rules in the rounding function.

Three rounding types are available for formulating checking rules. You can select a rounding type thatis suitable to the checking rule you want to use.

This rounding type builds the total for the data records found (according to the selection) and posts thetotal to the differential accounting object you specify.

For example, you can check that the total assets equals the total liabilities and equity – that is, whetherthe total of all balance sheet items equals zero.

To do this, you define as selection 1 all balance sheet items, and you determine a differentialaccounting object that lies within the selection.

The system builds the total and posts a result – if unequal to zero – to the differential accountingobject.

Land 100 (opening balance) 15Buildings 100 (opening balance) 15

Equity 100 (opening balance) 31-

Land 120 (additions) 2-

Equity 120 (additions) 3

Now you can decide whether to record a rounding difference per transaction type.

Perform rounding for all transaction types and record the difference at a differenttransaction type.

Selection 1 • Item = all balance sheet items (incl.

the item for the roundingdifference)

DifferentialAccounting object

• Item = the rounding difference

• TType = 150

In this case, the rounding rule has been fulfilled. Hence, the system does not post anything to thedifferential accounting object.

Perform rounding per transaction type

Selection 1 • Item = all balance sheet items (incl.the item for the roundingdifference)

DifferentialAccounting object

• Item = the rounding difference

• (TType is not applicable)





In this case no transaction type is specified. For selection 1 this results in the following totals,depending on the transaction type:

Selection 1 100 1-

Selection 1 120 1

In this case, the rounding rule is not fulfilled and the system posts the differences with reversed signsto the differential accounting object:

Rounding Difference 100 1

Rounding Difference 120 1-

This rounding type adds the values for the two selections and checks if the total is equal to zero.

This rounding type can also be used to check whether the total assets equals the total liabilities andequity.

The initial data is the same as in the previous example. You choose the selections as follows:

Selection 1 Item = all assets

Selection 2 Item = all liabilities and equity

After currency translation, you want to check if the amortization in the balance sheet matches theamortization expense in the income statement.

Initial data:

ValueGC = .5 * ValueLC

Buildings 220 5- 3-

Machinery &Equipment

220 3- 2-

Amortization Expense -- 8 4

As selection 1 you choose the asset items, as selection 2 you choose the amortization expense items

of the income statement.You select an expense item as the differential accounting object. This item must reside outside of theselection.

The selections and the corresponding totals are illustrated here:

Selection 1 Item = asset items 5-

Selection 2 Item = amortization items in theincome statement

4

The system posts the expense of +1 to the differential accounting object.

This rounding type checks if the two selections are equal.





You apply this process:

• to check if a set of data adheres to the your rounding rules, and

• to clear the rounding differences using adjustments.

An process may comprise multiple steps, each of which can contain its own sub-steps – thatis, the steps can be defined in a hierarchy.

In order to execute a rounding, you define its preliminary structure in the ; that is, youdefine the following:

• the number of levels the step hierarchy of this method layout contains

• which characteristics will appear in fast entry when defining a method (fast entry is discussed lateron)

• from which level you will start to see the rounding type, selection 1, selection 2, and the roundingdifference (when defining a method)

• the level of the method layout at which you must specify which characteristics (when defining amethod)

When defining the , you define the rule(s) the system uses for checking and rounding. Fastentry features an overview of the rounding steps. Fast entry enables you to create steps and tonavigate among these steps. You define the key figures globally for the entire method, but you definethe details for rounding for each step in the detail screen . The system executes the steps inthe desired sequence. This means that the adjustment entries of a step are considered in the following

step (that is, each step takes into account the results of the previous step).


Create a new method layout for or use an existing one.

Do the following when creating a new method layout:

1. In the screen for defining the rounding, define the number of levels the step hierarchy contains.



− from which level you are able to see and as well as the .You change the visibility by dragging the arrows over to the desired row,

− at which level of the method layout which characteristics must be specified In orderto use a characteristic, you assign it by selecting the target column and dragging thecharacteristic from the list of characteristics onto a cell of the table.

• If you only want a single step for the rounding, there is no need to designatecharacteristics for fast entry.







Say, you want to check the following rules in the sequence listed for individual financial statement datathat is translated from local currency to group currency.

1. Additions to amortization in the balance sheet + amortization expense in the income statement = 0

2. Total income statement = 0

3. Retained earnings on balance sheet = annual net income on income statement

4. Total balance sheet = 0


• the characteristics with the roles and

• the key figures and

To check the rules, you first create a method layout with steps. You then create a method that usesone step per rule.

1. Create a method layout with the type .

2. Define the method layout with steps.

Visibility ↓

Detail Screen

Fast Entry Item

Visibility ↓ ↓Detail Screen Item Item

Fast Entry

Later, when defining the method in fast entry, this method layout definition requires that youspecify the differential item for all steps, and the items for selections 1 and 2 (if applicable) ineach single step.



2. In the detail screen , select the local currency as the and thegroup currency as the .

3. Continue the definition of the method as follows:





−

Create a step for each checking rule. For each of the two steps specify the differentialaccounting object to which the rounding difference is to be posted.

1. Additions to amortization in thebalance sheet + amortizationexpense in the income statement =0

an expense item,e.g. 311900 Amortization Expense

2. Total income statement = 0 an income statement item,e.g. 321300 Gain/Loss from Currency Translation

3. Retained earnings on balancesheet = annual net income onincome statement

a balance sheet item,e.g. 251200 Retained Earnings, Current Year

4. Total balance sheet = 0 a balance sheet item,e.g. 250950 Currency Translation Differences, Rounding

− (additions to amortization in the balance sheet + amortization expense in the incomestatement = 0):

Rounding:

To check this rule, select rounding type 2 (selection 1 + selection 2 = 0).

For this step, select the transaction type as the additional characteristic.

Selection 1 represents the additions to amortization in the balance sheet. Choose theoption and enter the range of balance sheet items 191100 to 191500 withtransaction type 220.

Selection 2 represents the amortization expense item in the income statement. Forcharacteristic specify the range 311900 to 311950.

For the rounding difference, select the transaction type as the additional characteristic, butdo not enter a value for the transaction type.

− (total income statement = 0):

Rounding:

For this rule you select rounding type 1 (selection 1 = 0).

As selection 1 you define a range over all income statement items – 300000 to 399999.

− (retained earnings on balance sheet = annual net income on income statement):

Rounding:

For this rule you select rounding type 3 (selection 1 = selection 2).

For selection 1 you define 251000 – Retained Earnings without selecting a transactiontype.

For selection 2 you define 390000 – Annual Net Income.

For the rounding difference, you select the transaction type as the additionalcharacteristic, and you enter the value 120.

− (total balance sheet = 0):

Rounding:

For this rule you select rounding type 1 (selection 1 = 0).

For selection 1, you choose the option for characteristic FS Item and insert all

balance sheet items into the range – 100000 to 299999.For the rounding difference, you select the transaction type as the additionalcharacteristic, and you enter the value 120.





To check if the total balance sheet equals zero, you also could have chosenrounding type 2 (selection 1 + selection 2 = 0). In that case, as selection 1 youwould have had to define the total assets, and as selection 2 the total liabilitiesand equity.


Assign the rounding method to a task for currency translation.

Execute the rounding function by running the currency translation task in the consolidation monitor.

The system executes the steps in the desired sequence. Once the rounding steps are carried out, thebalance sheet and income statement are balanced again.

If you used key figures to be checked and errors occurred (that is, the rounding in the key figure wasnot fulfilled), the system displays the corresponding error messages.





Interunit (IU) elimination enables you to eliminate business relationships, based on the trade of goodsand services, between the consolidation units within a consolidation group. The business relationshipsto be eliminated exist between a pair of consolidation units, such as:

Payables & Receivables Elimination of IU payables and receivables

Revenue & Expense Elimination of IU revenue and expense

Revenue & Expense from Investment Holdings Elimination of investment income

From the group’s perspective, these business relationships must be eliminated. For, when viewing the

corporate group as a single entity, the group cannot have, for example, receivables and payables fromand to itself.

You can use monetary values or quantities as the basis for eliminating business relationships.

Prior to running interunit eliminations, you can use reconciliations to determine any eliminationdifferences without having the system post elimination entries. By doing this, you can correct postingerrors in the reported financial data, or manually post standardizing entries.

Interunit elimination is one of the major tasks [Page 65] within the overall consolidation process.

This component must be chosen if you want to perform IU eliminations using automatic postingfunctions. If you do not choose this component and still want to perform IU eliminations, you can usemanual posting.

Before executing the tasks for interunit elimination, you need to have collected the reported financialdata, posted the standardizing entries, and performed currency translation.

You can execute the reconciliation tasks immediately after you have collected the reported financialdata or after you have posted the standardizing entries.

In the consolidation monitor, the sequence of the tasks might look like this:

a. Data collection

b. Reconciliation for interunit payables/receivables

c. Reconciliation for interunit revenue and expense

d. Reconciliation for investment income

e. Standardizing entries

f. Currency translation

g. Elimination of IU payables and receivables

h. Elimination of IU revenue and expense

i. Elimination of investment income





j. Reclassification

A task for interunit elimination (for example, elimination of interunit payables/receivables) and itscorresponding reconciliation task are both based on the same method [Page 71].

To enable the system to eliminate group-internal business relationships, you need to define therelevant financial statement items along with the partner assignments. The system uses these partnerassignments to recognize the business relationships between consolidation units.

You define tasks and methods for IU eliminations in Customizing.

• Tasks represent accounting activities, such as the elimination of IU payables and receivables orrevenue and expense. You can define as many tasks as required to match your specificaccounting procedures.

• Methods determine which financial statement items are cleared and how the system posts anyelimination differences that may arise.

You can identify any existing differences prior to posting elimination entries by running a reconciliationtask in the consolidation monitor. The system shows you the differences, but does not post anyentries.

The posting of elimination entries is also run as a task in the consolidation monitor. Using the methodassigned to the task, the system determines the values to be eliminated for each pair of consolidationunits, and automatically posts the entries.

The system posts any differences to the differential accounting objects, which you define inCustomizing.

You can:

• Post two-sided [Page 141] eliminations (standard procedure) or one-sided [Page 142] eliminations(simplified procedure)

• Determine at which consolidation unit the elimination difference is posted – this is referred to asthe strategy for posting differences [Page 143]

• Split the elimination differences, according to their origin, between currency-related differencesand other differences – this is referred to as splitting of differences [Page 144]

• Define limits for elimination differences [Page 146]

• If you use period accounting (as opposed to cost of sales accounting), you also need to perform

group transfers (from Sales Revenue to Changes to Inventory, or to Other Capitalized Goods onOwn Account), in addition to the eliminations. Such transfers are not a part of interunit elimination.Instead, you can use the reclassification activity (see the example for this [Page 195]).

• The elimination of corporate tax credits is not a part of the elimination of investment income.Instead, you can use the reclassification activity (see the example for this [Page 200]).





A pair of characteristic groups (each with financial statement items, and – if applicable – consolidationunit, partner unit, subassignments and other characteristics), which are used to determine theelimination difference.

In interunit eliminations and reconciliations, you use the selections to reflect the business relationships(receivables/payables and revenue/expense) between the consolidation units within a consolidationgroup.

