SAP ECCS Consolidation Functions

AC660EC-CS Consolidation Functions mySAP Financials Date Training Center Instructors Education Website Participant Handbook Course Version: 2005 Q1 Course Duration: 5 Day(s) Material Number: 50071531 An SAP course - use it to learn, reference it for work Copyright Copyright © 2004 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. 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All other products mentioned are trademarks or registered trademarks of their respective companies. Disclaimer THESE MATERIALS ARE PROVIDED BY SAP ON AN "AS IS" BASIS, AND SAP EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR APPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THESE MATERIALS AND THE SERVICE, INFORMATION, TEXT, GRAPHICS, LINKS, OR ANY OTHER MATERIALS AND PRODUCTS CONTAINED HEREIN. IN NO EVENT SHALL SAP BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION LOST REVENUES OR LOST PROFITS, WHICH MAY RESULT FROM THE USE OF THESE MATERIALS OR INCLUDED SOFTWARE COMPONENTS. About This Handbook This handbook is intended to complement the instructor-led presentation of this course, and serve as a source of reference. It is not suitable for self-study. Typographic Conventions American English is the standard used in this handbook. The following typographic conventions are also used. Type Style Description Example text Words or characters that appear on the screen. These include field names, screen titles, pushbuttons as well as menu names, paths, and options. Also used for cross-references to other documentation both internal (in this documentation) and external (in other locations, such as SAPNet). Example text Emphasized words or phrases in body text, titles of graphics, and tables EXAMPLE TEXT Names of elements in the system. These include report names, program names, transaction codes, table names, and individual key words of a programming language, when surrounded by body text, for example SELECT and INCLUDE. Example text Screen output. This includes file and directory names and their paths, messages, names of variables and parameters, and passages of the source text of a program. Example text Exact user entry. These are words and characters that you enter in the system exactly as they appear in the documentation. <Example text> Variable user entry. Pointed brackets indicate that you replace these words and characters with appropriate entries. Icons in Body Text The following icons are used in this handbook. 03-12-2004 © 2004 SAP AG. All rights reserved. iii About This Handbook AC660 Icon Meaning For more information, tips, or background Note or further explanation of previous point Exception or caution Procedures Indicates that the item is displayed in the instructor’s presentation. iv © 2004 SAP AG. All rights reserved. 03-12-2004 Contents Course Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Course Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Course Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Unit 1: Positioning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Consolidation Strategy Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Enterprise Controlling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Unit 2: Master Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Consolidation Interface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Consolidation Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Consolidation Chart of Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Unit 3: Data Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Overview of Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Status Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Data Entry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Validation and Postings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126 Unit 4: Currency Translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Currency Translation Methods and Keys . . . . . . . . . . . . . . . . . . . . . . . . .152 Translation and Rounding Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . .159 Unit 5: Interunit Elimination & Consolidation of Investments 201 Interunit Elimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 Consolidation of Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Customizing Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272 Sequence of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .284 Equity Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .290 Reclassification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310 Unit 6: Balance Carry Forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Execution of Carry Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326 Appropriation of Carry Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 Unit 7: Information System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 Reports for Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Drilldown Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .363 03-12-2004 © 2004 SAP AG. All rights reserved. v Contents AC660 Unit 8: Versions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 Version Concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .400 Appendix 1: Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419 vi © 2004 SAP AG. All rights reserved. 03-12-2004 Course Overview The course introduces the application and IMG settings for the SAP Consolidation component. You learn about the main consolidation functions with SAP Consolidation, as well as the required customizing settings. The course introduces the straight-line case across the entire SAP Consolidation component which includes business workflows and customizing. Target Audience This course is intended for the following audiences: • Staff of consolidation accounting departments • Project team members of the IT department Course Prerequisites Required Knowledge • Understanding of the principles of consolidation Recommended Knowledge • SAP01 - SAP R/3 Overview • AC010 - Financial Accounting & Reporting Course Goals This course will prepare you to: • Represent your corporate group using objects in the SAP Consolidation application • Use SAP Consolidation to consolidate data for your corporate group Course Objectives After completing this course, you will be able to: • Define consolidation groups and units • Create and use a consolidation chart of accounts • Collect individual financial statement data in SAP Consolidation and translate it into group currency as required • Customize and execute various consolidation functions 03-12-2004 © 2004 SAP AG. All rights reserved. vii Course Overview AC660 SAP Software Component Information The information in this course pertains to the following SAP Software Components and releases: viii © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 1 Positioning Unit Overview The unit provides an overview of SAP’s R/3 solution for Enterprise Controlling and its functionality. You will learn about the demands placed on modern consolidation software. You will also learn about the functionality of SAP Consolidation and its integration with other SAP applications. Unit Objectives After completing this unit, you will be able to: • Evaluate the need for a consolidated software • Evaluate the need to unite the internal and external accounting • Describe how SAP Consolidation is embedded in enterprise controlling • Explain how SEM optimizes enterprise controlling • Outline the requirements for consolidation • Identify the applications and characteristics of SAP Consolidation • Explain the integration of SAP Consolidation with other SAP applications Unit Contents Lesson: Consolidation Strategy Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Lesson: Enterprise Controlling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 03-12-2004 © 2004 SAP AG. All rights reserved. 1 Unit 1: Positioning AC660 Lesson: Consolidation Strategy Requirement Lesson Overview This lesson will help you to understand the economic necessity of global and extensive monitoring of a global company. For this reason, the lesson will cover the need for consolidated software. Next, the lesson will introduce you to the business strategy to develop the consolidated software. The lesson will also cover the role of external factors to set the enterprise goals. Lesson Objectives After completing this lesson, you will be able to: • Evaluate the need for a consolidated software • Evaluate the need to unite the internal and external accounting Business Example Based on its economic success, the corporate group, G1, decides to implement the R/3 component, SAP Consolidation, by the end of this year to secure its market position. Corporate management wants to prepare consolidated financial statements for the end of December using the R/3 Enterprise. Experienced consultants are required to implement the SAP Consolidation component in such a short space of time. Your firm is trying to win the consulting contract. You are required to assess the requirements of the consolidation strategy. Managing a Global Enterprise Figure 1: Managing a Global Enterprise 2 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Strategy Requirement Complex group structures have to be managed effectively. At the same time, increasing globalization requires decentralized group management for independent organizational units. Business units that are close to the market have to be managed decentrally to leverage their full market potential. Decentralization of Responsibility Figure 2: Strategy - Decentralization of Responsibility Global process optimization allows synergies (know-how, core competencies) to be detected more quickly and used more efficiently in the group. New business concepts can be transferred from one unit to another. Enterprise goals are increasingly being set “from the outside” - by shareholders, for example. The executive board now has the task of implementing these goals internally. The corporate group head office calculates key figures and defines goals for the strategic business entities. Here, non-monetary success factors also have an influence: the group has the relevant information earlier, and no longer has to wait until effects are seen in the income statement. Formerly, external and internal accounting were usually separate (for example, due to different valuation methods). Nowadays, the goal is to unite external and internal accounting, since the requirements for legal consolidation also comprise a certain amount of information relevant to cost accounting. The company is managed in accordance with internal enterprise structures, which can be very detailed. This means that extremely flexible structures are necessary. Therefore, SAP Consolidation is not only based on companies. 03-12-2004 © 2004 SAP AG. All rights reserved. 3 Unit 1: Positioning AC660 Lesson Summary You should now be able to: • Evaluate the need for a consolidated software • Evaluate the need to unite the internal and external accounting 4 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Enterprise Controlling Lesson: Enterprise Controlling Lesson Overview This lesson will give you an overview of enterprise controlling and the role of Strategic Enterprise Management (SEM) to optimize enterprise controlling. You will also learn about the requirements and functions of SAP Consolidation and its integration with other SAP applications. Lesson Objectives After completing this lesson, you will be able to: • Describe how SAP Consolidation is embedded in enterprise controlling • Explain how SEM optimizes enterprise controlling • Outline the requirements for consolidation • Identify the applications and characteristics of SAP Consolidation • Explain the integration of SAP Consolidation with other SAP applications Business Example Based on its economic success, the corporate group G1 decides to implement the SAP Consolidationby the end of this year to secure its market position. The corporate management wants to prepare consolidated financial statements for the end of December using the SAP Consolidation. Experienced consultants are required to implement the SAP Consolidation component in such a short span of time. Your firm is one of the firms trying to win the consulting contract. The corporate management wants you to explore the functions of SAP Consolidation. 03-12-2004 © 2004 SAP AG. All rights reserved. 5 Unit 1: Positioning AC660 Strategic Enterprise Management Figure 3: Strategic Enterprise Management Success is measured by the speed with which a business strategy can be realized. To optimize process of enterprise controlling, SAP has developed Strategic Enterprise Management (SEM). One of the main advantages of the SAP SEM is the support it offers to strategic management processes by linking strategic and operational actions. Internal control of an enterprise can be carried out using value-oriented management principles. Requirements, Functionalities, and Integration of SAP Consolidation • Internal and external group reporting/consolidation – Projection of any number of parallel hierarchies – Different data categories, such as actual data, budget, and forecast • Complete automation of activities - even complex ones – Divestitures, transfers, and changes in indirect investment • Comprehensive reporting • International accounting rules – US GAAP, IAS, and HGB, ... Automatic creation of consolidated financial statements. 6 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Enterprise Controlling Flexible definition of consolidation methods. In legal consolidation, the consolidation units are the legally independent companies. They report their individual financial statements to the group that computes the consolidated financial statement. In management consolidation, the consolidation areas can be profit centers or business areas. In an SAP system, the integrated data can be transferred directly from the transaction systems to consolidation. During data transfer, you can work with the planned and budget values or execute simulations. The standard system includes all the international consolidation methods that are commonly used. Figure 4: SAP Consolidation: Function Applications of SAP Consolidation: • Company consolidation • Management consolidation 03-12-2004 © 2004 SAP AG. All rights reserved. 7 Unit 1: Positioning AC660 Characteristics: • Flexible hierarchies of consolidation units • SAP integration for companies, business areas, and profit centers • Tools for online and offline data entry: Online data entry for non-integrated consolidation units, Microsoft ACCESS PC data entry program for subsidiaries without SAP software, and flexible upload for data from external systems or through Web Access • Status monitors for data collection and consolidation • Powerful reporting functions and drilldown to the transaction SAP components • Interactive Excel link to the consolidation database for reporting • International rules for reporting (US-GAAP, IAS) • Versions for data categories, simulation, and planning Figure 5: Integration of SAP Consolidation SAP Consolidation is integrated within the SAP system in two ways: • Applications that handle day-to-day business transactions transfer data to SAP Consolidation in a summarized form. Consolidation reporting supports a drilldown back to these applications. • Consolidated data is transferred to the Executive Information System, which collects highly summarized data from all the enterprise areas, including logistics and human resources, for one company or the group as a whole. SAP Consolidation supports the consolidation of any “consolidation units”, provided the required financial data is supplied. Using SAP integration, data can be made available for the consolidation of companies (legally independent units), 8 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Enterprise Controlling business areas (subdivisions of companies for the purpose of external segment reporting), and profit centers (areas of responsibility inside or across companies). If the transaction applications and the Consolidation system are all in the same client of the same system, data can be transferred to the Consolidation system online in real-time. Additionally, data can be transferred by periodic extract or rollup from other SAP systems. 03-12-2004 © 2004 SAP AG. All rights reserved. 9 Unit 1: Positioning AC660 Lesson Summary You should now be able to: • Describe how SAP Consolidation is embedded in enterprise controlling • Explain how SEM optimizes enterprise controlling • Outline the requirements for consolidation • Identify the applications and characteristics of SAP Consolidation • Explain the integration of SAP Consolidation with other SAP applications 10 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Unit Summary Unit Summary You should now be able to: • Evaluate the need for a consolidated software • Evaluate the need to unite the internal and external accounting • Describe how SAP Consolidation is embedded in enterprise controlling • Explain how SEM optimizes enterprise controlling • Outline the requirements for consolidation • Identify the applications and characteristics of SAP Consolidation • Explain the integration of SAP Consolidation with other SAP applications 03-12-2004 © 2004 SAP AG. All rights reserved. 11 Unit Summary AC660 12 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. Business units close to the market have to be managed to be able to achieve their complete potential. Fill in the blanks to complete the sentence. 2. What is the need to unify internal and external accounting? 3. How is data from the various partial information systems inside and outside of the company grouped together to form a uniform dimension? 4. Strategic Enterprise Management (SEM) consists of BPS, CPM, SRM, BCS, and BIC components. Determine whether this statement is true or false. ! True ! False 5. The consolidation groups for management consolidation can be profit centres or . Fill in the blanks to complete the sentence. 6. Which of the following statements is incorrect with regard to the characteristics of SAP Consolidation? Choose the correct answer(s). ! A Flexible hierarchies of consolidation units are possible. ! B SAP integration for companies, business areas, and profit centers. ! C No status monitors for data collection. ! D Interactive Excel link to consolidation database for reporting. ! E Powerful reporting function. 03-12-2004 © 2004 SAP AG. All rights reserved. 13 Test Your Knowledge AC660 7. Consolidated data is transferred to the Executiv Information System, which highly summarized data from all enterprise areas for one company or the group as a whole. Fill in the blanks to complete the sentence. 14 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Answers 1. Business units close to the market have to be managed locally to be able to achieve their complete potential. Answer: locally 2. What is the need to unify internal and external accounting? Answer: As the legal consolidation requirements sometimes include information relevant to cost accounting, it is required to unify external and internal accounting. 3. How is data from the various partial information systems inside and outside of the company grouped together to form a uniform dimension? Answer: Data is heterogeneously structured. As a result, the database is divided into data areas that are self-contained from the business point of view. 4. Strategic Enterprise Management (SEM) consists of BPS, CPM, SRM, BCS, and BIC components. Answer: True SEM optimizes enterprise controlling using BPS, CPM, SRM, BCS and BIC components. 5. The consolidation groups for management consolidation can be profit centres or business areas. Answer: business areas 6. Which of the following statements is incorrect with regard to the characteristics of SAP Consolidation? Answer: C Status monitors are provided for data collection and consolidation. 7. Consolidated data is transferred to the Executiv Information System, which collects highly summarized data from all enterprise areas for one company or the group as a whole. Answer: collects 03-12-2004 © 2004 SAP AG. All rights reserved. 15 Unit 1: Positioning AC660 16 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 2 Master Data Unit Overview The focus of this unit is to provide an overview of the user interface. You will learn how to define consolidation units and groups, in order to model the corporate structure in the SAP System Consolidation. You will also learn how to work with the consolidation chart of accounts, its financial statement items, and the breakdown category, to characterize the different subitems. Unit Objectives After completing this unit, you will be able to: • Explain how global session parameters enable a user-friendly environment • Describe the use of hierarchical displays in the SAP Consolidation interface • Explain the function of list processor in the Consolidation interface • State the role of the SAP standard functions and multilevel customizing for a user-friendly interface • Describe the purpose and use of Dimension • Explain how dimension can be used • Explain how to work with a ledger for a consolidation group • Evaluate and state the advantage of using a version for consolidation • Describe a consolidation unit and a consolidation group • Specify the purpose and use of consolidation charts of accounts • Describe the financial statements items • Explain the breakdown category and subitems • Explain how characteristics structure the transaction data of consolidation • Describe the function of user-defined attributes for providing additional information about the consolidation unit • Create customer-specific sub-assignments as custom characteristics and assign an item Unit Contents Lesson: Consolidation Interface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 03-12-2004 © 2004 SAP AG. All rights reserved. 17 Unit 2: Master Data AC660 Lesson: Consolidation Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Exercise 1: Consolidation Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Lesson: Consolidation Chart of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Exercise 2: Exercises for Financial Statement Chart of Accounts, Financial Statement Items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 18 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Interface Lesson: Consolidation Interface Lesson Overview This lesson will give you an overview of the Consolidation user interface. You will learn about global session parameters, hierarchical displays, list processor, and the use of the SAP standard tool in SAP Consolidation. Lesson Objectives After completing this lesson, you will be able to: • Explain how global session parameters enable a user-friendly environment • Describe the use of hierarchical displays in the SAP Consolidation interface • Explain the function of list processor in the Consolidation interface • State the role of the SAP standard functions and multilevel customizing for a user-friendly interface Business Example The group G1 plans to consolidate by the end of this year. You have to present the basic workings of the Consolidation interface to the management. Working with Consolidation Interface • Global session parameters for each user • Access to many transactions from hierarchical displays • Identical presentation techniques for all lists, including drilldown functions (list processor) • Use of standard SAP tools – Planning processor – Validation – Report Writer/Painter – Drilldown Reporting • Multi-level Customizing keeps the unnecessary functions out of sight Global parameters are important settings for SAP Consolidation that typically remain the same for a work session. Both the enterprise structure and the consolidation chart of accounts used are built up in a multi-level. Examples of item hierarchies are income statement and cash flow statement. With the help of the list processor, you receive clearly arranged lists, the displays of which you can explain in stages (Drilldown). 03-12-2004 © 2004 SAP AG. All rights reserved. 19 Unit 2: Master Data AC660 The SAP standard tools are used: • You can structure the data entry layouts with the planning processor. • Validation rules check the consistency of transferred data, the accuracy of the currency translation, and the consolidation activities. • You can create reports quickly and evaluate any data with the Report Writer/Painter and drilldown reporting tools. The unnecessary Customizing functions are hidden. For example, when you select the accounting technique, purchase method, the further configuration settings for the equity method are hidden. Figure 6: Global Session Parameters Global parameters are important settings for Consolidation that typically remain the same for a work session. These parameters are saved for a particular user when the user logs off. The parameters are automatically used when the user logs back on. However, the parameters can be changed as and when required. When you run a function, the information saved as your global parameters are either proposed by default or set in the background in which they cannot be specified directly for the function. The global parameters are displayed in a status row at the top of every screen in Customizing and the consolidation functions. In Customizing, the parameters that are relevant for the current maintenance appear in a different color. For example, the maintenance of financial statement items is dependent on the consolidation chart of accounts, but not on the version. 20 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Interface Figure 7: Hierarchical Displays You can access all functions from the SAP Consolidation application menu. Within these hierarchies, you can perform such functions as maintain master data, start and monitor data collection, consolidation functions (monitors), and generate reports. Many complex functions, such as the entry of additional data for the consolidation of investments, and the assignment of consolidation of investments methods, also use hierarchical displays with simple navigation. 03-12-2004 © 2004 SAP AG. All rights reserved. 21 Unit 2: Master Data AC660 Figure 8: The List Processor The list processor is a reporting tool available for consolidation purpose. It is used to display and print information and for interactive drilldown reporting from a generated list. The expand and collapse functions in the list header can be used for all the areas in the main body of the list. You can drill down step-by-step or skip levels. The expand and collapse function in the main body also enables you to drill down step-by-step or skip levels. F1 Help is available for all the fields in the list header and the main body of the list. You can use the filter function to restrict the list to certain characteristic values. For example, if you have run interunit elimination for the entire consolidation group and want to see the results for only one consolidation unit in special, you can use the filter function. The report-report interface enables you to access other reports in Consolidation. Several links are predefined. The others can be defined by users. The search function is identical to the standard SAP list search. A special function is available to search for error messages. The date and time are added when a list is printed. A function to define page breaks is available as well. 22 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Interface Lesson Summary You should now be able to: • Explain how global session parameters enable a user-friendly environment • Describe the use of hierarchical displays in the SAP Consolidation interface • Explain the function of list processor in the Consolidation interface • State the role of the SAP standard functions and multilevel customizing for a user-friendly interface 03-12-2004 © 2004 SAP AG. All rights reserved. 23 Unit 2: Master Data AC660 Lesson: Consolidation Structure Lesson Overview This lesson shows you how to define the consolidation unit and how individual units can be grouped together in consolidation groups. You will learn about the purpose and use of dimension. This lesson will also explain how to work with a ledger and versions. Lesson Objectives After completing this lesson, you will be able to: • Describe the purpose and use of Dimension • Explain how dimension can be used • Explain how to work with a ledger for a consolidation group • Evaluate and state the advantage of using a version for consolidation • Describe a consolidation unit and a consolidation group Business Example The group, G1, plans to introduce the component Consolidation of the SAP system by the end of this year. You are required to define consolidation units and groups to represent the structure of your corporate group in the SAP system. Dimensions Figure 9: Consolidation Units and Groups 24 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Dimensions are specific views on group reporting. They include consolidation types, such as company consolidation, business area consolidation, or profit center consolidation. In a dimension, you define the group structure as a hierarchy of consolidation units and groups. You can manage several dimensions in parallel in the system. The company forms the basis for the generation of consolidation units. The consolidation unit is the smallest element of the group structure for which a complete consolidation can take place. The business object consolidation group is a user-defined group of consolidation units created for consolidation and reporting purposes. Figure 10: Parallel Hierarchies In a dimension, hierarchies are structured sets of consolidation units and consolidation groups. They are defined by their top-most consolidation group. As a result, a given dimension can represent one or more consolidation types. Any consolidation unit or group can exist in any number of hierarchies. 03-12-2004 © 2004 SAP AG. All rights reserved. 25 Unit 2: Master Data AC660 Figure 11: Variable Hierarchy Depth You can create any number of hierarchy levels. The number of hierarchy levels can vary in the different branches of the same hierarchy. In the above scenario with data from Profit Center Accounting, consolidation units are combinations of company and profit center. When you use the consolidation with integration to Profit Center Accounting, then you generate the consolidation units and groups from the organizational units of operational applications. The consolidation groups are derived from the profit centers and the hierarchy nodes. The consolidation unit is formed from the profit center and the company. 26 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Ledger Figure 12: Ledger Contains the transaction figures and documents that show the changes in the values and quantities that are the outcome of accounting transactions. The values of the transaction figures are saved in 16 periods and in one period for the balance carried forward. You assign a ledger to each consolidation group in the master record of the consolidation group. The data in the ECMCT totals table can be managed in three currencies: The data in the ECMCT totals table can be managed in three currencies: • Transaction currency • Currency of the consolidation unit • Ledger currency: The ledger currency indicates the currency of the consolidation group. Example: You want to consolidate two consolidation groups in USD and EURO. You need two ledgers for this purpose. At the group level, you copy the values from the EURO ledger into the USD ledger. SAP delivers the standard ledger "1C" for consolidation. This ledger is not for use in a live customer system. Please create a new ledger using ledger "1C" as a copy template. 03-12-2004 © 2004 SAP AG. All rights reserved. 27 Unit 2: Master Data AC660 Versions Figure 13: Versions Valuations can differ depending on whether they are carried out from the point of view of local trade law or for the corporate valuation of the group data. In Consolidation, the versions serve to maintain separate datasets in the consolidation database so that alternative consolidations can be managed. This means that various data categories, such as actual, plan, and budget data, can be maintained and consolidated. You can also carry out simulations on the basis of different exchange rates or changes in the group structure. A consolidation version is composed of special versions, which are methods and tasks that cover the various areas of consolidation. This enables you to define various consolidation versions that differ in only one or a few areas, but otherwise indicate the same special version. 28 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Figure 14: Consolidation Group, Ledger, Version You assign a ledger to each consolidation group in the master record of the consolidation group. The system saves the assignment in a special ledger version. This means that you can assign different ledgers, and similarly different consolidation group currencies, to a consolidation group in different consolidation versions. 03-12-2004 © 2004 SAP AG. All rights reserved. 29 Unit 2: Master Data AC660 Consolidation into Units and Groups Figure 15: Consolidation Unit The consolidation unit is the smallest element of the group structure for which a complete consolidation can take place. This Business Object is dimension-dependent and can have different characteristics, such as company, business area within a company, and profit center within a company. Some of the master data and control parameters are valid only in conjunction with other data. The local currency and the financial data types are dependent on the fiscal year effective, and the translation method is dependent on the translation version. 30 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Figure 16: Consolidation Group A consolidation group is a user-defined combination of multiple consolidation units or consolidation groups for consolidation and reporting purposes. It represents the structure of the group. Consolidation groups and consolidation units are dependent on the dimension. Each consolidation unit can be included in different consolidation groups, and each consolidation group, in turn, can be included in different hierarchies. Since consolidation groups are dimension-dependent, the master data created for the consolidation groups is valid only in the relevant dimension. 03-12-2004 © 2004 SAP AG. All rights reserved. 31 Unit 2: Master Data AC660 32 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Exercise 1: Consolidation Structure Exercise Objectives After completing this exercise, you will be able to: • Define the global parameters • Check the global system settings • Create master records for consolidation groups/consolidation units • Define a consolidation group hierarchy • Insert master data in a hierarchy Business Example The group G1 plans to introduce the component Consolidation of the SAP system by the end of 2002. Corporate management wants to prepare consolidated financial statements for December 2002 using the SAP system. Group G1 requires support from experienced SAP consultants. The management of your company creates a prototype for a presentation to be presented to the steering committee of group G1. The competitors will be judged on the outcome of this presentation, and the contract for implementation of SAP Consolidation awarded accordingly. You have been asked by the management of your consulting firm to build a prototype with a colleague within the next 5 days. Task 1: Define a dimension 1. Define a dimension using the code, XY. XY = 50 + your group number Example: Group 14 uses the dimension, 64. What you enter: a) Short and medium text for the dimension: b) Dimension, XY c) Consolidation unit / consolidation group: Field length, 3. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 33 Unit 2: Master Data AC660 d) Define all the output fields for the consolidation units and groups as optional in the screen selection settings. Task 2: Ledger: 1. Ledger: You are creating consolidated statements in the currency, USD, and will be using the ledger, US, which is already created. Check that the ledger currency of ledger US matches the one used in your prototype, which is USD. Find out which currency is used in the standard ledger, 1C. Task 3: Global session parameters: 1. Define the global session parameters: a) Dimension XY (see section Task 1) b) Ledger “US” in USD c) Actual version 100 (provided in the standard system) d) Period 012, 2002 e) (Group G1 will consolidate in the implementation year––period 012/2002––using the SAP system.) f) Chart of accounts XY (where XY = 50 + your group number), which has already been defined by your colleague. Task 4: Define hierarchy H1 (H1 Group ##) for statutory consolidation. 1. Define hierarchy H1 for statutory consolidation. a) Assign the consolidation groups (CGs) and consolidation units (CUs) A-E to this hierarchy as required, using the information on the structure of corporate group G1, as provided by the steering committee. b)Create consolidation units A, B, C, D and E: Consolidation unit A belongs to CG G1; Consolidation units B-E belong to CG G2. c)The steering committee has provided you with the following information to help you create master data: Enterprise Structure Continued on next page 34 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure - CU A, B, C, E: Corporate office USA - CU D: Corporate office Germany - Local currency: The country’s currency Note: Country currency for Germany: EUR - CU A: Parent company of CG G1 - CU B: Parent company of CG G2. Note: To locate the parent indicator, in the master data record of the CG go to Assignments tab. Data Transfer Methods - Consolidation units B, C, D, and E do not use an SAP system, and therefore report their financial data by sending an MS Excel file to the corporate office. - Consolidation unit A sends its data on paper to the group headquarters, where the data is entered manually. Fiscal year variant - All units use a fiscal year (FY) variant, which consists of a calendar year and 4 special periods (K4). Note: You define the FY variant in Consolidation Group Maintenance by selecting Goto !FY variant . Consolidation frequency Consolidation groups G1 and G2 disclose consolidated statements at the end of each quarter. Generate sets before exiting the hierarchy. 2. Demonstrate the navigation within the new hierarchy: Fully collapse the hierarchy and use the search function to find cons unit A. . Focus the hierarchy display on cons group G2 and then back on G1. 3. Create a “dummy” default partner unit for your dimension: A default consolidation unit must be established for each dimension. This default CU is required for the data collection task (Unit 4) and the Consolidation of Investment task (Unit 6) to be successful. - Create a new consolidation unit “999”by copying consolidation unit “999”from dimension 50. This will be used as a default partner unit for your dimension Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 35 Unit 2: Master Data AC660 - Assign this new consolidation unit “999” to your dimension as the default partner unit. 36 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Solution 1: Consolidation Structure Task 1: Define a dimension 1. Define a dimension using the code, XY. XY = 50 + your group number Example: Group 14 uses the dimension, 64. What you enter: a) Short and medium text for the dimension: b) Dimension, XY c) Consolidation unit / consolidation group: Field length, 3. d) Define all the output fields for the consolidation units and groups as optional in the screen selection settings. a) Defining a dimension Menu Path: Tools !Customizing !IMG!Edit Project !SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Define Dimensions !Create Dimension Do not use another dimension as a template. Choose Enter. On the Dimension Create screen, enter Dimension XY in the Short text and Medium text fields. Substitute XY with 50 + your group number. Enter 03 in the fields Length of consolidation unit and Length of consolidation group. Choose Screen selection CU and Screen selection CG to go to the detail screens. Enter 1 for all the fields to specify that they are optional. Use the green arrow to come back out. Save your entries. Task 2: Ledger: 1. Ledger: You are creating consolidated statements in the currency, USD, and will be using the ledger, US, which is already created. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 37 Unit 2: Master Data AC660 Check that the ledger currency of ledger US matches the one used in your prototype, which is USD. Find out which currency is used in the standard ledger, 1C. a) Both Ledger “1C” and Ledger “US” use the currency USD. To view the ledger definitions, choose: Menu Path: Tools !Customizing !IMG !Edit Project !SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Currencies !Define Ledgers !Display Ledger Double click to view the details. Since ledger “US” uses the currency USD, you do not need to change any settings because you also want to use the ledger currency USD for your prototype. Task 3: Global session parameters: 1. Define the global session parameters: a) Dimension XY (see section Task 1) b) Ledger “US” in USD c) Actual version 100 (provided in the standard system) d) Period 012, 2002 e) (Group G1 will consolidate in the implementation year––period 012/2002––using the SAP system.) Continued on next page 38 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure f) Chart of accounts XY (where XY = 50 + your group number), which has already been defined by your colleague. a) Session parameters: To set your global parameters, you choose: Menu Path: Tools !Customizing !IMG !Edit Project !SAP Reference IMG !Enterprise Controlling !Consolidation ! Define Global Parameters Alternatively, you can choose Global Parameters in the initial Consolidation application screen. Enter the following: Field/Data Type Value Dimension XY (XY = 50 + your group number) Version 100 Year Current Year Period 12 Cons chart of accounts XY (XY = 50 + your group number) Ledger US Task 4: Define hierarchy H1 (H1 Group ##) for statutory consolidation. 1. Define hierarchy H1 for statutory consolidation. a) Assign the consolidation groups (CGs) and consolidation units (CUs) A-E to this hierarchy as required, using the information on the structure of corporate group G1, as provided by the steering committee. b)Create consolidation units A, B, C, D and E: Consolidation unit A belongs to CG G1; Consolidation units B-E belong to CG G2. c)The steering committee has provided you with the following information to help you create master data: Enterprise Structure - CU A, B, C, E: Corporate office USA - CU D: Corporate office Germany Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 39 Unit 2: Master Data AC660 - Local currency: The country’s currency Note: Country currency for Germany: EUR - CU A: Parent company of CG G1 - CU B: Parent company of CG G2. Note: To locate the parent indicator, in the master data record of the CG go to Assignments tab. Data Transfer Methods - Consolidation units B, C, D, and E do not use an SAP system, and therefore report their financial data by sending an MS Excel file to the corporate office. - Consolidation unit A sends its data on paper to the group headquarters, where the data is entered manually. Fiscal year variant - All units use a fiscal year (FY) variant, which consists of a calendar year and 4 special periods (K4). Note: You define the FY variant in Consolidation Group Maintenance by selecting Goto !FY variant . Consolidation frequency Consolidation groups G1 and G2 disclose consolidated statements at the end of each quarter. Generate sets before exiting the hierarchy. a) Defining a consolidation unit and consolidation group hierarchy H1. This solution for this section consists of twelve (12) distinct steps. