intercompany elimination

Learn how to gain enhanced analysis capabilitywith US Eliminations in SAP BPC

Paul Rafferty, eBay PayPalVish Arunachalam, Perceptive Technologies

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Real Experience. Real Advantage.

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Todays speakers

Paul RaffertySAP Functional Lead

eBay [email protected]

Vish ArunachalamPrincipal, EPM AdvantageFinance

Perceptive [email protected]

AdvantageFinance


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Learning Points

Learn what it takes to enable enhanced analysiscapability with US eliminations in BPC

Get real-world tips and lessons learned with designing USEliminations in BPC

Understand typical challenges faced during intercompanyelimination analysis while using US eliminations in BPC


[ SAP Components & Application Integration

EPM Legal and ManagerialConsolidations BPC NW

BW- Data storage, Infoproviders,Meta Data and Master Data

ECC - ERP NonSAP Data

Planning,Analysis and

Reporting

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[ BPC NW Implementation Highlights Legal consolidation primarily company code based

Managerial and Segment reporting handled using profit centers

Reduced IC Elim accounts with uniformity across company codes

Currency translation for FASB 52 compliance handled in SAP ECC

All reported data and master data loaded from ECC via BW to BPC

Provided enhanced journal posting capability (multi-currency/ledger)

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[ Intercompany US Elimination: Basics When reporting the financial results of a group of entities,

BPC identifies Intercompany activities and balances andposts entries so these activities and balances are fullyeliminated when looking at the overall results for thegroup

Intercompany elimination entries should be reflected onlyin groups in which both the entity and the partner entityare part of the group

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[ US Eliminations BPC US Elimination process addresses simple

intercompany requirements in financial application, wherea full legal consolidation application is not required

Multiple lower level legal entities related data is eliminatedat first common parent

Consolidation Task US widely used IntercompanyElimination uses: Process Chain /CPMB/IC_ELIMINAT ION Script Logic ICELIM.LGF Business Rule Table US Elimination

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[ US Eliminations - Prerequisites The application must include a dimension of type I,

Intercompany The Intercompany dimension must include the property

ENTITY, whose values are entity names The account dimension must include the property

ELIMACC, whose values are account names The entity dimension must include the property ELIM,

whose values are Y or blank. The appropriate business rule table and DTS must be set

up

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[ Illustration: IC Elimination

All eliminations between X, Y, M and N are eliminated atElimination Entity A

Reconciliation is a challenge when too many children roll upunder a single parent elimination entity

Parent AElimination Entity A

Legal entity X

Legal entity Y

Legal entity M

Legal entity N

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[ Illustration: IC Transaction Basic Design

Entity Datasource Period AccountTradingPartner

Amount$

X INPUT 2011.SEP 122000 Y 50000Y INPUT 2011.SEP 250000 X -50000M INPUT 2011.SEP 122000 Y 23000Y INPUT 2011.SEP 250000 M -23000N INPUT 2011.SEP 122000 Y 5000Y INPUT 2011.SEP 250000 N -5000

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Note: A/c 122000 IC Accounts Receivable | A/c 250000 IC Accounts Payable


[ Illustration: IC Elimination Basic Design

Entity Datasource Period AccountTradingPartner

Amount$

A ELIM 2011.SEP 122000 Y -78000A ELIM 2011.SEP 250000 X 50000A ELIM 2011.SEP 122000 M 23000A ELIM 2011.SEP 250000 N 5000

Note: To simplify scenario, the ELIMACC records are excluded in above table

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Granularity is lost post IC elimination!


[ New approach to IC Elimination In the Financial Application data model, add an additional

user defined dimension for Entity Normally when eliminations happen, the granularity is

retained at Elimination Entity and Trading Partner As theres an additional user defined dimension for Entity,

data is aggregated by Elimination entity, Trading Partnerand also by the additional user defined dimension forEntity

A simple additional dimension in data model savestremendous effort later on during reporting design andanalysis

Dont lose granularity post IC elimination!

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[ Illustration: Intercompany Transaction - New

Entity DatasourceZ

LegalEntity

Period AccountTradingPartner

Amount$

X INPUT X 2011.SEP 122000 Y 50000Y INPUT Y 2011.SEP 250000 X -50000M INPUT M 2011.SEP 122000 Y 23000Y INPUT Y 2011.SEP 250000 M -23000

N INPUT N 2011.SEP 122000 Y 5000

Y INPUT Y 2011.SEP 250000 N -5000

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Note: Data Model includes additional user defined dimension Z Legal Entity


[ Illustration: IC Elimination New

Entity DatasourceZ

LegalEntity

Period AccountTradingPartner

Amount$

A ELIM X 2011.SEP 122000 Y -50000A ELIM Y 2011.SEP 250000 X 50000A ELIM M 2011.SEP 122000 Y -23000A ELIM Y 2011.SEP 250000 M 23000A ELIM N 2011.SEP 122000 Y -5000A ELIM Y 2011.SEP 250000 N 5000

Note: To simplify scenario, the ELIMACC records are excluded in above table

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[ Demo

BPC NW with Basic US elimination and US elimination with enhanced analysis enabled

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[ Result when enhanced analysis is enabled

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Result when enhanced analysis is not enabled

Note: Extract of BW Data in CPMB info cube shown to illustrate granularity of data under both scenarios


[ Enhanced Analysis works with managerialconsolidation too! User defined dimension can be added in similar manner

for managerial consolidation too

Additional user defined dimension can be added for profitcenter or segment or any such managerial entity, asapplicable

Ensure that the desired data granularity for elimination isachieved by calibrating data model to suit analysis needs

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[ This can be achieved in EPM BPC 10 too! US Elimination in BPC 10 works in similar manner

Adding additional user defined dimension for Entity willallow retention of granularity at Elimination Entity, TradingPartner and User Defined Entity

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Best Practices

IC Reconciliation is often a pain in close process, addressthis upfront

Consider post IC elimination review and analysis processand pain areas as critical input for designing optimal datamodel for BPC consolidation

Check dimensions required for Consolidation (Legal andManagement) What views of data do you need supported at the underlying

ledger? Consider system performance implications with adding

dimensions? Activate required dimensions on day one, becomes really

complicated later


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Key Learnings

Deficiency in data model could adversely impact closeprocess

Facilitate reconciliation by addressing granularity of ICElimination data

Dont lose granularity post IC elimination. More detailand granularity is appropriate

Optimal data model for consolidation will minimizereporting and analysis challenges during financial close


[ Q&A

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Paul RaffertySAP Functional Lead, eBay [email protected]

Vish Arunachalam ACAPrincipal, EPM AdvantageFinance , Perceptive TechnologiesSAP Certified BPC Elite | linkedin.com/in/[email protected] | www.perceptinc.com/adfin

Thanks!

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intercompany elimination

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