You can create multiple pairs of selections for each elimination method. The first selection contains theaccounting objects; the second selection contains the offsetting accounting objects for theeliminations.

The system differentiates elimination entries in terms of business relationships, as follows:

• The system processes a given pair of consolidation units (for example, consolidation units A andB).

• Within a pair of consolidation units, the system processes one pair of selections at a time(selection 1 and selection 2).

• The values of consolidation unit A in selection 1 (with consolidation unit B as the partnerassignment) and the values of consolidation unit B in selection 2 (with consolidation unit A as thepartner assignment) indicate a business relationship. The system eliminates these values anddetermines any existing differences.

The reverse correlation – that is, the values of consolidation unit B from selection 1 and thevalues of consolidation unit A from selection 2 – is also regarded as a business relationship.

If you want to restrict the values to be eliminated, you must or can select the following characteristicsfor each selection:

Item Required Determines the item or theoffsetting item

Consolidation unit(e.g. company; or thecombination of company and

profit center)

Optional

Partner unit(e.g. company; or thecombination of company andprofit center)

Optional

Restricts the selection ofconsolidation/partner units tothese units when you later

specify the consolidationgroup in an IU elimination run.If no consolidation/partnerunits are specified here, thesystem scans the businessrelationships for all unit pairsin the consolidation group.

Subassignment Optional Restricts the values in theselection to those values thatwere posted with exactly thissubassignment.

Document Type Optional

Other characteristics (ifdesired)

Optional

Further restricts the selection





You determine the consolidation group to be used in the interunit elimination orreconciliation when the corresponding task is started in the consolidation monitor: Thereyou place the cursor on the junction between the consolidation group and the task, thenyou execute the task.

Say, you create the following pair of selections for a method:

• Selection 1: Receivables

• Selection 2: Payables

Receivables

2000

Consolidation Unit A

Consolidation Unit B(the partner unit of A)

3000

Payables

5000





Accounting objects (financial statement item and subassignment if applicable) to which eliminationdifferences are posted.

In Customizing of interunit elimination, you can specify differential accounting objects per method stepand pair of selections. You also define the strategy for posting differences [Page 143] whichdetermines to which consolidation unit the elimination difference is posted.

If you split the differences [Page 144] you can specify different accounting objects for currency-relateddifferences and other differences.

The differential accounting objects must be outside of the ranges you defined for theselections.

If the differential item is broken down by subassignments, the system needs to know which value is tobe posted per subassignment. You can specify one value per each subassignment in methodcustomizing. You can also select the indicator The system uses the posting logic described indetail in the section Default Value [Page 58].





Two-sided interunit elimination uses a pair of elimination entries.Posting level 20 is reserved for this task.

The automatic elimination entries are based on the selections [Page 138] that are defined inCustomizing. (Selections are made for partner unit, accounting objects, subassignments, and so on.)

The system generates an elimination entry if:

• The data of a consolidation unit shows a value on an accounting object requiring elimination(sometimes delimited to subassignments)

• for this value another consolidation unit is assigned as the partner unit

• the selection shows that the consolidation unit and the partner unit are to be included in IUelimination

The system posts the elimination values with a reversed debit/credit sign. The system assigns theconsolidation unit as well as the partner unit in each line item of the elimination entry.





Two-sided interunit elimination is based on two selections [Page 138]. This is typically used foreliminations of group-internal business relationships through trade and services.

By contrast, one-sided interunit elimination is a simplified form of elimination. Here, the eliminationentries are based on the values listed in only one selection. You can use this simplified form ofelimination for the consolidation of IU revenue and expense, in particular.

In Customizing of interunit elimination, you selected one-sided interunit elimination in methoddefinition.

You defined only one selection of financial statement items to be eliminated. In this selection, you listthe accounting objects that are material for the elimination. For example, you may want the revenue

items to be material.As the differential item, you specify the offsetting item, for example, an expense item.

When you run IU elimination, the system calculates a difference equal to the sum of the values in theselection, and posts this value to the differential accounting object.

When IU elimination is based on the values of only selection, the system does not calculate andpost “real” elimination differences. Instead, it is assumed that the values of the selection for theelimination entries are material, and that corresponding offsetting values (of equal value) exist.

If the values of items in the selection differ from the corresponding offsetting values, the systemeliminates inaccurate values during a one-sided elimination.

Say, within your corporate group the revenue of 1000 USD is offset by the expenses of900 USD. You want to perform one-sided elimination based on revenue values. Youdefine an expense item as the differential item.

Using reversed debit/credit signs, the system posts 1000 USD to revenue and a differenceof 1000 USD to the expense item. This process therefore eliminates an undesired excessof 100 USD from expenses.





The system calculates and posts elimination differences for each business relationship between twoconsolidation units (that is, a consolidation unit and a partner unit). The system posts the eliminationdifference to one of the two consolidation units concerned.

You can define the strategy the system uses to determine which consolidation unit the eliminationdifference is posted to.

In Customizing of interunit elimination, you defined the strategy for posting differences – per method orper method step.

You can select one of the following strategies for posting differences:

•

In Customizing you choose whether the system posts the elimination difference to theconsolidation unit:

− from selection 1 or

− from selection 2

•

In this strategy the amount of the value of the accounting objects being eliminated determineshow the elimination differences are posted. In Customizing you choose whether the systemposts the elimination difference to the consolidation unit that has:

− the lower value or

− the higher value





You can use splitting of differences to analyze the reason for the elimination differences.The system distinguishes between currency-related elimination differences and other eliminationdifferences:

• are incurred if a consolidation unit and its partner unit have thesame transaction currency values in a business transaction, but report different group currencyvalues because they use different local currencies and/or exchange rates.

• are incurred if a consolidation unit and its partner unit use different ways ofreporting business relationships in their financial data.

Possible reasons for the different ways of reporting financial data:

− The units post their data on different dates

− The units use different accounting and valuation methods

− One unit makes an error in posting

By splitting differences you can post currency-related and other differences to different accountingobjects.

When defining the method for interunit eliminations:

• You select the indicator

• You select an exchange rate indicator

Furthermore, the following conditions must be fulfilled:

• The document type that is assigned must post in the transaction currency and the group currency.

• The accounting objects being eliminated and the differential accounting objects must have abreakdown by transaction currency.

In order to categorize differences, the system reads the FS item values for elimination in both groupcurrency and transaction currency. If elimination differences exist in transaction currency, the systemtranslates these into group currency. The exchange rate indicator you specify in Customizing of themethod determines the exchange rate.

The resulting translated value represents the other differences (in group currency). The remainingamount of the entire elimination difference in group currency represents the currency-relateddifferences.

The system posts these differences to the differential accounting objects designated for currency-related differences and for other differences.





You want to eliminate receivables and payables and split elimination differences. The exchange ratefor translating the differences from transaction currency (FJD) into the group currency (USD) is 0.4.

(FJD)

(USD)

Receivables 00 1000 FJD 300 USD 300 USD

Payables 00 1200- FJD 1200- FJD 480- USD

Difference 00 200- FJD 180- USD

Total difference = 180- USD

Other difference = 200– FJD * .4 = 80- USD

Currency-related difference = 180- USD - (80- USD) = 100- USD

Example: Elimination of IU Payables/Receivables with Splitting of Differences [Page 151]





1 A Receivables B 1 20 100-

2 B Payables A 1 20 500

3 A Differentialitem

B 1 20 400-

4 A Receivables B 2 20 50-

5 A Differentialitem

B 2 20 50

Limit is checked per differential line item

Limit is checked per method step

1

2

3

Difference = 400-;

i.e., limit amount exceeded

Difference = 400-

4

5

Difference = 50;

i.e., limit amount not exceeded

Difference = 50

Totaldifference

350-

•

•

•

• (in case of a task for IUelimination)





You perform this process if you want to carry out reconciliations or interunit eliminations for:

• Elimination of IU payables and receivables

• Elimination of IU Revenue and Expense

• Elimination of investment income

Define the tasks you need:

• for the reconciliations and

• for interunit elimination

For each IU elimination task, define a document type with the following properties:

• Posting level 20 (two-sided elimination entry)

• Automatic posting

• Posting in group currency and – if needed – in transaction currency; not posting in local currency

For a reconciliation task, use the same document type that is used for the associated IU eliminationtask.

An IU elimination task and its associated reconciliation task use the same method layout and the samemethod. Define a method layout and a method for each pair of tasks (for example, the elimination ofinterunit payables/receivables and the reconciliation for that elimination), or use an existing methodlayout and an existing method.

Do the following if you create a new method layout:

1. Select the characteristics you need for the elimination and/or reconciliation (see also Selectionsfor IU Eliminations [Page 138]).

2. If needed, create steps in the method layout.

For example, you need steps if you want to eliminate different receivables and payables items

with each other (for example, step 1 for current receivables and current payables, and step 2for long-term receivables and long-term payables).

Do the following if you create a new method:

• For the entire method:

− In general settings, determine:

• whether a one-sided or two-sided elimination [Page 142] is performed

• whether splitting differences [Page 144] is performed

• whether limits for elimination differences [Page 146] are used

− Define the details for the limits.

• For the entire method or for each method step, determine:

− the accounting objects for the selections [Page 138] [Page 138]





You want to perform for consolidation group CG1 an elimination of interunit payables/receivables withthe splitting of differences.

You have collected the following reported financial data, which has breakdowns by transactioncurrency:

A Receivables B 00 100 ARP 120 USD

B Payables A 00 80- ARP 100- USD

A Receivables B 00 100 JOD 200 USD

B Payables A 00 80- JOD 150- USD

The exchange rates for translating transaction currency to group currency are as follows:

• 1.3 for translating ARP into USD

• 2.5 for translating JOD into USD

1. Define a task for the elimination of interunit payables/receivables.

2. Define a document type for the elimination of interunit payables/receivables, or use an existingone with the following properties:

− Posting level 20 (two-sided elimination entry)

− Automatic posting

− Posting in group currency and transaction currency

Create a new method layout or use an existing one, which can look like this:

Visibility ↓ ↓ ↓ ↓

Detail Screen Item Item Item Item

Fast Entry

You do not need steps (hence no entry for fast entry), nor do you need substeps.

Create a new method, or use an existing one. Do the following if you create a new method:

1. Define the following in the :





− Two-Sided Elimination

− Differences are determined per transaction currency

− Exchange rate indicator (for example, current exchange rate)

− No limits

2. In the determine the FS items to be eliminated:

Item = Receivables

Item = Payables

3. For the elimination differences define the following:

− Differences are posted to the

− Key figure:

Item Other Operating Expenses Other Operating Revenue

Item Loss from Currency Translation Gain from Currency Translation

Assign the document type and the method to the task for eliminating interunit payables/receivables.

Execute the task in the consolidation monitor.

1. Place the cursor at the intersection between and .

2. Choose .





The system clears the selections with each other and posts the elimination difference to the differentialaccounting objects.

The system does not post the last line item (which is written in italics). It is only shownhere for informational purposes.