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Organizational Units !Consolidation Groups ! Maintain Hierarchies !Maintain Consolidation Group Hierarchy ! Choose Alternatively, you can choose Accounting/ Enterprise Controlling ! Consolidation !Master Data !Consolidation groups !Hierarchy !Maintain in the Consolidation application screen. Place your cursor on the dimension and choose Create or the menu item: Cons group hierarchy !Create . Continued on next page 40 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Enter H1 in the Hierarchy field and H1 group XY in the Description field (## is your group number). Choose Continue. Place your cursor on the hierarchy node that you have just created, and choose Create (or use the menu path). Create the top cons group G1 with the description CG G1, and choose Continue. Now select the top cons group G1 and choose Create. In the Selection Unit or group dialog box, add A to the hierarchy by entering A under Cons unit and entering Unit A as medium text. Under Create new org units as master data select the indicator Cons unit. Select Continue. After creating cons unit A, place your cursor on G1 again, and choose Create to add the cons group G2 to the hierarchy. In the Selection Unit or group dialog box, add G2 to the hierarchy by entering G2 under Cons unit and CG G2 as medium text. Under Create new org units as master data select the indicator Cons group. Select Continue. Place your cursor on G2 and define the consolidation units for group G2 by choosing Create. In the Selection Unit or group dialog box, add B,C,D, and E to the hierarchy by entering B,C,D, and E under Cons unit and entering medium texts. Under Create new org units as master data select the indicator Cons unit. Select Continue. In master data maintenance, double-click cons unit A in the hierarchy and make the following entries in the appropriate fields: Field/Data Type Value Short and medium text Cons unit X(substitute X with the corresponding unit A, B, C, D, or E) Country US (for units A, B, C, and E) DE (for unit D) Language EN (for units A, B, C, and E) DE (for unit D) Local currency USD (for units A, B, C, and E) UNT (for unit D) Choose the Correspondence tab to add more detail for cons unit master data. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 41 Unit 2: Master Data AC660 Field/Data Type Value Names 1 and 2 Cons unit X(substitute X with the corresponding unit A, B, C, D, or E; the same applies to Street and City. Street X Street City X City Choose: Goto !FY variant. In the screen Change View “ Fiscal Year Variant Assignments”: Overview, choose New entries and enter the ledger US and fiscal year variant K4 for each consolidation unit and group. Save your entries and choose Exit to return to the Consolidation group hierarchy Change screen. Choose the Data Collection tab to enter the data transfer method. Save your entries before exiting. • Data transfer method: Flexible Upload (for cons units B, C, D, and E) and Online Data Entry (for cons unit A) Now put your cursor on cons units B-E, double-click, and maintain the master data for B,C,D, and E in the same way, as listed in steps 6-10 above. Maintain the master data for cons groups G2 and G1. Put your cursor on the group that you want to edit in the hierarchy and double-click to go to the master data. You navigate within and between the individual detail screen as with the cons units. Enter the following: Field/Data Type Value Master Data: Cons frequency 4 Country US Language EN Ledger US Names 1 and 2 Consolidation group G1 and G2 Continued on next page 42 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Street G1 Street and G2 Street City G1 City and G2 City Parent indicator (PU) use A for G1 and B for G2 Hint: Parent indicator: You can find this indicator by choosing the Assignments tab on the Consolidation group hierarchy Change screen When you have finished maintaining the master data and have saved, you need to generate sets for Report Writer reports before exiting the hierarchy. Select the Generate sets icon on the icon bar. 2. Demonstrate the navigation within the new hierarchy: Fully collapse the hierarchy and use the search function to find cons unit A. . Focus the hierarchy display on cons group G2 and then back on G1. a) Navigating in and changing a hierarchy: Go back to Maintain Consolidation Group Hierarchy. • To collapse an entire hierarchy, click on the Collapse level icon on the icon bar. You can find a CU or CG using: Edit !Find and entering the unit or group concerned. To go to G2 in the hierarchy choose: Edit !Set focus (or click the corresponding icon) after positioning at G2. Select XY\H1\G1 in the header of the list screen to return to initial view of hierarchy. 3. Create a “dummy” default partner unit for your dimension: A default consolidation unit must be established for each dimension. This default CU is required for the data collection task (Unit 4) and the Consolidation of Investment task (Unit 6) to be successful. - Create a new consolidation unit “999”by copying consolidation unit “999”from dimension 50. This will be used as a default partner unit for your dimension Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 43 Unit 2: Master Data AC660 - Assign this new consolidation unit “999” to your dimension as the default partner unit. a) Creating a dummy default partner unit Defining a default partner consolidation unit Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Organizational Units !Consolidation Units ! Maintain consolidation units individually !Create Consolidation Unit !Choose Enter “ 999 ” for Consolidation unit and Copy from Dimension 50, Consoidation unit “ 999 ”. Save. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Master Data !Financial Statement Items !sub-assignments !Define default values for sub-assignments !Change default values !Choose On the line Partner unit, click on Dflt values button. Find your dimension ## (50 + your group number) and Enter cons unit “ 999 ” in the Default value for Partner field. Save. 44 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Structure Lesson Summary You should now be able to: • Describe the purpose and use of Dimension • Explain how dimension can be used • Explain how to work with a ledger for a consolidation group • Evaluate and state the advantage of using a version for consolidation • Describe a consolidation unit and a consolidation group 03-12-2004 © 2004 SAP AG. All rights reserved. 45 Unit 2: Master Data AC660 Lesson: Consolidation Chart of Accounts Lesson Overview This lesson will help you understand financial statement item and its characteristics. To begin with, you will learn about the structure of a consolidation chart of accounts and how to create a financial statement item. Next, you will see how to define the account assignment information necessary for consolidation and correctly allocate the individual financial statement items. This lesson will cover the structure of the consolidation database. You will also get to know why financial statement items are required and hence you can create them in customizing. Lesson Objectives After completing this lesson, you will be able to: • Specify the purpose and use of consolidation charts of accounts • Describe the financial statements items • Explain the breakdown category and subitems • Explain how characteristics structure the transaction data of consolidation • Describe the function of user-defined attributes for providing additional information about the consolidation unit • Create customer-specific sub-assignments as custom characteristics and assign an item Business Example The group, G1, plans to introduce the component SAP Consolidation by the end of this year. You have been asked by the management of your consulting firm to create consolidation chart of accounts with a colleague within the next 5 days. 46 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts FS Items and Subitems Figure 17: Consolidation Charts of Accounts In order to create consolidated financial statements, the transaction data of all the consolidation units included must be uniformly aggregated. For this purpose, the group headquarters provides all consolidation units with one or more consolidation charts of accounts. These charts of accounts structure the financial statement items in accordance with the internal and external requirements of the consolidated financial statements. In the consolidation chart of accounts, all financial statement items are arranged logically in an item hierarchy. The consolidation chart of accounts is client-dependent only. Therefore, you can use it in different dimensions. To allow the integrated transfer of reported financial data from SAP transaction applications, you must create a link between the G/L accounts and any secondary cost elements, and the consolidation financial statement items. When real-time updating or rollup is used, the ID’s of the transaction accounts are identical to the ID’s of the FS items. When periodic extract is used, the financial statement version items and the consolidation items are identical. In order to ensure that the IDs correspond, you can create the consolidation chart of accounts from both the FI chart of accounts and the financial statement version. 03-12-2004 © 2004 SAP AG. All rights reserved. 47 Unit 2: Master Data AC660 Figure 18: Financial Statement Items and Account Assignments The FS item is the central account assignment object of the consolidation system. It identifies a value or quantity entry and can be differentiated with further sub-assignments. The FS item type puts the characteristics of an item in concrete terms, with regard to data entry, posting and processing in evaluations. The following FS item types are distinguished: values, totals and text items. Where-applied indicator is used to define whether the FS item belongs to the assets, liabilities/equity, income statement or statistical items. The FS item type can be defined by the user, for example, in order to select items specially as key figure items. The breakdown category determines which sub-assignments should be managed. • Fixed values for sub-assignments can be necessary, like, for example the assignment of partner units with receivables and payables items, in order to execute the elimination of IU receivables and payables. • In the above example, the breakdown category ’1000’ for asset transactions defines a transaction type as a necessary sub-assignment. 48 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Figure 19: Subitems sub-assignments keep the number of items in consolidation charts of accounts down to a manageable level. It may, for example, be necessary to additionally assign financial statement items in transferred assets with different transaction types so that all changes to the items are shown from the opening to the closing balance. The subitems are grouped into subitem categories, in order to distinguish the transaction types in transferred assets from those in equity, for example. Only one subitem category can be assigned to a particular financial statement item in SAP Consolidation. Default subitems are provided for each of the subitem categories in the consolidation charts of accounts supplied with the system. Other standard sub-assignments are partner, currency and acquisition year/period. The breakdown type determines whether the FS item value should be expanded when entering and posting to this sub-assignment and how the system should check the respective sub-assignment, for example: required breakdown: value entry was forced, default value allowed. 03-12-2004 © 2004 SAP AG. All rights reserved. 49 Unit 2: Master Data AC660 Figure 20: Selected FS Items To create automatic postings the system requires information about certain financial statement items, for example, for posting financial statement balancing adjustments and deferred taxes. All special items (in this example, the items retained earnings in the balance sheet/income statement, allocation of deferred taxes in the balance sheet, and tax expense in the income statement) are dependent on the chart of accounts and the relevant consolidation version. The example shown is a depreciation adjustment. The following assumptions were made: • The individual balance sheet corresponds to the tax balance sheet. • The consolidated balance sheet corresponds to the commercial balance sheet. • The useful life of the machine is 4 years for the consolidation unit and 5 years for the cons group. • The tax rate is 60%. 50 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Structuring Data Figure 21: Structuring Data - Characteristics In the Consolidation database, SAP delivers a large number of predefined characteristics. They are used for structuring your data, above all transaction data. For that reason the most important characteristics are the key fields in the transaction databases. If you require further sub-assignments, you can create your own characteristics. As attributes, the characteristics can describe the consolidation unit in more detail. You can create characteristics to break down items, which structure the transaction data. You can define your own characteristic hierarchies and evaluate them in drilldown reporting / Excel reports. For example, you can reproduce a hierarchy of products for the item net sales. Definition of custom characteristics: • In the Consolidation database, you can add characteristics, which are based on structures that already exist in the SAP system (for example, region). Then you receive a list of components, that let you maintain the characteristic values, and you can go to these IMG activities. For every custom sub-assignment, that you create with a new validation table, you can load the values into the system by means of flexible upload. • You can add characteristics, whose structures have to be regenerated (for example type of company). The system then generates the necessary ABAP Dictionary objects and maintenance views. 03-12-2004 © 2004 SAP AG. All rights reserved. 51 Unit 2: Master Data AC660 Figure 22: Characteristic Consolidation Unit - Attributes You can use attributes to define additional information about the consolidation unit. This characteristic summarizes the consolidation units in reporting in different groupings. SAP delivers the characteristics country, company, consolidation business area, profit center and controlling area as attributes for the consolidation unit. They are useful when you transfer the reported financial data of your integrated consolidation units. You can add navigation attributes to the characteristic consolidation unit. The system automatically assigns the characteristics partner unit and investee unit to the attribute. Interunit elimination: You could restrict the values to be selected to certain consolidation and partner units. For example when you divide your consolidation un its into manufacturing companies and financial institutions, then you could restrict the elimination to a type of company, in order to study the elimination differences separately. 52 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Figure 23: sub-assignments of the Financial Statement Item Along with the standard sub-assignments you can define your own sub-assignments as characteristics and assign an item. For every account assignment you can define a breakdown type within a breakdown category. When a sub-assignment is missing, the breakdown type determines whether a default value is set. You can define default values for the following characteristics: partner unit, subitem, custom characteristic, for which you have set a default value when defining the indicator. Example: Enter which default partner unit should be set, when the account assignment information on the partner unit is missing, for example with the realtime update of reported data. Compound of characteristics: A region, for example, can only be maintained or interpreted together with a country’s data. In such a case you would create two custom sub-assignments and assign them to each other. Custom characteristics extend the database of Consolidation. SAP recommends that you activate and generate the new characteristics, when you have completed creating the characteristics, and are sure that you want to work with this database. In this way, you avoid time-consuming deletion actions. Note that deleting a characteristic is no longer possible, when you have already posted data with this characteristic. 03-12-2004 © 2004 SAP AG. All rights reserved. 53 Unit 2: Master Data AC660 Consolidation Database Structure Figure 24: Consolidation Database - Structure These are the most important fields in the Consolidation totals database. The first 5 fields in block A store the business unit whose data is collected and processed (dimension, consolidation unit), the collection period (year, accounting period), the data category (version) and the consolidation group currency (indirectly from the ledger field). You can use multiple ledgers in SAP Consolidation to achieve greater flexibility in your use of group currencies. The fields in blocks B1 and B2 store the consolidation chart of accounts, the financial statement item and all additional account assignments that can occur in the data collected in SAP Consolidation. The fields Document type and Cons group in block C are only used for posting transactions within Consolidation. The last 4 fields (block D) store up to three currency amounts and a quantity for totals records. In addition, the database contains a balance carried forward field and 16 period fields. The totals database is flexible. You can add fields to the additional account assignments (block B2) predefined by SAP. 54 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Exercise 2: Exercises for Financial Statement Chart of Accounts, Financial Statement Items Exercise Objectives After completing this exercise, you will be able to: • Use financial statement items and FS item hierarchies Business Example The group, G1, plans to introduce the SAP Consolidation by the end of this year. Corporate management wants to prepare consolidated financial statements for December 2003 using the SAP system. Group G1, requires support from experienced SAP consultants. The management of your company creates a prototype for a presentation to be presented to the steering committee of group, G1. The competitors will be judged on the outcome of this presentation, and the contract for implementation of SAP Consolidation awarded accordingly. You have been asked by the management of your consulting firm to build a prototype with a colleague within the next five days. Structure of corporate group, G1: Task 1: Master data for the consolidation chart of accounts: 1. Check the definition of the master data for chart of accounts XY (XY = 50 + your group number). Task 2: Changing item 311200: 1. Correct the totals item: While checking the master record of the item Insurance Expense, you discovered that the item is not defined as a totals item. 2. Creating value items: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 55 Unit 2: Master Data AC660 Create the related value items, Building Insurance Expense and Other Insurance Expenses. Note: Find this item by navigating in the hierarchy. Task 3: Maintaining financial statement (FS) items: 1. When presenting your prototype, you will outline the FS item hierarchy and the content of an FS item master record (191500). Explain the following terms using the item Machinery and Equipment as an example: a). Breakdown category b). Subitem category c). Default subitem d). Subitems When you exit the FS item hierarchy, generate sets. The example includes the following selected items used for postings: a. Creation of automatic line items; for example, the modification of the annual net income item in the balance sheet and the income statement when financial statement imbalances occur. b. Posting of deferred income taxes Your colleague was not aware that this function existed. Task 4: Define the following selected items: 1. Define the following selected items and explain them at the same time. What you enter: ANI, B/S item FS Item Debit and Credit 251200 Sub Item Category 6 SubItem 120 ANI I/S Tab FS Item 390000 Continued on next page 56 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts What you enter: Def. Tax, B/S tab FS Item Debit 150100 FS Item Credit 225100 Def. Tax, I/S tab FS Item Debit & Credit 350100 Other items tab FS Balancing adjustment item 239999 Item- debit and Item- credit 251100 Subitem category 6 Subitem 120 03-12-2004 © 2004 SAP AG. All rights reserved. 57 Unit 2: Master Data AC660 Solution 2: Exercises for Financial Statement Chart of Accounts, Financial Statement Items Task 1: Master data for the consolidation chart of accounts: 1. Check the definition of the master data for chart of accounts XY (XY = 50 + your group number). a) Master data for the consolidation chart of accounts: To display cons chart of accounts master data, you choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Master Data !Financial Statement Items !User-Defined consolidation Chart of Accounts !Maintain Item Hierarchies for cons Chart of Accounts !Edit Item Hierarchies !Choose Go to the chart of accounts master data by double-clicking on the chart of accounts at the top of the hierarchy display Enter the description Group ## Chart of Accounts. Save. You can see that your chart of accounts allows for an output length of 6 characters for its FS items, and that retained earnings are recorded in the balance sheet. Select Back to return to the hierarchy. Task 2: Changing item 311200: 1. Correct the totals item: While checking the master record of the item Insurance Expense, you discovered that the item is not defined as a totals item. 2. Creating value items: Continued on next page 58 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Create the related value items, Building Insurance Expense and Other Insurance Expenses. Note: Find this item by navigating in the hierarchy. a) Changing item 311200: In the item hierarchy, you can go to the item’s master data by selecting the income statement item Insurance Expense (311200). Menu Path: Node IS !Net Income !Net Income before minority interest !Income from continuing operations !Income before taxes !Operating Income !Operating expenses Double-click 311200. On Attributes tab, instead of FS item type Value item, choose item type Totals item, and save your change. Execute the consistency check. Leave your cursor on the totals item 311200 and choose Create . Enter the two new items, for example 311201 and 311202 with the item texts: Building Insurance Expense and Other Insurance Expense, respectively. Maintain FS item master data for 311201 and 311202. Choose FS Item type: Value Item, where-applied indicator: Income Statement Item, Sign for Entry: Debit, Breakdown Cat 2000, functional area. Save your entries, execute the consistency check and generate sets (by choosing the Generate sets icon) when you exit the hierarchy. Task 3: Maintaining financial statement (FS) items: 1. When presenting your prototype, you will outline the FS item hierarchy and the content of an FS item master record (191500). Explain the following terms using the item Machinery and Equipment as an example: a). Breakdown category b). Subitem category c). Default subitem d). Subitems When you exit the FS item hierarchy, generate sets. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 59 Unit 2: Master Data AC660 The example includes the following selected items used for postings: a. Creation of automatic line items; for example, the modification of the annual net income item in the balance sheet and the income statement when financial statement imbalances occur. b. Posting of deferred income taxes Continued on next page 60 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Your colleague was not aware that this function existed. a) Maintaining financial statement (FS) items: In the item hierarchy go to node BS: Menu Path: BS !Total Assets !Total Fixed Assets !Property, Plant & Equipment, Net ! Property, Plant & Equipment ! Machinery and Equipment (191500). Or Edit !Find 191500 The breakdown category 1000 (transaction type) has been assigned to the item on the Attributes tab and the breakdown type “3” (required breakdown) has been assigned to the subitem on the subassignment tab. The set of subitems CS01-1000 has been assigned. 1. The breakdown category classifies subassignments that are required for performing consolidation tasks.The following subassignments are supported • Partner unit • Transaction currency • Year of acq, period of acq • Subitem • Customsubassignments For each financial statement item, the breakdown category determines which subassignments must e entered 2. The subitems category enables you to classify your subitems. A subitem category is assigned to each FS Item, thus allocating all of the associated subitems of the category to the FS item. E.g. you can define subitem categories for • Transaction types • Product groups • Divisions The subitems are grouped into subitem categories in order to distinguish between transaction types in Fixed Assets from those in Equity for example 3. The default sub-item is used when no value has been specified for the sub-assignment 4. A sub-item is a sub-assignment of a financial statement item,i.e. the value assigned for the particular transaction. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 61 Unit 2: Master Data AC660 Task 4: Define the following selected items: 1. Define the following selected items and explain them at the same time. What you enter: ANI, B/S item FS Item Debit and Credit 251200 Sub Item Category 6 SubItem 120 ANI I/S Tab FS Item 390000 Def. Tax, B/S tab FS Item Debit 150100 FS Item Credit 225100 Def. Tax, I/S tab FS Item Debit & Credit 350100 Other items tab FS Balancing adjustment item 239999 Item- debit and Item- credit 251100 Subitem category 6 Subitem 120 a) Selected items for posting: Selected items are maintained in Customizing. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Financial statement items !Specify selected items for posting If there are no selected items specified for your example, choose New entries and enter selected items as listed in the Exercises section of this unit. Otherwise review that the selected items are the same as those listed in the Exercises section . Check that all subitems are properly assigned. Select FS items are used to create automatic postings. 62 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation Chart of Accounts Lesson Summary You should now be able to: • Specify the purpose and use of consolidation charts of accounts • Describe the financial statements items • Explain the breakdown category and subitems • Explain how characteristics structure the transaction data of consolidation • Describe the function of user-defined attributes for providing additional information about the consolidation unit • Create customer-specific sub-assignments as custom characteristics and assign an item 03-12-2004 © 2004 SAP AG. All rights reserved. 63 Unit Summary AC660 Unit Summary You should now be able to: • Explain how global session parameters enable a user-friendly environment • Describe the use of hierarchical displays in the SAP Consolidation interface • Explain the function of list processor in the Consolidation interface • State the role of the SAP standard functions and multilevel customizing for a user-friendly interface • Describe the purpose and use of Dimension • Explain how dimension can be used • Explain how to work with a ledger for a consolidation group • Evaluate and state the advantage of using a version for consolidation • Describe a consolidation unit and a consolidation group • Specify the purpose and use of consolidation charts of accounts • Describe the financial statements items • Explain the breakdown category and subitems • Explain how characteristics structure the transaction data of consolidation • Describe the function of user-defined attributes for providing additional information about the consolidation unit • Create customer-specific sub-assignments as custom characteristics and assign an item 64 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. Global parameters are important settings for SAP Consolidation that remain same for a work session. Determine whether this statement is true or false. ! True ! False 2. What are the functions that can be performed with hierarchies? 3. What are the main components of the list processor? 4. What is the function of multi-level customizing? 5. Dimensions are specific views on group reporting. Determine whether this statement is true or false. ! True ! False 6. The master data created for the consolidation groups is valid only in the relevant dimension. Determine whether this statement is true or false. ! True ! False 03-12-2004 © 2004 SAP AG. All rights reserved. 65 Test Your Knowledge AC660 7. A consolidation version is composed of special versions. Determine whether this statement is true or false. ! True ! False 8. In a dimension, hierarchies are structured sets of consolidation units and consolidation groups. With regard to the above statement, which of the following is NOT correct? Choose the correct answer(s). ! A The top-most consolidation group defines the hierarchies. ! B A given dimension cannot represent more than one consolidation type. ! C You can create any number of hierarchy levels. ! D The number of hierarchy levels can vary in different branches of the same hierarchy. 9. Name the currencies in which the data in the ECMCT totals table can be managed. 10. In the consolidation charts of accounts, all financial statement items are arranged logically in an item hierarchy. Determine whether this statement is true or false. ! True ! False 11. The FS item type puts the of an item in concrete terms, with regard to data entry, posting and processing in evaluations. Fill in the blanks to complete the sentence. 12. keep the number of items in consolidation charts of accounts down to a manageable level. Fill in the blanks to complete the sentence. 66 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge 13. How can characteristics describe the consolidation unit in detail? 14. Using characteristics, you can define further sub-assignments. Fill in the blanks to complete the sentence. 15. It is possible to add attributes to the chararcteristic consolidation unit. Fill in the blanks to complete the sentence. 16. Custom characteristics extend the database of consolidation. Determine whether this statement is true or false. ! True ! False 03-12-2004 © 2004 SAP AG. All rights reserved. 67 Test Your Knowledge AC660 Answers 1. Global parameters are important settings for SAP Consolidation that remain same for a work session. Answer: True Global session parameters save the user-specific settings for the dimension, the version, the year, the period, the consolidation chart of accounts, and the ledger during a system session. 2. What are the functions that can be performed with hierarchies? Answer: You can perform many functions with hierarchies such as maintain master data, start and monitor data collection and consolidation functions and generate reports. Many complex functions also use hierarchical displays. 3. What are the main components of the list processor? Answer: Expand and collapse functions, filter function and search function are some of the component functions of the list processor. 4. What is the function of multi-level customizing? Answer: Multi-level customizing keeps unneeded functions out of sight. 5. Dimensions are specific views on group reporting. Answer: True In a dimension, you define the group structure as a hierarchy of consolidation units and groups. 6. The master data created for the consolidation groups is valid only in the relevant dimension. Answer: True Consolidation groups and consolidation units are dependent on the dimension. 68 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge 7. A consolidation version is composed of special versions. Answer: True Special versions are methods and tasks that cover the various areas of consolidation. 8. In a dimension, hierarchies are structured sets of consolidation units and consolidation groups. With regard to the above statement, which of the following is NOT correct? Answer: B A given dimension can represent one or more consolidation types. As a result, any consolidation unit or group can exist in any number of hierarchies. 9. Name the currencies in which the data in the ECMCT totals table can be managed. Answer: The data in the ECMCT totals table can be managed in three currencies such as transaction currency, currency of the consolidation unit, and ledger currency. 10. In the consolidation charts of accounts, all financial statement items are arranged logically in an item hierarchy. Answer: True The consolidation charts of accounts structure the financial statement items in accordance with the internal and external requirements of the consolidated financial statements. 11. The FS item type puts the characteristics of an item in concrete terms, with regard to data entry, posting and processing in evaluations. Answer: characteristics 12. sub-assignments keep the number of items in consolidation charts of accounts down to a manageable level. Answer: sub-assignments 03-12-2004 © 2004 SAP AG. All rights reserved. 69 Test Your Knowledge AC660 13. How can characteristics describe the consolidation unit in detail? Answer: You can create characteristics to break down items, which structure the transaction data. Also you can define your own characteristic hierarchies and evaluate them in drilldown reporting / Excel reports. 14. Using custom characteristics, you can define further sub-assignments. Answer: custom 15. It is possible to add navigation attributes to the chararcteristic consolidation unit. Answer: navigation 16. Custom characteristics extend the database of consolidation. Answer: True You can activate and generate new characteristics after completing creation of characteristics and when you are definitely going to work on this database. 70 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 3 Data Collection Unit Overview In this unit, you will learn about the important procedures for data collection. You will get an overview of the individual data collection procedures and the procedures online entry, offline entry, and flexible upload. In addition, you will learn the concept of the monitor and how to implement all the necessary customizing settings. You will learn about the required settings for postings and how to generate a posting document. You will also be able to define validation rules, start validation, and interpret the error log. The following points detail how the unit fits into the overall context of the course: Before consolidation can take place, the individual financial statements from the consolidation units have to be collected in the SAP system. Both adjustment and consolidation entries have to be made during consolidation. To achieve this, the following preparation is required: Selected financial statement items have to be defined to perform the automatic postings. Document types with the appropriate number ranges have to be defined in the system to differentiate between the individual postings. The postings are allocated to different posting levels to be able to evaluate the original individual FS values, adjustment entries, and consolidation entries at all times. Unit Objectives After completing this unit, you will be able to: • Explain the data collection methods from both SAP systems and the non-SAP systems • Use financial data in consolidation • Describe the features of the status monitor • Customize data monitor • Assign tasks in the data monitor • Describe the settings for online data entry • Define data entry layouts • Describe offline data entry with Microsoft Access/Excel • Explain flexible upload • Explain the concept of validations • Describe postings and document types 03-12-2004 © 2004 SAP AG. All rights reserved. 71 Unit 3: Data Collection AC660 Unit Contents Lesson: Overview of Data Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Exercise 3: Exercise for Entering Data in Financial Tables . . . . . . . . . . . . 77 Lesson: Status Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Exercise 4: Data Monitor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Lesson: Data Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Exercise 5: Online Data Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105 Exercise 6: Flexible Upload . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Lesson: Validation and Postings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126 Exercise 7: Validation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133 Exercise 8: Posting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137 72 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Overview of Data Collection Lesson: Overview of Data Collection Lesson Overview This lesson provides an overview of the data collection methods. You will learn about the data collection methods from both SAP systems and non-SAP systems. In addition, you will learn how to use financial data in consolidation. Lesson Objectives After completing this lesson, you will be able to: • Explain the data collection methods from both SAP systems and the non-SAP systems • Use financial data in consolidation Business Example The group, G1, plans to introduce the SAP Consolidation by the end of this year. You are required to transfer the financial statement data of the individual consolidation units into the SAP system before the consolidation can take place. Data Collection Methods Figure 25: Data Collection Methods 03-12-2004 © 2004 SAP AG. All rights reserved. 73 Unit 3: Data Collection AC660 Data collection from SAP systems: • Real-time update from other application components within the same SAP system • Rollup from an Special ledger • Rollup from another Consolidation component • Periodic extract from Financial accounting • Periodic extract from R/2 Data collection from non-SAP systems: • Flexible upload of data extracts from non-SAP systems • Microsoft Access offline data entry using an additional Microsoft Excel interface • Web access Financial Data in Consolidation Figure 26: Financial Data in Consolidation Consolidation with the SAP system is based on totals data. This data is recorded using various data collection procedures and is stored in the totals table ECMCT. Additional financial data relevant for consolidation is also entered in separate tables. This additional data is not necessarily reported by consolidation units in their individual financial statements. All postings made during the consolidation process are saved as documents in the journal entry database ECMCA. 74 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Overview of Data Collection For this reason, the totals table ECMCT includes the following elements: All data from the individual financial statements, changes or additions to this dataset as a result of any additional financial data reported standardizing entries and consolidation entries. 03-12-2004 © 2004 SAP AG. All rights reserved. 75 Unit 3: Data Collection AC660 76 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Overview of Data Collection Exercise 3: Exercise for Entering Data in Financial Tables Exercise Objectives After completing this exercise, you will be able to: • Enter data in the additional financial tables Business Example Your presentation example includes a unit on the consolidation of investments. Therefore, you also need to collect additional financial data, which is used by the consolidation task. In practice, subsidiaries supply this information along with the other reported financial statement data. This is why you populate these tables in the course of the data collection. Two steps are necessary before you can collect the additional financial data for the consolidation of investments: You need to define the system utilization for the consolidation of investments. You must define the global settings. Task 1: System utilization of consolidation of investments: 1. Under system utilization, define the consolidation types that were decided upon by the steering committee: • Accounting technique: - Almost all of the consolidation units are consolidated fully. - The exception is consolidation unit E, an affiliate, which uses the equity method. • Treatment of goodwill: - Any positive or negative goodwill resulting from the consolidation is to be amortized. You do not have any further details, such as the amortization method, at this point. These settings can be defined later in unit Consolidation of Investments. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 77 Unit 3: Data Collection AC660 Task 2: Global settings: 1. At this point, you make a note in your presentation guide, that the IMG settings under Specify System Utilization for C/I greatly affect the screen contents in the IMG step Make Global Settings. Determine the following global settings for your example, as agreed upon with upper management: The data concerning changes in equity are gathered from the totals database and the additional financial data. Equity Holding adjustments are gathered from additional fin_data. The calculation base are the standardized financial data. Please assign the document type to the Task. 78 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Overview of Data Collection Solution 3: Exercise for Entering Data in Financial Tables Task 1: System utilization of consolidation of investments: 1. Under system utilization, define the consolidation types that were decided upon by the steering committee: • Accounting technique: - Almost all of the consolidation units are consolidated fully. - The exception is consolidation unit E, an affiliate, which uses the equity method. • Treatment of goodwill: - Any positive or negative goodwill resulting from the consolidation is to be amortized. You do not have any further details, such as the amortization method, at this point. These settings can be defined later in unit Consolidation of Investments. a) System utilization of consolidation of investments: Define the system utilization at: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Consolidation Functions !Automatic Posting !Consolidation of Investments !Determine system utilization for C/I Select New entries. The detail screen appears. Under Accounting Technique, select “purchase method” and “equity method”. The treatment of goodwill is defined in the Further Settings section of the screen. Select the options Amortization of goodwill and Amortization of negative goodwill. Save your entries. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 79 Unit 3: Data Collection AC660 Task 2: Global settings: 1. At this point, you make a note in your presentation guide, that the IMG settings under Specify System Utilization for C/I greatly affect the screen contents in the IMG step Make Global Settings. Determine the following global settings for your example, as agreed upon with upper management: The data concerning changes in equity are gathered from the totals database and the additional financial data. Equity Holding adjustments are gathered from additional fin_data. The calculation base are the standardized financial data. Please assign the document type to the Task. a) To maintain the global settings, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Consolidation Functions !Automatic Posting !Consolidation of Investments !Make global settings Select New entries. The detail screen appears. Save the change. 80 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Overview of Data Collection Lesson Summary You should now be able to: • Explain the data collection methods from both SAP systems and the non-SAP systems • Use financial data in consolidation 03-12-2004 © 2004 SAP AG. All rights reserved. 81 Unit 3: Data Collection AC660 Lesson: Status Management Lesson Overview This lesson provides an overview of the status monitor. You will learn how to customize the data monitor and assign tasks to a task group. Lesson Objectives After completing this lesson, you will be able to: • Describe the features of the status monitor • Customize data monitor • Assign tasks in the data monitor Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You are required to monitor the status of the consolidation process and execute tasks directly from within the status monitor. Status Monitor Figure 27: Status Monitor The data monitor and the consolidation monitor control the status of the consolidation process, and tasks can be started directly from within the monitor. Each monitor can accommodate as many tasks as required. 82 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Tasks are user-defined. They are grouped into task groups, which carry information about their sequence. Task groups are assigned to dimensions. Overall status of consolidation units and groups: • Initial stage / open / error(s) / complete Detailed status per task: • Initial stage / incomplete / errors / error-free / provisional / blocked / unblocked / irrelevant • Date last changed/ user responsible for last change / number of errors or warnings Tasks can be run in test or update mode. They can be run successively up to the next milestone or without stop. Period can be opened or closed. You can call up the last log for the selected consolidation group and/or the selected unit and the tasks. This function is only available for a task, when you have activated log archiving in Customizing. Note that this new function does not yet support all task categories. Data Monitor Figure 28: Customizing the Data Monitor All tasks assigned to a task group must be executed for all the consolidation units. Exceptions are tasks for manual posting, data collection, and those that you specify irrelevant for a unit. 03-12-2004 © 2004 SAP AG. All rights reserved. 83 Unit 3: Data Collection AC660 Once you have started consolidation processing for a period, you should not change the task groups that you are using. Note: The system regards all manual posting tasks as milestones Group-dependent task groups: When you assign a group-dependent task group to a consolidation group, then the monitor only displays the tasks of the relevant group-dependent task groups. Normally such a task group does not include all tasks, which are assigned to the global (dimension level) task group. Note the following rules: • A group-dependent task group must always be a partial number of the global task number. • It must always start with the first task of the global task group. • There can be no gaps in the global task sequence. Figure 29: Sequence of Tasks in the Data Monitor A task for the validation of standardized financial data must be included in the data monitor task group. All other tasks are optional. The following tasks can only be entered once in the task group, although they are assigned to more than one block: Item substitution/retained earnings, Rollup to consolidation groups. The following tasks can also only be entered once in the task group: Balance carry forward, Data collection, Validation of reported financial data, Currency translation, Apportionment, Validation of standardized data. 84 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management The tasks Manual posting and Reclassification can be entered several times in the task group. But then they must differentiate by the assigned document type. Status management also lets you execute custom tasks at any point in time. You can insert custom tasks into any of these 7 blocks. 03-12-2004 © 2004 SAP AG. All rights reserved. 85 Unit 3: Data Collection AC660 86 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Exercise 4: Data Monitor Exercise Objectives After completing this exercise, you will be able to: • Define tasks and task groups Business Example Your presentation example includes a unit on the consolidation of investments. For this reason, you need to collect additional financial data, which is used by the consolidation task. In practice, subsidiaries supply this information along with the other reported financial statement data. This is why you populate these tables in the course of the data collection. You need to perform two steps before you can collect the additional financial data for the consolidation of investments. First, you need to define the system utilization for the consolidation of investments. Then, you must define the global settings. Task 1: Global system settings 1. Define the following global system settings: Activate status management to ensure that individual consolidation steps are carried out in the correct order. To simplify your presentation, specify that new periods are open by default. Task 2: Use the data monitor and the consolidation monitor to visually keep track of the status of your various tasks. Data monitor: 1. Run the following tasks in the data monitor: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 87 Unit 3: Data Collection AC660 Task Task category Short text Medium txt DATA INPUT Data collection Data entry Online Date Entry LOCAL VAL Validation of reported Financial Data Valid LC Validation in local currency GROUP VAL Validation of Standardized Financial Data Valid GC Validation in group currency Create the task for data entry and two validation steps in the Implementation Guide (IMG). Assign them to the task group DATA with the description DataMonitor. In the definition of the task group, specify that you want the validation tasks to be automatically blocked after completion without errors. Assign the task group to your dimension using the period category 2 and 3. Task 3: Entry of activities for the additional financial data: 1. Entry of activities for the additional financial data: • Execute the DATA INPUT task for consolidation group G1. • Enter the activities listed below, making a note of each of the activity numbers for the different steps in your forthcoming presentation. Changes in Investments A) First consolidation: Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment A B 170100 120 + 80 USD 1000 USD 1000 Capital Stock B 250100 100 + USD 1000 USD 1000 B) First consolidation: Continued on next page 88 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment A C 170100 120 + 16 USD 260 USD 260 Invest- ment B C 170100 120 + 60 USD 1000 USD 1000 Capital Stock C 250100 100 + USD 1000 USD 1000 C) First consolidation: Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment B D 170100120+ 75 USD 1050 USD 1050 Capital Stock D 250100100+ UNI 2500 USD 1000 D) First consolidation: Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment B E 170300120 + 40 USD 800 USD 800 Capital Stock E 250100100 + USD 1000 USD 1000 03-12-2004 © 2004 SAP AG. All rights reserved. 89 Unit 3: Data Collection AC660 Solution 4: Data Monitor Task 1: Global system settings 1. Define the following global system settings: Activate status management to ensure that individual consolidation steps are carried out in the correct order. To simplify your presentation, specify that new periods are open by default. a) Global system settings: To change the global system settings, choose: Menu Path: Tools ! Customizing !IMG !Execute Project !SAP Reference IMG ! Enterprise Controlling !Consolidation !Check Global System Settings . Select Status management activated. Caution: Do NOT select Open periods explicitly Task 2: Use the data monitor and the consolidation monitor to visually keep track of the status of your various tasks. Data monitor: 1. Run the following tasks in the data monitor: Task Task category Short text Medium txt DATA INPUT Data collection Data entry Online Date Entry LOCAL VAL Validation of reported Financial Data Valid LC Validation in local currency GROUP VAL Validation of Standardized Financial Data Valid GC Validation in group currency Create the task for data entry and two validation steps in the Implementation Guide (IMG). Assign them to the task group DATA with the description DataMonitor. In the definition of the task group, specify that you want the validation tasks to be automatically blocked after completion without errors. Continued on next page 90 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Assign the task group to your dimension using the period category 2 and 3. a) Tasks: To define the data collection task DATA INPUT, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Define Task Choose New Entries. Enter task name, task category and texts as listed in the table. To define the validation task LOCAL VAL, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Data !Validations for Reported Data and Standardized Data !Define Task Choose New Entries. Enter task name, task category and texts as listed in the table. Save your entry. To define the validation task GROUP VAL, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Validations for Reported Data and Standardized Reported Data !Define Task Choose New Entries. Enter task name, task category and texts as listed in Exercises section. Save your entry. To define the task group DATA, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Monitor !Define Task Group Choose New entries, and enter the name DATA and description Data Monitor for the task group. Select the task group you just created and double-click the Assign tasks to task group folder. Choose New Entries and assign the tasks that you have defined to this task group (without specifying preceding tasks). Autoblock the validation tasks. Save your entries. To assign the task group to a dimension, choose: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 91 Unit 3: Data Collection AC660 Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Monitor !Assign Task Group to Dimension Choose New Entries. Field or Data Type Value FY effect current year Period Effect 12 Period Cat. 2 and 3 Data mon task group DATA Save your entries. Task 3: Entry of activities for the additional financial data: 1. Entry of activities for the additional financial data: • Execute the DATA INPUT task for consolidation group G1. • Enter the activities listed below, making a note of each of the activity numbers for the different steps in your forthcoming presentation. Changes in Investments A) First consolidation: Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment A B 170100 120 + 80 USD 1000 USD 1000 Capital Stock B 250100 100 + USD 1000 USD 1000 B) First consolidation: Continued on next page 92 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment A C 170100 120 + 16 USD 260 USD 260 Invest- ment B C 170100 120 + 60 USD 1000 USD 1000 Capital Stock C 250100 100 + USD 1000 USD 1000 C) First consolidation: Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment B D 170100120+ 75 USD 1050 USD 1050 Capital Stock D 250100100+ UNI 2500 USD 1000 D) First consolidation: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 93 Unit 3: Data Collection AC660 Cons Unit In- vestee Unit FS Item Sub Item Inc/ Dec Change in Share Book Value LC Book Value GC Invest- ment B E 170300120 + 40 USD 800 USD 800 Capital Stock E 250100100 + USD 1000 USD 1000 a) Activity entry: • To enter the activities, start the data monitor at: Menu Path: Accounting ! Enterprise controlling ! Consolidation !Data Collection !Monitor In the hierarchy, place the cursor on the cross section for consolidation group G1 and the data entry task. Then choose Update run. • Enter the listed activities, as listed in the Changes in Investments table by selecting “Changes in Investments“ under the Additional financial data folder. Double click to select the relevant consolidation unit then double click on first consolidation. Input the investee unit and then go to the details tab to input the rest of the data. Write down each assigned activity number. • Save your entries. 94 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Status Management Lesson Summary You should now be able to: • Describe the features of the status monitor • Customize data monitor • Assign tasks in the data monitor 03-12-2004 © 2004 SAP AG. All rights reserved. 95 Unit 3: Data Collection AC660 Lesson: Data Entry Lesson Overview This lesson provides an overview of online data entry and offline data entry with Microsoft Access/Excel. You will learn how to use data entry layouts for online data entry. In addition, you will learn the benefits of flexible upload for data collection. Lesson Objectives After completing this lesson, you will be able to: • Describe the settings for online data entry • Define data entry layouts • Describe offline data entry with Microsoft Access/Excel • Explain flexible upload Business Example The group, G1, plans to introduce the SAP Consolidation by the end of this year. You are required to prepare and customize the elements for data entry. Online Data Entry Figure 30: Customizing Online Data Entry 96 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Figure 31: Settings for Online Data Entry Companies in a group often have different requirements concerning reported financial data. For this reason, you can formulate different rules for each consolidation unit in the data entry version. A data entry profile consists of the assignment of a data entry group to a combination of special version for data entry, financial data type, and period category. The data entry profile valid for a consolidation unit/group determines the data entry layouts that can be used to enter its financial data. Data entry groups, period categories, and financial data types are valid in all dimensions and versions. Data entry layouts are valid for a specified chart of accounts. When you start the data entry task in the data monitor, only layouts can be used from the data entry group whose chart of accounts matches that in the global parameters. You can assign a data entry layout to more than one data entry group. In the period category, you specify all the periods in the fiscal year in which you enter the same category of financial data. You use financial data types to categorize the detail level of the financial data reported by a unit and also the category of data that it reports. For example, you could assign one financial data type to units that, due to their size and importance, enter highly detailed data possibly more frequently, and a different data type to units of less importance. 03-12-2004 © 2004 SAP AG. All rights reserved. 97 Unit 3: Data Collection AC660 Figure 32: Variable Scope of Reported Data The scope of data to be reported by each consolidation unit can be flexibly defined. In the example above, company 1 must enter the balance sheet and income statement data in the period 6. Conversely, company 2 only needs to enter the income statement data. The following Customizing elements determine the scope of reported data: • Data entry groups - A collection of any number of data entry layouts. • Period category - Encompasses periods that require the same processing in Consolidation. • Financial data type - Indicates the units that have the same requirements for reporting data. • After defining the above, you specify which consolidation units belong to which financial data type. You also specify which data entry group is valid for which combination of financial data type and period category. 98 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Figure 33: Online Data Entry with Flexible Layouts User-definable data entry layouts are used to enter reported financial data online in the SAP system. They can also be used to enter data offline. Microsoft Excel can be started within the SAP GUI and serves as an entry screen and/or display screen. Each layout can have its own unique structure. You define the row structure and specify the currencies and/or quantity units of measure that you want to enter. The row structure is normally based on the financial statement items and their breakdowns by partner unit, subitem, transaction currency, and/or year of acquisition. To display the comparison values from other versions, years or periods, you can create value columns, which are not ready for input. You specify the characteristics version, year or period in these columns, or you refer to other variables and/or the global parameter. As an alternative to the definition of lead columns, you can define individual rows. By doing this, you have additional possibilities to create layouts to further meet your individual requirements. For example, by defining empty rows, you can create additional layouts. You can use the characteristics version, year or period in value columns, which are ready for input, to enter data values simultaneously in several versions, years or periods. The status management for the monitor is read correspondingly. 03-12-2004 © 2004 SAP AG. All rights reserved. 99 Unit 3: Data Collection AC660 Figure 34: Definition of Data Entry Layouts Data entry layouts are used to enter reported financial data online in an SAP system or offline in a Microsoft Access database. The layouts that you require depend on the level of detail and the type of data to be entered. For example, you could use different layouts to enter balance sheet data, income statement data, and quantities. You define a data entry layout for a particular chart of accounts. The structure of a layout is flexible. You define the layout of the rows, which means a combination of characteristics and characteristic values in the lead columns, such as FS items and their breakdown by partner unit, subitem, transaction currency, or year of acquisition. You also specify the currencies and/or quantities that you want to enter. You can enter both currencies and quantities in a layout. 100 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Offline Data Entry Figure 35: Offline Data Entry with MS Access / Excel You use this method if one or more units do not use any integration, but administer the reported financial data on PC. You can start the data collection both for a single unit and for a group. You have defined master data, data entry layouts, and validation rules in the SAP system, which you can transfer to Microsoft Access with the means of a download. In Access, you can define more master data, which you can upload into the SAP system. Further, in Access you can enter data and carry out a validation check. In addition, you can execute a currency translation already. With Interactive Excel, you have another possibility for data entry. It is included in the standard Excel as a template. With the use of Interactive Excel as a data entry tool for an Access database, you have more flexibility than in the offline data entry directly in Access. This is because the structure of a data entry form is strictly specified in Access. The entered data is loaded into the Access database. You can download data from the SAP system and the Access database into Interactive Excel for report purposes. 03-12-2004 © 2004 SAP AG. All rights reserved. 101 Unit 3: Data Collection AC660 Figure 36: Data Entry and Validation with MS Access Central definition and download of control parameters • Data entry layouts • Validation rules The decentralized data entry in Access is controlled with data entry layouts. You can change the consolidation units within the data entry layout. Items: • You can differentiate immediately between totals items and value items. • The item breakdown by double-clicking on the amount field displays a considerable difference to the layouts in the data monitor. • The item long text can be displayed in the item. Decentralized validation in Access • Start using consolidation unit or group • Comparison of item values 102 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Flexible Upload Figure 37: Flexible Upload You use this method if one or more units does not use any integration, but administer the reported financial data on PC. You can start the data collection both for a single unit and a group. Reported data/standardizing entries: You can start the data collection directly in the data monitor when you supply the master data of the cons units with the following information: logical file name, server selection, upload method The system only transfers the data streams, which correspond to the global parameters and refer to the unit to be edited. Other data streams of the file are not taken into account. You can upload standardizing entries. A document is generated for each combination of ledger, consolidation chart of accounts, dimension, version, period, and consolidation unit. The item breakdowns, which are uploaded, check the breakdown categories correspondingly. During the upload, you can select between different update sessions to ensure the treatment of data streams that already exist. With this, you can report again with the session, Prorate, such as partner specific extensive information to FS items, after the correct totals are already available. Flexible upload can also be used for file upload of organizational units, FS items, and sub-assignments. For example, you can transfer product groups from a file. 03-12-2004 © 2004 SAP AG. All rights reserved. 103 Unit 3: Data Collection AC660 104 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Exercise 5: Online Data Entry Exercise Objectives After completing this exercise, you will be able to: • Define data entry layouts and use the layouts to collect data Business Example Task 1: Financial data types: 1. Create a financial data type for your example. Name: A (for group 01) ... R (for group 18) Assign the financial data type to the consolidation units. Task 2: Layouts: 1. According to the steering committee, the consolidation unit A is entered manually. The group requires data entry layouts, which you create as follows: a) LXY-0001 Balance sheet (XY = 50 + your group number) The balance sheet layout contains all the relevant balance sheet items with their characteristic values and description, and also the local currency. b) LXY-0003 Asset history sheet (XY = 50 + your group number) The asset history sheet contains all the relevant asset items and the item Investments in Subsidiaries – Purchase with the following: • item description • breakdown by subitem (transaction type) • partner unit in local currency Observe the individual financial statement data reported by cons unit A and decide the items you require. c) Your colleague has already created the remaining layouts for testing, using a different naming convention. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 105 Unit 3: Data Collection AC660 Because you want to use uniform layout naming for the presentation, copy these layouts using the Copy function and change the layout names in the following way: Template Your layout L50-0002 A/P - A/R LXY-0002 .(XY = 50 + your group number) L50-0004 Changes in Investee Equity LXY-0004 L50-0005 I/S with Functional Area LXY-0005 L50-0006 Income From Invest. Affiliates LXY-0006 L50-0007 Sales by Region LXY-0007 Hint: Make sure that you change the values for the consolidation chart of accounts and the dimension under General Selections. You must make the dimension and chart of accounts group-specific, and you may not use variables. Individual financial statement data for A: Version: 100, Current Year, Period: 12, Ledger: US CU FS item Subitem Part- ner CU Trans Curcy Key Trans Curcy LC GC Item text A 130100 B UNI 600 400 400 IC Trade Rec. A 130100 B USD 200 200 200 A 130100 C UNI 500 300 300 A 130100 C USD 300 300 300 A 170100120 B USD 1000 1000 1000 In- vest. Pur- chase A 170100120 C USD 260 260 260 A 191500100 USD 600 600 600 Mach. & Equip. Continued on next page 106 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry CU FS item Subitem Part- ner CU Trans Curcy Key Trans Curcy LC GC Item text A 191500120 USD 300 300 300 A 191500140 USD -100 -100 -100 A 191500220 USD -100 -100 -100 A 201100 USD -60 -60 -60 Trade Payables A 210100 B UNI -130 -100 -100 IC Trade Pay. A 210100 B USD -150 -150 -150 A 210100 C UNI -300 -200 -200 A 210100 C USD -150 -150 -150 A 250100100 USD -2000 -2000 -2000 Com- mon Stock A 251200120 USD -500 -500 -500 RE-Cur- rent Year A 301100400 USD -5000 -5000 -5000 Sales 3rd Party A 3101000001 USD 4520 4520 4520 Raw mate- rials. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 107 Unit 3: Data Collection AC660 CU FS item Subitem Part- ner CU Trans Curcy Key Trans Curcy LC GC Item text A 3119500003 USD 100 100 100 Amor- tiza- tion A 320400 B USD -120 -120 -120 In- vest- ment In- come A 390000 USD 500 500 500 An- nual net in- come Hint: Do not enter credit signs. The sign will be determined by the definition of the FS item/subitem. Task 3: Data entry group: 1. You want to carry out the data entry for a unit with a specific data entry layout on a particular date. Define a data layout group (XY = 50 + your group number). This group should contain all the layouts you created in Task 2. Task 4: Data entry profile: 1. Indicate that all layouts in the group, XY, are valid for cons unit A when entering data quarterly in version 100. Your colleague has already created the appropriate period categories (2 and 3) for the period, 12 and the periods, 3,6, and 9, respectively. Use these in your profile. Caution: Use your own financial data type! Continued on next page 108 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Task 5: 1. Now use the Data Monitor to enter data for consolidation unit A. Run the appropriate task in the monitor and enter the financial data provided in Task 2. 03-12-2004 © 2004 SAP AG. All rights reserved. 109 Unit 3: Data Collection AC660 Solution 5: Online Data Entry Task 1: Financial data types: 1. Create a financial data type for your example. Name: A (for group 01) ... R (for group 18) Assign the financial data type to the consolidation units. a) Financial data types: To define a new financial data type in the Implementation Guide, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Online and Offline Data Entry !Settings for Online and Offline Data Entry !Define Financial Data Types Create a financial data type for your example. Data type: A (for group 01) ... R (for group 18) Description: Group ## Data Type Choose New Entries. Save your entries when finished. Assign the financial data type to consolidation units A, B, C, D, and E, effective as of the current year, by choosing: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Online and Offline Data Entry !Settings for Online and Offline Data Entry !Assign Financial Data Types Save your entries. Task 2: Layouts: 1. According to the steering committee, the consolidation unit A is entered manually. The group requires data entry layouts, which you create as follows: a) LXY-0001 Balance sheet (XY = 50 + your group number) Continued on next page 110 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry The balance sheet layout contains all the relevant balance sheet items with their characteristic values and description, and also the local currency. b) LXY-0003 Asset history sheet (XY = 50 + your group number) The asset history sheet contains all the relevant asset items and the item Investments in Subsidiaries – Purchase with the following: • item description • breakdown by subitem (transaction type) • partner unit in local currency Observe the individual financial statement data reported by cons unit A and decide the items you require. c) Your colleague has already created the remaining layouts for testing, using a different naming convention. Because you want to use uniform layout naming for the presentation, copy these layouts using the Copy function and change the layout names in the following way: Template Your layout L50-0002 A/P - A/R LXY-0002 .(XY = 50 + your group number) L50-0004 Changes in Investee Equity LXY-0004 L50-0005 I/S with Functional Area LXY-0005 L50-0006 Income From Invest. Affiliates LXY-0006 L50-0007 Sales by Region LXY-0007 Hint: Make sure that you change the values for the consolidation chart of accounts and the dimension under General Selections. You must make the dimension and chart of accounts group-specific, and you may not use variables. Individual financial statement data for A: Version: 100, Current Year, Period: 12, Ledger: US Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 111 Unit 3: Data Collection AC660 CU FS item Subitem Part- ner CU Trans Curcy Key Trans Curcy LC GC Item text A 130100 B UNI 600 400 400 IC Trade Rec. A 130100 B USD 200 200 200 A 130100 C UNI 500 300 300 A 130100 C USD 300 300 300 A 170100120 B USD 1000 1000 1000 In- vest. Pur- chase A 170100120 C USD 260 260 260 A 191500100 USD 600 600 600 Mach. & Equip. A 191500120 USD 300 300 300 A 191500140 USD -100 -100 -100 A 191500220 USD -100 -100 -100 A 201100 USD -60 -60 -60 Trade Payables A 210100 B UNI -130 -100 -100 IC Trade Pay. A 210100 B USD -150 -150 -150 A 210100 C UNI -300 -200 -200 A 210100 C USD -150 -150 -150 A 250100100 USD -2000 -2000 -2000 Com- mon Stock A 251200120 USD -500 -500 -500 RE-Cur- rent Year A 301100400 USD -5000 -5000 -5000 Sales 3rd Party Continued on next page 112 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry CU FS item Subitem Part- ner CU Trans Curcy Key Trans Curcy LC GC Item text A 3101000001 USD 4520 4520 4520 Raw mate- rials. A 3119500003 USD 100 100 100 Amor- tiza- tion A 320400 B USD -120 -120 -120 In- vest- ment In- come A 390000 USD 500 500 500 An- nual net in- come Hint: Do not enter credit signs. The sign will be determined by the definition of the FS item/subitem. a) Layouts: To define data entry layouts, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Data !Data Collection !Online and Offline Data Entry ! Settings for Online and Offline Data Entry !Define Data Entry Layouts !Create Data Entry Layout 1. Enter the name and description for the balance sheet layout, and choose Create. Name: LXY-0001 Description: Balance sheet (XY = 50 + your group number) 2. To specify characteristics for the layout header, choose Edit !Gen. data selection !Gen. data selection in the layout definition screen. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 113 Unit 3: Data Collection AC660 3. Select all the characteristics except FS item from Available Characteristics by clicking on the box to the left of each name and press the left arrow icon to move them to the Selected characteristics table. 4. Define a variable for all characteristics except Dimension and Cons chart/acct by checking the Variable on/off box (third column) 5. Enter your own dimension (XY) and chart of accounts (XY) in the From column. Confirm your entries. Check and Confirm. 6. In the Report Painter screen for layout definition, double-click on the first column (lead column). 7. Select the characteristic FS item from Available Characteristics and press the left arrow icon to move it to the Selected characteristics table. 8. Enter the item range 100000 to 299999 in the From and To columns. 9. Enter a text for this lead column (for example, FS item). Choose text icon at bottom of dialog box. Select confirm. 10. In the lead column structure, select Characteristic value and name. Specify a length of 8 for the characteristic value, and a text length of 30 and confirm your selection. Choose Lead Column icon at bottom of dialog box. Select Confirm. Check and Confirm. 11. Double-click on Column 1. Select the key figure Local currency. Use key figure drop-down menu. Enter short, medium, and long texts. Text icon is at the bottom of entry box. Select Confirm. Check and Confirm. 12. To add the debit/credit sign you put the cursor on the column header Local currency. Choose the menu Edit !Element ! Insert Element Select Element type Attribute. Press Enter to confirm.In the pop-up window press Confirm to confirm the element definition of debit/credit sign.Confirm your entries and save the layout. b) Use the same procedure to define an asset history sheet layout. Name: LXY-0003 Description: Asset history sheet (XY = 50 + your group number) 1. Choose Edit !Gen. data selection !Gen. data selection and maintain same as with the first layout. Continued on next page 114 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry 2. For the first lead column select FS item. Do not specify an item range; instead enter the items 170100 and 191500 individually. Enter 170100 in the From column; press the More arrow, and enter 191500 on the next line. 3. Enter a text using the Text icon at the bottom of entry box. Using the Lead column structure icon at the bottom of box, select Characteristic value and name, and specify a length of 8 places for the characteristic value, and a text length of 20. Confirm. 4. You also need to define two further lead columns in this layout. Choose Edit !Columns !New lead column The first lead column is for the characteristic Subitem (transaction type), with the range 100 - 299, text Subitem, a characteristic value length of 5 and a text length of 10 places. Confirm. The second lead column is for the characteristic Partner unit, with the range A to E, text Partner, and a characteristic value length of 3 places. Name is not needed. Confirm. 5. Sort the lead columns by going to Edit " Columns "Sort lead columns. Place FS Item first; Subitem second; and Partner Unit third. Define the local currency column and the debit/credit sign as you did for the balance sheet layout. Save. c) You can create all the other layouts using the copy function. To do this, stay at: Menu Path: Tools !Customizing !IMG !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Data !Data Collection !Online and Offline Data Entry !Settings for Online and Offline Data Entry !Define/Create Data Entry Layouts Enter the name (e.g. LXY-0004) and description of the new layout, and the name of an existing layout which you want to use as a template (e.g. L50-0004) in the Copy from section. Choose Create and then Edit !Gen. data selection !Gen. data selection in order to change the chart of accounts and dimension to that of your group Caution: You must define the dimension and the chart of accounts as being group-specific, and you may not use variables. Then save the layout. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 115 Unit 3: Data Collection AC660 Repeat this procedure to create the remaining 5 layouts. Task 3: Data entry group: 1. You want to carry out the data entry for a unit with a specific data entry layout on a particular date. Define a data layout group (XY = 50 + your group number). This group should contain all the layouts you created in Task 2. a) Data entry group: To define a data entry group, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Online and Offline Data Entry !Settings for Online and Offline Data Entry !Define Data Entry Groups Choose New entries and enter a name for your group (50 + your group number) and a description, for example Group ## Layouts. Choose the group you just created and select the Assignment of data entry layouts folder and choose New entries. Provide a sequence number (e.g. 010,020,030,etc.) and assign all the layouts that you have defined, including those for which you used a template, to this group. Do not check the Integrated Excel box; you will not use this option at this time. Save your entries. Task 4: Data entry profile: 1. Indicate that all layouts in the group, XY, are valid for cons unit A when entering data quarterly in version 100. Your colleague has already created the appropriate period categories (2 and 3) for the period, 12 and the periods, 3,6, and 9, respectively. Use these in your profile. Continued on next page 116 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Caution: Use your own financial data type! a) Data entry profile: To define a data entry profile, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Online and Offline Data Entry !Settings for Online and Offline Data Entry !Define Data Entry Profiles Choose New entries, and enter your financial data type (A for group 1 to R for group 18), the period category 2 (period 12 data entry), and the data entry group that you defined in section 1-3. Make a second entry, entering your financial data type, the period category 3 (periods 3,6,9), and your data entry group. Save your entries. The period categories 2 and 3 already exist. Period categories are defined at: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Collection !Online or Offline Data Entry !Settings for Online or Offline Data Entry !Define Period Categories Task 5: 1. Now use the Data Monitor to enter data for consolidation unit A. Run the appropriate task in the monitor and enter the financial data provided in Task 2. a) Menu Path: Accounting !Enterprise Controlling !Consolidation !Data Collection !Monitor Place the cursor on the cross section of Consolidation Unit A and the Data Entry Task. Choose Update Run. Select the layouts in turn from the Reported Financial Data Section and enter the data from Task 2 for Consolidation Unit A. N.B. Some items will appear as totals in some of the layouts. The detail will have to be entered in another layout. When you have finished entering the data, go back to the Balance Sheet Layout and check that it balances to zero. 03-12-2004 © 2004 SAP AG. All rights reserved. 117 Unit 3: Data Collection AC660 118 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Exercise 6: Flexible Upload Exercise Objectives After completing this exercise, you will be able to: • Enter individual financial statement data by means of a flexible upload Business Example Your presentation example includes a unit on the consolidation of investments. For this reason, you need to collect additional financial data, which is used by the consolidation task. In practice, subsidiaries supply this information along with the other reported financial statement data. This is why you populate these tables in the course of the data collection. You need to undertake two steps before you can collect the additional financial data for the consolidation of investments. You need to define the system utilization for the consolidation of investments and you must define the global settings. Task: Defining an upload method: 1. According to the steering committee, all the remaining cons units, B, C, D, and E, use Microsoft Excel to report their individual financial statements. Your colleague has already entered the data for the consolidation units B, C, D, and E in an Excel worksheet extract file (.TXT). The data is transferred to Consolidation using a flexible upload. Define the upload method UPLXY (XY = 50 + your group number) with the following properties: a. Column width: variable b. Field separator T: file type “Text (Tabs delimited)” c. Row Type Indicators: Do not use d. Comment character: “*” e. Digit separators: "1.000,00" f. Debit/credit signs: Copy from upload file without changes g. Update mode: Delete all items h. Input type: Cumulative i. Dialog box: enter the dimension and consolidation chart of accounts Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 119 Unit 3: Data Collection AC660 j. Header row: enter the fields (in this order): consversion, fiscal year, period, and ledger k. Data rows: enter the fields (in this order): consolidation unit, FS item, subitem, partner unit, transaction currency, value in transaction currency, value in local currency, value in group currency, user-defined field 2. Assign the upload method you just created to the master data of all the units in consolidation group G2 by using hierarchy maintenance. 3. Create the Excel file for upload and then upload it to SAP Consolidation 4. Check the contents of the Totals Database then block the task. 120 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Solution 6: Flexible Upload Task: Defining an upload method: 1. According to the steering committee, all the remaining cons units, B, C, D, and E, use Microsoft Excel to report their individual financial statements. Your colleague has already entered the data for the consolidation units B, C, D, and E in an Excel worksheet extract file (.TXT). The data is transferred to Consolidation using a flexible upload. Define the upload method UPLXY (XY = 50 + your group number) with the following properties: a. Column width: variable b. Field separator T: file type “Text (Tabs delimited)” c. Row Type Indicators: Do not use d. Comment character: “*” e. Digit separators: "1.000,00" f. Debit/credit signs: Copy from upload file without changes g. Update mode: Delete all items h. Input type: Cumulative i. Dialog box: enter the dimension and consolidation chart of accounts j. Header row: enter the fields (in this order): consversion, fiscal year, period, and ledger k. Data rows: enter the fields (in this order): consolidation unit, FS item, subitem, partner unit, transaction currency, value in transaction currency, value in local currency, value in group currency, user-defined field a) Defining an upload method: To define an upload method, choose: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Data !Data Collection !Data Collection from Non-SAP Systems !Define Method for uploading reported financial data !Maintain methods for uploading financial data !Choose Choose New entries and enter the name of your upload UPLXY and a description (for example, Upload group ##). A detail screen appears in which you define your upload. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 121 Unit 3: Data Collection AC660 In the top half of the screen, define the upload method with the following properties: 1. Column width: variable 2. Field separator: “Tabulator” 3. Row Type Indicators: “Do not use” 4. Comment character: “*” 5. Digit separators: “1.000,00” 6. Debit/credit signs: Copy from upload file without changes 7. Update mode: Delete (all items) 8. Input type: Cumulative Use the icons at the top of the screen to change the fieldseparator to T, the digit separator to 1.000,00 , and the comment character to *. Define the dialog box and file rows as follows and in the exact order: 1. Dialog box: enter the Dimension and Cons chart of accounts 2. Header row: enter the ConsVersion, Fiscal year, Period, and Ledger 3. Data rows: enter the fields Consolidation unit, FS item, Subitem, Partner unit, Transaction currency, Value in transaction currency,Value in localcurrency, andValue in group currency To select a field, double click or position the cursor on it and click on the select icon at the top of the screen. Position the cursor on Dialog Box/Header Row/Data Rows and click on the move icon at the top of the screen Save your settings. 2. Assign the upload method you just created to the master data of all the units in consolidation group G2 by using hierarchy maintenance. a) Menu Path: Accounting !Enterprise Controlling !Consolidation !Master Data !Consolidation Groups !Hierarchy !Maintain Expand the hierarchy. Double click B, C, D and E in turn and on the Data Collection tab of each, enter the name of the upload method you have just defined. Save your changes Continued on next page 122 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry 3. Create the Excel file for upload and then upload it to SAP Consolidation a) To create the upload file: Menu Path: Office !WorkplaceNavigate through the menus:Shared Folders !EC !EC-CS !Training From the contents windoe on the right double click on the Excel file upload_B_E Change the year in Cell B2 to the current year. In column E change any UNI to EUR. Save to the C: drive of the machine as a .txt file. Now upload using the Data Monitor Menu Path: Accounting !Enterprise Controlling !Consolidation !Data Collection !Monitor Expand the hierarchy. Put your cursor on the cross section of Consolidation Group G2 and the Data Entry task. Choose Update Run. On the next screen, start the upload by clicking on the import icon to the right of Consolidation Group G2. Enter Upload Method UPLXY. Click on the browser button to the right of the Physical file name field and navigate to your file. File format is ASCII. Select presentation server. Execute Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 123 Unit 3: Data Collection AC660 4. Check the contents of the Totals Database then block the task. a) From within the Data Monitor Menu Path: Goto !Database Listing of Totals Records Enter the following parameters Dimension XY Consolidation Group G1 Version 100 Fiscal Year 2002 Period 12 Cons Chart XY Execute Verify that the LC Value is zero for each unit. To lock the task, click on the intersection of consolidation group G1 and the Data Entry task and select the lock icon from the top of the screen. The data entry column should turn to a series of padlocks. 