A Receivables B 20 100- ARP (130-) 120- USD

B Payables A 20 80 ARP (104 ) 100 USD

A Other Oper.Expenses

B 20 20 ARP (26 ) 26 USD

A Gain from C/T B 20 0 ARP (0 ) 6- USD

A Receivables B 20 100- JOD (250-) 200- USD

B Payables A 20 80 JOD (200 ) 150 USD

A Other Oper.Expenses

B 20 20 JOD (50 ) 50 USD

20 0 JOD (0 ) 0 USD





Current assets, typically inventory items, are sold within consolidation groups (for example, corporategroups). These transactions lead to interunit profits or losses.

You can use this feature to automatically eliminate the interunit (IU) profits and losses that requireelimination. This elimination can be a statutory accounting requirement or a policy of managementaccounting for the group, either or both of which require that the consolidated statements portray thegroup as if it were a single entity.

The following prerequisites must be met to use this component:

• Interunit profit or loss requiring elimination has been recorded in your group as a result of the saleof inventory.

• The consolidation units involved in the sale are included in consolidation.

• The consolidation group still owns (at least a part of) the asset that was sold within the group asper the date of consolidation – that is, it has not been fully sold to a third party.

• You want to post the elimination entries automatically.

Install this component if you want to eliminate IU profit/loss resulting from inventory transfers bymeans of automatic posting.

The elimination of interunit profit/loss in inventory is based on data about:

• The inventory-managing consolidation unit and...

• ... the supplying consolidation unit

A trading relationship exists between such a pair of consolidation units. The system uses productgroups when reconciling the inventory data with the supplier data of those units.

The interunit profit/loss is calculated as follows:

Book value of the asset Additional financial data or totals database

- Group cost of goods manufactured Additional financial data

= Interunit profit or loss

Valuation allowances may already be accounted for in the interunit profit/loss.

The system eliminates the interunit profit/loss as follows:

• If the difference reflects an IU profit – that is, the difference is positive – then the system makes anadjustment to match the lower value, in this case, the group COGM. The group records the lowestvalue.

• If the difference reflects an IU loss – that is, the difference is negative – then the system makes anadjustment to match the higher value – in this case, the group COGM.

There is no requirement to automatically post interunit losses.

The following is achieved by the automatic postings:

• The asset is adjusted by the amount of the interunit profit/loss.

• The offsetting entry can be posted either to an income statement item (standard procedure) or to abalance sheet item.





• At the same time, the system adjusts retained earnings and/or annual net income.

• The system posts deferred taxes to the profit adjustment item.

• You can transfer the distribution costs to an item you specify – for example, cost of goodsmanufactured.

• Furthermore, you can record currency translation differences that are incurred in the elimination ofinterunit profit/loss.

The system exclusively portrays trade relationships with two units (pairs) within a consolidation group.It does not portray supply chains that span multiple pair relationships.





The following assumptions are given in this standard case example:

• Consolidation units A and B are trading partners and are consolidated using the purchase method.

• Consolidation unit A sells goods to B, which incurs an interunit profit of 100 monetary units.

• No currency translation differences are posted and no transfer of distribution costs takes place.

• No transactions from prior periods are taken into account.

• The tax rate for deferred taxes is 50%.

The following standardized data was reported by A and B in group currency:

Fixed Assets 500 Stockholders’ Equity 700-

Current Assets 500 Liabilities 100-

Retained Earnings 200-

1000 1000-

Sales Revenue 1200

Expenses 1000-

Annual Net Income 200

Unappropriated Retained Earnings (Prior Year) 100

Appropriation of Retained Earnings 100-

Retained Earnings 200


Current Assets 300 Liabilities 400-

Retained Earnings 100-

1500 1500-





Sales Revenue 2000

Expenses 1500-

Annual Net Income 500

Unappropriated Retained Earnings (Prior Year) 200

Appropriation of Retained Earnings 600-

Retained Earnings 100

The following entries are posted to eliminate the IU profit of 100 monetary units, with a tax rate of 50%:

Dr. Cr.

Expenses

Current Assets

100

100

Capitalized Deferred Tax

Deferred Tax Expense

50

50

Retained Earnings (B/S)

Retained Earnings (I/S)

50

50

The deferred income taxes that arise are cleared in subsequent periods.

After the elimination, the consolidated financial statements show the following data:


Current Assets (500+300)-100

= 700

Liabilities 500-

Deferred Income Tax 50 Retained Earnings -200+(-100)+50

= 250-

Accrued TaxProvision

----

2450 2450-





Sales Revenue = 1200+2000 = 3200

Expenses = (-1000)+(-1500)+(-50) = 2550-

Annual Net Income = 200+500-50 = 650

UnappropriatedRetained Earnings(Prior Year)

= 100+200 = 300

Appropriation ofRetained Earnings

= (-100)+(-600) = 700-

Retained Earnings = (-200)+(-100)-50 = 250





Balance sheet or income statement items that are to be automatically posted for the elimination ofinterunit (IU) profit/loss in transferred inventory.

You can assign one, several, or all product groups to a single value or to a range of inventory items.

For each combination of inventory items and product groups, you determine the posting items:

• for the interunit profit/loss

• for translation differences (if applicable), and...

• for the distribution costs (if applicable)

The system offsets the interunit (IU) profit/loss to be eliminated with the inventory item. Theassignment of the item for the offsetting entry determines the treatment of interunit profit/loss: Thesystem either posts the IU profit/loss to an income statement item (affecting earnings) – the standardprocedure – or it posts to a stockholder’s equity item (without affecting earnings).

When you offset interunit profit/loss with an effect on earnings, you can determine which incomestatement item is posted for each inventory item. You can specify a debit item and credit item for theoffsetting entry, which, in turn, are further specified by all subassignments.

When defining the tasks, you also decide whether the offsetting entry is posted to the inventory-managing consolidation unit or the supplying consolidation unit.

You can use the posting items for translation differences to separately post and disclose translationdifferences from interunit profit/loss [Page 171] in your consolidated financial statements.

You can use the posting items for distribution costs if your corporate group uses cost of salesaccounting in its income statement and, for this reason, you need to disclose your sales-relateddistribution costs as an element of cost of goods manufactured [Page 172].





You have recorded additional financial data for the elimination of interunit (IU) profit/loss in transferredinventory.

You have maintained the posting items for the elimination of interunit profit/loss.

The system:

1. Calculates the group cost of goods manufactured [Page 164]

2. Calculates and posts the interunit profit/loss to be eliminated [Page 165]





The calculation of the group cost of goods manufactured (COGM) is the basis for determining theinterunit profit or loss to be eliminated. In accordance with the economic unit concept, this cost isdetermined for all subsidiaries of the group as if they were a single entity. Transportation costs forgoods transferred within the corporate group, for example, are distribution costs from the point of viewof the individual enterprise and part of COGM from the point of view of the group.

The following data is required for calculating the group COGM:

• The cost of goods manufactured that was charged to the supplier

• Incidental acquisition costs

Incidental acquisition costs – for example, group-internal transportation costs – are read fromthe additional financial data that reflects the trade relationship.

The system requires the following information from the additional financial data:

Consolidation units involved in transaction Consolidation units involved in transaction

Product group Product group

Book value Profit Margin

Inventory quantity Rate of distribution costs (as % of sales)

Valuation allowance Cost of goods manufactured

(as % of sales or per unit of measure)

Incidental acquisition costs

The system can calculate group COGM in the following ways:

• Calculation with the :

Under the assumption that:

sales = book value + valuation allowance – incidental acquisition costs...

the group cost of goods manufactured are calculated as follows:

group COGM = sales * COGM percentage rate + incidental acquisition costs

• Calculation with the :

group COGM = quantity * COGM + incidental acquisition costs

When you start the elimination task, the system translates the inventory data and supplierdata from the local currency into the group currency to determine the interunit profit/loss.





This function automatically calculates the amount of interunit (IU) profit/loss to be eliminated, whichresults from group-internal sales of goods and services between subsidiaries.

The calculation of the group cost of goods manufactured [Page 164] forms the basis for the calculationof the interunit profit/loss requiring elimination.

Interunit profit/loss has resulted from the sale of goods or services between individual units in thecorporate group. From the point of view of the group as a single entity, no such profit/loss may occur.The amount of IU profit/loss calculated depends on the volume of inventory transferred and the profitpercentages your group uses. Another factor influencing the profit/loss are the distribution costs and

other incidental acquisition costs that arise at different stages in the supply chain. From the group’spoint of view, these costs are considered part of the cost of goods manufactured as long as suchgoods are not sold externally.

The system calculates the IU profit/loss requiring elimination as follows:

A (Net) in reporting period

B Valuation allowance allowing losses

C Valuation allowance disallowing losses,

that is, a valuation allowance that may not change aninterunit (gross) profit into an interunit loss.

D A + B + C Value of goods supplied / inventory value (= interunittransfer price) = basis for group-internal transaction

E Incidental acquisition costs (as monetary value orpercentage of sales); need to be capitalized from the pointof view of the group

F D - E

G Profit percentage rate;

used either as a markup or a gross margin

H 100 - G Rate of cost of goods manufactured

I (F * H) + E

or F * (H + E)

...if incidental acquisition costs are entered as a percentage

J A - I

System activities:

1. The is determined.

All value adjustments made to the book value are reversed, giving the inventory value. Theincidental acquisition costs (entered either as percentages or as monetary values) arededucted from the inventory value, giving the sales revenue.





2. The (COGM) is calculated from the sales revenue bymultiplying the sales revenue amount by the COGM percentage rate and adding the incidentalacquisition costs (or by multiplying sales revenue by the sum of the COGM percentage plus theincidental acquisition cost percentage).

3. The is the difference between the book value and groupCOGM.

Keep in mind that the Consolidation system gives equal consideration to incidental costs as well as theadditions or reductions to the cost of goods manufactured. This logic makes the assumption that bothfigures are similar in content.

You can choose one of two procedures for the automatic calculation of interunit profit/loss contained inthe invoice amount:

This procedure calculates the interunit profit/loss using a that is recorded inthe supplier data. Two calculation variants are possible:

• The profit percentage is used as a markup. The interunit profit/loss is viewed as a percentage ofthe net invoice amount.

• The profit percentage is used as a gross margin of sales. The interunit profit/loss is viewed as apercentage of the gross invoice amount.

Interunit profit/loss in percent: 20%

Invoice amount: 2500

• When the profit percentage is used as a markup, the following IU profit is calculated:

2500 * 20 / 120 = 417

• When the profit percentage is used as a gross margin, the following IU profit is calculated:

2500 * 20 / 100 = 500

This procedure calculates the supplying unit’s cost of goods manufactured by multiplying the inventoryquantity by the COGM that recorded per unit of measure. Hence, this procedure differs from variant Jin the above schema. The following formula is used:

A Quantity

B Cost of goods manufactured perunit of measure

C Incidental acquisition costs

D A * B + C Group cost of goods manufactured

The following situations can occur during the calculation of IU profit/loss:

• Typically, IU profit/loss is calculated as follows:

interunit profit/loss to be eliminated = book value - group COGM

• An exception exists if you:

− Perform valuation allowances disallowing loss, and...