124 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Data Entry Lesson Summary You should now be able to: • Describe the settings for online data entry • Define data entry layouts • Describe offline data entry with Microsoft Access/Excel • Explain flexible upload 03-12-2004 © 2004 SAP AG. All rights reserved. 125 Unit 3: Data Collection AC660 Lesson: Validation and Postings Lesson Overview This lesson provides an overview of validation and postings. You will learn how to define validation rules with the formula builder. In addition, you will learn how to use the various document types for postings. You will also learn about posting levels. Lesson Objectives After completing this lesson, you will be able to: • Explain the concept of validations • Describe postings and document types Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. Financial statement data of the individual consolidation units has been transferred into the SAP system. You need to define the validation rules to check the transferred values and prepare the system for standardizing and consolidation entries. User-defined Validations Figure 38: Validation The concept of user-defined validation is employed in many SAP applications. 126 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Validations are available in addition to the standard checks in the SAP system posting transaction. You can run validation when processing the following: • Document header • Individual document line • Complete document Validation for a consolidation unit typically takes place after data collection in local currency and currency translation into group currency. You require to perform validation across consolidation units or dimensions to ensure reconciled data in legal and management consolidation. You can check the validation result step-by-step in the validation log. You can verify the validation rules that were interpreted in a validation step. You can also know how the result of the step breaks down into the partial results of the validation rules involved. With the help of concrete numeric values, you can analyze the computation of the total result. Reporting tools such as drilldown reporting or Report Writer/Painter are recommended to verify the values that were calculated by the validation. Figure 39: Formula Builder for Defining Rules You can define validation rules with the formula builder. The field selection contains, in accordance with the callup point chosen by you, the fields of the document header, the FS item, the complete document , or the Consolidation totals data. You can also define validation rules with the help of the attributes that you have defined. The available fields, logical operators and comparative operators, can only be selected when they are meaningful in that place. 03-12-2004 © 2004 SAP AG. All rights reserved. 127 Unit 3: Data Collection AC660 If the check contains an error, you can decide whether you want to react to the error with an error message or a warning message. You can store the texts for the error or warning messages in message classes. The message classes bring similar messages together. Postings and Document Types Figure 40: Postings and Document Types Two types of entries are posted during consolidation, adjusting or consolidation entries. The system posts automatic entries to the selected items that you specify, such as retained earnings in the balance sheet and income statement, provisions for taxation in the balance sheet, and income tax expenses in the income statement. Postings are differentiated by the document type. Each document type is assigned to a single number range for a particular version. A posting level and other control parameters are assigned to each document type. Note: You should use a document type for one task only, to enable you to repeat and reverse postings. The system needs to be able to identify the documents posted for a task. 128 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Figure 41: Document Types SAP Consolidation supports a wide range of automatic postings. You can also post standardizing and consolidation entries manually. Postings are classified by means of document types. This enables you to perform a simple analysis and outline the distinction between different business functions. The system automatically generates journal entries, such as financial statement balancing adjustments and deferred income taxes. In this way, you can control the special items for deferred taxes independently of the respective document type. In addition, with document types that are larger than or equal to 20, you can define a clearing item for cross-consolidation units postings. A cross-consolidation unit posting can take place only for these posting levels. To indicate selected items for the document type, enter an item for the debit and credit postings. You need to use different document types to distinguish between manual and automatic postings. You can use identical or different number ranges for posting. The account assignment takes place by the item number and as required by the sub-assignment possibilities, which you can specify individually. A reversal function and a mass reversal function is available for single documents. 03-12-2004 © 2004 SAP AG. All rights reserved. 129 Unit 3: Data Collection AC660 Figure 42: Posting Levels I The posting level standardizes the postings in the Consolidation system. For example: • Adjustments to reported financial data • Standardizing Entries Further posting levels: • Space: Financial data from real-time update • 08: Item substitution based on levels “space”, 00, and 01 • 23: Two-sided elimination (special logic), particularly for eliminating investment revenue during mutual stock consolidation • R0 to R3 Reporting Report Writer (roll-up only) Standardizing entries are valid in all the consolidation groups, which contain the consolidation unit that is posted against. Two-sided consolidation entries are valid only for the consolidation groups in which the cons unit and the partner unit are consolidated using the purchase, or proportional, or mutual stock method (levels 23 and 24). Postings that are dependent on the consolidation group are valid only for the relevant consolidation unit (levels 02, 12, 22, and 24) or for the consolidation group and all the other groups in which it is included. 130 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Figure 43: Posting Levels II You specify a posting level when you define document types. Journal entries are stored in the database with a respective posting level. In reporting, they can be subdivided by the posting level. In the above example, documents are portrayed for different tasks: • Activity 1: The standardizing entry to cons unit C only affects this unit. The document is valid in all the cons groups (CG). • Activity 2: The elimination of IU payables and receivables between A and B is valid in the cons groups 1 and 2. • Activity 3: The elimination of IU payables and receivables between A and B is valid in the cons group 1, as both companies are only affiliated to companies at the group level. • Activity 4: The task consolidation of investments is started in CG1, the document is created in the lowest affected cons group CG3 and is also valid in CG1. 03-12-2004 © 2004 SAP AG. All rights reserved. 131 Unit 3: Data Collection AC660 132 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Exercise 7: Validation Exercise Objectives After completing this exercise, you will be able to: • Define simple validation rules using the formula builder Business Example You have now entered in the individual financial statement data of all the consolidation units in your prototype example. This data now needs to be validated, in order to provide a correct basis for the following tasks. Task: Defining and running a validation: 1. Define validation VXY (where XY = 50 + your group number). The validation contains two simple steps: 1st check: Ensures that the sum of asset FS items is equal to the sum of liability/equity FS items. 2nd check: Checks whether depreciation of machinery and equipment in the balance sheet is equal to the depreciation expense of machinery and equipment in the income statement. Hint: Specify the standard messages 601 and 607, and use the local currency fields for message output. 2. Assign the validation rule to all consolidation units. 3. Run the task that validates the local currency data. The system automatically blocks the task if it is successfully completed for the whole group G1. You have already made the appropriate setting in the previous section 03-12-2004 © 2004 SAP AG. All rights reserved. 133 Unit 3: Data Collection AC660 Solution 7: Validation Task: Defining and running a validation: 1. Define validation VXY (where XY = 50 + your group number). The validation contains two simple steps: 1st check: Ensures that the sum of asset FS items is equal to the sum of liability/equity FS items. 2nd check: Checks whether depreciation of machinery and equipment in the balance sheet is equal to the depreciation expense of machinery and equipment in the income statement. Hint: Specify the standard messages 601 and 607, and use the local currency fields for message output. a) To define a validation, choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Validations for Reported Data and Standardized Data ! Define validations !Create validation !Choose Enter VXYasthe name of your validation (where XY = 50 + yourgroup number) and description Group ## Validation. Enter. Put cursor on VXY folder . Then choose Insert step icon. Edit the steps Prerequisite, Check, Message successively by placing cursor on each and double-clicking. Make the following settings for the validation using the Formula Builder Validation step 001: Total assets = Total liabilities + stockholders’ equity Continued on next page 134 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Field / Data Type Value Prerequisite: TRUE Check: SUM (ECCSDAT-HSLYD) where T100000 = SUM (ECCSDAT-HSLYD) where T200000 Message: Use the existing message 601 T100000 and T200000 are Rules. You access them by selecting the Rules tab. Click on the buttons in the formula builder to select them. You can display the technical names in the top section ofthe screen by choosing Settings !Technical names or by selecting the Display Technical Name icon (3rd icon) to the right of the field name listings. When choosing Table fields, first select Data structure for CS validation, then you will see the field descriptions, forexample, local currency YTD. Hint: Note that the check is structured as follows: SUM (*Table field*) WHERE *Rule* *Operator* SUM (*Table field*) WHERE *Rule* If the traffic light is not green, the syntax is incorrect. With cursor on VXY on left side of screen, choose Insert step icon. Validation step 002 : Depreciation of machinery and equipment in the balance sheet = depreciation of machinery and equipment in the income statement Field/Data Type Value Prerequisite: TRUE Check: SUM (ECCSDAT-HSLYD) where T191500 + SUM (ECCSDAT-HSLYD) where T311950 = ‘0.00’ Message: Use the existing message 607 Hint: Use the existing rules T191500_220 and T311950. Choose the CONSTANT button to enter the constant value 0. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 135 Unit 3: Data Collection AC660 Save your definition. 2. Assign the validation rule to all consolidation units. a) Assign the validation to your cons units by choosing: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Validations for Reported Data and Standardized Data ! Assign Validations to Consolidation Units Select New Entries. Make the assignment for period category 2and 3. Enter your validation in the columns Val . r pt d and Val . s t d for each of your cons units.Save. 3. Run the task that validates the local currency data. The system automatically blocks the task if it is successfully completed for the whole group G1. You have already made the appropriate setting in the previous section a) Since you have already defined validation tasks and assigned them to the task group, you only need to ensure that the Automatic blocking indicator is set for both of the validation tasks. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Monitor !Define Task Group Select your task group and double click on assign tasks to task group. Now go to the application and run the data monitor. Execute the local currency vaidation task for consolidation group G1 by placing the cursor at the cross section between unit G1 and the LOCAL VAL task, and choosing Update run. Menu Path: Accounting !Enterprise controlling !Consolidation !Data Collection !Monitor Open up the hierarchy.Position the cursor on the intersection of consolidation group G1 and the task VALID LC. Select Update Run. Open up the results table. You should see green lights for the validations you created. 136 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Exercise 8: Posting Exercise Objectives After completing this exercise, you will be able to: • Post a standardizing entry. Business Example • You want to present a manual adjustment entry. You assume that consolidation unit A recorded a useful life of 10 years for an asset, whereas the group will depreciate the asset only over a period of 5 years. This posting, which has an effect on earnings, automatically triggers an allocation of deferred taxes and an adjustment of annual net income. The tax rate of 40% applies to all consolidation units. You already created the necessary selected items in a previous step. • You also explain how to post a reversal of a generated document. You add one more assumption to your example: The information regarding the difference in the depreciable life was wrong. The original depreciation of consolidation unit A was correct, and should not be adjusted for the corporate group. You therefore post a reversal to the document that was posted. Task: Depreciation adjustment: 1. Depreciation adjustment: 1) Define a tax rate of 40% for all consolidation units for posting deferred taxes. Hint: Use the function Carry out Mass Change . 2) Define document type 10 for postings in local currency (LC) in conjunction with deferred taxes. For this document type create a new number range 10 with document numbers from 1000000000 through 1999999999. 3) Create a new task called STD POST : Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 137 Unit 3: Data Collection AC660 a) Short text: Adj.Entry; medium text: Adjustment Entry· b) Assign the new document type 10 to the task, making it effectivefrom last year and period 12. 4) Add task STD POST to the tasks in your task group. 5) Post the adjustment entry in the data monitor. Make a note of the document number and display the document. In the Information System, display a list of the totals records and journal entries. 2. Reverse the document created beforehand. 1) Display the document and make sure that the reversal document number is recorded in the original document, and the organization document number is recorded in the reversal document. 2) Block the task STD POST in the data monitor for the entire corporate group G1. 138 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Solution 8: Posting Task: Depreciation adjustment: 1. Depreciation adjustment: 1) Define a tax rate of 40% for all consolidation units for posting deferred taxes. Hint: Use the function Carry out Mass Change . 2) Define document type 10 for postings in local currency (LC) in conjunction with deferred taxes. For this document type create a new number range 10 with document numbers from 1000000000 through 1999999999. 3) Create a new task called STD POST : a) Short text: Adj.Entry; medium text: Adjustment Entry· b) Assign the new document type 10 to the task, making it effectivefrom last year and period 12. 4) Add task STD POST to the tasks in your task group. 5) Post the adjustment entry in the data monitor. Make a note of the document number and display the document. In the Information System, display a list of the totals records and journal entries. a) Depreciation adjustments: 1) Add the percentage rate for posting deferred taxes in the master records of the consolidation units. Since this change is the same for all units, use the Mass Changes function. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Master Data !Organizational Units !Consolidation Units ! Carry out a mass change Enter the following values: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 139 Unit 3: Data Collection AC660 Field/Data Type Value Dimension XY Consolidation group G1 Consolidation units A through E Version 100 Year Current Year Period 12 New values !save as new value 40 % tax rate Test run No Execute program. 2) Define the new document type 10. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Manual Posting !Define document types Choose New entries and enter the following: Field/Data Type Value Document type 10 Description ADJUSTMENT ENTRIES Posting level 10 Balance check 0 Application 9 Manual posting Select the indicator Posting in local currency Select the indicator Deferred Taxes Select the indicator for debits and credits Number Range Maintenance: Number range ID 10 Number range 101000000000 to 1999999999 Year valid until (2003) Choose Number Ranges/Auto Reversal folder. Choose New Entries. Specify version 100 and the number range (10). Continued on next page 140 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings Choose Define Number Range. Choose Insert interval icon and enter data as listed above. Save the number range. Save your entries. 3) Define a new task for the adjustment entry and insert the task in the existing task group. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Manual Posting !Define tasks Choose New entries and create the task STD POST. text Std Posting) Select this task and double-click Document Type Assignment folder. Choose New Entries and specify the following: Field/Data Type Value Effective year year 2002 Effective period Last year Document type 10 4) After saving these entries, add task STD POST as a New Entry to task group DATA. Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data Monitor !Define Task Group Select your task group and double click on assign tasks to task group. Select new entries. Add the task STD POST. Save your entries 5) In the application, run the data monitor and execute the adjustments task for consolidation unit A by placing the cursor at the cross section between unit A and the STD POST task, and choosing Update run. Enter document header text and then select Line Items tab. Field/Data Type Value Item 191500, Subitem 220 -100 Item 311950, Subitem 0003 100 Save and make a note of the document number when it is displayed on the status line. To display the document, from within the data monitor, choose: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 141 Unit 3: Data Collection AC660 Menu Path: Goto !Journal entries Select the following: Field/Data Type Value Dimension XY Consolidation group G1 Consolidation unit A Version 100 Fiscal year 2002 Period 12 Document type 10 Posting level 10 Chart of accounts XY Make sure you delete any other entries. After confirmation, the selected document will be displayed. An alternative way of displaying the document is to directly select the document number that was displayed on the status line when the adjustment was posted. To do this, choose: Menu Path: Accounting !Enterprise controlling !Consolidation !Data Collection !Manual posting !Display 2. Reverse the document created beforehand. 1) Display the document and make sure that the reversal document number is recorded in the original document, and the organization document number is recorded in the reversal document. Continued on next page 142 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Validation and Postings 2) Block the task STD POST in the data monitor for the entire corporate group G1. a) Reversal: To enter a reversal against an already posted document, run the STD POST task from the data monitor for cons unit A by choosing Update run.or, in the application menu go to: Menu Path: Accounting !Enterprise controlling !Consolidation !Data Collection !Manual posting !Enter Under Copy from enter the document number of the entry you posted beforehand, and select the Reverse flag. After entering a header text for the reversal, choose the Line Items tab. Reverse this document by choosing Post (or Update). Finally, block the task STD POST for the entire group by placing the cursor at the cross section between the task and consolidation group G1, and selecting Block. 03-12-2004 © 2004 SAP AG. All rights reserved. 143 Unit 3: Data Collection AC660 Lesson Summary You should now be able to: • Explain the concept of validations • Describe postings and document types 144 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Unit Summary Unit Summary You should now be able to: • Explain the data collection methods from both SAP systems and the non-SAP systems • Use financial data in consolidation • Describe the features of the status monitor • Customize data monitor • Assign tasks in the data monitor • Describe the settings for online data entry • Define data entry layouts • Describe offline data entry with Microsoft Access/Excel • Explain flexible upload • Explain the concept of validations • Describe postings and document types 03-12-2004 © 2004 SAP AG. All rights reserved. 145 Unit Summary AC660 146 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. In case of data collection from non-SAP systems, there is Microsoft Access data entry using an additional Microsoft Excel interface. Fill in the blanks to complete the sentence. 2. The data is recorded using various data collection procedures. Fill in the blanks to complete the sentence. 3. Which of these is NOT true about tasks? Choose the correct answer(s). ! A Tasks are user-defined ! B Tasks can be grouped into task groups ! C Tasks can only be run in test mode ! D Tasks can be run successively up to the next milestone 4. A group-dependent task group must always be a partial number of the task number and must always start with the first task of the global task group. Fill in the blanks to complete the sentence. 5. Which task can be entered only once in the data monitor task group? Choose the correct answer(s). ! A Balance carry forward ! B Manual posting ! C Rollup to consolidation groups ! D Data collection 6. Explain how you can categorize the detail level of the financial data reported by a unit. 7. What are User-definable data entry layouts used for? 03-12-2004 © 2004 SAP AG. All rights reserved. 147 Test Your Knowledge AC660 8. When can you use offline data entry with Microsoft Access/Excel? 9. When is flexible upload used in data collection? 10. During flexible upload, you cannot select different update sessions. Determine whether this statement is true or false. ! True ! False 11. You can check the validation result step-by-step in the . Fill in the blanks to complete the sentence. 12. You do not require validation across consolidation units or dimensions. Determine whether this statement is true or false. ! True ! False 13. The posting level standardizes the postings in the system. Fill in the blanks to complete the sentence. 148 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Answers 1. In case of data collection from non-SAP systems, there is Microsoft Access offline data entry using an additional Microsoft Excel interface. Answer: offline 2. The totals data is recorded using various data collection procedures. Answer: totals 3. Which of these is NOT true about tasks? Answer: C Tasks can be run in both test and update modes. 4. A group-dependent task group must always be a partial number of the global task number and must always start with the first task of the global task group. Answer: global 5. Which task can be entered only once in the data monitor task group? Answer: B The task Manual posting can be entered several times in the data monitor task group. 6. Explain how you can categorize the detail level of the financial data reported by a unit. Answer: You can use financial data types to categorize the detail levels of the financial data reported by a unit and to detail the category of data that it reports. For example, you can assign one financial data type to units that, due to their size and importance, enter highly detailed data and a different data type to units of lesser importance. 7. What are User-definable data entry layouts used for? Answer: User-definable data entry layouts are used for entering reported financial data online in the SAP system. They can also be used for entering data offline. 03-12-2004 © 2004 SAP AG. All rights reserved. 149 Test Your Knowledge AC660 8. When can you use offline data entry with Microsoft Access/Excel? Answer: You can use offline data entry with Microsoft Access/Excel if one or more consolidation units do not use any integration, but administer their reported financial data on PC. 9. When is flexible upload used in data collection? Answer: Flexible upload can be used in data collection if one or more consolidation units do not use integration, but administer their reported financial data on PC. 10. During flexible upload, you cannot select different update sessions. Answer: False During flexible upload, you can select different update sessions, in order to guarantee the treatment of data streams, which already exist. 11. You can check the validation result step-by-step in the validation log. Answer: validation log 12. You do not require validation across consolidation units or dimensions. Answer: False You need validation across consolidation units or dimensions to ensure reconciled data in legal and management consolidation. 13. The posting level standardizes the postings in the consolidation system. Answer: consolidation 150 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 4 Currency Translation Unit Overview The unit covers currency translation in SAP Consolidation. You will learn how to configure the translation methods for each consolidation unit. You will be able to create tasks for currency translation and set up special financial statement items that are required when translation differences with an effect on net income are posted. Finally, you will be able to maintain the exchange rate table and the table of translation ratios. Unit Objectives After completing this unit, you will be able to: • Determine the need for currency translation • Evaluate currency translation methods • Use currency translation keys • Determine exchange rates • Examine the translation of individual financial statement values into group currency • Manage currency translation differences that do not affect net income or the ones that affect net income • Explain rounding differences Unit Contents Lesson: Currency Translation Methods and Keys. . . . . . . . . . . . . . . . . . . . . . . . . .152 Lesson: Translation and Rounding Differences. . . . . . . . . . . . . . . . . . . . . . . . . . . . .159 Exercise 9: Currency Translation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171 Exercise 10: Validation II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193 03-12-2004 © 2004 SAP AG. All rights reserved. 151 Unit 4: Currency Translation AC660 Lesson: Currency Translation Methods and Keys Lesson Overview This lesson will give you an overview of currency translation methods. This lesson will cover currency translation keys and compare the values of two translation keys. You will also learn about the relationship between the currency translation keys and the exchange rate indicator. Lesson Objectives After completing this lesson, you will be able to: • Determine the need for currency translation • Evaluate currency translation methods • Use currency translation keys • Determine exchange rates Business Example The group, G1, plans to introduce the component, SAP Consolidation by the end of this year. Financial data reported by consolidation units is collected in the Consolidation application in local currency. Notice that the local currency of a consolidation unit is not the same as the group currency. You need to translate this data into group currency before you can create consolidated financial statements. 152 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Currency Translation Methods and Keys Currency Translation Methods Figure 44: Currency Translation The currency translation task enables you to translate financial data reported by consolidation units in their local currency into the currency of the consolidation group. Currency translation is based on translation methods. You can define several methods to translate data reported by your consolidation units. You can assign every consolidation unit by time period and version. The type of currency translation you use depends on the relationships between your corporate group and its individual consolidation units (functional currency). You can define any of the commonly-used translation methods, such as temporal method and current-rate method, for your chart of accounts. 03-12-2004 © 2004 SAP AG. All rights reserved. 153 Unit 4: Currency Translation AC660 Figure 45: Currency Translation - Customizing Elements Translation methods indicate the exchange rate used to translate certain items, and how any subsequent translation or rounding differences are to be handled. Translation methods are assigned to consolidation units in their master data. Item sets are ranges of items that are translated using the same translation key and exchange rates. Example: Fixed assets: Translated using historical rates Current assets: Translated using current rates Income statement: Translated using average rates If you want translation differences to be posted with an effect on net income, you need to create selected items for automatic posting. These are typically items for retained earnings/net income in the income statement and balance sheet. You store exchange rates for exchange rate types in the exchange rate table. Exchange rate types are a combination of the translation version and the exchange rate indicator. Translation methods are dimension-dependent. 154 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Currency Translation Methods and Keys Currency Translation Keys Figure 46: Currency Translation Keys Different financial statement item sets are normally translated using different exchange rates. You use various combinations of the currency translation key and the exchange rate indicator to determine these exchange rates. The currency translation key determines the base currency for translation, the table used to find the exchange rate, and the procedure to calculate the group currency values. The currency translation keys are fixed and cannot be changed, except translation key 7. 03-12-2004 © 2004 SAP AG. All rights reserved. 155 Unit 4: Currency Translation AC660 Figure 47: Comparison of Translation Keys 1 and 5 The following example shows the differences in the translation of values with the translation keys 1 (period end rate) and 5 (monthly rate). The period values and period rates are projected as initial values. Translation key 1 Period 1: LC 100 * 2.0 = GC 200 This value is posted. Period 6: LC 250 * 3.0 = GC 750 The total annual value is translated here. 200 has already been posted. Only the rest of GC 550 is booked in period 6. Translation key 5 LC 100 * 2.0 = GC 200 LC 150 * 3.0 = GC 450 Here, only the respective monthly value is calculated and posted. 156 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Currency Translation Methods and Keys Determination of Exchange Rates Figure 48: Determination of Exchange Rates The translation keys 1, 2, 5, 9, and A require the entry of an exchange rate indicator. The exchange rate indicator specifies whether the current rate, average rate, or historical rate is used. You assign the exchange rate indicator to the exchange rate type, time and version-dependent. The exchange rate type is the key, under which you define the exchange rate in the system. When you configure the currency translation, you have defined the consolidation version in the global parameters. The consolidation version contains the currency translation version. All Customizing settings are stored under this special version. As a result, you can use these settings in other consolidation versions. The exchange rate table contains a validity area and the currency exchange rate for each exchange rate type. 03-12-2004 © 2004 SAP AG. All rights reserved. 157 Unit 4: Currency Translation AC660 Lesson Summary You should now be able to: • Determine the need for currency translation • Evaluate currency translation methods • Use currency translation keys • Determine exchange rates 158 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Lesson: Translation and Rounding Differences Lesson Overview This lesson will help you understand the translation differences extensively. You will learn how to manage currency translation differences. You will also learn how to calculate rounding differences. In addition, you will examine the concept of customizing. Finally, you will learn how to execute currency translation. Lesson Objectives After completing this lesson, you will be able to: • Examine the translation of individual financial statement values into group currency • Manage currency translation differences that do not affect net income or the ones that affect net income • Explain rounding differences Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You need to define the selected that you require for an update of currency translation differences that affect net income. Translation into Group Currency Figure 49: Individual FS: Translation into Group Currency 03-12-2004 © 2004 SAP AG. All rights reserved. 159 Unit 4: Currency Translation AC660 The individual financial statement values are first translated using a reference exchange rate that you assigned to the translation method by specifying a reference exchange rate indicator. This ensures that all the items from the balance sheet and income statement are translated consistently. During currency translation, if you want to translate certain items using particular exchange rates, such as the income statement using an average exchange rate, it will result in translation differences between the translation using the reference exchange rate and that using the average exchange rate. Reference exchange rate ind. “*”: This entry means that the values that already exist in group currency are used to determine the translation differences. As a rule, group currency values already exist if you use the automatic data transfer for real-time updates, periodical extracts, or rollups. Translation Differences Figure 50: Treatment of Differences Not Affecting Net Income When the FS items of the annual statement of accounts are not calculated with a standard exchange rate, currency translation differences occur. These differences can be posted not affecting net income or affecting net income. Not affecting net income: Both balance sheet and income statement differences that arise from currency translation are allocated, within the balance sheet, with an owner equity item. 160 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences You can determine how you want net income and retained earnings to be affected. To do this, you select certain differential items for the translation item sets in the translation method. Typically, only the translation differences in the balance sheet are posted with an effect on net income and retained earnings. In US GAAP accounting, the differences in the income statement are posted back to the balance sheet. Translation differences in the income statement are typically posted to an income statement item. The differences affect neither net income nor retained earnings. You also have the following options for posting translation differences: Post with subitems. Break down differences by partner unit or transaction currency. Figure 51: Treatment of Differences Affecting Net Income In the Customizing of translation methods, if you define that balance sheet currency translation differences are to be posted to items in the income statement, an imbalance occurs in the balance sheet and the income statement, from the posting. This financial statement imbalance should normally flow into the annual net income and retained earnings. When posting translation differences with an effect on net income, you want to differentiate between translations within the first translation affecting net income and the translation affecting net income in subsequent periods. During first translation, the entire translation difference is posted with an effect on net income. 03-12-2004 © 2004 SAP AG. All rights reserved. 161 Unit 4: Currency Translation AC660 During subsequent translations, only the change in the translation difference since the first translation can be posted with an effect on net income. In the system, a differentiation between the first and subsequent translation with an affect on net income is made by means of selected items. The system uses this selected item to store the translation differences from the first translation. In subsequent translations, it calculates the change in translation differences internally and posts this amount. You specify selected items, such as the statistical item for currency translation affecting net income, in the section translation Customizing. Figure 52: Example for Different Translations Assets: In this example, the FS items of the fixed assets are translated differently: The acquisition cost is estimated with the available value in group currency, and mid-year acquisitions are translated at the current exchange rate. Receivables are translated at the current exchange rate. Liabilities and Equity: The common stock is estimated with the historical value according to the changes in investee equity. Retained earnings are translated at the current exchange rate. The total difference of 100- between the translation using the reference exchange rate and the respective special exchange rate is cleared in the currency translation difference item on the liabilities and equity side. 162 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Figure 53: Totals Database - Temporal Translation Differences Record You can calculate the temporal translation differences for items without subitems, as the currency translation indicator takes on the function of a subitem. For currency translation using the currency translation key at the period end rate (both 9 and 7), you can calculate temporal translation differences. Up to four database records are generated in local currency from one database record in group currency. This is specified in the method entries and separately stored in the totals database using the translation indicator. The above example presents the records with the translation indicator 0 (original r ecord) and 2. The temporal translation difference between the old and the new reference exchange rate is shown here for the prior period value. If you do not activate the temporal translation difference indicator, the following records of currency translation appear: Original record (translation indicator 0): Shows the transaction period value in local currency and the reference value in group currency When the translation method contains another exchange rate indicator, the period value shows the difference between the value in group currency and the transaction reference value (translation indicator 1) In drilldown reports, you can analyze the effect of the currency translation using the characteristic translation, and display the generated database records for each currency translation key. 03-12-2004 © 2004 SAP AG. All rights reserved. 163 Unit 4: Currency Translation AC660 Figure 54: Asset History Sheet: Temporal Transl. Diff. Record If you translate asset values using the current exchange rate for the current period and not historically by year of acquisition, then temporal translation differences occur if the current exchange rate changes with a new fiscal year. The closing balance for the prior year no longer corresponds to the opening balance of the current year. As the asset items are always defined broken down by subitems, you receive a special record of translation differences using the transaction types for the currency translation. The following subitems (consolidation transaction types) are used in the above asset history sheet: 105 Opening balance translation differences 205 Value adjustment translation differences 100 Opening balance APC 200 Opening balance accumulated depreciation 120 Acquisitions 220 Depreciation 164 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Figure 55: Asset History Sheet at Current Rate: Method You can record the translation difference separately using the subitem transaction type. To do this, you must make the following entries when you maintain the currency translation method: Ref. exchange rate ind.: Current exchange rate Record closing bal. (APC or VA) prior year: For the FS item sets, fixed assets, and value adjustments, specify a subitem set for OB APC, OB VA, and a set for all the other subitems. As a result, only the items values assigned to the subitems OB APC / OB VA, specified in the set are translated. Fixed assets are translated using the exchange rate indicator Current exchange rate. If you select Use of prior year rates in the method entry, the prior year translation rate is used. The currency translation posts the translation difference to the triggering items with the subitems for translation differences. The other activities, such as the acquisitions, retirements, and transfers, are defined in the third method entry. The subitem set contains all the remaining subitems. 03-12-2004 © 2004 SAP AG. All rights reserved. 165 Unit 4: Currency Translation AC660 Rounding Differences Figure 56: Rounding Differences The translation of financial data can produce differences that are caused by rounding in the system. These differences are not related to translation differences. If rounding differences occur, translated financial data does not pass subsequent validation checks, such as Total assets = Total liabilities and equity. The system calculates these differences and posts them to the differential items that you specify in rounding entries. 166 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences For the definition of rounding entries, the following three possibilities are available: • Using an item set. – The values of items in this set must equal zero when added. For example, the corresponding validation checks whether the sum of all the balance sheet items is 0. • Using two item sets, check whether the sum of items in the first set, such as the net income and appropriation of retained earnings, is equal to the sum of items in the second set, such as the retained earnings in the balance sheet. • Using two item sets, the first of which is restricted to a set of subitems, check whether the sum of values for the subitems specified in the first set and the values from the second set equal zero. The first set can contain fixed asset items restricted to depreciation entries, and the second set can contain depreciation expense items in the income statement. Note: When you specify a sequence for rounding entries, ensure that no entry invalidates an entry positioned earlier in the sequence. The system only rounds if the criteria in a rounding rule are met in local currency. Figure 57: Rounding Entry for Item Reconciliation Rounding differences can be used to reconcile financial statement items that should have the same values after currency translation. An example of this is the retained earnings items in the balance sheet and the income statement if you use a 03-12-2004 © 2004 SAP AG. All rights reserved. 167 Unit 4: Currency Translation AC660 chart of accounts with appropriation of retained earnings in the income statement and a reversed debit/credit sign. If you use varying exchange rates, currency translation can cause differences to occur between these financial statement items. The example shows the historical translation of retained earnings (with the appropriation of retained earnings shown in the income statement) , and the need for rounding of entries for reconciling the financial statement items. Balance carried forward 2002: carry forward the balance sheet item of the retained earnings. The retained earnings income statement item is carried forward to the same item in the new year, and with reversed debit/credit sign to the unappropriated retained earnings item in the new year. In this way, the income statement is cleared in the new year. Currency Translation: As a result of currency translation, the retained earnings (2001) are translated in the balance sheet at the 2001 exchange rate (2.0), and the retained earnings from 2002 are translated at the 2002 exchange rate (3.0). In the income statement, the total retained earnings are translated at the 2002 exchange rate (3.0). Item reconciliation between the retained earnings items in the balance sheet and income statement: The difference is posted to the retained earnings item in the income statement with the corresponding debit/credit sign. The second reconciliation corrects the value of the unappropriated retained earnings item. Reconciliation of the entire income statement establishes a difference of 1,000 units, which is then posted to the unappropriated retained earnings. This balances the income statement. 168 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Customization of Currency Translation Figure 58: Customizing Currency Translation Figure 59: Currency Translation - Process Flow Currency translation can be carried out “provisionally” or “finally”. 03-12-2004 © 2004 SAP AG. All rights reserved. 169 Unit 4: Currency Translation AC660 “Provisional” translation is primarily required in order to generate balance reconciliation lists in group currency for the interunit elimination task that follows. The type of translation run depends on the system settings and the status of preceding tasks in the monitor. The system runs a “provisional” translation, which cannot be blocked in the following situations. If you have defined the translation method and specified exchange rates, however you have not yet checked and activated the method. Or, if you have not yet executed the task for validating reported financial data and/or not blocked this task. Both the “provisional” and “final” translation can be rerun if the reported data is subsequently modified. Previously calculated values are simply overwritten with new ones. Restrictions exist with the reference exchange rate indicator “*”. 170 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Exercise 9: Currency Translation Exercise Objectives After completing this exercise, you will be able to: • Define a currency translation method Execute the task currency translation in the data monitor Business Example The consolidation unit D reports its data in the local currency EUR. After you define and assign a translation method, demonstrate currency translation using the consolidation unit D as an example. Task: Translation method 1. Translation entries Define the translation method XY-01 (where XY stands for the chart of accounts) using reference exchange rate indicator 5 (= current rate). Hint: The sets you need begin with the letter for your group (A for group 01, etc.) and a hyphen (X-...). Example: Group 01: Set A- Group 10: Set J- Group 18: Set R- The suffix consists of the FS item number, the subitem, or the from FS item number. Make the following settings in the method: Enter the following: Field/Data Type Value Translation entry 010: FS Item Set: X-191500 Fixed Assets From: 191500 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 171 Unit 4: Currency Translation AC660 Field/Data Type Value Subitem set: X-100 Opening Balances From: 100 Translation key 6 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation entry 020: FS Item Set: X-191500 Fixed Assets Subitem Set: X-999 Fixed Asset Movements From 120 to 299 Exchange rate indicator 5 Translation key 1 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation entry 030: FS Item Set: X-170100 Investments From 170100 to 170400 Translation key 3 Translation differences: Item (debit/credit) 250920 Subitem category 6 Subitem 120 Continued on next page 172 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Translation entry 040: FS Item set: X-250100 Common Stock From: 250100 Translation key 4 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation entry 050: FS Item Set X-299999 BS-Investments- MachEquip-Common Stock From 100000 to 170099 From 170401 to 191499 From 191501 to 250099 From 250101 to 299999 Exchange rate indicator 5 Translation Key 1 Translation differences: Item (debit/credit) 250940 Subitem category 6 Subitem 120 Transaction Currency Check the default box Translation entry 060: FS Item set: X-389999 Income Statement From 300000 to 389999 Exchange rate indicator 6 Translation key 5 Translation differences: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 173 Unit 4: Currency Translation AC660 Field/Data Type Value Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation entry 070: FS Item Set X-299999 BS-Investments- MachEquip-Common Stock From: 390000 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 251200 Subitem category 6 Subitem 120 2. Rounding rules Define the following rounding rules in the sequence listed: - Annual net income in the balance sheet and income statement: differential item 251200 Retained Earnings - Current Year, subitem 120 Additions - Balance sheet - Differential item 250950 Currency Translation Adjustments - Rounding, subitem 120 Additions - Income statement - Differential item 321300 Currency Translation Difference, I/S Continued on next page 174 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Translation Entry 010: FS Item Set: X-191500 Fixed Assets From: 191500 Subitem set: X-100 Opening Balances From: 100 Translation key 6 Translation differences: FS Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation Entry 020: FS Item Set: X-191500 Fixed Assets Subitem Set: X-999 Fixed Asset Movements From 120 to 299 Exchange rate indicator 5 Translation key 1 Translation differences: Item (debit/credit) 250910 Subitem category 6 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 175 Unit 4: Currency Translation AC660 Field/Data Type Value Subitem 120 Translation Entry 030: FS Item Set: X-170100 Investments From 170100 to 170400 Translation key 3 Translation differences: Item (debit/credit) 250920 Subitem category 6 Subitem 120 Translation Entry 040: FS Item set: X-250100 Common Stock From: 250100 Translation key 4 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation Entry 050: FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From 100000 to 170099 From 170401 to 191499 From 191501 to 250099 From 250101 to 299999 Continued on next page 176 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Exchange Rate Indicator 5 Translation Key 1 Translation differences: Item (debit/credit) 250940 Subitem category 6 Subitem 120 Transaction Currency Check the default box Translation Entry 060: FS Item set: X-389999 Income Statement From 300000 to 389999 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation Entry 070: FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From: 390000 Exchange rate indicator 6 Translation key 5 Translation differences: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 177 Unit 4: Currency Translation AC660 Field/Data Type Value Item (debit/credit) 251200 Subitem category 6 Subitem 120 3. Assignment: Assign the translation method XY-01 (where XY stands for the chart of accounts) to consolidation unit D in the master record. - You will use the data monitor to carry out currency translation for consolidation unit D. You therefore need to define one more task. 4. Defining tasks: Call the currency translation task CURR TRAN and assign it to task group DATA. Make sure that currency translation is automatically blocked after it is executed successfully. 5. Run currency translation for consolidation unit D in the data monitor, and examine the audit trail. 178 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Solution 9: Currency Translation Task: Translation method 1. Translation entries Define the translation method XY-01 (where XY stands for the chart of accounts) using reference exchange rate indicator 5 (= current rate). Hint: The sets you need begin with the letter for your group (A for group 01, etc.) and a hyphen (X-...). Example: Group 01: Set A- Group 10: Set J- Group 18: Set R- The suffix consists of the FS item number, the subitem, or the from FS item number. Make the following settings in the method: Enter the following: Field/Data Type Value Translation entry 010: FS Item Set: X-191500 Fixed Assets From: 191500 Subitem set: X-100 Opening Balances From: 100 Translation key 6 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation entry 020: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 179 Unit 4: Currency Translation AC660 Field/Data Type Value FS Item Set: X-191500 Fixed Assets Subitem Set: X-999 Fixed Asset Movements From 120 to 299 Exchange rate indicator 5 Translation key 1 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation entry 030: FS Item Set: X-170100 Investments From 170100 to 170400 Translation key 3 Translation differences: Item (debit/credit) 250920 Subitem category 6 Subitem 120 Translation entry 040: FS Item set: X-250100 Common Stock From: 250100 Translation key 4 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Continued on next page 180 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Translation entry 050: FS Item Set X-299999 BS-Investments- MachEquip-Common Stock From 100000 to 170099 From 170401 to 191499 From 191501 to 250099 From 250101 to 299999 Exchange rate indicator 5 Translation Key 1 Translation differences: Item (debit/credit) 250940 Subitem category 6 Subitem 120 Transaction Currency Check the default box Translation entry 060: FS Item set: X-389999 Income Statement From 300000 to 389999 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation entry 070: FS Item Set X-299999 BS-Investments- MachEquip-Common Stock From: 390000 Exchange rate indicator 6 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 181 Unit 4: Currency Translation AC660 Field/Data Type Value Translation key 5 Translation differences: Item (debit/credit) 251200 Subitem category 6 Subitem 120 a) To define a translation method, you choose: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Automatic Posting !Currency Translation !Translation Methods !Define Currency Translation Methods 1. Choose and make New entries Field/Data Type Value Translation method XY-01 (XY = chart of accounts) Description Translation method Gr. ## Reference exchange rate ind. 5 Save your entries. 2. Double-click Method Entries folder. • Choose New entries to define the individual method entries. • Assign the number 010 to the first entry. Number all subsequent entries sequentially in further increments of 10. 3. Use the data for translation entry 010. In the FS item set block, name item set 1 X-191500 (where X = the letter for your group (A for group 01, E for group05,etc.)). In the Restrict to Sub items block enter the set name X-100 (where X = the letter for your group)and press Enter. Click on Item Set 1 and choose Maintain sets to go to the set definition. Continued on next page 182 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences This set should only contain the item “Fixed Assets”, restricted to the opening balance. Enter a description e.g. Fixed Assets. Enter the item 191500 in the From value column, and savethis entry. Place the cursor in the field Subitem Set in the frame for selecting subitems. Choose Maintain Sets to go to the set definition Enter name Opening Balance. Enter the subitem 100 in the From value column. Save your entries. 4. In the Type of translation frame, specify the currencytranslation key 6. In the Translation differences frame enter the item 250910 forboth debits and credits and press Enter. Enter subitem 120 for both debits and credits. Save the entries for the first method entry. Use the same procedure for the other entries. Choose the Next Entry icon at the top of the page to create the next method entry. The data to be entered is listed on the next page. Note: You have already entered data for entry 010. Field/Data Type Value Translation Entry 010: FS Item Set: X-191500 Fixed Assets From: 191500 Subitem set: X-100 Opening Balances From: 100 Translation key 6 Translation differences: FS Item (debit/credit) 250910 Subitem category 6 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 183 Unit 4: Currency Translation AC660 Field/Data Type Value Subitem 120 Translation Entry 020: FS Item Set: X-191500 Fixed Assets Subitem Set: X-999 Fixed Asset Movements From 120 to 299 Exchange rate indicator 5 Translation key 1 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation Entry 030: FS Item Set: X-170100 Investments From 170100 to 170400 Translation key 3 Translation differences: Item (debit/credit) 250920 Subitem category 6 Subitem 120 Translation Entry 040: FS Item set: X-250100 Common Stock From: 250100 Translation key 4 Translation differences: Item (debit/credit) 250930 Continued on next page 184 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Subitem category 6 Subitem 120 Translation Entry 050: FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From 100000 to 170099 From 170401 to 191499 From 191501 to 250099 From 250101 to 299999 Exchange Rate Indicator 5 Translation Key 1 Translation differences: Item (debit/credit) 250940 Subitem category 6 Subitem 120 Transaction Currency Check the default box Translation Entry 060: FS Item set: X-389999 Income Statement From 300000 to 389999 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation Entry 070: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 185 Unit 4: Currency Translation AC660 Field/Data Type Value FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From: 390000 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 251200 Subitem category 6 Subitem 120 2. Rounding rules Define the following rounding rules in the sequence listed: - Annual net income in the balance sheet and income statement: differential item 251200 Retained Earnings - Current Year, subitem 120 Additions - Balance sheet - Differential item 250950 Currency Translation Adjustments - Rounding, subitem 120 Additions - Income statement - Differential item 321300 Currency Translation Difference, I/S Field/Data Type Value Translation Entry 010: FS Item Set: X-191500 Fixed Assets From: 191500 Continued on next page 186 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Subitem set: X-100 Opening Balances From: 100 Translation key 6 Translation differences: FS Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation Entry 020: FS Item Set: X-191500 Fixed Assets Subitem Set: X-999 Fixed Asset Movements From 120 to 299 Exchange rate indicator 5 Translation key 1 Translation differences: Item (debit/credit) 250910 Subitem category 6 Subitem 120 Translation Entry 030: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 187 Unit 4: Currency Translation AC660 Field/Data Type Value FS Item Set: X-170100 Investments From 170100 to 170400 Translation key 3 Translation differences: Item (debit/credit) 250920 Subitem category 6 Subitem 120 Translation Entry 040: FS Item set: X-250100 Common Stock From: 250100 Translation key 4 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation Entry 050: FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From 100000 to 170099 From 170401 to 191499 From 191501 to 250099 From 250101 to 299999 Exchange Rate Indicator 5 Translation Key 1 Continued on next page 188 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Field/Data Type Value Translation differences: Item (debit/credit) 250940 Subitem category 6 Subitem 120 Transaction Currency Check the default box Translation Entry 060: FS Item set: X-389999 Income Statement From 300000 to 389999 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 250930 Subitem category 6 Subitem 120 Translation Entry 070: FS Item Set X-299999 BS-Investments-MachEquip- Common Stock From: 390000 Exchange rate indicator 6 Translation key 5 Translation differences: Item (debit/credit) 251200 Subitem category 6 Subitem 120 a) Rounding rules Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 189 Unit 4: Currency Translation AC660 Rounding rules are defined in the same way as translation entries, but you also need to select the Rounding entry indicator. Define the following rounding entries: Field/Data Type Value Rounding entry 010: FS Item Set: X-251200-390000 CY Retained Earning BS & IS From 251200 From 390000 Rounding Differences: Item (debit/credit) 251200 Subitem category 6 Subitem 120 Rounding entry 020: FS Item Set: X-200000 Balance Sheet From 100000 to 290000 Item (debit/credit) 250950 Subitem category 6 Subitem 120 Rounding entry 030: FS Item srt: X-300000 IS including Ret Earnings From: 300000 to: 399999 Item (debit/credit) 321300 3. Assignment: Assign the translation method XY-01 (where XY stands for the chart of accounts) to consolidation unit D in the master record. Continued on next page 190 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences - You will use the data monitor to carry out currency translation for consolidation unit D. You therefore need to define one more task. a) Assignment: Assign the translation methods that you defined forconsolidation unit D for version 100, effective 12/Current Year bychoosing: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Automatic Posting !Currency Translation !Translation Methods !Assign Translation Methods to Consolidation Units . . Save your entries 4. Defining tasks: Call the currency translation task CURR TRAN and assign it to task group DATA. Make sure that currency translation is automatically blocked after it is executed successfully. a) To define task CURR TRAN, choose: Menu Path: Tools !Customizing !IMG !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Data !Automatic Posting !Currency Translation !Define Task . . Choose New entries, and enter CURR TRAN as the name of your task and Translation as the task description (both short and medium text). Task category is Currency Translation. Save your entries. Assign this task with a New Entry to the task group DATA for the data monitor by choosing: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Data !Data monitor !Define Task Group . Green Arrow back to the currency translation overview screen. Select your method and the check button. Set the active flag by checking the box. Select Automatic blocking when you assign the task to the task group. Save your entries. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 191 Unit 4: Currency Translation AC660 5. Run currency translation for consolidation unit D in the data monitor, and examine the audit trail. a) Executing a task: Menu Path: Accounting !Enterprise Controlling !Consolidation !Data Collection !Monitor Run the task from the data monitor by placing your cursor at the cross-section between consolidation unit D and the translation task. Choose Update run. Currency translation was only carried out for consolidation unit D. 192 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Exercise 10: Validation II Exercise Objectives After completing this exercise, you will be able to: • Run a validation of group currency values in the data monitor Business Example The currency translation task translated the reported financial data of the consolidation unit D into USD. You will use a validation to make sure the reported data is consistent. You will execute the task to validate standardized financial data in the data monitor. Task: Executing a validation 1. After the task Validate Standardized Data runs without finding errors, you want it to be blocked automatically. Ensure that the appropriate settings have been made in the task group. Execute the validation in the data monitor. 03-12-2004 © 2004 SAP AG. All rights reserved. 193 Unit 4: Currency Translation AC660 Solution 10: Validation II Task: Executing a validation 1. After the task Validate Standardized Data runs without finding errors, you want it to be blocked automatically. Ensure that the appropriate settings have been made in the task group. Execute the validation in the data monitor. a) Task: To check the definition of the task group, choose: Menu Path: Tools !Customizing !IMG !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Data ! Data Monitor !Define Task Group .. Select task DATA and go to the detail screen Assign tasks to task group. You can see that you already defined the task GROUP VAL and assigned it to the task group. You also already selected automatic blocking after successful execution for this task. Assign the validation rule to the consolidation units for validating the standardized financial data for period category 2: Menu Path: Tools !Customizing !IMG !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Data !Validations for Reported Data and Standardized Data !Assign Validations to Consolidation Units .. Your validation VXY is assigned to the Consolidation Units. Run the task in the data monitor (application) by placing your cursor at the cross-section between consolidation group G1 and the task for validating group currency (consolidated values), and choosing Update run. Once the task is completed, it is automatically blocked for allcons units on the cons group level. You should now have a green traffic light for the overall status. 194 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Translation and Rounding Differences Lesson Summary You should now be able to: • Examine the translation of individual financial statement values into group currency • Manage currency translation differences that do not affect net income or the ones that affect net income • Explain rounding differences 03-12-2004 © 2004 SAP AG. All rights reserved. 195 Unit Summary AC660 Unit Summary You should now be able to: • Determine the need for currency translation • Evaluate currency translation methods • Use currency translation keys • Determine exchange rates • Examine the translation of individual financial statement values into group currency • Manage currency translation differences that do not affect net income or the ones that affect net income • Explain rounding differences 196 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. Explain the use of currency translation. 2. What are currency translation methods used for? 3. What are currency translation keys used for? 4. The type is the key under which you define the exchange rate in the system. Fill in the blanks to complete the sentence. 5. What causes translation differences during currency translation? 6. Currency translation differences in the income statement are posted to an income statement item and affect the net income. Determine whether this statement is true or false. ! True ! False 7. Rounding differences can be used to reconcile statement items that should have the same values after translation. Fill in the blanks to complete the sentence. 03-12-2004 © 2004 SAP AG. All rights reserved. 197 Test Your Knowledge AC660 Answers 1. Explain the use of currency translation. Answer: The currency translation task enables you to translate financial data reported by consolidations units in their local currency into the currency of the consolidation group. 2. What are currency translation methods used for? Answer: Currency translation methods indicate the exchange rate used to translate certain items and explain how any subsequent translation or rounding differences are to be handled. 3. What are currency translation keys used for? Answer: Different financial statement item sets are normally translated using different exchange rates. You can use various combinations of the currency translation key and the exchange rate indicator to determine these exchange rates. 4. The exchange rate type is the key under which you define the exchange rate in the system. Answer: exchange rate 5. What causes translation differences during currency translation? Answer: During currency translation, if certain items are translated using particular exchange rates, such as the income statement using an average exchange rate, it results in translation differences between the translation using the reference exchange rate and the one using the average exchange rate. 6. Currency translation differences in the income statement are posted to an income statement item and affect the net income. Answer: False Currency translation differences in the income statement are typically posted to an income statement item and affect neither the net income nor the retained earnings. 198 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge 7. Rounding differences can be used to reconcile the financial statement items that should have the same values after translation. Answer: the financial 03-12-2004 © 2004 SAP AG. All rights reserved. 199 Unit 4: Currency Translation AC660 200 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 5 Interunit Elimination & Consolidation of Investments Unit Overview At the end of this unit, you will be able to define and perform the interunit elimination in the SAP system. You will also be able to define you own elimination. Unit Objectives After completing this unit, you will be able to: • Define the tasks and methods for interunit elimination • Explain the interunit elimination method • Examine the causes of elimination differences • List the benefits of and the steps for document reconciliation • Compare simultaneous consolidation, step consolidation, and stepwise simultaneous consolidation • Describe Consolidation of Investments utilization • Use the consolidation of investments method • Explain method assignment for simultaneous consolidation and step consolidation • Describe the automatic consolidation activities • Describe two ways to convey the consolidation of investments activities to the system • Explain the customizing settings to enable automatic consolidation of investments postings • Discuss the posting process for appropriation of retained earnings • Describe how dividends and bonus payments are distributed in the customizing of selected items for consolidation of investments • Explain activity interpretation in a consolidation group • Describe the consolidation logic in SAP • Explain the equity method • Describe subsequent consolidation in equity method 03-12-2004 © 2004 SAP AG. All rights reserved. 201 Unit 5: Interunit Elimination & Consolidation of Investments AC660 • Compare between HGB and US GAAP/IAS for first and subsequent consolidation • Describe the benefits of reclassification • Differentiate between types of reclassification • Explain periodic reclassification Unit Contents Lesson: Interunit Elimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 Exercise 11: Interunit Elimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213 Lesson: Consolidation of Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Exercise 12: Consolidation of Investments – Methods . . . . . . . . . . . . . . . .249 Exercise 13: Consolidation of Investments - Activities in the Consolidation of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .255 Lesson: Customizing Settings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272 Lesson: Sequence of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .284 Lesson: Equity Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .290 Exercise 14: Consolidation of Investments – Equity Method . . . . . . . . .297 Exercise 15: Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .305 Lesson: Reclassification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310 202 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Lesson: Interunit Elimination Lesson Overview This lesson will cover the execution and methods for interunit elimination. You will learn about the causes of elimination differences. In addition, you will learn about document reconciliation. Lesson Objectives After completing this lesson, you will be able to: • Define the tasks and methods for interunit elimination • Explain the interunit elimination method • Examine the causes of elimination differences • List the benefits of and the steps for document reconciliation Business Example The group G1 plans to consolidate with SAP by the end of this year. You are required to do a presentation on the elimination of intercompany payables and receivables for the management. You also have to run interunit elimination as one of the consolidation tasks after you have translated the local currency data and posted the standardizing entries. Execution and Method Figure 60: Interunit Elimination 03-12-2004 © 2004 SAP AG. All rights reserved. 203 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Interunit elimination is based on the information about the partner consolidation unit. Figure 61: Interunit Elimination You define the tasks and methods for IU eliminations in Customizing. You should create a task for each of the interunit consolidation procedures such as elimination of interunit payables and receivables or revenue and expense. In a method, you specify which items are to be mutually eliminated and how you want to handle any resulting differences. You execute IU elimination tasks from the consolidation monitor. 204 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Figure 62: Interunit Elimination Method You can create multiple pairs of FS item sets for each IU elimination method. The first set in the pair contains the FS items for elimination, and the second set contains the corresponding offsetting items. These pairs of FS item sets represent a trading partner relationship. To restrict the item values to be eliminated, you can specify the following characteristic values: sub-assignments, consolidation or partner units and their attributes, and document type. The selection is restricted to the units that have these attributes or to the data records that have been posted with these document types. The following strategies are supported for posting elimination differences against one of the units in a pair: • FS item sets: Differences are posted against the unit that reports the data for a selected item set. • Lower/higher value: Differences are posted against the unit that reports the lower/higher absolute value. If you enter a threshold value, no entry is posted if the differences are above the specified amount. You can only split the differences into currency-related and other differences if the financial data is reported in both transaction and local currency. 03-12-2004 © 2004 SAP AG. All rights reserved. 205 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Procedure for Interunit Elimination Figure 63: Database prior to Interunit Elimination A separate posting level (20) is used for two-sided elimination entries. These entries are based on the items for elimination that you specify in Customizing and the partner account assignments of the financial data concerned. The system generates an elimination entry in the following cases: • A consolidation unit reports a value for an FS item requiring elimination. • Another consolidation unit is assigned as the trading partner for this value. • You have specified that both the consolidation units are to be included in IU elimination. The system differentiates elimination entries according to trading partner relationships, as follows: A pair of consolidation units is always looked at, and within this pair, a pair of FS item sets. Elimination documents contain an entry for each partner relationship, broken down by transaction currency, if requested. 206 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Figure 64: Elimination of Interunit Profit and Loss (Procedure) A consolidated balance sheet shows only the payables and receivables that relate to non-affiliated companies. The payables and receivables resulting from the goods and services transactions within the corporate group must be eliminated. You can use custom characteristics to restrict the values to be selected for the elimination of interunit payable and receivables to particular consolidation and partner units. For example, when you divide your consolidation units into manufacturing companies and financial institutions, you can restrict the elimination to a type of company, in order to study the elimination differences separately. Figure 65: Two-Sided Elimination Entries 03-12-2004 © 2004 SAP AG. All rights reserved. 207 Unit 5: Interunit Elimination & Consolidation of Investments AC660 The system posts the values that require elimination with a reversed debit/credit sign. A consolidation unit and a partner unit are posted against each line. • The document type of the elimination entry determines its posting level. • You specify pairs of item sets for interunit elimination in elimination method customizing. You can use more than one pair of item sets for each method. • You select a posting strategy in method customizing to specify the consolidation unit against which you want the elimination differences to be posted. Elimination Differences Figure 66: Causes of Elimination Differences The corporate policy normally states the procedures to handle temporal posting differences, individual value allowances for receivables, and incomplete recognition of payables. Currency translation differences can be calculated in SAP Consolidation, provided the units report financial data in both transaction and local currency. This is automatically the case if you collect the data from Financial Accounting. 208 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Figure 67: Splitting of Elimination Differences A splitting of differences is understood as an analysis of the system concerning the causes of elimination differences. The system can analyze elimination differences and split them into two categories, depending on their cause. The differences are classified as either currency-related or other. The following factors are the prerequisites for difference splitting: Values exist in transaction and group currency. You have selected difference splitting in the definition of the elimination method. You have specified a reference exchange rate indicator for your elimination method. You have created separate differential items for currency-related and other differences. You have specified in the relevant document type that you want elimination entries posted in transaction and group currency. 03-12-2004 © 2004 SAP AG. All rights reserved. 209 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 68: Simplified Elimination in the Income Statement You have the option to run a simplified, one-sided elimination of interunit trading partner relationships. This is used particularly for the elimination of intercompany revenue and expense. In this procedure, the system posts elimination entries based on the values in one financial statement (FS) item set only. Figure 69: Document Reconciliation 210 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination The reconciliation of group-internal payables and receivables is a time-consuming procedure during the preparation of consolidated financial statements. SAP’s Financial Accounting enables efficient document matching to be run during the fiscal year. This reduces the time required for elimination. The consolidation user responsible for a particular company code specifies one or more “partner” company codes with which reconciliation is to be run. By reading the company assignments in the customer and vendor master records, the system selects and displays all open items. Document matching consists of the following steps: • The documents with the same group reference number and value are automatically recognized as belonging together. • The system then sorts the documents posted with the same document date into groups, the values of which differ below a tolerance defined by the user. • The remaining documents appear in two windows and are processed manually by the user (by means of e-mail to other users, notes, or subsequent maintenance of reference number). The document matching program can also be called up directly from balance reconciliation after the elimination of IU payables and receivables so that the consolidation user can drill down to FI documents. 03-12-2004 © 2004 SAP AG. All rights reserved. 211 Unit 5: Interunit Elimination & Consolidation of Investments AC660 212 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Exercise 11: Interunit Elimination Exercise Objectives After completing this exercise, you will be able to: • Define a task to eliminate IU payables/receivables • Define a task to eliminate IU investment income and insert the task in a new task group for the consolidation monitor • Set up a document type for posting the elimination of IU payables/receivables and IU investment income • Define methods for the two eliminations Business Example • In this part of your presentation, you demonstrate the elimination of interunit payables and receivables. • Interunit elimination is one of the consolidation tasks that you run after you have translated local currency data and posted standardizing entries to produce a corporate valuation of data. • You decide to run all of the elimination tasks in the consolidation monitor so that you can benefit from its visual status display. Task 1: Interunit Elimination 1. Defining the document type: Create document type 21, Elimination of IU payables/receivables: The steering committee wants the following values in the document type: - Postings in transaction currency and group currency - Reversal of generated postings in the subsequent period - Use of item 131000 (Clearing item for payables/receivables) as the clearing item for postings between consolidation units What you enter: 2. Define the method for the elimination of IU payables/receivables What you enter: IU010, Elimination of A/P, A/R Assign sequence number 010 Create one set for the receivables item and one set for the payable item. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 213 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Set name: For example, for the receivables item: X-130100 where the letter corresponds to your group number !Group 01: A-130100 !Group 18: R-130100 The steering committee decided that the elimination difference is posted to the consolidation unit that has the receivable. Make the appropriate settings. Use exchange rate indicator 5 for the splitting of differences. The steering committee prescribed the following items for posting the debit and credit entries for Other Elimination and Currency-related Elimination Differences. - Other differences: - Debit 125300 - Credit 205700 - Currency-related differences: - Debit 250940 Subitem: 120 - Credit 250940 Subitem: 120 You set up the task for the elimination of IU payables and receivables: Define a task to eliminate IU payables/receivables Add this task to a new task group Assign the new task group to your dimension. This enables you to run the elimination in the consolidation monitor. 3. Defining the task A/R-A/P and task group CONS: Defining the task A/R-A/P - Name: A/R-A/P Short text Payables, Medium text IU Payables/Receivables Create task version 100 with the description Elim. A/P-A/R Assign the following values to the task version: Method IU010 (IUpayables/receivables) and Document Type 21 (effective from period12 Current Year). Assign task version 100 to consolidation version 100. Continued on next page 214 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Include the task that you created in a new task group CONS with the description Cons Monitor (group XY) for the consolidation monitor. Assign task group CONS to your dimension 4. Executing the elimination Procedure: In the consolidation monitor, run the elimination tasks for consolidation group G2. Then, run the task for G1. In your presentation, demonstrate that the ownership of G1 in B and C is still displayed after the elimination entries have been posted and consolidation group G2 has not been locked yet. After presenting the elimination of IU payables and receivables, block the task for all consolidation groups. In this part of your presentation, you demonstrate the elimination of investment income. Interunit elimination includes the consolidation task elimination of IU investment income. You make the same Customizing settings as used for the previous elimination. Task 2: Eliminating investment income 1. Define a document type as prescribed by the steering committee. Requirements: Document type 23, description IU investment income Posting level 20 Balance check 0 Bus. application 3 automatic posting is to take place in group currency (without posting of deferred income taxes or automatic reversal in the subsequent period). Version-based attributes: Number range 20 (range from 2000000000 to 2999999999, effective until current year + 1), no automatic reversal for documents with document type 23 Clearing item: Item 251620 (Retained earnings - Clearing of Dividends Paid), subitem 120 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 215 Unit 5: Interunit Elimination & Consolidation of Investments AC660 2. Define method IU020 to eliminate IU investment income: Requirements: Method IU020, description IU investment income Treatment of differences: One-sided elimination Set X-320400 (X = the letter that corresponds to your group number) Set X-320400 contains item 320400 Define as other item 251600 retained earnings, subitem 140 (item for other differences) 3. Defining a task: Procedure: Create task DIV ELIM Short text Inv-Income, medium text Elim. of IU investment income Define task version 100 Name: IU Inv-Income Assign document type 23 and method IU020 to the task version (witheffective period 12 and Current Year). Assign the task version to the consolidation version. Insert task DIV ELIM in task group CONS. Specify task A/R-A/P as a preceding task. (You already assigned task group CONS to your dimension.) 4. Run the following in the monitor: In the consolidation monitor, run task DIV ELIM for consolidation group G1. 216 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Solution 11: Interunit Elimination Task 1: Interunit Elimination 1. Defining the document type: Create document type 21, Elimination of IU payables/receivables: The steering committee wants the following values in the document type: - Postings in transaction currency and group currency - Reversal of generated postings in the subsequent period - Use of item 131000 (Clearing item for payables/receivables) as the clearing item for postings between consolidation units Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 217 Unit 5: Interunit Elimination & Consolidation of Investments AC660 What you enter: a) Interunit Elimination Define document type 21: Menu Path: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Consolidation Functions !Automatic Posting !Interunit Elimination !Define document types Choose New Entries Field/Data Type Value Document type 21 Description Elim of IU payables and receivables Attributes frame Posting level 20 Balance check 0 Bus. Application 1(Elimination A/P-A/R) Select: Currencies frame: • Post in transaction currency • Post in group currency Deferred income taxes frame: • Credit deferred tax • Debit deferred tax 1. Select document type 21. Double-click Number Range/Auto Reversal folder. 2. Choose New entries and enter version 100 and the number range. Choose Auto Reversal. 3. Choose Define Number Range and specify the document number range 20, by choosing Insert Interval icon, from 2000000000 through 2999999999, effective until the current year + 1. Save. 4. To enter the clearing item, double-click Selected FS items folder, and choose New Entries. Go to the Clearing items tab, enter the item 131000 in the Value field and save your entry. 