− ... the interunit profit/loss to be eliminated is less than zero (meaning an IU loss situation inwhich the gross IU profit/loss is less than zero)





In this case, the IU profit/loss to be eliminated equals zero.

No loss can be posted in this case in order to comply with the principles of prudence andlowest value.

The book value resulting in this case is the maximum value permitted from group’s the point ofview.

The system eliminates IU profit/loss for pairs of consolidation units, and lists the posted entries in theaudit trail.

Deferred income taxes are normally posted during the elimination because the IU profit/loss calculatedmust be allocated to the period in question. The profit/loss that is eliminated is realized in a later periodwhen the inventory item is sold to an external enterprise. Income taxes, therefore, are due at a laterdate (additional payments or refunds).

If you do not want to post deferred income taxes, you can declare this in the document type you usefor the elimination.

Currency-related differences are recorded if the exchange rate indicator used for translating the

balance sheet differs from the indicator used for the income statement and you specified a comparisonexchange rate indicator in the elimination task.

Distribution costs are reclassified to COGM (if specified).

Unit A Sale of goods to unit B Sale: US $ 1,200 COGM: US $ 1,000

Unit B Sale of 80% of thegoods from A to anexternal company

Sale: US $ 1,300 COGM: US $ 960

Unit B Inventory supplied byunit A

20% of US $ 1,200= US $ 240

CurrencyTranslation

Balance sheet andannual net income atcurrent rate of 2.00AUS/US $

Profit/loss at averagerate of 1.50 AUS/US $

(all values translated to AUS using the current exchange rate of 2.00 AUS per US $)

ReportedData

ReportedData

Total

Inventory 0 480 80- 400

Cash 2400 200 2600

Annual NetIncome

400- 680- 80 1000-

Stockholders’Equity

2000- 2000-





The audit trail of the elimination of interunit (IU) profit/loss provides an overview of the IU profits andlosses incurred by the transfer of goods and services between consolidation units. It lists the relevantsales, the group cost of goods manufactured, and other information.

The system generates an audit trail, which discloses the IU profit/loss that was incurred by thepostings.

Each posted document involves both the consolidation unit that reported the data and the partner unit.

The audit trail lists the following information for each pair of consolidation units:

• An overview of the IU profit/loss eliminated

• The IU profit/loss for the current period with posting documents

• The IU profit/loss for the prior period with posting documents

• Any messages for the elimination run

The posting documents show the IU profit/loss incurred for each individual inventory item and productgroup, and all the elimination entries posted in the balance sheet and income statement.





Rather than eliminating the full amount of interunit profit/loss in each period, the system onlyeliminates the difference since the prior period.

... 100 ...

... 80 100-80=20





You can record currency translation differences that arise in the elimination of interunit profit/loss ininventory when different exchange rate indicators are used.

Currency translation differences can result for the following reasons:

• You record goods supply data grouped by pairs of consolidation units and grouped by productgroup. The system translates this additional financial data into group currency as part of thecalculation of IU profit/loss. Using the exchange rate indicator you specified in the task, the systemdetermines the exchange rate for the inventory item assigned to the product group.

• IU profit/loss is therefore calculated using the exchange rate for inventory accounts. The entry forthe elimination of IU profit/loss is posted to an inventory item and its offsetting item (which istypically an income statement item)..

• Income statement items are often translated using different exchange rates than for balance sheetitems, for example, with average rates. This means that the group currency value of the revenuesor expenses to be eliminated can differ from the calculated IU profit/loss. This discrepancy is atranslation difference.

• Translation differences can occur in interunit profit/loss in inventory because the relevantadditional financial data is translated twice: once using the exchange rate indicator defined in thetask, and once using the comparison exchange rate indicator (which is also defined in the task).

The system automatically posts translation differences that occur for inventory items to the differentialitem you specify beforehand. This should be the same currency translation item you specified incustomizing for currency translation.

Temporal translation differences, which result from changes in exchange rates between two differentconsolidation dates, influence interunit profit/loss. The system posts these differences with asummarized amount and also splits this amount to distinguish between “pure profit/loss” and exchangerate differences between two closing dates.

• When defining the task, specify the exchange rate indicators for:

− The balance sheet items

− The income statement items

• Specify a translation differential item in the posting items.





You use this function if your group uses cost of sales accounting in its consolidated income statementand you therefore need to disclose your sales-related distribution costs as an element of the cost ofgoods manufactured.

If you use this function, specify the following items in the maintenance of posting items:

• The item from which the distribution costs are cleared

• The item to which the distribution costs are posted





You use this process to run automatic elimination of interunit profit/loss in transferred inventory (IPI) inthe Consolidation system.

If you are going to use currency translation, you have defined the customizing settings for currencytranslation.

You have defined the customizing settings for deferred taxes.

The additional financial data with regards to interunit trade of goods and services is available and canbe collected by means of one of the methods for data collection [Page 74].

Define a document type with posting level 20 (two-sided elimination entries).

Define a task for the elimination of interunit profit/loss in transferred inventory.

• Assign a document type to the task.

• Select the location of the values: totals data or additional financial data.

• Select the exchange rate indicator for the currency translation of balance sheet and incomestatement items.

• Decide whether the system is to take valuation allowances into account – that is, whether thecalculation of the group cost of goods manufactured uses the gross book value or the net bookvalue (which discounts the valuation allowances).

• Decide whether offsetting entries are posted to the inventory-managing consolidation unit (buyer)or the supplying consolidation unit (seller).

• Indicate whether interunit losses may be posted.

Assign the task to a task group (in the workbench, process view, you choose →

).

Define the product groups, which will be the basis for eliminating interunit profit/loss.

You will only be able to use the product groups in the additional financial data.

Define the inventory items and their subassignments. When doing this, specify the subassignmentsfor all relevant additional financial data.

1. Define the combinations of inventory items and product groups.

You can use either single values or ranges of values for specifying inventory items andproduct groups.





The combinations may not overlap.

2. Do the following for each individual combination:

a. Specify the offsetting item for the posting of the interunit profit/loss. (In general, these areincome statement items.)

b. If applicable, specify the posting items for the posting of currency translation differences.

c. If applicable, specify the posting items for the transfer of distribution costs. When doing this,specify:

• The item from which the distribution costs are cleared

• The item to which the distribution costs are posted

To record the additional financial data (inventory and suppler data), go to the consolidation monitorand run the task for data collection [Page 74].

Execute the elimination of IU profit/loss by running the corresponding task in the consolidation monitor.

The system calculates and posts the IU profit/loss, and logs the results in an audit trail.





The reclassification function enables you transfer currency values from one account assignment toanother.

In the Consolidation system you can use reclassifications for all posting levels [Page 103]. That is, youcan use them to:

• Adjust the financial data reported by consolidation units to meet the group’s accountingrequirements (standardizing entries)

• Reclassify already-consolidated data

You choose this function if you want to post automatic reclassification entries.

If you do not choose this function, you must use the manual posting functions to processreclassifications.

You can use the reclassification function:

• After the collection of reported financial data, if you want to use the reclassification to standardizethe data

• After the execution of consolidation tasks

In the consolidation monitor, the sequence of the tasks might look like this:

k. Data collection

l. Manual standardizing entries

m. Reclassification

n. Currency translation

o. Elimination of IU payables and receivables

p. Elimination of IU revenue and expense

q. Elimination of investment income

r. Reclassification

You cannot use the reclassification function to distribute values to multiple account assignments.Instead, you use the allocation [Page 203] function.





A reclassification consists of the following elements:

• Trigger (account)

• optional: Source (account)

• Target (account)

• optional: Percentage rate

• optional: Condition

A reclassification transfers the trigger value from the source account to the target account using a

reversed debit/credit sign.

500

500

500

You can:

• Define a under which a reclassification takes place

• Perform a partial reclassification by applying a to the trigger.

the account that triggers thereclassification

• explicit data

(data you can enteryourself)

• transaction data

(the system getsthe data accordingto the selectioncondition you enter)

− cumulative values,or

− periodic values

• a single value

(for example, item311920)

• Ranges

(for example, item310600, and310800 - 311000)

• Hierarchy

(for example,consolidation group

CG2 with all of itsunits)

• No value





(only available witha percentage rate,then only if you usea characteristic that

is not needed forthe trigger)

(optional)

a rate per hundred usedwith a partial reclassification

• Explicit data

• Transaction data

• With explicit data:

Percentage Rate

− Total

− Per trigger

• With transaction data:

− No value

− Ranges

− Hierarchy

− Inherited fromtrigger

(optional)

the condition to be met inorder to execute thereclassification in the firstplace

• Key figure

(for example, groupcurrency)

• Condition:

> 0, ≥ 0, < 0, or ≤ 0

• a single value

• Ranges

• Hierarchy

• Inherited from trigger

(optional)

the item that is

decreased/credited.

The trigger item can the besame as the source item. Inthis case, you do not needto use the source defined inCustomizing.

• No value

(instead, the valueis inherited from thetrigger)

• a single value

• substitution

the item that isincreased/debited.

• No value

(instead, the valueis inherited from thetrigger)

• a single value

• substitution

• Inherited from source





You can post reclassification entries with posting levels [Ext.] 10 and 20:

• Use posting level 10 for standardizing entries at the triggering consolidation unit.

See also:

− Example 1: Reclassification of Finished Goods [Page 189]

− Example 2: Standardization of Fixed Asset Depreciation [Page 191]

• Use posting level 20 for consolidation entries taking the partner unit into consideration.

See also:

− Example 3: Reclassification of Sales Revenue [Page 195]

− Example 4: Sign-triggered Reclassification of a FS Item [Page 198]

All values of the triggering item(s) which areposted with a posting level less than or equalto 10

With this posting level, the entry is alwaysposted at the triggering consolidation unit.

The consolidation unit only needs to beentered once at the trigger. Then it isautomatically set as the default for the sourceand the target (inheritance).

All values of the triggering item(s), which:

• Are entered or posted with a posting levelless than or equal to 20

• Have a partner unit assignment thatbelongs to the selected consolidationgroup

By default, the entry is posted at thetriggering unit with a partner unit assignment.

If necessary, you can restrict the values of

the trigger to subassignments.

If necessary, you can define a breakdown by

subassignments for the reclassification entry.





If you define a reclassification in which the trigger is not the same as the source, and which is to beperformed in each consolidation interval, then in subsequent consolidation you want to only reclassifythe changes to the value at the trigger, but not the cumulative value. In this case, you choose periodicreclassification.

In Customizing for the trigger you can select as the type of trigger data. For you have two options:

• Periodic

• Cumulative

In periodic reclassification, the system only includes the values of those periods that belong to thecurrent interval in the consolidation frequency.

Reclassification entries can only be posted in the last period in the consolidation interval. For example,in semi-annual consolidation you can only post reclassifications in the periods 006 and 012.

The starting period is the first period of the current period interval. The ending period is current period – that is, the period in which the reclassification is executed – the consolidation period.

The option is the default.

The starting period is 000, and the ending period is the current period – that is, the period in which the

reclassification is executed.





You consolidate on a semi-annual basis. Because the trigger and source are not the same, inCustomizing you selected for the trigger the option with .