2. Define the method for the elimination of IU payables/receivables Continued on next page 218 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination What you enter: IU010, Elimination of A/P, A/R Assign sequence number 010 Create one set for the receivables item and one set for the payable item. Set name: For example, for the receivables item: X-130100 where the letter corresponds to your group number !Group 01: A-130100 !Group 18: R-130100 The steering committee decided that the elimination difference is posted to the consolidation unit that has the receivable. Make the appropriate settings. Use exchange rate indicator 5 for the splitting of differences. The steering committee prescribed the following items for posting the debit and credit entries for Other Elimination and Currency-related Elimination Differences. - Other differences: - Debit 125300 - Credit 205700 - Currency-related differences: - Debit 250940 Subitem: 120 - Credit 250940 Subitem: 120 You set up the task for the elimination of IU payables and receivables: Define a task to eliminate IU payables/receivables Add this task to a new task group Assign the new task group to your dimension. This enables you to run the elimination in the consolidation monitor. a) Create the method Elimination of payables/receivables: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Interunit Elimination !Define methods Choose New entries and enter IU010 as the name of your method, and Elimination IU pay./rec. as the description. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 219 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Save your entry, select it, and double-click the FS item sets folder. Choose New entries and make the following settings: Hint: Note: Define the sets in the same way as you did for currency translation. Enter FS item value in Set maintenance and NOT in the Value field on the first method screen. Field/Data Type Value Sequence number 010 Set 1: X-130100 (X = the letter that corresponds to your group number) From 130100(Input in Set Maintenance, NOT the valuefield) Till: 130500 Radiobutton Difference: Set 1 Receivables Set 2: X-210100 From 210100 Till: 210500 Other differences: Debit: 125300 Other differences: Credit: 205700 Currency-related differences, debit, subitem 250940 120 Currency-related differences, credit,subitem 250940 120 Save your entries. Select the entry that you just created and go to Further control options folder. Continued on next page 220 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Field/Data Type Value Difference strategy 1 Exchange rate indicator 5 Split Differences Check box Save the entries. Answer Yes to checking the Interunit elimination method. 3. Defining the task A/R-A/P and task group CONS: Defining the task A/R-A/P - Name: A/R-A/P Short text Payables, Medium text IU Payables/Receivables Create task version 100 with the description Elim. A/P-A/R Assign the following values to the task version: Method IU010 (IUpayables/receivables) and Document Type 21 (effective from period12 Current Year). Assign task version 100 to consolidation version 100. Include the task that you created in a new task group CONS with the description Cons Monitor (group XY) for the consolidation monitor. Assign task group CONS to your dimension a) Defining task Elimination of IU payables/receivables and the task group: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Interunit Elimination !Define tasks for Interunit elimination Choose New entries. Field/Data Type Value Task A/P-A/R Short text Pay./rec. Medium text Elimination of IU payables and receivables Save your entries. Select the entry and double-click Maintain task version folder. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 221 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Choose New entries. Field/Data Type Value Task version 100 Description Elimination of IU payables and receivables Save your entries. Select the entry and double-click Assign method and document type folder. Make a new entry with the following settings. Field/Data Type Value Task version 100 FY eff. year 2002 Period eff. 12 Method IU010 Document type 21 Save your entries. Select the new entry and double-click Assign task version to cons version folder Enter the following: Field/Data Type Value Version 100 (actual version) Task version 100 (Elimination A/P-A/R) Save your entries. Now perform the following steps: • Define a new task group • Assign the task to the task group • Assign the task group to the dimension Continued on next page 222 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Define Task Group Make a new entry with the following settings. • Task group: CONS • Description: Cons Monitor Save your entry, select it, and double-click Assign tasks to task group folder. Create a new entry with the following values: Task: A/P-A/R, (short text: Elim A/P-A/R) and save your entries. In Customizing, assign task group CONS to your dimension: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Assign Task Group to Dimension In the existing entry, enter the task group CONS in the field Cons mon. task group . Save your entries. 4. Executing the elimination Procedure: In the consolidation monitor, run the elimination tasks for consolidation group G2. Then, run the task for G1. In your presentation, demonstrate that the ownership of G1 in B and C is still displayed after the elimination entries have been posted and consolidation group G2 has not been locked yet. After presenting the elimination of IU payables and receivables, block the task for all consolidation groups. In this part of your presentation, you demonstrate the elimination of investment income. Interunit elimination includes the consolidation task elimination of IU investment income. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 223 Unit 5: Interunit Elimination & Consolidation of Investments AC660 You make the same Customizing settings as used for the previous elimination. a) Execution: Menu Path: Accounting !Enterprise Controlling !Consolidation !Consolidation !Monitor Execute the task in the consolidation monitor. Place your cursor on the cross-section between consolidation group G2 and the IU elimination task, and choose Test run. Next run the task, choosing Update run for cons group G1. Lock A/P-A/R task. Task 2: Eliminating investment income 1. Define a document type as prescribed by the steering committee. Requirements: Document type 23, description IU investment income Posting level 20 Balance check 0 Bus. application 3 automatic posting is to take place in group currency (without posting of deferred income taxes or automatic reversal in the subsequent period). Version-based attributes: Number range 20 (range from 2000000000 to 2999999999, effective until current year + 1), no automatic reversal for documents with document type 23 Clearing item: Continued on next page 224 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Item 251620 (Retained earnings - Clearing of Dividends Paid), subitem 120 a) Elimination of Investment Income Defining the document type: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Interunit Elimination !Define document types Hint: You go directly to the detail screen for document type 21 (elimination of IU payables and receivables) that you already defined. Choose New entries. What you enter: Field/Data Type Value Document type 23 (elimination of IU investment income) Posting level 20 Balance check 0 Bus. Application 3 Post in Group Currency check box Double-click Number Ranges/Auto Reversal folder. Choose New Entries. Enter version 100 and number range 20. Save. Select the entry for version 100. Double-click Selected FS items folder, and choose New Entries. Go to Clear. Items tab and make the following entries: • Value: 251620 • Subitem: 120 Save your entries. 2. Define method IU020 to eliminate IU investment income: Requirements: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 225 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Method IU020, description IU investment income Treatment of differences: One-sided elimination Set X-320400 (X = the letter that corresponds to your group number) Set X-320400 contains item 320400 Continued on next page 226 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Define as other item 251600 retained earnings, subitem 140 (item for other differences) a) Defining a method: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Interunit Elimination !Define methods Choose New entries and make the following settings: • Method: IU020 • Description: Elimination investment income Save your entry, select it, and double-click the FS item sets folder. Make a new entry with the following settings: Field/Data Type Value Sequence number 010 Set 1: X-320400 320400 Save set. Other Differences Debit 251600 subitem 140 Credit 251600 subitem 140 Hint: Define the sets in the same way as you did for currency translation. Enter FS item value in Set maintenance and NOT in the Value field on the first method screen. Save your entries, choose Back, select the entry, and double-click the Further control options folder. • Difference strategy 1 One-sided Interunit Elimination: select the indicator Finally, save your entries. 3. Defining a task: Procedure: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 227 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Create task DIV ELIM Short text Inv-Income, medium text Elim. of IU investment income Define task version 100 Name: IU Inv-Income Assign document type 23 and method IU020 to the task version (witheffective period 12 and Current Year). Assign the task version to the consolidation version. Insert task DIV ELIM in task group CONS. Specify task A/R-A/P as a preceding task. (You already assigned task group CONS to your dimension.) a) Defining a task: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Interunit Elimination !Define tasks for Interunit elimination Make the following settings: Field/Data Type Value In the task overview screen: New Entries: Task DIV ELIM Short text Inv.income Medium text Elimination investment income Save and select this entry. Detail screen folders: (double-click) Maintain task version: Choose New Entry Task version 100 Description Investment income Save and select this entry. Double-click: Assign method/document type: Continued on next page 228 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Field/Data Type Value New Entry Task version 100 Fiscal year effective: year 2002 Period effective 12 Method IU020 Document type 23 Save and select this entry: Double-click: Assign task version to cons version: New Entry Version 100 Task version 100 Save your entries. Assign the new task to task group CONS. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Define Task Group Select task group CONS, go to the Assign tasks to task group folder, double-click and make the following New entry: • Task: DIV ELIM • Short Text Inv. Income Save this new entry. Select this task, and double-click Specify preceding tasks folder. Choose New Entries and enter task A/P-A/R. Save. 4. Run the following in the monitor: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 229 Unit 5: Interunit Elimination & Consolidation of Investments AC660 In the consolidation monitor, run task DIV ELIM for consolidation group G1. a) Run the following in the monitor: Menu Path: Accounting !Enterprise Controlling !Consolidation !Consolidation !Monitor You run your task in the consolidation monitor by putting your cursor on the cross-section between consolidation group G1 and the elimination of investment income task. Choose Update run. 230 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Interunit Elimination Lesson Summary You should now be able to: • Define the tasks and methods for interunit elimination • Explain the interunit elimination method • Examine the causes of elimination differences • List the benefits of and the steps for document reconciliation 03-12-2004 © 2004 SAP AG. All rights reserved. 231 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Lesson: Consolidation of Investment Lesson Overview This lesson will give you an overview of simultaneous consolidation, step consolidation, and stepwise simultaneous consolidation. You will learn how to use consolidation of investment. Next, you will learn the method assignment for simultaneous consolidation and step consolidation. In addition, you will explore the automatic consolidation activities. Lesson Objectives After completing this lesson, you will be able to: • Compare simultaneous consolidation, step consolidation, and stepwise simultaneous consolidation • Describe Consolidation of Investments utilization • Use the consolidation of investments method • Explain method assignment for simultaneous consolidation and step consolidation • Describe the automatic consolidation activities • Describe two ways to convey the consolidation of investments activities to the system Business Example The group G1 has introduced the SAP Consolidation this year. You have carried out the task of interunit elimination as one of the consolidation tasks. Next, you have to define the method for consolidation of investments and assign this method to all the consolidation units. 232 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Simultaneous and Step Consolidation Figure 70: SAP Consolidation of Investments Simultaneous and Step Consolidation for any type of corporate structure Support of US GAAP, IAS, and local GAAPs Treatment of investments, equity, and goodwill (with special amortization) Automatic recognition of activities or manual entry of activities Automatic generation of posting documents Processing of almost all business transactions Predefined C/I methods included in the standard system Parameter selections enable easy definition of customer-specific methods Method allocation using inheritance logic for multiple-level groups Comprehensive specialized reports and unrestricted reporting 03-12-2004 © 2004 SAP AG. All rights reserved. 233 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 71: Simultaneous Consolidation Advantages of Simultaneous Consolidation • Details of all the units are available for analyzing the overall consolidation group. • The simultaneous consolidation process is more straightforward than step consolidation. Disadvantages of Simultaneous Consolidation Lack of clarity when groups are too large (too much detail). • Parallel sub-consolidation groups are possible for reporting purposes, but this generally poses the risk of being inconsistent with the overall group. 234 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Figure 72: Step Consolidation Advantages of Step Consolidation Improved clarity when groups are very large Disadvantagesof Step Consolidation Consolidation units of different sub-groups do not share common details • When network-like investment structures are involved, disclosures and computations are much more complex than in simultaneous consolidations. For example, the change of methods in the hierarchy or re-interpretation of activities. 03-12-2004 © 2004 SAP AG. All rights reserved. 235 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 73: Stepwise Simultaneous Consolidation Stepwise simultaneous consolidation unites the advantages of simultaneous and step consolidation: • Details of each consolidation unit • Details at each level of consolidation SAP Consolidation supports stepwise simultaneous consolidation. 236 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Customizing Method Assignment Figure 74: Customizing SAP’s Consolidation of Investments When you implement the software, you have three options: • You can use the C/I methods, as delivered by SAP. • You can modify the C/I methods to meet your requirements. For example, specify the different FS items or life of goodwill. • You can define the new C/I methods. You go through several steps to choose the functionality you need and to customize the settings. This ensures that functions that are not required, such as no proportional consolidation, can be recognized at a very high level. 03-12-2004 © 2004 SAP AG. All rights reserved. 237 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 75: Consolidation of Investments Utilization Selection of accounting techniques to be used. According to this selection, a check is made for the method definition to see whether this accounting technique is eligible. When equity aging is chosen, the related global settings, such as net display and subitems, are made. If you determine that retained earnings appropriations are to be automatically posted, the associated selected items in Customizing must be defined. If you do not select this flag, any existing settings are ignored. You choose which the methods, such as amortization and direct elimination, which are valid for treating goodwill and negative goodwill. You also determine how the related settings, such as goodwill items, are to be defined, whether globally, per method, or by exceptions. You decide whether to permit negative stockholders’ equity for the equity method, thus allowing for a negative investment book value. If the purchase method is used, you determine whether to bypass the calculation of minority interest if stockholders’ equity is negative. 238 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Figure 76: Global Settings The investment data is obtained from the additional financial data. The equity data is obtained from the totals database and/or the additional financial data. You determine what kind of data (calculation base) is processed by the consolidation of investments, whether reported financial data or standardized financial data. If the equity method is selected in system utilization, you determine from where the related data is obtained, whether from the reported equity data or additional financial data. You define how to treat direct or indirect partial divestitures with regard to revenues and expenses. You also determine how the document types are to be assigned. This can be through tasks or the activities/accounting technique. If C/I utilization is set to "“global”, you define the properties of the following fields: goodwill amortization and life, new goodwill, threshold value, equity aging, and negative stockholders’ equity. If the treatment is “global”, on the FS item detail screen, you define the chart of accounts-based settings for posting goodwill or negative goodwill. When equity aging is chosen, you define in the global settings if you want net or gross display of equity aging. In a separate step, you maintain the subitems for the activities: • Net display: Subitems for the equity / subitems for minority interest in investments if you use one or more methods that calculate acquisitions using group shares. • Gross display: Define the subitems for each activity for the group and the subitems for minority interest. 03-12-2004 © 2004 SAP AG. All rights reserved. 239 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 77: Consolidation of Investments Method You define one consolidation of investments method for each valid accounting technique checked against the C/I utilization settings. You choose between calculating additions using the direct share or the group share, which means according to IAS and US GAAP, or local GAAPs). You define the treatment of goodwill/negative goodwill. For each method, you choose either amortization, direct elimination, or periodic reduction. You also define the life of goodwill amortization, the date of new goodwill, and the threshold value. If you click the “FS items” button, it takes you to the chart of accounts-based settings for posting goodwill/negative goodwill. In rare cases, these values are already defined by the global settings. Here you can also define a stat. FS item for goodwill, such as 933100 Stat: Positive Goodwill, which requires an account assignment category with a partner. This item is used for changes in indirect investments. 240 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Figure 78: Method Assignment for Simultaneous Cons. A consolidation of investments (C/I) method is assigned to every consolidation unit within each consolidation group by the time period and the version. The method assignment uses an “effective period” approach, which voids the need to re-enter repetitive definitions for each subsequent period, as long as the method remains consistent. You can make the assignments easier by assigning one method to the overall consolidation group and making exceptions for individual units. A feature is planned that will automatically propose the C/I methods based on the investment structure. The feature will require certain rules, which will be predefined in the SAP system or made available through a user exit and a customer’s program. 03-12-2004 © 2004 SAP AG. All rights reserved. 241 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 79: Method Assignment for Step Consolidation In consolidation groups that consist of multiple levels, the methods assigned at lower levels are used as defaults for the upper levels (upward inheritance). The SAP Consolidation knows if there are any lower-level consolidation units that belong to multiple subgroups and prompts you to make additional method assignments for these units. Automatic Activities Figure 80: Example Data 242 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment The consolidation group G1 consists of the consolidation unit ’A’ and the consolidation group “G2”. “G2” consists of the consolidation units “B”, “C”, “D”, and “E”. “A” is the parent unit in the consolidation group “G1”. “B” is the parent unit in the consolidation group “G2”. The consolidation unit “A” is fed with manual data entry. Conversely, the other units collect their data through the flexible upload. The consolidation unit “D” uses a foreign currency. Its local currency is UNI. All the other units share the same domestic currency, USD. The consolidation unit “E” is consolidated using the equity method. The other units are consolidated using the purchase method. “B” acquires another 20% ownership in “C” (step acquisition). At a later date, “B” divests a 30% interest in “C” (partial divestiture). Figure 81: Calculation of First Consolidation Consolidation under the following assumptions: • Investment book value Parent 1,000 • Investment percent Parent 80 % • Equity Subsidiary 1,000 • Hidden reserves Subsidiary None 03-12-2004 © 2004 SAP AG. All rights reserved. 243 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Calculation • Difference amount 1,000 - 80% * 1,000 = 200 • Group hidden reserves (Group share * hidden reserves) • Goodwill 200 - 0 = 200 • Minority interest 20 % * 1,000 = 200 Figure 82: First Consolidation (A ! B: 80%) The investments and the group share in the subsidiary equity are eliminated. The minority share is transferred to the minority interest. Any resulting difference is either positive or negative goodwill. The entry “I” shows the elimination of the investment of the parent (“A”) and the equity of the subsidiary (B). The remaining equity of the subsidiary is reclassified to the minority interest. The excess investment over equity is disclosed as goodwill at the parent. The Goodwill item needs to be specified for automatic postings. This is normally done in the Method Definition. The item must have a breakdown category with transaction types if you want to report asset history. To account for any divestitures or partial divestitures at a later date, a form of subsidiary accounting is done using statistical items. The amount corresponding to the equity, which was eliminated against the investment of the parent, is posted to these items. In addition, the partner unit is set to the parent unit. For a simpler view of the posting proposals, there is an option to turn off the display of statistical items. The option is found in IMG, in the Global Settings, “Display statistical items”. 244 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Figure 83: Results of the Consolidation of Investments Consolidation of investments produces: • A comprehensive audit trail in a hierarchical form • Automatic posting of documents The hierarchy can be expanded and compressed at will. The analysis criteria are: • Consolidation groups • Consolidation unit • Activity, such as first consolidation“first consolidation” • FS items, such as “investment” • Document 03-12-2004 © 2004 SAP AG. All rights reserved. 245 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 84: Automatic Consolidation Activities When you enter reported investment and equity data, the system automatically assigns a sequential activity number that uniquely identifies the activity. The activity number is also recorded in the posting document. You do not enter the activities, increase/reduction in indirect investment and indirect transfer. These are derived from other activities. Example: An increase in indirect investment in a company D controlled by a subsidiary is achieved when the parent company A acquires more shares in subsidiary B. B holds shares in D. The step acquisition by A in B results in a change in the indirect investment in D. An indirect transfer occurs in the following situation: “A” owns stock in “B” and “C”, and “B”owns stock in “D”, which in turn owns stock in “E” (A-B-D-E). “B” decides to sell “D” to “C”. Because this transaction takes place within the group, the activity total transfer is entered. The indirect transfer takes place for “E”. The activity number of the derived activity always coincides with the activity number of the triggering activity. 246 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Figure 85: Entry of C/I Activities There are two ways to convey C/I activities to the system: • Fully automatic derivation of the equity from the balance sheet of the respective units • Manual entry of activities SAP Consolidation supports several ways of viewing the activities of a period or a year: • Changes in investments, sorted by the reporting “upper units”: Depending on the activity, you either only enter the changes in investment data (separate data entry), or simultaneously enter the changes in investment data as well as the changes in equity data (combined data entry). Separate data entry involves the activities step acquisition, partial transfer, total transfer, partial divestiture, total divestiture, and investment amortization/write-up. Combined data entry involves first consolidation, increase/reduction in capitalization, liquidation, and horizontal/vertical business combinations. You can define default values to make the manual entries easy. • Changes in equity, sorted by the consolidated units: Depending on the activity, you either only enter the changes in equity data, such as for subsequent consolidation or dividend distribution, or enter both changes in investments and equity data. • Overall view of all activities of a consolidation unit : This also shows the activities that were only entered for other units, such as step acquisitions. • You can use a flexible upload to transfer investment or equity change data separately for each unit 03-12-2004 © 2004 SAP AG. All rights reserved. 247 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 86: Automatic Activity Recognition The consolidation of investments (C/I) program can access the changes in equity data relevant for consolidation processing directly in the totals database. Notice that you always need to enter the changes in investments as additional financial data. You need to specify reported items to enable the system to locate the data it requires to process consolidation of investments (C/I) activities in the totals database. For each activity, you specify the items and subitems used to enter the relevant data in the totals database. To simplify this procedure, you can define and then specify sets of items. You only need to specify reported items if you indicate in the global settings that you want data for C/I processing to be read from the totals database or the reported equity data, instead of being entered as additional financial data. 248 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Exercise 12: Consolidation of Investments – Methods Exercise Objectives After completing this exercise, you will be able to: • Define a consolidation of investments method • Make assignments using inheritance Business Example Interunit elimination is one of the consolidation tasks that you run after you have translated local currency data and posted standardizing entries to produce a corporate valuation of data. You decide to run all the elimination tasks in the consolidation monitor so that you can benefit from its visual status display. Task: Defining a method: 1. Make the following settings to use the consolidation of investments: Goodwill/negative goodwill is amortized by specific methods Appropriations of retained earnings are posted automatically Under global settings determine that: Standardized financial data is used as the calculation base. The document types are assigned through tasks. 2. Define a consolidation of investments method called PURCH for the accounting technique purchase method using the following properties: Minority interest is calculated using direct shares (US GAAP). Positive and negative goodwill is amortized over five years, no threshold value is used, and amortization begins at the beginning of each period (Enter: 2) Item for positive goodwill (APC/VA item) 181100 Choose the appropriate subitems (120, 220, 275). Item for amortization and write-ups: 311810 Choose the functional area administration (0003). Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 249 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Statistical item for the amortization ofpositive goodwill: 933100 Statistical item for currency translation differences goodwill: 940000 Make the same entries for the amortization of negative goodwill, except for statist. item negative, which is goodwill, 933200. 3. Assigning the method: Go to Hierarchy Maintenance and assign the method, PURCH, to all the consolidation units, using the inheritance technique. 250 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Solution 12: Consolidation of Investments – Methods Task: Defining a method: 1. Make the following settings to use the consolidation of investments: Goodwill/negative goodwill is amortized by specific methods Appropriations of retained earnings are posted automatically Under global settings determine that: Standardized financial data is used as the calculation base. The document types are assigned through tasks. a) Completing the Utilization of Consolidation of Investments Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Determine system utilization for C/I Specify the accounting techniques purchase method and equity method. Under Global Settings, select Appropriation of retained earnings. Specify that the settings concerning the amortization of goodwill and negative goodwill are dependent on the method used; do this by selecting the appropriate indicator in the per method column for both amortization of goodwill and negative goodwill. Save your entries. Edit the following global settings: Save your entries when finished. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Make Global Settings In the Calculation base section choose standardized financial data. Under Document types assigned to select the option tasks. 2. Define a consolidation of investments method called PURCH for the accounting technique purchase method using the following properties: Minority interest is calculated using direct shares (US GAAP). Positive and negative goodwill is amortized over five years, no threshold value is used, and Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 251 Unit 5: Interunit Elimination & Consolidation of Investments AC660 amortization begins at the beginning of each period (Enter: 2) Item for positive goodwill (APC/VA item) 181100 Choose the appropriate subitems (120, 220, 275). Item for amortization and write-ups: 311810 Choose the functional area administration (0003). Statistical item for the amortization ofpositive goodwill: 933100 Statistical item for currency translation differences goodwill: 940000 Make the same entries for the amortization of negative goodwill, except for statist. item negative, which is goodwill, 933200. a) Defining a consolidation of investments method: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Methods !Define methods Select New entries and create the new method PURCH. • Accounting technique: Purchase Method • Additions: calculate using “direct shares” Hint: The treatment of goodwill already displays the option Amortization (for positive and negative goodwill), as specified in C/I utilization. Field/Data Type Value Accounting technique Purchase Method Calculate Acquitions using: calculate using “direct shares” Press Enter. Amortization of goodwill and negative goodwill sections: 5 Amortizable life, number of years Begin amortization 2 Caution: Do not select Threshold value. Continued on next page 252 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Note that you can maintain additional amortization data only after pressing Enter. Save your entries. To enter the chart of accounts-based settings for the method, choose FS items to the right of the method description. Select New Entries. Enter the following FS items for BOTH the Amortization of goodwill and Amortization of Negative goodwill. Field/Data Type Value Acquisition Item 181100 Subitem 120 Accumulated amortization item 181100 Subitem, amortization 220 Subitem, write-ups 275 Amortization Exp. item 311810 Subitem (Functional area) 0003 (Management) Writeup Item 311810 Subitem (Functional area) 0003 (Management) Stat. item pos. goodwill 933100 Stat. item curr. trans. diff. 940000 Stat. item neg. goodwill 933200 Save your entries. 3. Assigning the method: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 253 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Go to Hierarchy Maintenance and assign the method, PURCH, to all the consolidation units, using the inheritance technique. a) Assigning the method: Assign consolidation method PURCH to your consolidation units: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Methods !Assign methods to the consolidation units !Edit method hierarchies !Choose • Expand your hierarchy, select consolidation group G1, and choose Change. • In the detail screen, assign method PURCH to consolidation group G1. • Choose Downward inheritance. Save your entries. 254 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Exercise 13: Consolidation of Investments - Activities in the Consolidation of Investments Exercise Objectives After completing this exercise, you will be able to: • Examine activities • Make Customizing settings • Post and analyze entries Business Example In the unit Data Collection you already entered additional financial data to accommodate various activities. Task: First/Subsequent Consolidation 1. Examining the additional financial data: Examine the additional financial data for the activity first consolidation. 2. Defining a task: Define a task called C/I, which will be used for all activities and all accounting techniques. In the consolidation monitor, assign the task to task group CONS. As the preceding task to task C/I specify DIV ELIM, Elim. of IU investment income. 3. Defining the document type: Define document type 51 with posting level 30 for the consolidation of investments. 4. Assignment of document types: Go to the C/I global settings and find out to what the document types are assigned to. Then assign them accordingly. 5. Assigning minority interest items to the equity items: The minority interest items are preassigned to most of the equity items. Find out which equity items are missing and assign minority interest items to these equity items. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 255 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Field/Data Type Value 250100 Common Stock 240100 MI-Common Stock 6. Assigning statistical equity items: As part of the preparation for postings of subsequent partial or total divestitures, statistical equity items need to be assigned to all equity items. Do this for the same Common stock FS item that was added in the previous exercise. Field/Data Type Value 250100 Common Stock 950100 Stat: Common Stock 7. Define the miscellaneous selected items for C/I: Field/Data Type Value Annual net income prior to first consolidation 251300 Retain earnings, Method change 251900 Clearing: consolidation of investments 251700 Subitems 140 Clearing, debits: 120 Equity - divestitures 370100 Clearing, credits: 370100 Acquisitions, equity Transfers to minority interest in annual net income Deductions from minority interest in annual net income Annual net income 931100 Annual net income, offsetting item 931200 Minority interest in annual net income 931300 Minority interest in ANI, offsetting item 931400 Adjusted annual net income 931500 Minority interest in adjusted annual net income 931600 Adjust ANI - goodwill 931700 Min.int. in adj. ANI goodwill 931800 Continued on next page 256 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Field/Data Type Value Adjusted ANI - equity method 931900 Min.int. in adj ANI equity method 931950 Overall offsetting item 939000 Hint: Do not specify any items for posting group shares, divestitures, or negative investment book values. 8. Activating the display of statistical items: Check and make sure that the display of statistical items in documents is activated in the global system settings. - In the global settings, you specified that the equity data is partially taken from the additional financial data and partially from the totals database. The additional financial data has already been maintained. - Reading the data from the totals database has the advantage of always accessing current values. 9. Executing the consolidation of investments: In order to do this, you need to specify which items are to be read from the totals database. You will find these transactions in the following section of the Implementation Guide: Consolidation Functions - Automatic Posting – Consolidation of Investments – Activities – Reported Items for Automatic Activity Recognition – Specify Reported Items for Equity You want to read values from the database for the following activities: - First consolidation: the item for carrying forward balances (all transaction types) - Subsequent consolidation: annual net income and currency translation differences (all transaction types) - Distribution of dividends: the distribution item (all transaction types) Hint: Specify the set name, keeping the consolidation chart of accounts and activity number in mind. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 257 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Field/Data Type Value Activity 01, First Consolidation Set e.g.: CSxy-zz (xy=chart of accounts, zz=activity number) FS item 251100 Subitem set CS01-6000 Subitems (transaction types) 100 through 150 (for subitem category 6) Field/Data Type Value Activity 02, Subsequent Consolidation CSxy-02 Retained Earnings item Set 251200 Currency translation differences item 250900 to 250990 Activity 18, Distribution of Dividends CSxy-02 Set 251600 FS item Ret. Earnings, distribution of dividends You can use the same subitem (transaction type) set for all activities. Start task C/I for consolidation group G2 in test mode and analyze the activities: What is the amount of the differential from the first consolidation of consolidation unit C? What amount is posted to C at item 950100 “Statistical Common Stock”? Continued on next page 258 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment What is the amount of the amortization of the goodwill of B in C? What amounts are posted during the subsequent consolidation of C to the statistical items “Annual net income - total” and “Annual net income - minority interest”? Start task C/I for consolidation group G1 in test mode and analyze the activities: What is the amount of the differential from the first consolidation of consolidation unit C? Compare this with the result for consolidation group G2. Why is no document posted with parent B? How does the amortization of the goodwill of B in C within group G1 differ from that in group G2? 03-12-2004 © 2004 SAP AG. All rights reserved. 259 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Solution 13: Consolidation of Investments - Activities in the Consolidation of Investments Task: First/Subsequent Consolidation 1. Examining the additional financial data: Examine the additional financial data for the activity first consolidation. a) Activities in the Consolidation of Investments Check the financial data for your consolidation group: Menu Path: Accounting !Enterprise Controlling !Consolidation !Data Collection !Additional financial data !Display Call up the changes in investments and equity, and display them by activity. 2. Defining a task: Define a task called C/I, which will be used for all activities and all accounting techniques. In the consolidation monitor, assign the task to task group CONS. Continued on next page 260 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment As the preceding task to task C/I specify DIV ELIM, Elim. of IU investment income. a) Defining task C/I Consolidation of Investments: Menu Path: Tools ! Accelerated SAP ! Customizing ! ExecuteProject !SAP Reference IMG !Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Define tasks Choose New Entries. Define task C/I and texts. Save. Select task C/I and double-click the detail folder Assign activities and Accounting technique. Select New Entries. Specify 00 for “all activities”, and 0 for “all accounting techniques”. Save. Again, go to the consolidation monitor and assign the task C/I to task group CONS. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Define task group Select CONS and double-click Assign tasks to task group folder. Select New Entries and choose C/I and Save. Select task C/I and double-click the detail folder Specify preceding tasks. Select New Entries. Specify task DIV ELIM (Dividend Elimination) as the preceding task. Save. 3. Defining the document type: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 261 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Define document type 51 with posting level 30 for the consolidation of investments. a) Defining the document type: Create document type 51 for the consolidation of investments. Menu Path: Tools !Accelerated SAP !Customizing !Edit Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Consolidation Functions !Automatic Posting !Consolidation of investments !Document Types !Define Document Types Choose New Entries and Enter document type 51 with text. Field/Data Type Value Posting level 30 (consolidation entry) Balance check 0 (error if balance not = 0) Use 6 (consolidation of investments) Manual posting do not select Post in group currency Select Deferred income taxes No calculation Double-click Number ranges/Auto Reversal folder on left and New Entries. Choose Define number range then Insert Interval 30 Number range 9999 EffectiveNumbers from/to 3000000000 - 3999999999 Save and go back. Version 100 Number range 30 Automatic reversal do not select Save. 4. Assignment of document types: Continued on next page 262 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Go to the C/I global settings and find out to what the document types are assigned to. Then assign them accordingly. a) Assignment of document types: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Make Global Settings Here you see that the document types are assigned to the tasks. Assign document type 51 for period 012 of the year 2002. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting !Consolidation of investments !Document Types !Assign Document Types to Tasks Choose New Entries. Task: C/I, FY Effect. current year, Per. 12, Doc type 51. Save. 5. Assigning minority interest items to the equity items: The minority interest items are preassigned to most of the equity items. Find out which equity items are missing and assign minority interest items to these equity items. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 263 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Field/Data Type Value 250100 Common Stock 240100 MI-Common Stock a) Assigning minority interest items to the equity items: Check the current status of the assignments (18 items are already assigned): Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Selected Items !Specify minority interest items The Common Stock FS item and 2 investment items have not been assigned a corresponding minority interest item. Choose New entries and make the following assignments: Field/Data Type Value 250100 Common Stock 240100 MI-Common Stock Save. 6. Assigning statistical equity items: As part of the preparation for postings of subsequent partial or total divestitures, statistical equity items need to be assigned to all equity items. Do this for the same Common stock FS item that was added in the previous exercise. Continued on next page 264 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Field/Data Type Value 250100 Common Stock 950100 Stat: Common Stock a) Assigning the statistical items: The Common Stock FS item has not been assigned a corresponding minority interest item. Choose New entries and make the following assignments: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Selected Items !Specify Equity items and Items for Statistical Equity postings Select New Entries. Field/Data Type Value 250100 Common Stock 950100 Stat: Common Stock Save. 7. Define the miscellaneous selected items for C/I: Field/Data Type Value Annual net income prior to first consolidation 251300 Retain earnings, Method change 251900 Clearing: consolidation of investments 251700 Subitems 140 Clearing, debits: 120 Equity - divestitures 370100 Clearing, credits: 370100 Acquisitions, equity Transfers to minority interest in annual net income Deductions from minority interest in annual net income Annual net income 931100 Annual net income, offsetting item 931200 Minority interest in annual net income 931300 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 265 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Field/Data Type Value Minority interest in ANI, offsetting item 931400 Adjusted annual net income 931500 Minority interest in adjusted annual net income 931600 Adjust ANI - goodwill 931700 Min.int. in adj. ANI goodwill 931800 Adjusted ANI - equity method 931900 Min.int. in adj ANI equity method 931950 Overall offsetting item 939000 Hint: Do not specify any items for posting group shares, divestitures, or negative investment book values. a) Define the miscellaneous selected items for C/I: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Selected Items !Specify selected miscellaneous items Review the selected items and ensure that they are the same as listed in the exercises section. 8. Activating the display of statistical items: Check and make sure that the display of statistical items in documents is activated in the global system settings. - In the global settings, you specified that the equity data is partially taken from the additional financial data and partially from the totals database. The additional financial data has already been maintained. - Reading the data from the totals database has the advantage of always accessing current values. a) Activating the display of statistical items: Ensure that Display statistical items is selected (Consolidation of investments section). Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Check Global System Settings 9. Executing the consolidation of investments: Continued on next page 266 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment In order to do this, you need to specify which items are to be read from the totals database. You will find these transactions in the following section of the Implementation Guide: Consolidation Functions - Automatic Posting – Consolidation of Investments – Activities – Reported Items for Automatic Activity Recognition – Specify Reported Items for Equity You want to read values from the database for the following activities: - First consolidation: the item for carrying forward balances (all transaction types) - Subsequent consolidation: annual net income and currency translation differences (all transaction types) - Distribution of dividends: the distribution item (all transaction types) Hint: Specify the set name, keeping the consolidation chart of accounts and activity number in mind. Field/Data Type Value Activity 01, First Consolidation Set e.g.: CSxy-zz (xy=chart of accounts, zz=activity number) FS item 251100 Subitem set CS01-6000 Subitems (transaction types) 100 through 150 (for subitem category 6) Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 267 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Field/Data Type Value Activity 02, Subsequent Consolidation CSxy-02 Retained Earnings item Set 251200 Currency translation differences item 250900 to 250990 Activity 18, Distribution of Dividends CSxy-02 Set 251600 FS item Ret. Earnings, distribution of dividends You can use the same subitem (transaction type) set for all activities. Start task C/I for consolidation group G2 in test mode and analyze the activities: What is the amount of the differential from the first consolidation of consolidation unit C? What amount is posted to C at item 950100 “Statistical Common Stock”? What is the amount of the amortization of the goodwill of B in C? What amounts are posted during the subsequent consolidation of C to the statistical items “Annual net income - total” and “Annual net income - minority interest”? Start task C/I for consolidation group G1 in test mode and analyze the activities: What is the amount of the differential from the first consolidation of consolidation unit C? Compare this with the result for consolidation group G2. Why is no document posted with parent B? How does the amortization of the goodwill of B in C within group G1 differ from that in group G2? a) Executing the consolidation of investments: Create the reported equity items: Menu Path: Tools !Accelerated SAP !Customizing !Eecute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting Continued on next page 268 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment !Consolidation of investments !Activities !Reported Items for Automatic Activity Recognition !Specify reported items for changes in equity Select New Entries. Field/Data Type Value Activity 01, First Consolidation e.g.: CSxy-zz (xy=chart of accounts, zz=activity number) Set 251100 Go to Set maintenance Item CS01-6000 Save set maintenance. Subitem set (set already defined) Subitems (Transaction types) 100 through 150(for subitem category 6) Activity 02, Subsequent Consolidation Csxy-02 Set 251200 Go to Set maintenance Retained Earnings item Currency translation differences item 250900 to 250990 Save Set maintenance. Subitem set CS01-6000 Activity 18, Distribution of Dividends Csxy-18 Set 251600 Go to Set maintenance FS item Ret. Earnings, distribution of dividends Save set maintenance. Subitem set CS01-6000 Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 269 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Save. Hint: You can use the same subitem (transaction type) set for all activities. Go to the consolidation monitor and execute the equity task for consolidation group G2. Menu Path: Accounting !Enterprise Controlling !Consolidation !Consolidation !Monitor Place cursor at intersection of Task C/I and G2. Select Test run. The amount of the differential from the first consolidation of consolidation unit C is 400. Item 950100 Stat: Common Stock is 600. The amortization of the goodwill of B in C equals 20. This is calculated as follows: The differential of 400 from the first consolidation is amortized over 5 years at the amount of 80 per year. The consolidation frequency is quarterly; thus, the amount of 20 is amortized. The amount of 200 is posted to item 931100 Annual net income - total; 80 is posted to item 931300 Annual net income - minority share. Now place cursor at intersection of Task C/I and G1. Select Test run. The amount of the differential from the first consolidation for consolidation unit C within consolidation group G1 is 500. The amount for C in consolidation group G2: 400. No document is posted for parent B in G1 because the document posted in G2 also applies to G1, and because the first consolidation using direct shares is identical. The amortization of the goodwill of B in C within group G1 differs from that in group G2 as follows: A minority share of 20% (group share of B=80%) is posted to the amortization of 20 already posted in G2. 270 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Consolidation of Investment Lesson Summary You should now be able to: • Compare simultaneous consolidation, step consolidation, and stepwise simultaneous consolidation • Describe Consolidation of Investments utilization • Use the consolidation of investments method • Explain method assignment for simultaneous consolidation and step consolidation • Describe the automatic consolidation activities • Describe two ways to convey the consolidation of investments activities to the system 03-12-2004 © 2004 SAP AG. All rights reserved. 271 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Lesson: Customizing Settings Lesson Overview The focus of this lesson is to help you understand the purpose and use of customizing settings. You will learn about the posting process for appropriation of retained earnings. You will also examine how to distribute dividends and bonus payments. Lesson Objectives After completing this lesson, you will be able to: • Explain the customizing settings to enable automatic consolidation of investments postings • Discuss the posting process for appropriation of retained earnings • Describe how dividends and bonus payments are distributed in the customizing of selected items for consolidation of investments Business Example The group, G1, plans to introduce the component SAP Consolidation by the end of this year. You are required to determine the customizing settings required to enable automatic postings. Purchase Method Figure 87: Customizing Settings (Purchase Method) 272 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings To enable automatic postings, the following Customizing settings are required: • Definition of a consolidation of investments method, such as items and calculation of acquisitions. • Assignment of minority interest items to the equity items. HGB also requires minority interest items for the investment items. • Assignment of appropriation of retained earnings items to the equity items for the group and minority interest shares. • Assignment of statistical equity items to the equity items. • Distribution of dividend items and bonus payment items. • Definition of further statistical items • As in the other consolidation steps, you need to define one or more tasks for consolidation of investments and assign them to the consolidation monitor. For each task you determine, which accounting techniques and activities are to apply. • Posting requires a document type with posting level 30 in group currency. Figure 88: Minority Interest Among the selected items, each equity item is assigned a minority interest item in the balance sheet. This can be 1:1 or n:1. If you want an equity aging schedule, the minority interest items require a breakdown category with transaction types. These settings ensure that external shares are automatically transferred to the minority interest items within the balance sheet. 03-12-2004 © 2004 SAP AG. All rights reserved. 273 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 89: Appropriation of Retained Earnings A prerequisite for automatic postings to appropriation of retained earnings is the selection of the Appropriation of retained earnings flag in C/I utilization. An appropriations item is assigned to each equity item for the group share depending on whether appropriations are disclosed in the balance sheet or the income statement. This can be 1:1 or n:1 and can be distinguished between debits and credits. An appropriation of the retained earnings item for the minority share is assigned to each equity item. This can also be 1:1 or n:1. The postings depend on whether the appropriations are disclosed in the balance sheet or at the end of the income statement. You determine this in the master data for the consolidation chart of accounts. Figure 90: Appropriation of Retained Earnings - Posting Process 274 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings The postings for the activities subsequent consolidation (only when appropriations in income statement are made) and divestiture take place within the appropriation of retained earnings. No postings are needed for activities such as first consolidation and step acquisition. Subsequent consolidation: • If retained earnings are shown in the balance sheet, the system assumes that the changes in equity were entered at the appropriations items. No special logic is required. • If retained earnings are shown in the income statement, the balance of the equity item is used as the trigger. The minority share of the balance is transferred from the group appropriation item to the minority appropriation item. This is why it is important that in Customizing, you explicitly define the balance sheet item. * entries are invalid. Divestitures: • If retained earnings are shown in the balance sheet, the divestiture process computes the change to the equity item (360 in the). Because equity items are involved, the system also computes the minority share that is incurred during the divestiture (60). The delta to the triggering equity item is also posted to this appropriation of retained earnings item (which is, 360-60=300) so that this again results in a value of 360. The offsetting entry is posted to the C/I clearing item defined in the other selected items. • If retained earnings are shown in the income statement, the divestiture computes the change to the equity item and posts this amount to the group/minority appropriation items. Figure 91: Posting of Statistical Equity To be able to automatically post subsequent divestitures, simultaneous postings must be made to statistical items. 03-12-2004 © 2004 SAP AG. All rights reserved. 275 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Each stockholder’s equity item, including the translation differences, must be assigned its own statistical item for this. It must be a 1:1 assignment. The items require a breakdown category that corresponds to the breakdowns of the respective equity item, such as transaction types for the equity schedule, and that of the partner. Figure 92: Distribution of Dividends, Bonus Payments You define one or more items for the distribution of dividends in Customizing of selected items for C/I. This is an appropriation item, broken down by the transaction type, subitems, if you require an equity aging schedule. The item is needed for the correct calculation of the minority share in annual net income and the gain/loss from partial/total divestitures. For this reason, it is essential that only dividend distributions be posted to this item. Make sure you do not specify the Distribution of dividends clearing item defined in the document type for the elimination of investment income. There is a correlation with the elimination of investment income. You also define the items for bonus payments in Customizing of selected items. These are appropriation items broken down by transaction types, when required. • Bonus payments are distributions to the management of a company and do not affect net income. As opposed to dividends, bonus payments need not be eliminated. • The item is needed for the correct calculation of the gain/loss from partial/total divestitures. As a result, ensure that only bonus payments be posted to this item. • When a partial or total divestiture occurs, all revenues/expenses minus any distribution of dividends and bonus payments are summed up and proportionally/fully inverted. 276 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings Figure 93: Elimination of Investment Income The investment income of the consolidation unit, A, is eliminated against the distribution at the consolidation unit, B, (see entry I ). This uses the items specified in the method for the elimination of investment income. In this example, the entry is one-sided, which means that the amount of the investment income is the determining factor. The amount of 30 represents minority interest and remains on the distribution item. Clearing entries are made to ensure that the balance sheet at the consolidation unit level also balances out. You specify the item for this entry under the document type for the elimination of investment income - chart-based characteristics. A financial statement balancing entry is automatically posted. 03-12-2004 © 2004 SAP AG. All rights reserved. 277 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 94: Distribution of Dividends After the elimination of investment income, the minority share of the distribution of dividends must be reclassified if the group share of the distributing consolidation unit is less than 100%. This is done in a separate C/I activity for dividend distributions. Customizing needs to know the items that contain the dividend distributions to be able to reclassify the amount still remaining on the distribution of dividends item. • Appropriation of retained earnings – Annual net income prior to first consolidation – ... – Transfers to minority interest in annual net income – Deductions from minority interest in annual net income • ... • Statistical items – Annual net income – Annual net income, offsetting item – Minority interest in annual net income – Minority interest in ANI, offsetting item – Adjusted annual net income – Minority interest in adjusted annual net income – Overall offsetting item 278 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings Further statistical items are required for annual net income. • The items, Annual net income and Minority share in annual net income, are needed for reporting purposes. • The item, Adjusted annual net income, is the annual net income minus the dividends and bonus payments distributed within the consolidation group. The item is needed to compute the gain/loss from partial/total divestitures. • The items do not require a breakdown category, and are defined preferably in the range of numbers starting with 9. • Items for Group Shares – Group share – ... – Group share in annual net income • Divestiture – Item for loss – Item for gain – Item for loss - minority share – Item for gain - minority share – Clearing item for divestiture preparation Further, you need to specify items for group shares. These items provide information about the structure of the corporate group for reporting purposes. To display this information, you need to run the group shares report. For subsequent divestitures, you define gain and loss items for the group and minority shares, respectively. The item Clearing for divestiture preparation is used in the function, Preparation for changes to consolidation groups. This ensures the accurate disclosure of the balance sheet, income statement, and aging schedules during first consolidations and total divestitures. The item is used for zero balances for each transaction currency. 03-12-2004 © 2004 SAP AG. All rights reserved. 279 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 95: Automatic Entries at the Click of a Button This example summarizes some of the necessary configuration steps for automatic posting: 1. Specifying reported items to enable the system to locate the data required. 2. Specifying selected items for automatic postings during the run of Consolidation of Investment program. Figure 96: Subsequent Consolidation Assume that the current year saw a profit of 200. 280 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings Subsequent consolidation reclassifies the minority interest according to the external share of 40 monetary units. In the balance sheet, the minority interest is transferred to the minority interest item. The minority shares are also adjusted in the income statement (see II). The item for transfers to the minority share in the annual net income in the income statement is defined in Customizing under Other selected items. The statistical items for annual net income are updated separately for the total annual net income, the adjusted annual net income, and the minority share. These items are also defined in Customizing under Other selected items. Figure 97: Goodwill Amortization The automatic posting of goodwill amortization requires the following settings: • In global settings or method definition, you define a goodwill item (acquisition and accumulated amortization), an amortization expense item, and the amortization characteristics (life in years). • The financial statement imbalance is automatically calculated and posted in the balance sheet and the income statement to the items that are defined in IMG under Financial statement items - Selected items for posting. • The subsidiary entry to statistical items is also automatic. It uses the same items as in subsequent consolidation. These items need to be posted to accommodate future total/partial divestitures. The amortization entry occurs at the parent (A). 03-12-2004 © 2004 SAP AG. All rights reserved. 281 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Minority interest entries in the balance sheet, income statement, and statistical items are posted exactly when the C/I method uses direct shares and the parent’s group share is less than 100%. Note: The training system is set up for quarterly consolidations. This is why the annual amortization of 40 USD is divided into 10 USD per quarter. Figure 98: Step Acquisition Step Acquisition This example assumes that B acquires an additional 20% of common stock of C for 240 monetary units. The equity at B consists of common stock of 1,000 units and prior year retained earnings of 200 units. The investment is cleared and the minority share is adjusted by 20%. In this case, no goodwill is incurred by the parent company B. In the area of statistical items, the equity items are adjusted by the amount that is eliminated against the parent’s investment. This is posted at the C subsidiary, showing parent, B, as the partner unit. The offset is posted to the overall statistical offsetting item. 282 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Customizing Settings Lesson Summary You should now be able to: • Explain the customizing settings to enable automatic consolidation of investments postings • Discuss the posting process for appropriation of retained earnings • Describe how dividends and bonus payments are distributed in the customizing of selected items for consolidation of investments 03-12-2004 © 2004 SAP AG. All rights reserved. 283 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Lesson: Sequence of Activities Lesson Overview This lesson will cover information about activity interpretation in a consolidation group. You will also learn about consistent consolidation logic. Lesson Objectives After completing this lesson, you will be able to: • Explain activity interpretation in a consolidation group • Describe the consolidation logic in SAP Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You are required to define the sequence of activities to customize SAP Consolidation. Default and Auto Sequence Figure 99: Sequence of Activities (Default Sequence) This example shows the functions of activity sequencing. The sequence numbers of the activities correspond to the ones in the SAP system. The data of the example is entered as activities in the above sequence. This leads to an investment structure with an implicit sequence of consolidation units (A ! B !C !D). 284 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Sequence of Activities At this point, you can define a default sequence of activities in Customizing, based on one consolidation unit. The additional flag (up to here) controls the meshing of the activities of different consolidation units: In the first run, all the activities up to the flagged activity (step acquisition in this example) are processed. After this, the activities of the next consolidation unit are processed. Next, the remaining activities (partial divestiture, total divestiture in this example) of the first consolidation unit are processed. Figure 100: Sequence of Activities (Auto Sequence) The left column lists the original sequence of all the activities of the period, which is determined by data entry. Together with the activities from all the prior periods (none in this example), it shows the changes in investments and forms the investment structure. The sequence of the second column is determined by the definition of a default sequence in Customizing. The sequence is determined for each consolidation unit. In this example, the activity subsequent consolidation (02), is placed in front of step acquisition (07), and partial divestiture (10) in front of total divestiture (11). The overall sequence is the result of the mixing of the investment structure in the left column with the sequence for each consolidation unit in the center column. 03-12-2004 © 2004 SAP AG. All rights reserved. 285 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Each of the hierarchy levels are processed from top to bottom. • In every hierarchy level, each of the consolidation units are processed in alphabetic sequence. For each unit, all the activities are processed up to and including the Up to here threshold. • Next, all the activities following the Up to here threshold are added, the sequence of the consolidation units being reversed. • You can also create a manual sequence: – If you move or delete the Up to here threshold among the activities of each consolidation unit (afterwards automatic sequence as described) – If you manipulate the automatically derived global sequence using the select and move functions for activities (this is done under Global sequence) Activities Interpretation Figure 101: Activity Interpretation in a Consolidation Group The activities reported to the overall consolidation group - from its point of view - need to be re-interpreted for each sub-group. However, different C/I methods may be applied - even if the same activities are interpreted. 286 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Sequence of Activities Figure 102: Consistent Consolidation Logic The characteristics of consolidation of investments are: • High complexity of individual activities, such as method changes, divestitures, and transfers. • Strong interrelation between all activities: The semantics of individual activities cannot be viewed and implemented as a stand alone activity. SAP delivers a consistent consolidation logic across all activities. Figure 103: Report Painter: Stockholders’ Equity Analysis 03-12-2004 © 2004 SAP AG. All rights reserved. 287 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Example of a user-defined analysis of the use of stockholders’ equity: • Elimination during activities similar to first consolidation • Remaining group equity from subsequent consolidation • Equity transferred to minority interest The comparison between the investment and the eliminated equity explains the acquisition value of goodwill. 288 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Sequence of Activities Lesson Summary You should now be able to: • Explain activity interpretation in a consolidation group • Describe the consolidation logic in SAP 03-12-2004 © 2004 SAP AG. All rights reserved. 289 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Lesson: Equity Method Lesson Overview This lesson will provide an overview of the equity method. You will learn about the treatment of the amortization of goodwill, the first consolidation, and the subsequent consolidation in the equity method. In addition, you will learn the differences between the German HGB and the US GAAP/IAS for both first consolidation and subsequent consolidation. Lesson Objectives After completing this lesson, you will be able to: • Explain the equity method • Describe subsequent consolidation in equity method • Compare between HGB and US GAAP/IAS for first and subsequent consolidation Business Example The group, G1, plans to introduce the SAP Consolidation by the end of this year. You are required to consolidate investments using equity method and customize the treatment of differentials. First Consolidation Figure 104: Equity Method 290 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method For the equity method, • You supply the parent’s investment (changes in investments) and the subsidiary’s equity (additional financial data or totals database). • For the subsequent consolidation, you supply the equity holdings adjustments either using the equity holdings adjustment data as a part of the additional financial data or through the changes in equity data. In the last case, no other data must be supplied. The only data still needed are the reported itemsthat are taken from the reported equity data. • The system automatically calculates the differential, which means the excess investment over equity or vice-versa. In Method Definition of Customizing, you specify how the differential is disclosed: • One-line consolidation (book value method) – Goodwill is not separately disclosed. Instead, it is a part of the investment book value (equity in earnings of affiliates). The investment and goodwill are one and the same item. – Notice that according to the German HGB, goodwill must be separately disclosed in the notes to financial statements. To do this, you can create a separate subitem, such as 135 Additions to goodwill, equity method, and specify the subitem in the method for the Acquisitions goodwill item. • Two-line consolidation (proportion of equity method) – Goodwill is disclosed separately, as in the purchase method: – Create an item for the investment book value and another item for goodwill. Figure 105: First Consolidation for Unit E (Equity Method) 03-12-2004 © 2004 SAP AG. All rights reserved. 291 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Parent ’B’ holds an investment of 500 units in the affiliate ’E’ and reports this in its balance sheet. Affiliate ’E’ shows common stock of 1,000 units. However, its financial data is not included in the group’s aggregated balance sheet. Because the group share in ’E’ is 40%, the system computes a minority share of 600 units in common stock of ’E’. The settlement between the investment and the equity leads to a differential of 100 units (500 - 400 = 100). The system generates an entry, which proportionately adjusts the investment of the parent ’B’ by 100 units, and reports the excess amount as goodwill. In this case, it uses the two-line method. Amortization Figure 106: Amortization of Goodwill (Equity Method) The amortization of goodwill (100 units over 5 years = 20 units) is posted at parent ’B’. In this example, the amortized amount is credited directly to the goodwill item. The offsetting entry is charged to the amortization expense (see entry I). Because the activity affects net income, the annual net income items in both the balance sheet and the income statement are automatically adjusted (see entry II). As in amortization using the purchase method, the adjustment to annual net income is posted to the statistical items (see entry III). 292 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Subsequent consolidation Figure 107: Customizing Settings (Equity Method, Subseq. Cons) Subsequent consolidation in the equity method adjusts the parent’s investment share by the values that are collected in the reported data. For this reason, at first you define the scope of the reported data for the equity method postings. Next, you specify the posting items for each scope. For each scope, you also specify the following items: • Offsetting item • Negative investment book value • Statistical equity In some cases, these items must be enhanced in the consolidation chart of accounts. The latter two items have different characteristics for different scopes of reported data. For each scope, you also define reported items if the equity holdings adjustment data is collected from the reported equity data. The collection can only be automatic if the items defined for each scope are unambiguous. 03-12-2004 © 2004 SAP AG. All rights reserved. 293 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 108: Accounting Techniques - Comparison Subsequent consolidation in the equity method adjusts the parent’s investment share by the values that are collected in the reported data. For this reason, at first you define the scope of reported data for the equity method postings. Next, you specify the posting items for each scope. For each scope, you also specify the following items: Offsetting item • Negative investment book value • Statistical equity In some cases, these items must be enhanced in the consolidation chart of accounts. The latter two items have different characteristics for different scopes of reported data. For each scope, you also define reported items if the equity holdings adjustment data is collected from the reported equity data. The collection can only be automatic if the items defined for each scope are unambiguous. 294 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Comparison between HGB and US GAAP/IAS Figure 109: First Consolidation - HGB vs. US GAAP/IAS SAP supports the consolidation of investments according to German HGB as well as US GAAP / IAS. Both methods can be used simultaneously. The methods are selected in the definition of the consolidation of investments method. Figure 110: Subseq. Consolidation - HGB vs. US GAAP/IAS 03-12-2004 © 2004 SAP AG. All rights reserved. 295 Unit 5: Interunit Elimination & Consolidation of Investments AC660 The differences between HGB and US GAAP/IAS in first consolidation in a multiple-level group with minority interests reappear during subsequent consolidation and all other, more complex activities. After goodwill is completely amortized, the minority interest in the group becomes the same for both HGB and US GAAP / IAS. 296 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Exercise 14: Consolidation of Investments – Equity Method Exercise Objectives After completing this exercise, you will be able to: • Define financial data types • Make the Customizing settings required to run the task from the monitor Business Example The steering committee just decided that consolidation unit E is no longer to be consolidated using the purchase method. From now on the equity method is to be used. Task 1: 1. Define the method EQUIT for the equity method (with two-line consolidation) with the following properties: a) Additions are calculated using the direct share (in compliance with US GAAP) b) Amortization of goodwill (positive and negative), life = 5 years, no threshold value, amortization starts at the beginning of the current range of periods c) Item for positive/negative goodwill: 181300 Choose the appropriate subitems for additions, amortizations and write-ups d) Item for amortization and write-ups: 311830 Specify the functional area “administration” e) Statistical item for the amortization of positive goodwill: 933100 f) Statistical item for curreny translation difference: 940000 Task 2: 1. Assign the method to consolidation unit E in the consolidation group G2. Task 3: 1. Scope of reported data: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 297 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Check the settings for the scope of reported data for the equity method, but do not make any changes. The parent unit’s investment book value is to be updated by disclosures of: a) the annual net income b) distributions of dividends on behalf of the “equity company” Make a note of the scopes of reported data. Task 4: 1. Maintaining reported equity items: Define the reported equity items for equity holdings adjustments as follows: Reported annual net income: 251200 120 Reported distributions of dividends: 251600 140 Task 5: 1. Executing the task for G2: a). Before executing the consolidation of investments, go to the global settings and specify/review that the data for subsequent consolidations with the equity method is to be read from the reported equity data for equity. b) Then execute task C/I for consolidation group G2. c) What is the amount of the differential from the first consolidation of unit E? What is the amount of the amortization of the differential (excess) of B in E? Task 6: 1. Executing the task for G1: Block the task for G2 and execute the same task for G1. Afterwards, block the task for G1, too. 298 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Solution 14: Consolidation of Investments – Equity Method Task 1: 1. Define the method EQUIT for the equity method (with two-line consolidation) with the following properties: a) Additions are calculated using the direct share (in compliance with US GAAP) b) Amortization of goodwill (positive and negative), life = 5 years, no threshold value, amortization starts at the beginning of the current range of periods c) Item for positive/negative goodwill: 181300 Choose the appropriate subitems for additions, amortizations and write-ups d) Item for amortization and write-ups: 311830 Specify the functional area “administration” e) Statistical item for the amortization of positive goodwill: 933100 f) Statistical item for curreny translation difference: 940000 a) Defining the method: Define the equity method similar to the solution for the purchase method, using the different FS items and subitems Completing the Utilization of Consolidation of Investments Menu Path:Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Determine System Utilization for C/I Ensure that the accounting technique Equity is specified. Defining a consolidation of investments method: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !!Methods !Define methods Select New entries and create the new method EQUITY a) Accounting technique: Equity Method Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 299 Unit 5: Interunit Elimination & Consolidation of Investments AC660 b) Additions: calculate using “direct shares” Hint: The treatment of goodwill already displays the option Amortization (for positive and negative goodwill), as specified in C/I utilization. Field/Data Type Value Accounting technique Equity Method Calculate Acquitions Using: “ direct shares ” Press Enter. Amortization of goodwill and negative goodwill sections: 5 Amortizable life, number of years 2 Begin amortization Caution: Do not select Threshold value. Note that you can maintain additional amortization data only after pressing Enter. Save your entries. To enter the chart of accounts-based settings for the method, choose FS items to the right of the method description. Select New Entries. Enter the following FS items for BOTH the Amortization of goodwill and Amortization of Negative goodwill. Field/Data Type Value Acquisition Item 181300 Subitem 120 Accumulated amortization item 181300 Subitem, amortization 220 Subitem, write-ups 275 Amortization Exp. item 311830 Subitem (Functional area) 0003 (Administration) Continued on next page 300 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Field/Data Type Value Writeup Item 311830 Subitem (Functional area) 0003 (Administration) Stat. item for pos. goodwill 933100 Stat. item for neg. goodwill 933200 Stat. item curr. trans. diff. 940000 Save your entries. Task 2: 1. Assign the method to consolidation unit E in the consolidation group G2. a) Assigning the method: In the method hierarchy for consolidation unit E, change the method PURCH to EQUIT. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Methods !Assign methods to the consolidation units !Edit method hierarchies a) Expand your hierarchy, select consolidation unit E, and choose Change. b) In the detail screen, assign method EQUITY to consolidation unit E. Save your entries. Task 3: 1. Scope of reported data: Check the settings for the scope of reported data for the equity method, but do not make any changes. The parent unit’s investment book value is to be updated by disclosures of: a) the annual net income b) distributions of dividends on behalf of the “equity company” Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 301 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Make a note of the scopes of reported data. a) Scope of reported data: To examine the scopes of reported data, go to: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting !Consolidation of investments !Specify scope of reported data for equity method The scope entails: 1. Annual net income 2. Dividends No adjustments should be required. Task 4: 1. Maintaining reported equity items: Define the reported equity items for equity holdings adjustments as follows: Reported annual net income: 251200 120 Reported distributions of dividends: 251600 140 a) Maintaining reported equity items: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Activities !Reported Items for Automatic Activity Recognition !Specify reported items for equity holdings adjustments Select New Entries For scope 1 define the item 251200 with subitem 120. For scope 2 define the item 251600 with subitem 140. Save your entries. Task 5: 1. Executing the task for G2: Continued on next page 302 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method a). Before executing the consolidation of investments, go to the global settings and specify/review that the data for subsequent consolidations with the equity method is to be read from the reported equity data for equity. b) Then execute task C/I for consolidation group G2. c) What is the amount of the differential from the first consolidation of unit E? What is the amount of the amortization of the differential (excess) of B in E? a) Executing the task for G2: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Automatic Posting ! Consolidation of investments !Make Global Settings In the Get earnings from window, choose the “reported equity data” option. Save. You execute the task in the consolidation monitor by placing the cursor at the cross-section between the task and the consolidation group G2. Choose Test run. The amount of the differential from the first consolidation of unit E is USD 400. The amortization of the excess amount is USD 20. This is computed as follows: The differential from the first consolidation of 400 is amortized over a period of 5 years, which equates to 80 per year, or 20 per quarter. Now execute the task in the consolidation monitor by placing the cursor at the cross-section between the task and the consolidation group G1. Choose Update run. Block task when completed. Task 6: 1. Executing the task for G1: Block the task for G2 and execute the same task for G1. Afterwards, block the task for G1, too. a) Executing the task for G1: Block the task for G2 and execute the same task for G1. Afterwards, block the task for G1, too. 03-12-2004 © 2004 SAP AG. All rights reserved. 303 Unit 5: Interunit Elimination & Consolidation of Investments AC660 304 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Exercise 15: Validation Exercise Objectives After completing this exercise, you will be able to: • Define financial data types • Make the Customizing settings required to run the task from the monitor Business Example Task 1: Assignment: 1. In order to check the consolidated data, you use the same validation VXY (where XY = 50 + your group number) that you created in Data Collection, topic Validation I. You now assign the validation to cons groups G1 and G2, for period categories 2 and 3. Task 2: Task: 1. For this validation, define the task CONS VAL and assign it to the existing task group CONS. The translation should be run as the last task and be automatically locked after it has run without errors. Task 3: Execution: 1. Run the validation for cons group G1 in the consolidation monitor. 03-12-2004 © 2004 SAP AG. All rights reserved. 