500

500

500

Period 001

200Period 007

Consolidation in period 006

ReclassificationEntry

200

200

Consolidation in period 012

Reclassification

Entry





You want to the system to post a reclassification only if the balance of the trigger item reflects a certaindebit/credit sign.

Some possible applications are:

• Reclassification if the sign of an item’s value changes

You want to reclassify the value of an item to another item if the item’s balance changes to thewrong debit/credit sign.

See also: Example 4: Sign-triggered Reclassification of an Item [Page 198]

• Reclassification for balancing FS items

You want to state the values of two or more items or subitems as a net balance. The

debit/credit sign determines which item is to state the balance.

In Customizing you define the reclassification with a condition. For the condition you select the keyfigure (for example, the local currency) and you determine which balance will trigger thereclassification.

• Balance > 0

• Balance ≥ 0

• Balance < 0, or

• Balance ≤ 0

The selection condition along with the characteristics are automatically passed on from the triggeringitem to the condition. However, you can overwrite the proposed characteristics and characteristicvalues.

If the balance meets the condition you defined, the reclassification is performed – that is, the systemreclassifies the trigger value from the source item to the target item.





If you run a reclassification and, afterwards, need to modify the initial data, you need to rerun thereclassification.

In general, the reclassification can be repeated without causing any problems. The system deletes allof the previously–created totals records that belong to the selected consolidation units and theselected period. Then the system reposts the reclassification entries.

If you ran two reclassification tasks, each of which uses a different document type, and both of whichuse the same items (or at least partially), the repetition of the first task can produce to incorrectfigures.

First, you run reclassification task 1 at consolidation unit A, then you run reclassificationtask 2. Different document types are assigned to the tasks. FS item 1234 is the triggeringitem for both tasks.

Afterwards, you repeat task 1. The system deletes the documents and totals records thatwere created in task 1 and reposts the reclassification entries. Because the documentsand totals records created by task 2 were not deleted, the system finds the value of item1234 which was modified by task 2, and reclassifies the wrong value.





You perform this process if you want to reclassify the reported financial data or the consolidated dataof one or more consolidation units.

You might need to perform reclassification tasks at various stages in the consolidation process:

• After the collection of the reported financial data – to standardize the data to meet the standardsrequired by the corporate group

• After currency translation of the reported financial data – to standardize the data translated intogroup currency to meet the standards required by the corporate group

• After currency translation and the standardization of the reported data – as one of the tasksbelonging to the consolidation process itself

• After performing all of the remaining consolidation tasks – to prepare the consolidated data for thecreation of group statements.

Define a task for the reclassification.

Define a document type.

1. Check if a standard method layout already meets your requirements.

2. If necessary, change the method layout or create a new one.

a. Decide which elements you want to use in the reclassification.

• a percentage rate

• a condition and/or

• a source (needed only if the trigger and the source are not the same)

b. Select the characteristics needed for the reclassification.

c. If needed, create substeps in the method layout.

Adopt an existing standard method for you requirements, or create a new method with the followingelements:

• Trigger

• Source (if required in the method layout)

• Target

• Percentage rate, source (if required in the method layout)

• Condition (if required in the method layout)

Assign the document type and the method to the reclassification task.





• Trigger data:

Consolidation Unit = C2000

Item [ ] 135300 Finished Goods Purchased,

135400 Finished Goods Manufactured


Item = 135200 Unfinished Goods

Assign the document type and method to the reclassification task.

Execute the reclassification task in the consolidation monitor. The system posts as follows:

135300 Finished Goods Purchased 50-

135400 Finished Goods Manufactured 350-

135200 Unfinished Goods 400

The finished goods for consolidation unit C2000 are now transferred.





• With substeps

Visibility ↓ ↓

Detail Screen

Fast Entry Item Item

Visibility ↓

Detail Screen Item

Cons Unit

Fast Entry

The source and target also require the characteristic . But you don’tneed to specify this characteristic again for the target because it is inherited from thetrigger.

You don’t need the characteristic for all elements of the reclassification;therefore, you select them later, if necessary, when defining the method (see below).

Create a method with two steps:

• In the first step you clear the depreciation of 200 monetary units

from Machinery & Equipment and

from the expense item Depreciation of Machinery & Equipment.

• In the second step you post the depreciation of 300 monetary units (which was posted accordingto corporate accounting policy)

to Machinery & Equipment and

to the expense item Depreciation of Machinery & Equipment.

• Type of trigger data:

− Transaction data:

− Cumulative

− Key figure: Total in local currency

• Trigger data:


Item = 191500 Machinery & Equipment

Transaction type = 220 Depreciation






Item = 311950 Depreciation of Machinery & Equipment


− Transaction data, accumulated

− Key figure: Total in local currency

• Trigger data:


Item = 919150 Statistical item: Depreciation ofMachinery & Equipment

Transaction type = 220


Item = 311950 Depreciation of Machinery &Equipment


Item = 191500 Machinery & Equipment

Transaction type = 220 Depreciation


Execute the reclassification task in the consolidation monitor. The system posts as follows:

191500 Machinery & Equipment 220 200

311950 Depreciation of Machinery & Equipment 200-

311950 Depreciation of Machinery & Equipment 300

191500 Machinery & Equipment 220 300-





After the reclassification, the values of the items and are adjusted from 200 to 300 monetary units.





From the corporate group point of view, sales revenue gained from partner units must be reclassifiedas (when using the period accounting method).

This process does eliminate interunit profit and loss. In a sense, this type ofreclassification represents a simplified form of elimination of interunit profit and loss intransferred assets.

The reclassification entry uses posting level 20.

In our example, consolidation unit A delivered machinery to consolidation unit B for 100 monetary units

B 10320200 Machinery & Equipment 125 (additions) A 100

A 30110200 Sales Revenue, GrossRevenue from Affiliates

B 100-

This example uses the consolidation chart of accounts that shows the appropriation of retainedearnings in the balance sheet and uses period accounting (as opposed to cost of sales accounting).

In the consolidation monitor you have finished data collection, standardization of financial data, and

currency translation.

• Define a document type [Ext.] with posting level 20 (two-sided elimination entries).

• Define a task for the reclassification.

Create a method layout for the reclassification, or use an existing one that has the following properties:

• Without percentage rate

• Without a condition

• With source

because the trigger (Machinery & Equipment) and the source (Other Capitalized Goods onOwn Account) are not the same






Execute the reclassification task in the consolidation monitor.

The system posts as follows:

A 30300000 Other Capitalized Goods on OwnAccount

-- B 100-

A 30110200 Sales Revenue, Gross Revenuefrom Affiliates

-- B 100

After the reclassification, is reclassified as .





Assume that you set up the Customizing of interunit elimination to post elimination differences to , in debit entries as well as credit entries. This lets you state the net total ofthe differences.

Just in case the item’s balance has a negative balance after the interunit eliminations, you set up areclassification triggered by the debit/credit sign, which reclassifies the balance as .


C1000 321100 Miscellaneous Expense to

Affiliates

C3000 100-

For the sake of clarity, this example only uses one consolidation unit with one partner unit.However, in Customizing you can also select all consolidation units of a consolidationgroup with all partner units of the same consolidation group.

You have completed all of the tasks, including interunit eliminations.

• Define a document type [Ext.] for posting level 20 (two-sided elimination entries).



• Without percentage rate

• With a condition

• Without a source – the trigger and the source are the same

• Without substeps

Visibility ↓ ↓ ↓

Detail Screen Cons Unit

Partner Unit

Item

Item





• For the target you also need the characteristics and . Butyou don’t need to specify them again because they are inherited from the trigger.

Create a method with the following properties:


− Transaction data

− Cumulative

− Key figure: Total in group currency

• Trigger data:


Item = 321100 Miscellaneous Expense to Affiliates

Partner Unit = C3000

• Key figure = total in group currency

• Balance < 0

• Characteristics: (the same as for the trigger data)


Item = 320600 Miscellaneous Income from Affiliates

Partner Unit = C3000

Assign the document type and the method to the reclassification task.

Execute the reclassification task in the consolidation monitor.

The system posts as follows:

C1000 321100 Miscellaneous Expense to Affiliates C3000 100

C1000 320600 Miscellaneous Income from Affiliates C3000 100-

After the reclassification, the value of is reclassified as .





You want to perform an elimination of investment income. In order to accurately report the group’s taxexpenditures, you first reclassify the tax income (corporate income tax credit) for the consolidation unitthat receives the credit before performing the elimination of investment income.

For the receipt of dividends, instead of recording the tax credit on a separate item, the respectiveparent unit discloses the tax credit on the item .

You use the reclassification function to reclassify the tax income (in this case, a credit for corporateincome tax) to a tax expense item.


Consolidation unit A owns 80% of consolidation unit B.

Consolidation unit B distributes a dividend totaling 100 monetary units; thus, A receives 80 monetaryunits.

The tax rate for retained earnings is 50% for consolidation unit A.

The tax rate for distributed (paid out) earnings is 40% for consolidation unit A.

(Parent Unit)

(Investee Unit)

Distribution of Dividends,Gross = ,

(taxed at 40%)

Retained Earnings = ,(taxed at 50%)

Gross DividendCorporate Income Tax ReturnNet Dividend

= = .4 x 80 =

=

Sales 200- 200-

Expenses

Dividend Income 80- 32 48

Tax Expense 40 + 50 = 90 32- 58

Distribution ofDividends

100 - 40 = 60 48- 12

Retained Earnings 80- 50- 130-





You have finished data collection, standardization of financial data, and currency translation.

• Define a document type with posting level 20 (two-sided elimination entries).



• With a percentage rate

• Without a condition

• Without a source – the trigger and the source are the same

• Without substeps

Visibility ↓ ↓ ↓


Partner Unit

Item

Item

The target also requires the characteristic . But you don’t need to specifythis characteristic again for the target because it is inherited from the trigger.

Create a method with the following properties:


− Transaction data

− Cumulative

− Key figure: Total in group currency

• Trigger data:

Consolidation unit = A

Partner Unit = B

Item = Dividend Income

Type of percentage rate data:

• Master data

Attribute: Tax rate for distributed (paid out) earnings (40% in this case)





You use this function to distribute [Ext.] or assess [Ext.] values from one sender item to one or morereceiver items.

For example, you can use an allocation to:

- assess values from certain cost centers to several other cost centers

- distribute values from one consolidation unit to several other consolidation units

Allocation requires an accounting data model (that is, a model of accounts).

You can implement this function as part of SEM-BCS as well as SEM-BPS.

There are two types of allocation:

• Distribution

Distributions allocate the amounts or quantities to the receiver objects (accounts, financialstatement items, or cost centers). The balance of the sender object is decreased while thebalance of the receiver object is increased. These debit and credit entries take place at therespective original accounting object. The information about the original accounting object isretained.

• Assessment

Assessments function like distributions. However, assessments post the debit and creditentries at the assessment object (for example, the assessment account) instead of at theoriginal accounting object. Hence, the information about the original accounting object is lost.

You can use allocations for the following posting levels [Page 103]:

• Posting level 01 (adjustments to reported financial data)

• Posting level 10 (standardizing entries)





The following account assignments are used during an allocation (distribution or assessment):

• Trigger

• Sender

• Receiver

• Distributor

Examples of trigger, sender, and receiver objects are accounts, financial statement items, and costcenters.

The item that triggers the assessment or distribution.The trigger determines which values are selected forthe assessment or distribution.

ssment or distribution. The trigger determines whichvalues are selected for the assessment ordistribution.

There are two types of trigger data:

• explicit data (key figure)

• transaction data (key figures)

• a single value(for example, FS item 311900)

• a range of values(for example, FS items 311920 to311950)

• Inheritance from sender

An item, the balance of which is decreased(credited).

• a single value

• Range

An item, the balance of which is increased (debited). • a single value

• Range

• Inheritance from sender

An item that determines how the system distributesthe quantities or amounts to the receiver items.

The following types of distribution data are available:• explicit data (key figure type)

• transaction data (key figures)

With explicit data (key figure type):

• percentage rate where the sum is

less than or equal to 100%• percentage rate where the sum is

equal to 100%

• weighting factor

With transaction data:

• a single value

• Range

• Inheritance from receiver





The assessment is to use the following data:

Consolidation unit “P” (parent unit);

Items 1 to 3

Consolidation unit “P” (parent unit);

Assessment account “P”

Consolidation units “S1” to “S4” (subsidiaries);

Items: the respective assessment account “M” of the receiving consolidationunit

With explicit data:

Percentage rate where the sum is equal to 100%

The values of the trigger are aggregated and posted to the assessment account, and then posted tothe respective assessment account of the receiver using the predefined percentage rate. Theinformation about the trigger is lost in the process.





You perform an allocation to assess or distribute values (quantities or monetary amounts) from onesender item to one or more receiver items.

First you define a document type and a for the allocation.

Then you can define a step hierarchy in the . For example, this could look like this:

(Method Layout)

The simplest allocation has one step and no sub-steps.

The method layout determines:

• the number of levels the allocation has


• the first level in which you will see the sender, receiver, trigger, and distribution key (when defininga method)

• the level of the method layout at which you must specify which characteristics (whendefining a method)

When defining the , you define how the allocation is to modify the key figure values. Fast entry

features an overview of the allocation steps. Fast entry enables you to create steps and to navigateamong these steps. In the detail screens for sender/receiver, trigger, and distribution, you can definethe details for the entire allocation as well as for a single step (for example, you can entercharacteristic values such as consolidation units and FS items along with the type of trigger anddistribution data). The system executes the steps in the desired sequence. Consequently, the resultsof a step are taken into consideration when the next step is executed.

Finally, you assign the document type and the method to the allocation task..

You use the task to execute the allocation.






• Define a document type with posting level 10 (standardizing entry).

• Define a task for the allocation.

1. Create a new method layout with the type .

2. In the screen for defining the allocation, define the number of levels the method layout has.



− from which level you will begin to see the sender, receiver, trigger, and distribution key Youchange the visibility by dragging the arrows over to the desired row,

− at which level of the method layout, which characteristics must be specified In order to use acharacteristic, you assign it by selecting the target column and dragging the characteristicfrom the list of characteristics onto a cell of the table.

• If you only want a single step for the allocation, there is no need to designatecharacteristics for fast entry.



3. Save the method layout definition.


2. At the top level, first specify the values for the characteristics, which you defined in the methodlayout.

You can add further characteristics on the tab pages and .

− : On this tab page you enter the characteristic values for the sender and the

receiver. You can select the following:• a single value (for example, consolidation unit C1000)

• a range of values (for example, consolidation units C1000 to C2500)

• inheritance from the sender (only selectable for the receiver)

If you choose to enter a range or to inherit the sender values, choose the correspondingoption within the context menu in the icon column for the sender or the receiver.

If you specify a range for the sender, you can select an individual distribution key persender item by selecting the option .

If you enter a single value for the sender and/or receiver subassignments, you can selectthe Default [Page 58] indicator and/or specify a characteristic value for the

subassignment.







FS Item

Cons Unit

FS Item FS Item

Cons Unit

FS Item

Fast Entry

For the trigger you also need the characteristic . But this characteristicdoes not have to be specified again for the trigger because it is inherited from the sender.

3. Save the data.

1. Create a method, based on the method layout.

2. Define the method as follows:

− :

Cons Unit = C1000 ... [ ] C2000 to C2200 ... √

FS Item [ ] 303210 to 303250

(Selling Exp.)

... No Value ...

Explanation:At the receiver, the characteristic FS item may not contain a value because you only wantto distribute to the respective FS items of the two consolidation units. Only if no value isentered will the system match the sender and receiver items on a 1:1 basis.

−

You select as the type of trigger data. You also select a key figure – forexample .

The trigger automatically inherits the characteristic values from the sender.

− :

You select as the type of distribution data. You also select a key figure –

for example .

The distribution object automatically inherits the characteristic values from the receiver.You overwrite the characteristic value of the FS item with the Sales Revenue item sincethis is the basis for the distribution.

FS Item = 300000

(SalesRevenue)

3. Save the data.





When the fiscal year changes, the item balances need to be carried forward from the old fiscal year tothe new fiscal year.

The balance carryforward function carries forward the designated item balances into the carryforwardperiod (period 000). The system uses the following logic:

• Balance sheet items are generally always carried forward.

• Income statement items are only carried forward if explicitly designated as carryforward items.

• Statistical balance items are generally always carried forward.

• Statistical flow items are only carried forward if explicitly designated as carryforward items.

At present, additional financial data for changes in investments and changes in equity cannot becarried forward.





You use this process to:

• Determine the items that are carried forward

• Carry forward the balances of those items to the carryforward period (000)

You have defined the customizing settings for the items and their subassignments.

Create a task for the balance carryforward function.

By default, the balance sheet items and the statistical inventory items are carried forward tothemselves.

Determine here, which items are carried forward in addition to the standard carryforwards. The systemuses the following logic:

• You can specify items that are not carried forward by default, but should nevertheless be carriedforward. For example, you are able to carry forward income statement items.

• You can also specify balance sheet to be carried forward, even though these are – by default – carried forward onto themselves. If you do this, the following applies:

− If you assign a different balance sheet item to a balance sheet item for the balancecarryforward into the new year, the balance sheet item is then only carried forward to theassigned balance sheet item, not to itself.

− If you assign a non-balance sheet item to a balance sheet item for the balance carryforwardinto the new year, the balance sheet item is then carried forward to both the assigned balancesheet item and itself.

When appropriations are stated after the income statement, you specify the followingcarryforward items:

− Retained earnings in the income statement -> itself

− Retained earnings in the balance sheet -> prior year retained earnings in the incomestatement

This entry causes the retained earnings item in the balance sheet to be carried forward toboth the prior year retained earnings item in the income statement as well as itself.

These settings trigger the following balance carryforwards: Retained earnings in thebalance sheet and retained earnings in the income statement are both carried forward tothemselves. And the retained earnings item is carried forward to the prior year retainedearnings item in the income statement.

Proceed as follows:

1. Specify the item to be carried forward (the original item).

2. Specify the debit and the credit items to which the balance is carried forward.





Define the carryforward transaction types in customizing of subitems.

Execute the balance carryforward function by running the corresponding task in the consolidation

monitor.





After you have completed your consolidation tasks, you run reports in order to evaluate the data.

In SAP Consolidation there are two ways you to generate reports.

• You can use BW queries to create reports [Page 244].

• You can use XBRL to create and evaluate individual financial statements and consolidatedfinancial statements [Page 246].





After completing the consolidation tasks, you can evaluate the data by means of BW queries [Ext.].SAP delivers a variety of pre-defined queries you can use. Plus, you can create your own customqueries to meet your specific requirements.

You create reports:

• With pre-defined queries from the business content [Ext.] in BW; or...

• With your own queries you define in the BW system with the Business Explorer Analyzer [Ext.]

You can analyze the totals data contained in the InfoCube for totals data as follows:

• To generate technical reports – such as database listings – you can define queries directly on topof the InfoCube for totals data.

• To generate business reports you use the predefined virtual InfoCube [Ext.]. The virtual InfoCubeis based on the BasisCube for totals data.

The following illustration shows how the totals data of the BasisCube is evaluated with the aid of avirtual InfoCube:

1. You define a query on top of the virtual InfoCube (or you use an existing query).

2. The function module that belongs to the virtual InfoCube submits the query with its selectionconditions to the corresponding SEM-BCS programs.

3. The SEM-BCS programs tailor the selection conditions and select the totals data from theBasisCube.

4. The SEM-BCS programs interpret the totals data read from the BasisCube.

5. The SEM-BCS programs return the results to the virtual InfoCube.

6. The report is output in the BW system.





(transactionalInfoCube)

interpret the totalsdata read from theBasicCube

(has no data;has same structureas the BasicCube)

incl. selectionconditions





In SAP Consolidation, you can create and publish your individual financial statements and/orconsolidated financial statements in XBRL [Ext.] format for various taxonomies [Ext.].

XBRL is a standard for the creation, publication, analysis, and comparison of information aboutbusiness enterprises, with a special focus on financial statements.

With XBRL you prepare your data once only, but can use it many times.

The user of the information only needs to be concerned with a single format when dealing with datafrom many sources. The logical structure of the data always remains the same, enabling the user tofurther process the data more efficiently – the user no longer needs to manually prepare and adjustthe data in order to analyze it.

You download the current taxonomies from the Internet.

The system reads the totals data from BW when creating an instance document – that is, the actualindividual or consolidated financial statements.

The following functionality is available:

• Various taxonomies can be:

− Downloaded from the Internet and imported into the Consolidation System (for example,taxonomies for US GAAP or German HGB); and...

− Displayed in the consolidation workbench

• You can assign items from any consolidation chart of accounts to the elements of a taxonomy.

• You can create instance documents in XBRL format. These are the readable financial statements.

When doing this, the system reads the totals data from the BW System.

• You can publish instance documents (for example, via e-mail, over the Internet, or with a portal)

More information about XBRL at http://www.xbrl.org





You use this process to create and publish the individual financial statements of consolidation units orconsolidated financial statements of your group.

1. In the process view of the workbench, choose → → .

2. Download the desired taxonomy from the Internet.

To display the source text of a taxonomy, select the desired taxonomy in the list, call up

the context menu and choose

The system automatically displays the consolidation chart of accounts that is assigned to theconsolidation area. Assign the items of the consolidation chart of accounts to the elements of theselected taxonomy.

For more detail, see Assigning Items [Page 248].

1. Make sure you have defined the desired parameters, including the consolidation area, inparticular. To do this, go to the workbench menu and choose → .


3. In the list of instance documents, double-click the desired taxonomy.

The system creates the instance document and displays its source text in the work area.

You can publish the finished instance document. For example, you can:

• Send it by e-mail or...

• Post it in the Internet, where it can be downloaded





You use this procedure to assign the items of a consolidation chart of accounts to the elements of aspecific taxonomy.

You have downloaded the desired taxonomy from the Internet.

1. The consolidation chart of accounts is fixed in the consolidation area.

For this reason, make sure you have defined the desired parameters, including theconsolidation area, in particular. To do this, go to the workbench menu and choose → .


3. In the list of available taxonomies, double-click the desired taxonomy.

The taxonomy and the consolidation chart of accounts are displayed in the work area.

4. Expand both hierarchies down to the desired level.

5. You have the following possibilities when allocating items in the consolidation chart of accounts tothe elements of the taxonomy:

• Assignment end node

• Assignment node


• Assignment node• Restriction of the assignment to subassignments

To do this, double-click an item; then make the restrictionin the dialog box that appears. The subassignment isthen displayed as an additional end node in the hierarchy.

• Single assignment (1 : 1)

• Multiple assignment (n 1)

You can assign multiple items (or subitems) to oneelement in the taxonomy.





:::

::

:::

:::

a. For the target, select a node or end node in the taxonomy.

Blue arrows indicate which nodes and end nodes in your chart of accounts can beassigned to the target node in the taxonomy.

b. To make the assignment, click the blue arrows of those items you want to assign.

Black connection lines indicate the assignment.

6. Repeat steps 4 and 5 until you have assigned all of the relevant items in your consolidation chart

of accounts.

7. Save the assignments.

Once the assignments are made, you are able to create instance documents.

If changes are made in the consolidation chart of accounts, you must adjust the assignments to thetaxonomy accordingly.





You use this function to grant different privileges for accessing the characteristics of consolidation topersons who work with the SEM System.

The authorization concept of consolidation is embedded in the SAP authorization concept.

Authorization checks can be made for all master data of consolidation.

For each characteristic you can determine how the authorization is to be assigned and checked:

• Per characteristic (for example, across all consolidation units) or...

• Per characteristic value (for example, for each individual consolidation unit)

There are two authorization objects:

• Authorization object is used for aggregate checking of characteristics in the local

system.

• Authorization object (from SAP Basis) is used for checking authorizations for

individual characteristic values.

In consolidation customizing, when you choose authorization checking for individual characteristicvalues of a characteristic, the system generates a so-called organizational criterion. The organizationalcriterion lets you make authorization assignments per characteristic value.

Master data can be stored in the SEM system and/or the BW system. A mechanism ensures that the

master data of both systems is kept synchronized. In the same way, the authorization check isextended across all systems in which the characteristic resides. The BW system uses authorizationobject , which serves the same purpose as authorization object in the localsystem.

It is possible to have BW and SEM in different physical systems. A user requires the sameauthorizations in all systems.

To assign authorizations for characteristics, you make the customizing settings listed below under A,B, and C:

In the workbench you determine whether authorization checks are made per characteristic or percharacteristic value.

1. In the process view of the workbench, choose → .

2. Select the desired data basis using change mode.

3. Go to the tab.

The system displays all of the characteristics for which you can assign authorizations.

4. For each characteristic, determine whether authorization is to be checked per characteristic value.

5. Save the data basis.

6. For those characteristics to be checked per characteristic value, the system generates anorganizational criterion for each characteristic value. The organizational criterion lets you assignauthorizations per characteristic value in role maintenance.





1. In the local system, start role maintenance in the SAP menu by choosing →

→ → .

2. Specify an existing role or create a new role.

3. In role maintenance, go to the tab and choose .

4. Go to authorization maintenance and activate the authorizations as follows:

− Define the authorizations for each individual characteristic value (authorization object) under → .

− Define the aggregate authorizations for the desired characteristics (authorization object ) under → .

5. Save the authorizations.

1. In the BW System, activate authorization assignments per characteristic value as follows: Maintainthe desired characteristic, go to the tab, and select the indicator .

2. Save the characteristic.

Proceed the same way as for the authorization assignments in the local system – that is, define thefollowing authorizations:

• The authorizations for individual characteristic values (authorization object )

• The aggregate authorizations for characteristics (authorization object )

Once you have made the customizing settings, the system is able to perform authorization checks forcharacteristic as defined. The system uses the following procedure:





BW Where?

Doesauthorization object

exist?

Check individual auth.for characteristic values

YES

Is userauthorized

?

Grantauthorization

YES NO

NO

Check global authorizationfor characteristic

Local

Check authorizationfor characteristic

Do not grantauthorization

The SAP Authorization Concept [Ext.]





You use this function to transport master data and/or customizing data from the customizing system toanother system (for example, a live system).

You use this function to create customizing requests, which you can post-edit with the TransportOrganizer of the ABAP Workbench.

You should not delete or change any objects in the Transport Organizer when transportingthe master data or customizing data of consolidation.

No further prerequisites are necessary for collecting transport requests.

You system administrator needs to define a valid transport path in order to transport the objects.

You have the following alternatives:

• You can transport all of the values of a characteristic (for example, all consolidation groups).

• You can transport individual values (for example, selected consolidation groups).

1. In the navigation hierarchy of the workbench, select an object (for example, )and choose in the context menu.

2. In the selection screen of the transport, proceed as follows:

a. Specify the selection condition for the object to be transported.

b. Identify which objects are to be transported. Determine the following:

• Should the transport request contain the individual values of the object (if applicable)?

• Do you want to transport the hierarchy structure (if applicable)?

• Do you want to transport the top nodes of hierarchies (if applicable)?

• Do you want to transport text nodes (if applicable)?

c. Specify whether you want to use patterns for the transport:





(system activities)

The system only transports singlevalues that exist in the sourcesystem at the time the transportrequest is created.

The transport replaces the existingvalues in the target system with thenew values from the source systemon a one-to-one basis.

Example: When consolidation chartof accounts 01 is transported, thesystem (a) deletes all of the items inthe target system that match theitems being imported from thesource system, and (b) writes theitems from the source system intothe target system.

If new values are added for acharacteristic after the transportrequest is created, the systemtransports these as well.

Example: When consolidation chartof accounts 01 is transported, thesystem (a) deletes all of the items ofchart 01 in the target system, and(b) writes all of the new items of thechart from the source system intothe target system.

d. Specify whether you want to only transport texts.

e. Create a customizing request by choosing .

3. In the dialog box , select a suitable transport request or create a new one.Confirm your entries.

The objects are added to the transport request.

4. To physically transport the objects, you need to release the transport request in the TransportOrganizer.

Once the transport request is released, the objects of the request are ready to be imported into thetarget system.

1. In the workbench in the detail screen for customizing objects, select the characteristic value orhierarchy, and choose from the context menu.

2. Continue with the steps listed under starting with step 3.





You perform an allocation to assess or distribute values (quantities or monetary amounts) from onesender item to one or more receiver items.

First you define a document type and a for the allocation.

Then you can define a step hierarchy in the . For example, this could look like this:

(Method Layout)

The simplest allocation has one step and no sub-steps.

The method layout determines:

• the number of levels the allocation has


• the first level in which you will see the sender, receiver, trigger, and distribution key (when defininga method)

• the level of the method layout at which you must specify which characteristics (whendefining a method)

When defining the , you define how the allocation is to modify the key figure values. Fast entry

features an overview of the allocation steps. Fast entry enables you to create steps and to navigateamong these steps. In the detail screens for sender/receiver, trigger, and distribution, you can definethe details for the entire allocation as well as for a single step (for example, you can entercharacteristic values such as consolidation units and FS items along with the type of trigger anddistribution data). The system executes the steps in the desired sequence. Consequently, the resultsof a step are taken into consideration when the next step is executed.

Finally, you assign the document type and the method to the allocation task..

You use the task to execute the allocation.







• with key figure types Percentage Rate (with any sum of percentage rates),Percentage Rate (with a required sum of 100%), and Weighting Factor

• (for example, distribution analogous to the values at the MarketingExpense item for all subsidiaries)

can only be maintained at the lowest level of steps.

− : If you designated characteristics in the method layout for fast entry, the systemcreates the first step for the method. You can create additional steps in fast entry. You use thearrow symbol to navigate among these steps. The detail screens of the steps show therespective data of all higher levels. (This data cannot be modified.)

3. You proceed at step level or sub-step level as you do at the top level (see the previous item).Special considerations:

− You can add further characteristics on the tab pages and.

− You can maintain explicit trigger and distribution data when you are on the lowest level ofsteps.

If you selected the option and the type for the trigger, in a tableyou can map to each other the sender items, percentage rates (or factors), and receiveritems. To do this, you drag the sender and receiver items from a list onto the table (usingDrag&Drop).

4. Save your data.

Assign the document type and method to the allocation task.

Execute the allocation function by running the corresponding task in the consolidation monitor.

A confirmation message is displayed after successful execution of an allocation. The assessed ordistributed data is now available in the corresponding InfoCube.





Say, you want to perform an allocation for the following case: You want to plan the retained earningsof the sub-units in a consolidation group for the current fiscal year. To do this, you distribute theretained earnings of the parent units to the sub-units. For the basis of the distribution, you select theretained earnings of sub-units from the prior year.

Current fiscal year: 2000

• Parent unit: C9000

• Sub-units: C1000, C2000, C2200, C2300, C3000, C4000, C4100

Retained earnings: 251000

All consolidation units belong to the same consolidation group. The earnings of the sub-units have nomaterial dependencies.


• the characteristics and

• the key figure




2. The method layout only has one level and no steps. Therefore, no input is necessary for fast entry.The characteristics required in all detail screens are “fiscal year”, “consolidation unit”, and“financial statement item”.



FS Item

Cons Unit

FS Item FS Item

Cons Unit

FS Item

Fast Entry

For the trigger you also need the characteristic . But this characteristicdoes not have to be specified again for the because it is inherited from the sender.

3. Save the data.







− :

Cons Unit = C9000

(parent unit)

... [ ] C1000 to C4100

(all sub-units)

... √

FS Item [ ] 251000 ... InheritfromSender

251000 ...

You don’t need to explicitly specify the current fiscal year (2000) because the system usesthe fiscal year specified in the permanent parameters.

−

You select as the type of trigger data.


− :

You select as the type of distribution data. You also select a key figure – for example .

The distribution object automatically inherits the characteristic values from the receiver.You overwrite the characteristic value for the fiscal year:

Fiscal Year = 1999

FY Variant = K4

3. Save the data.

Assign the document type and method to the allocation task.

Execute the allocation by starting the corresponding task in the consolidation monitor.





Say, you want to perform an allocation for the following case: You want to distribute the sellingexpense of consolidation unit C1000 to consolidation units C2000 and C2200. The basis for thisdistribution is the relationship of sales revenue of the two consolidation units.

Consolidation units:

• C1000 (the distributing consolidation unit)

• C2000, C2200 (the receiving consolidation units)

The values the allocation:

300000 Sales Revenue 0 30,000- 10,000-

303210 Selling Expense, Material Group 1 1,500 0 0





According to the sales revenue, the selling expenses must be distributed using the relationship 3 (forC2000) to 1 (for C2200).


• the characteristics and

• the key figure




2. The method layout only has one level and no steps. Therefore, fast entry is not necessary. Thecharacteristics required in all detail screens are “consolidation unit” and “financial statement item”.







FS Item

Cons Unit

FS Item FS Item

Cons Unit

FS Item

Fast Entry

For the trigger you also need the characteristic . But this characteristicdoes not have to be specified again for the trigger because it is inherited from the sender.

3. Save the data.



− :

Cons Unit = C1000 ... [ ] C2000 to C2200 ... √

FS Item [ ] 303210 to 303250

(Selling Exp.)

... No Value ...

Explanation:At the receiver, the characteristic FS item may not contain a value because you only wantto distribute to the respective FS items of the two consolidation units. Only if no value isentered will the system match the sender and receiver items on a 1:1 basis.

−

You select as the type of trigger data. You also select a key figure – forexample .


− :

You select as the type of distribution data. You also select a key figure –

for example .

The distribution object automatically inherits the characteristic values from the receiver.You overwrite the characteristic value of the FS item with the Sales Revenue item sincethis is the basis for the distribution.

FS Item = 300000

(SalesRevenue)

3. Save the data.





When the fiscal year changes, the item balances need to be carried forward from the old fiscal year tothe new fiscal year.

The balance carryforward function carries forward the designated item balances into the carryforwardperiod (period 000). The system uses the following logic:

• Balance sheet items are generally always carried forward.

• Income statement items are only carried forward if explicitly designated as carryforward items.

• Statistical balance items are generally always carried forward.

• Statistical flow items are only carried forward if explicitly designated as carryforward items.

At present, additional financial data for changes in investments and changes in equity cannot becarried forward.





You use this process to:

• Determine the items that are carried forward

• Carry forward the balances of those items to the carryforward period (000)

You have defined the customizing settings for the items and their subassignments.

Create a task for the balance carryforward function.

By default, the balance sheet items and the statistical inventory items are carried forward tothemselves.

Determine here, which items are carried forward in addition to the standard carryforwards. The systemuses the following logic:

• You can specify items that are not carried forward by default, but should nevertheless be carriedforward. For example, you are able to carry forward income statement items.

• You can also specify balance sheet to be carried forward, even though these are – by default – carried forward onto themselves. If you do this, the following applies:

− If you assign a different balance sheet item to a balance sheet item for the balancecarryforward into the new year, the balance sheet item is then only carried forward to theassigned balance sheet item, not to itself.

− If you assign a non-balance sheet item to a balance sheet item for the balance carryforwardinto the new year, the balance sheet item is then carried forward to both the assigned balancesheet item and itself.

When appropriations are stated after the income statement, you specify the followingcarryforward items:

− Retained earnings in the income statement -> itself

− Retained earnings in the balance sheet -> prior year retained earnings in the incomestatement

This entry causes the retained earnings item in the balance sheet to be carried forward toboth the prior year retained earnings item in the income statement as well as itself.

These settings trigger the following balance carryforwards: Retained earnings in thebalance sheet and retained earnings in the income statement are both carried forward tothemselves. And the retained earnings item is carried forward to the prior year retainedearnings item in the income statement.

Proceed as follows:

1. Specify the item to be carried forward (the original item).

2. Specify the debit and the credit items to which the balance is carried forward.





Define the carryforward transaction types in customizing of subitems.

Execute the balance carryforward function by running the corresponding task in the consolidation

monitor.





After you have completed your consolidation tasks, you run reports in order to evaluate the data.

In SAP Consolidation there are two ways you to generate reports.

• You can use BW queries to create reports [Page 244].

• You can use XBRL to create and evaluate individual financial statements and consolidatedfinancial statements [Page 246].





After completing the consolidation tasks, you can evaluate the data by means of BW queries [Ext.].SAP delivers a variety of pre-defined queries you can use. Plus, you can create your own customqueries to meet your specific requirements.

You create reports:

• With pre-defined queries from the business content [Ext.] in BW; or...

• With your own queries you define in the BW system with the Business Explorer Analyzer [Ext.]

You can analyze the totals data contained in the InfoCube for totals data as follows:

• To generate technical reports – such as database listings – you can define queries directly on topof the InfoCube for totals data.

• To generate business reports you use the predefined virtual InfoCube [Ext.]. The virtual InfoCubeis based on the BasisCube for totals data.

The following illustration shows how the totals data of the BasisCube is evaluated with the aid of avirtual InfoCube:

1. You define a query on top of the virtual InfoCube (or you use an existing query).

2. The function module that belongs to the virtual InfoCube submits the query with its selectionconditions to the corresponding SEM-BCS programs.

3. The SEM-BCS programs tailor the selection conditions and select the totals data from theBasisCube.

4. The SEM-BCS programs interpret the totals data read from the BasisCube.

5. The SEM-BCS programs return the results to the virtual InfoCube.

6. The report is output in the BW system.





In SAP Consolidation, you can create and publish your individual financial statements and/orconsolidated financial statements in XBRL [Ext.] format for various taxonomies [Ext.].

XBRL is a standard for the creation, publication, analysis, and comparison of information aboutbusiness enterprises, with a special focus on financial statements.

With XBRL you prepare your data once only, but can use it many times.

The user of the information only needs to be concerned with a single format when dealing with datafrom many sources. The logical structure of the data always remains the same, enabling the user tofurther process the data more efficiently – the user no longer needs to manually prepare and adjustthe data in order to analyze it.

You download the current taxonomies from the Internet.

The system reads the totals data from BW when creating an instance document – that is, the actualindividual or consolidated financial statements.

The following functionality is available:

• Various taxonomies can be:

− Downloaded from the Internet and imported into the Consolidation System (for example,taxonomies for US GAAP or German HGB); and...

− Displayed in the consolidation workbench

• You can assign items from any consolidation chart of accounts to the elements of a taxonomy.

• You can create instance documents in XBRL format. These are the readable financial statements.

When doing this, the system reads the totals data from the BW System.

• You can publish instance documents (for example, via e-mail, over the Internet, or with a portal)

More information about XBRL at http://www.xbrl.org





You use this process to create and publish the individual financial statements of consolidation units orconsolidated financial statements of your group.


2. Download the desired taxonomy from the Internet.

To display the source text of a taxonomy, select the desired taxonomy in the list, call up

the context menu and choose

The system automatically displays the consolidation chart of accounts that is assigned to theconsolidation area. Assign the items of the consolidation chart of accounts to the elements of theselected taxonomy.

For more detail, see Assigning Items [Page 248].

1. Make sure you have defined the desired parameters, including the consolidation area, inparticular. To do this, go to the workbench menu and choose → .


3. In the list of instance documents, double-click the desired taxonomy.

The system creates the instance document and displays its source text in the work area.

You can publish the finished instance document. For example, you can:

• Send it by e-mail or...

• Post it in the Internet, where it can be downloaded





You use this procedure to assign the items of a consolidation chart of accounts to the elements of aspecific taxonomy.

You have downloaded the desired taxonomy from the Internet.

1. The consolidation chart of accounts is fixed in the consolidation area.

For this reason, make sure you have defined the desired parameters, including theconsolidation area, in particular. To do this, go to the workbench menu and choose → .


3. In the list of available taxonomies, double-click the desired taxonomy.

The taxonomy and the consolidation chart of accounts are displayed in the work area.

4. Expand both hierarchies down to the desired level.

5. You have the following possibilities when allocating items in the consolidation chart of accounts tothe elements of the taxonomy:


• Assignment node


• Assignment node• Restriction of the assignment to subassignments

To do this, double-click an item; then make the restrictionin the dialog box that appears. The subassignment isthen displayed as an additional end node in the hierarchy.

• Single assignment (1 : 1)

• Multiple assignment (n 1)

You can assign multiple items (or subitems) to oneelement in the taxonomy.





You use this function to grant different privileges for accessing the characteristics of consolidation topersons who work with the SEM System.

The authorization concept of consolidation is embedded in the SAP authorization concept.

Authorization checks can be made for all master data of consolidation.

For each characteristic you can determine how the authorization is to be assigned and checked:

• Per characteristic (for example, across all consolidation units) or...

• Per characteristic value (for example, for each individual consolidation unit)

There are two authorization objects:

• Authorization object is used for aggregate checking of characteristics in the local

system.

• Authorization object (from SAP Basis) is used for checking authorizations for

individual characteristic values.

In consolidation customizing, when you choose authorization checking for individual characteristicvalues of a characteristic, the system generates a so-called organizational criterion. The organizationalcriterion lets you make authorization assignments per characteristic value.

Master data can be stored in the SEM system and/or the BW system. A mechanism ensures that the

master data of both systems is kept synchronized. In the same way, the authorization check isextended across all systems in which the characteristic resides. The BW system uses authorizationobject , which serves the same purpose as authorization object in the localsystem.

It is possible to have BW and SEM in different physical systems. A user requires the sameauthorizations in all systems.

To assign authorizations for characteristics, you make the customizing settings listed below under A,B, and C:

In the workbench you determine whether authorization checks are made per characteristic or percharacteristic value.

1. In the process view of the workbench, choose → .

2. Select the desired data basis using change mode.

3. Go to the tab.

The system displays all of the characteristics for which you can assign authorizations.

4. For each characteristic, determine whether authorization is to be checked per characteristic value.

5. Save the data basis.

6. For those characteristics to be checked per characteristic value, the system generates anorganizational criterion for each characteristic value. The organizational criterion lets you assignauthorizations per characteristic value in role maintenance.





1. In the local system, start role maintenance in the SAP menu by choosing →

→ → .

2. Specify an existing role or create a new role.

3. In role maintenance, go to the tab and choose .

4. Go to authorization maintenance and activate the authorizations as follows:

− Define the authorizations for each individual characteristic value (authorization object) under → .

− Define the aggregate authorizations for the desired characteristics (authorization object ) under → .

5. Save the authorizations.

1. In the BW System, activate authorization assignments per characteristic value as follows: Maintainthe desired characteristic, go to the tab, and select the indicator .

2. Save the characteristic.

Proceed the same way as for the authorization assignments in the local system – that is, define thefollowing authorizations:

• The authorizations for individual characteristic values (authorization object )

• The aggregate authorizations for characteristics (authorization object )

Once you have made the customizing settings, the system is able to perform authorization checks forcharacteristic as defined. The system uses the following procedure:





BW Where?

Doesauthorization object

exist?

Check individual auth.for characteristic values

YES

Is userauthorized

?

Grantauthorization

YES NO

NO

Check global authorizationfor characteristic

Local

Check authorizationfor characteristic

Do not grantauthorization

The SAP Authorization Concept [Ext.]





You use this function to transport master data and/or customizing data from the customizing system toanother system (for example, a live system).

You use this function to create customizing requests, which you can post-edit with the TransportOrganizer of the ABAP Workbench.

You should not delete or change any objects in the Transport Organizer when transportingthe master data or customizing data of consolidation.

No further prerequisites are necessary for collecting transport requests.

You system administrator needs to define a valid transport path in order to transport the objects.

You have the following alternatives:

• You can transport all of the values of a characteristic (for example, all consolidation groups).

• You can transport individual values (for example, selected consolidation groups).

1. In the navigation hierarchy of the workbench, select an object (for example, )and choose in the context menu.

2. In the selection screen of the transport, proceed as follows:

a. Specify the selection condition for the object to be transported.

b. Identify which objects are to be transported. Determine the following:

• Should the transport request contain the individual values of the object (if applicable)?

• Do you want to transport the hierarchy structure (if applicable)?

• Do you want to transport the top nodes of hierarchies (if applicable)?

• Do you want to transport text nodes (if applicable)?

c. Specify whether you want to use patterns for the transport.