305 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Solution 15: Validation Task 1: Assignment: 1. In order to check the consolidated data, you use the same validation VXY (where XY = 50 + your group number) that you created in Data Collection, topic Validation I. You now assign the validation to cons groups G1 and G2, for period categories 2 and 3. a) Assignment: Assign the validation to consolidation groups G1 and G2: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation ! Consolidation Functions ! Validation of Consolidated Data !Assign Validations to Consolidation Groups Choose New entries and make the following settings: Field/Data Type Value Cons group Period cat. Val. CG G1 and G2 2 and 3 VXY (XY = 50 + your group number, which is the validation you already created) Save the entry. Task 2: Task: 1. For this validation, define the task CONS VAL and assign it to the existing task group CONS. Continued on next page 306 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method The translation should be run as the last task and be automatically locked after it has run without errors. a) Task: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation ! Consolidation Functions ! Validation of Consolidated Data !Define Task Make the following settings for your new entry: Field/Data Type Value Task Short text Medium text CONS VAL Val. GC Validation consolidated data Save the entry. Assign the new task to the task group: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Define Task Group Select the task group CONS, go to Assign tasks to task group, and make the following new entry: Field/Data Type Value Task Automatic blocking CONS VAL select the indicator Save your entry. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 307 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Task 3: Execution: 1. Run the validation for cons group G1 in the consolidation monitor. a) Execution: You can execute task Valid. GC in the consolidation monitor by placing the cursor at the cross-section between the task and the consolidation group. Choose Update run. Menu Path: Accounting !Enterprise Controlling !Consolidation !Consolidation !Monitor 308 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Equity Method Lesson Summary You should now be able to: • Explain the equity method • Describe subsequent consolidation in equity method • Compare between HGB and US GAAP/IAS for first and subsequent consolidation 03-12-2004 © 2004 SAP AG. All rights reserved. 309 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Lesson: Reclassification Lesson Overview This lesson provides an overview of the features and uses of reclassification. You will learn about the reclassification of sales revenue and the netting of receivables and payables in reclassifications. In addition, you will learn about periodic reclassification and the debit/credit sign-triggered reclassification. Lesson Objectives After completing this lesson, you will be able to: • Describe the benefits of reclassification • Differentiate between types of reclassification • Explain periodic reclassification Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You have been asked to reclassify the values of the financial statement. Customization and Application of Reclassification Figure 111: Reclassifications 310 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reclassification This component provides the functionality for reclassifying the values of the financial statement (FS) items. It features a flexible set of rules, which is able to accommodate a wide array of applications. You may need reclassifications to adjust the financial data reported by consolidation units to meet corporate requirements. You may also need to reclassify consolidated data. In most cases, a reclassification transfers the value of one item to another. For example, the group may require reclassifying Finished Goods to Unfinished Goods. Reclassification has the following uses: • Reclassification of the value of one item or an entire set of items • Reclassification of an entire value or a percentage of a value • Items can be delimited to certain subitems, partner units, or the sets thereof • Reclassifications can be posted at the triggering unit or the partner unit • Inheritance of items and their additional account assignments • Use of different posting levels (10, 20, 30) Figure 112: Reclassification of Sales Revenue In this reclassification, the order of the source item and the destination item is reversed in relation to normal accounting logic. You need to do this because the debit/credit signs of the triggering item and the source item differ. The system reverses the sign of the balance of the triggering item to reclassify that balance from the source item to the destination item. 03-12-2004 © 2004 SAP AG. All rights reserved. 311 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Figure 113: Reclassification: Netting of Receivables / Payables One part of consolidation is interunit elimination, which eliminates the receivables and payables incurred by business transactions that take place within the boundaries of a corporate group. As in our example, however, in the overall consolidation group you might record your business partners as partner units that are not included in the consolidation group during the consolidation process. During step consolidation, when the consolidated group is passed on to the next higher level, these business partners might belong to one of the higher-level consolidation groups. Such business relationships might require that you net your receivables against the payables, from and to each trading partner, thus, stating a net balance for each trading partner. When customizing the reclassification, in this situation you need two reclassification rules - one for (positive) debit balances and one for (negative) credit balances. The reclassification entry uses posting level 20. In this example, however, posting level 30 is used in order to trigger a group-dependent reclassification of those payables/receivables that do not have a partner within the subgroup concerned. You can specify in the reclassification rule that you want to compute the net balance per partner unit. Then the reclassification is posted at the partner unit instead of at the triggering consolidation unit. In this case, the triggering unit is used for the partner assignment. This function is only available for reclassifications at levels equal to or greater than 20. 312 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reclassification Figure 114: Reclassification of an Item, Triggered by the Debit/Credit Sign An alternative to the standard reclassification logic is the debit/credit sign-triggered reclassification. The reclassification is triggered by the sign of the balance of all triggering items. This type of reclassification reclassifies the value of the source item as opposed to the standard reclassification logic, which reclassifies the value of the triggering item (or item set). The source item is cleared to a zero balance. 03-12-2004 © 2004 SAP AG. All rights reserved. 313 Unit 5: Interunit Elimination & Consolidation of Investments AC660 Periodic Reclassification Figure 115: Periodic Reclassifications Periodic reclassification only processes the new values added in the selected range of periods. Otherwise, the year-to-date value of the current period is used. You use this special type of reclassification (a) if the triggering item is not the same as source item, or (b) a percentage of the value is reclassified. To set up periodic reclassification, in Customizing of the definition of the respective method you select the Periodic reclassification indicator and specify the desired Consolidation frequency for each applicable reclassification rule. This only includes the item values that belong to the current interval of the selected consolidation frequency. Reclassifications are restricted to the last period in the range of periods specified in the consolidation frequency. For example, only periods 06 and 12 are posted in semi-annual consolidation runs. 314 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reclassification Lesson Summary You should now be able to: • Describe the benefits of reclassification • Differentiate between types of reclassification • Explain periodic reclassification 03-12-2004 © 2004 SAP AG. All rights reserved. 315 Unit Summary AC660 Unit Summary You should now be able to: • Define the tasks and methods for interunit elimination • Explain the interunit elimination method • Examine the causes of elimination differences • List the benefits of and the steps for document reconciliation • Compare simultaneous consolidation, step consolidation, and stepwise simultaneous consolidation • Describe Consolidation of Investments utilization • Use the consolidation of investments method • Explain method assignment for simultaneous consolidation and step consolidation • Describe the automatic consolidation activities • Describe two ways to convey the consolidation of investments activities to the system • Explain the customizing settings to enable automatic consolidation of investments postings • Discuss the posting process for appropriation of retained earnings • Describe how dividends and bonus payments are distributed in the customizing of selected items for consolidation of investments • Explain activity interpretation in a consolidation group • Describe the consolidation logic in SAP • Explain the equity method • Describe subsequent consolidation in equity method • Compare between HGB and US GAAP/IAS for first and subsequent consolidation • Describe the benefits of reclassification • Differentiate between types of reclassification • Explain periodic reclassification 316 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. Which of the following tasks are covered by interunit elimination in the consolidation system? Choose the correct answer(s). ! A Elimination of interunit payables and receivables ! B Elimination of interunit revenues and expenses ! C Elimination of investment income ! D All of the above 2. How can you restrict the item values to be eliminated in the interunit elimination (IU) method? 3. What are splitting differences? 4. The document matching program cannot be called from balance reconciliation after the elimination of interunit payables and receivables. Determine whether this statement is true or false. ! True ! False 5. When network-like investment structures are involved, disclosures and computations in step consolidation are simpler than in simultaneous consolidation. Determine whether this statement is true or false. ! True ! False 6. SAP does not support stepwise simultaneous consolidation. Determine whether this statement is true or false. ! True ! False 03-12-2004 © 2004 SAP AG. All rights reserved. 317 Test Your Knowledge AC660 7. List the fields, the properties of which have to be defined if consolidation of investments utilization is set to global. 8. You can define more than one consolidation of investments method for each valid accounting technique. Determine whether this statement is true or false. ! True ! False 9. In consolidation groups that consist of multiple levels, the methods assigned at lower levels cannot be used as defaults for upper levels. Determine whether this statement is true or false. ! True ! False 10. When you enter reported and equity data, the system automatically assigns a sequential activity number that uniquely identifies the activity. Fill in the blanks to complete the sentence. 11. What are the two ways to convey consolidation of investment activities to the system? 12. List two Customizing settings for automatic consolidation of investments postings. 318 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge 13. When do the postings for the activities-subsequent consolidation and divestiture take place? 14. When a partial or total divestiture occurs, all revenues/expenses minus any distribution of dividends and are summed up and proportionally/fully invested. Fill in the blanks to complete the sentence. 15. Different consolidation of investments methods cannot be applied, even if the same activities are interpreted for each subgroup of the overall consolidation group. Determine whether this statement is true or false. ! True ! False 16. What are the characteristics of consolidation of investments? 17. For the equity method, you supply the subsidiary’s and the parent’s investment. Fill in the blanks to complete the sentence. 18. List the steps to treat subsequent consolidation in the equity method. 03-12-2004 © 2004 SAP AG. All rights reserved. 319 Test Your Knowledge AC660 19. The difference between German HGB and US GAAP/IAS in first consolidation in a multiple-level group with minority interests does not appear during subsequent consolidation. Determine whether this statement is true or false. ! True ! False 20. List any three uses of reclassification. 21. The debit/credit sign triggered reclassification reclassifies the value of the triggering item. Determine whether this statement is true or false. ! True ! False 22. When would you use periodic reclassification? 320 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Answers 1. Which of the following tasks are covered by interunit elimination in the consolidation system? Answer: D Interunit elimination covers the elimination of interunit payables and receivables, the elimination of interunit revenues and expenses, and the elimination of investment income in the data monitor. 2. How can you restrict the item values to be eliminated in the interunit elimination (IU) method? Answer: By specifying the characteristic value sub-assignments, consolidation or partner units and their attributes, and document type, you can restrict the item values to be eliminated in the IU method. The selection is restricted to those units that have these attributes, or to the data records that have been posted with these document types. 3. What are splitting differences? Answer: A splitting of differences is understood as an analysis of the system containing the causes of elimination differences. The system can analyze elimination differences and split them into two categories, depending on their cause. 4. The document matching program cannot be called from balance reconciliation after the elimination of interunit payables and receivables. Answer: False The document matching program can be called directly from balance reconciliation after the elimination of interunit payables and receivables. 5. When network-like investment structures are involved, disclosures and computations in step consolidation are simpler than in simultaneous consolidation. Answer: False When network-like investment structures are involved, disclosures and computations in step consolidation are much more complex than in simultaneous consolidation. 03-12-2004 © 2004 SAP AG. All rights reserved. 321 Test Your Knowledge AC660 6. SAP does not support stepwise simultaneous consolidation. Answer: False SAP supports stepwise simultaneous consolidation. 7. List the fields, the properties of which have to be defined if consolidation of investments utilization is set to global. Answer: If consolidation of investments utilization is set to global, the properties of goodwill amortization and life, new goodwill, threshold value, equity aging, and negative stockholders value are defined. 8. You can define more than one consolidation of investments method for each valid accounting technique. Answer: False You can define only one consolidation of investments method for each valid accounting technique. 9. In consolidation groups that consist of multiple levels, the methods assigned at lower levels cannot be used as defaults for upper levels. Answer: False In consolidation groups that consist of multiple levels, the methods assigned at lower levels are used as defaults for the upper levels (upward inheritance). 10. When you enter reported investment and equity data, the system automatically assigns a sequential activity number that uniquely identifies the activity. Answer: investment 11. What are the two ways to convey consolidation of investment activities to the system? Answer: The two ways to convey consolidation of investment activities to the system are: • Fully automatic derivation of the equity from the balance sheet of the respective units • Manual entry of activities 322 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge 12. List two Customizing settings for automatic consolidation of investments postings. Answer: Two Customizing settings for automatic consolidation of investments postings are: • Definition of a consolidation of investments method • Assignment of minority interest items to the equity items 13. When do the postings for the activities-subsequent consolidation and divestiture take place? Answer: The postings for the activities subsequent consolidation and divestiture take place within the appropriation of retained earnings. 14. When a partial or total divestiture occurs, all revenues/expenses minus any distribution of dividends and bonus payments are summed up and proportionally/fully invested. Answer: bonus payments 15. Different consolidation of investments methods cannot be applied, even if the same activities are interpreted for each subgroup of the overall consolidation group. Answer: False Different consolidation of investments methods may be applied, even if the same activities are interpreted for each subgroup of the overall consolidation group. 16. What are the characteristics of consolidation of investments? Answer: Consolidation of investments has the following characteristics: • High complexity of individual activities, such as method changes, divestitures, and transfers. • Strong interrelation between all activities, which means the semantics of individual activities cannot be viewed and implemented as a stand-alone activity. 17. For the equity method, you supply the subsidiary’s equity and the parent’s investment. Answer: equity 03-12-2004 © 2004 SAP AG. All rights reserved. 323 Test Your Knowledge AC660 18. List the steps to treat subsequent consolidation in the equity method. Answer: The steps to treat subsequent consolidation in the equity method are as follows: • Define the scope of reported data for the equity method postings • Specify the posting items for each scope. For each scope, also specify the offsetting item, the negative investment book value and statistical equity • For each scope, also define reported items if the equity holdings adjustment data is collected from the reported equity data 19. The difference between German HGB and US GAAP/IAS in first consolidation in a multiple-level group with minority interests does not appear during subsequent consolidation. Answer: False The difference between German HGB and US GAAP/IAS in first consolidation in a multiple-level group with minority interests reappears during subsequent consolidation. 20. List any three uses of reclassification. Answer: Three uses of reclassification are as follows: • Transfers the value of one item to another item • Items can be delimited to certain subitems, partner units or the sets thereof • Reclassification can be posted at the triggering unit or at the partner unit 21. The debit/credit sign triggered reclassification reclassifies the value of the triggering item. Answer: False The debit/credit sign triggered reclassification reclassifies the value of the source item and the source item is cleared to a zero balance. 22. When would you use periodic reclassification? Answer: Periodic reclassification is used in the following two cases: • If the triggering item is not the same as the source item • If a percentage of the value is reclassified 324 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 6 Balance Carry Forward Unit Overview In this unit, you will learn the differences in the carry forward logic of the balance carry forward between appropriation of retained earnings in the balance sheet and in the closing income statement. In addition, you will learn how to customize the settings and perform the balance carry forward. Unit Objectives After completing this unit, you will be able to: • State how balance carry forward is executed • Arrange the balance carry forward and define selected financial statement items • Identify the procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement • Differentiate between the two procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement Unit Contents Lesson: Execution of Carry Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326 Exercise 16: Executing Carry Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .331 Lesson: Appropriation of Carry Forward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .346 03-12-2004 © 2004 SAP AG. All rights reserved. 325 Unit 6: Balance Carry Forward AC660 Lesson: Execution of Carry Forward Lesson Overview The lesson covers the differences in the carry forward logic of the balance carry forward between appropriation of retained earnings in the balance sheet and in the closing income statement. You will learn how to customize settings. You will also learn how to perform the balance carry forward. Lesson Objectives After completing this lesson, you will be able to: • State how balance carry forward is executed • Arrange the balance carry forward and define selected financial statement items Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You have to demonstrate how the balance carry forward must be executed in SAP. To do this, you need to arrange the balance carry forward and define selected financial statement items. Steps of Execution Figure 116: Balance carry forward 326 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward The closing balance of one year must be identical to the opening balance of the following year. The first task that needs to be performed in the data monitor in a new fiscal year is therefore to carry forward balances from the prior to the current year. Balance carry forwards are dependent on the item type and work as follows: • All balance sheet items are automatically carried forward to themselves by default. • Income statement items are not carried forward by default. • When subsequently appropriating retained earnings to the income statement, you create special items so that the annual net income is carried forward from one year to the next. • You can carry forward statistical items to themselves, if required. To do this, you need to make a setting in the item master record. • If you want to carry forward items to different items (this is necessary if you show appropriations in the balance sheet), you need to make additional settings in Customizing. • Balance carry forwards are run for a specified dimension, version, and consolidation chart of accounts. Balances can be carried forward for a consolidation group or for individual consolidation units. Figure 117: Balance carry forward (Version-Dependent) carry forwards are run for individual versions. carry forwards can only be run if you have selected Carry forward version in version maintenance. 03-12-2004 © 2004 SAP AG. All rights reserved. 327 Unit 6: Balance Carry Forward AC660 Subitem and Posting level Figure 118: Balance carry forward (Subitems) At the subitem category level, you determine if the category is relevant for balance carry forwards. Regions and functional areas are not relevant, for example. Each subitem category that you mark as relevant for carry forwards is allocated a default subitem. The balance is carried forward to this default subitem unless otherwise specified. A carry forward subitem is assigned to each subitem. The carry forward is then made in the next year. This way, you ensure that in a fixed-asset movement schedule, all the current year’s transactions are carried forward to the subitem “Opening balance”. Figure 119: Balance carry forward (by Posting Level) Individual posting levels and document types are carried forward separately. 328 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Additional account assignments (such as partner unit, subitem, year of acquisition) are retained in principle with balance carry forward, but are, however, interpreted depending on the breakdown category of the target item. There may be a summarization (drilldown not planned for target item) or a default account assignment may be set up (target item requires drilldown). The values in italics do not exist in the database. 03-12-2004 © 2004 SAP AG. All rights reserved. 329 Unit 6: Balance Carry Forward AC660 330 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Exercise 16: Executing Carry Forward Exercise Objectives After completing this exercise, you will be able to: • Configure and execute the carrying forward of balances Business Example After you have completed all your consolidation tasks, you want to create an opening balance for the new fiscal year. To do this, you need to run a balance carry forward as the first task in the new year. Since the cons group G1 states the appropriation of retained earnings in the balance sheet, you need to make certain settings in Customizing, in preparation for the balance carry forward. Task 1: Carry forward 1. Retained earnings items: Specify/review that the following retained earnings items are not carried forward onto themselves, but to the item 251100 Retained Earnings - Prior Years: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 331 Unit 6: Balance Carry Forward AC660 Field/Data Type Value Retained Earnings - Current Year Retained Earnings - CY Prior to First Consolidation Retained Earnings - ANI Prior to Proportion Change Retained Earnings - Appropriation Transfers Retained Earnings - Appropriation Deductions Retained Earnings - Dividends Paid Retained Earnings - Clearing of Dividends Paid Retained Earnings - Bonus Management Retained Earnings - Clearing Cons of Investments Retained Earnings - Appropriations 251200 251300 251350 251400 251500 251600 251620 251630 251700 251800 Minority interest items: Use the same procedure for the minority interest items. Review that the following entries exist. These items are carried forward to item 241100 Minority interest, retained earnings – prior years. Continued on next page 332 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Field/Data Type Value Min. Int. - Ret. Earn. - Current Year Min. Int. - Ret. Earn. - CY Prior to First Consolidation Min. Int. - Ret. Earn. - ANI Prior to Proportion Change Min. Int. - Ret. Earn. - Appropriation Transfers Min. Int. - Ret. Earn. - Appropriation Deductions Min. Int. - Ret. Earn. - Dividends Paid Min. Int. - Ret. Earn. - Dividends Paid Clearing Min. Int. - Ret. Earn. - Bonus Management Min. Int. - Ret. Earn. - Appropriations 241200 241300 241350 241400 241500 241600 241620 241630 241800 Statistical items: Use the same procedure for the statistical items. Review that the following entries exist. These items are carried forward to the item Stat: Retained Earnings- Prior Years (951100). Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 333 Unit 6: Balance Carry Forward AC660 Field/Data Type Value Stat. - Ret. Earn. - Current Year Stat. - Ret. Earn. - CY Prior to First Consolidation Stat. - Ret. Earn. - ANI Prior to Proportion Change Stat. - Ret. Earn. - Appropriation Transfers Stat. - Ret. Earn. - Appropriation Deductions Stat. - Ret. Earn. - Dividends Paid Stat. - Ret. Earn. - Dividends Paid Clearing Stat. - Ret. Earn. – Bonus Management Stat. – Ret. Earn. – Consolidation of Investments Clearing Stat. - Ret. Earn. – Appropriations 951200 951300 951350 951400 951500 951600 951620 951630 951700 951800 Task 2: Defining a task: 1. Define task CARRY FWD. Copy the task group DATA for the data monitor to DATA2 “Data monitor with carry forward”. Add the task CARRY FWD to the task group DATA2. Finally, assign the task group DATA2 to your dimension for the fiscal year 2003/003, for the period category 3. Task 3: Modify global parameters 1. Change the global parameters to year 2003/003 and run a balance carry forward for cons group G1 from the data monitor. Use a database listing in the Info System to check that the contents of the totals database are correct. Continued on next page 334 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Then block the task. Change the parameters back to year 2002/012. Task 4: Carry forward 1. Adding missing items: You determined that an item for the appropriation of retained earnings is missing in your consolidation chart of accounts. Create the item as well as the other items that need to be assigned. Then make the necessary settings in the IMG. 2. Entering further activities: Set the global period/year to 003/2003, execute the task DATA INPUT, and enter additional activities: Increase/Capitalization Investment A B 170100 120 + 0% 400 USD 400 USD Stock Capital B 250100 120 500 USD 500 USD Step Acquisition Investment B C 170100 120 + 20% USD240 USD240 Partial Div. Investment B C 170100 140 - 30% -465USD -465USD 3. Sorting activities: Check and adjust the order of the activities: Show the increase in capitalization for B prior to the amortization of goodwill. 4. Assigning the task group to the dimension; executing the task: Assign the task group CONS to your dimension for the new fiscal year (003/ 2003). In the consolidation monitor, execute the task C/I in test mode and examine all of the activities for the consolidation groups G2 and G1. 5. Resetting the parameters: Change back the global period/fiscal year to 012/2002. 03-12-2004 © 2004 SAP AG. All rights reserved. 335 Unit 6: Balance Carry Forward AC660 Solution 16: Executing Carry Forward Task 1: Carry forward 1. Retained earnings items: Specify/review that the following retained earnings items are not carried forward onto themselves, but to the item 251100 Retained Earnings - Prior Years: Field/Data Type Value Retained Earnings - Current Year Retained Earnings - CY Prior to First Consolidation Retained Earnings - ANI Prior to Proportion Change Retained Earnings - Appropriation Transfers Retained Earnings - Appropriation Deductions Retained Earnings - Dividends Paid Retained Earnings - Clearing of Dividends Paid Retained Earnings - Bonus Management Retained Earnings - Clearing Cons of Investments Retained Earnings - Appropriations 251200 251300 251350 251400 251500 251600 251620 251630 251700 251800 Minority interest items: Use the same procedure for the minority interest items. Review that the following entries exist. These items are carried forward to item 241100 Minority interest, retained earnings – prior years. Continued on next page 336 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Field/Data Type Value Min. Int. - Ret. Earn. - Current Year Min. Int. - Ret. Earn. - CY Prior to First Consolidation Min. Int. - Ret. Earn. - ANI Prior to Proportion Change Min. Int. - Ret. Earn. - Appropriation Transfers Min. Int. - Ret. Earn. - Appropriation Deductions Min. Int. - Ret. Earn. - Dividends Paid Min. Int. - Ret. Earn. - Dividends Paid Clearing Min. Int. - Ret. Earn. - Bonus Management Min. Int. - Ret. Earn. - Appropriations 241200 241300 241350 241400 241500 241600 241620 241630 241800 Statistical items: Use the same procedure for the statistical items. Review that the following entries exist. These items are carried forward to the item Stat: Retained Earnings- Prior Years (951100). Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 337 Unit 6: Balance Carry Forward AC660 Field/Data Type Value Stat. - Ret. Earn. - Current Year Stat. - Ret. Earn. - CY Prior to First Consolidation Stat. - Ret. Earn. - ANI Prior to Proportion Change Stat. - Ret. Earn. - Appropriation Transfers Stat. - Ret. Earn. - Appropriation Deductions Stat. - Ret. Earn. - Dividends Paid Stat. - Ret. Earn. - Dividends Paid Clearing Stat. - Ret. Earn. – Bonus Management Stat. – Ret. Earn. – Consolidation of Investments Clearing Stat. - Ret. Earn. – Appropriations 951200 951300 951350 951400 951500 951600 951620 951630 951700 951800 a) Items: Retained earnings, Minority Interest and Statistical This solution covers exercise all the questions in the step statement. Menu Path:Tools: Accelerated SAP !Customizing !Exceute Project ! SAP Referenz IMG !Enterprise Controlling ! Consolidation !Data !Carrying forward Balances !Specify FS Items to be Carried Forward • Select New Entries • Create an entry for each item to be carried forward. These entries can be found in the exercise question above. If entries already exist, review that all required entries have been made in the exercise • Enter each item as the item in the old fiscal year, and make the generic entry * for the subitem, so that all subitems are carried forward. • The debit and credit items for the new year are identical. Continued on next page 338 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward • Enter item 251100 in the first section, item 241100 in the section minority interest items,and 951100 in section statistical items. Enter subitem 100 in all sections. Save your entries. Task 2: Defining a task: 1. Define task CARRY FWD. Copy the task group DATA for the data monitor to DATA2 “Data monitor with carry forward”. Add the task CARRY FWD to the task group DATA2. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 339 Unit 6: Balance Carry Forward AC660 Finally, assign the task group DATA2 to your dimension for the fiscal year 2003/003, for the period category 3. a) Define task CARRY FWD for carrying forward balances. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Data !Carrying forward balances !Define Task Select New Entries. Enter task name and texts. Task category is Balance carry forward. Save. Select task group DATA and copy it along with all subentries to DATA2. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Data !Data Monitor !Define task group Select task group DATA. Choose Copy as icon. Change name to DATA2. Select Copy all when questioned in the dialog box. Select task group DATA2 and double-click the Assign tasks to task group detail folder. Then, add the task CARRY FWD as a new entry. Save. Create a new entry for effective year current year + 1, effective period 003, and period category 3, and assign task group DATA2. Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Data !Data Monitor !Assign Task Group to Dimension Select New Entries. Enter FY effect 2003, Period eff. 003, Period cat. 3, Data mon. task group DATA2. Save. Task 3: Modify global parameters 1. Change the global parameters to year 2003/003 and run a balance carry forward for cons group G1 from the data monitor. Use a database listing in the Info System to check that the contents of the totals database are correct. Then block the task. Continued on next page 340 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Change the parameters back to year 2002/012. a) Global parameters: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Define Global Parameters Change the fiscal year and the period to 2003, period 003. Run the balance carry forward from the data monitor (which you access from the initial Consolidation application screen). Put your cursor at the intersection between group G1 and the task, and choose Update run. Menu Path:Accounting !Enterprise Controlling !Consolidation !Data Collection !Monitor To Review Database listing of Totals Records: From within the Data Monitor: Menu Path:Goto !Database listing of totals records Task 4: Carry forward 1. Adding missing items: You determined that an item for the appropriation of retained earnings is missing in your consolidation chart of accounts. Create the item as well as the other items that need to be assigned. Then make the necessary settings in the IMG. a) Adding missing items: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Master Data !FS Items !User-defined Chart of Accounts !Maintain Hierarchies of Chart of Accounts !Edit item Create the following items: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 341 Unit 6: Balance Carry Forward AC660 Field/Data Type Value within stockholders’ equity FS item FS item type Debit/credit sign Where-applied indicator Breakdown categoryFS item Breakdown category FS item Where-applied indicator Breakdown category Carry forward the net balance 250750 Appropriations Value item - Liabilities/equity (B) 6000 240750 Minority Interest – Appropriations 6000 950750 Stat. Appropriations Statistical item 6100 Check box • Assign item 240750 to item 250750. Menu Path: Tools ! Accelerated SAP ! Customizing !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Consolidation Functions ! Automatic Postings !Consolidation of Investments !Selected Items !Specify Minority Interest Items In this case, no assignments need to be made to the appropriation items because the retained earnings are recorded in the balance sheet. • Assign statistical item 950750 to item 250750. Menu Path: Tools ! Accelerated SAP ! Customizing !Execute Project !SAP Reference IMG !Enterprise Controlling !Consolidation !Consolidation Functions ! Automatic Postings !Consolidation of investments !Selected Items !Define Items for Statistical Equity Postings 2. Entering further activities: Continued on next page 342 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Set the global period/year to 003/2003, execute the task DATA INPUT, and enter additional activities: Increase/Capitalization Investment A B 170100 120 + 0% 400 USD 400 USD Stock Capital B 250100 120 500 USD 500 USD Step Acquisition Investment B C 170100 120 + 20% USD240 USD240 Partial Div. Investment B C 170100 140 - 30% -465USD -465USD a) Entering further activities: Change the global parameters and enter the activities in the data monitor as described. 3. Sorting activities: Check and adjust the order of the activities: Show the increase in capitalization for B prior to the amortization of goodwill. a) Sorting activities: Modify the sequence of the activities as follows: 1. In the additional financial data choose Activities for Investee Units. Menu Path: Accounting ! Enterprise Controlling ! Consolidation !Data Collection !Additional financial data !Enter !Activities: Investee Units 2. Go to Global Sequence in change mode. 3. Select an increase in capitalization for B. 4. Place the cursor at the activity Amortization of goodwill. 5. Choose Move activities. 6. Save the sequence. 4. Assigning the task group to the dimension; executing the task: Assign the task group CONS to your dimension for the new fiscal year (003/ 2003). Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 343 Unit 6: Balance Carry Forward AC660 In the consolidation monitor, execute the task C/I in test mode and examine all of the activities for the consolidation groups G2 and G1. a) Assigning the task group to the dimension; executing the task: Menu Path: Tools !Accelerated SAP !Customizing !Execute Project ! SAP Reference IMG ! Enterprise Controlling ! Consolidation !Consolidation Functions !Consolidation Monitor !Assign task group to dimension Once again, assign the task group CONS to your dimension for 003/ current year + 1. You start the consolidation of investments in the consolidation monitor. 5. Resetting the parameters: Change back the global period/fiscal year to 012/2002. a) Resetting the parameters: Change back the global period/fiscal year to 012/2002. 344 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Execution of Carry Forward Lesson Summary You should now be able to: • State how balance carry forward is executed • Arrange the balance carry forward and define selected financial statement items Related Information • 03-12-2004 © 2004 SAP AG. All rights reserved. 345 Unit 6: Balance Carry Forward AC660 Lesson: Appropriation of Carry Forward Lesson Overview The lesson covers how the appropriation of retained earnings in the balance sheet requires customizing settings for the subitems of the retained earnings that are carried forward to different financial statement items than themselves. You will learn how to identify the procedures to manage the appropriation of retained earnings in the balance sheet and the income statement. In addition, you will be able to differentiate between the two procedures to manage appropriation of retained earnings in the balance sheet and in the income statement. Lesson Objectives After completing this lesson, you will be able to: • Identify the procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement • Differentiate between the two procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement Business Example The group, G1, plans to introduce the SAP Consolidation by the end of this year. You have to check whether the appropriation of retained earnings is reflected in the balance sheet and, if applicable, carry forward the retained earnings subitems to the FS item, previous year’s retained earnings. Appropriation of Balance Sheet Figure 120: Balance carry forward (Appropriations in B/S) 346 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Appropriation of Carry Forward Items: All appropriations items must be carried forward to the item, Unappropriated retained earnings. Due to the fact that balance sheet items can only be carried forward to identical items, you need to make further settings in this case. Using the menu option “Determine items to be carried forward”, maintain all appropriations items and assign them to the item “Unappropriated retained earnings”. • Both the source and target items are balance sheet items. Notice that the treatment is different. This means that the balance sheet item is not carried forward to itself, but rather only to the balance sheet item you specified. • Income statement items are not carried forward by default. Annual net income in the balance sheet and income statement must be identical both before and after the carry forward. After the carry forward, the sum of all the income statement items must be zero. Appropriation of Income Statement Figure 121: Balance carry forward (Appropriations in I/S) For subsequent appropriation of retained earnings to the income statement, you also need to make certain settings for the items to be carried forward. In this case, you assign a non-balance sheet item, Unappropriated retained earnings in I/S, to the balance sheet item, Retained earnings. This, in turn, means that the balance sheet item is carried forward to the same item, (1), and additionally to the assigned income statement item, (2). You must also make an assignment in the income statement for the balance sheet retained earnings. This is also to be carried forward to the same item, (3). This ensures that the retained earnings are identical in the balance sheet and income statement. 03-12-2004 © 2004 SAP AG. All rights reserved. 347 Unit 6: Balance Carry Forward AC660 Lesson Summary You should now be able to: • Identify the procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement • Differentiate between the two procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement 348 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Unit Summary Unit Summary You should now be able to: • State how balance carry forward is executed • Arrange the balance carry forward and define selected financial statement items • Identify the procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement • Differentiate between the two procedures to manage the appropriation of retained earnings in the balance sheet and in the income statement 03-12-2004 © 2004 SAP AG. All rights reserved. 349 Unit Summary AC660 350 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. Balance sheet items are not carried forward to themselves by default. Determine whether this statement is true or false. ! True ! False 2. How would you ensure that in a fixed-asset movement schedule, all the current year’s transactions are carried forward to the subitem “Opening balance”? 3. How can you ensure that retained earnings are identical in the balance sheet and in the income statement? 4. Why is it required to assign a non-balance sheet item to the balance sheet item “Retained earnings” for appropriation of retained earnings to the income statement? 03-12-2004 © 2004 SAP AG. All rights reserved. 351 Test Your Knowledge AC660 Answers 1. Balance sheet items are not carried forward to themselves by default. Answer: False All balance sheet items are automatically carried forward to themselves by default. 2. How would you ensure that in a fixed-asset movement schedule, all the current year’s transactions are carried forward to the subitem “Opening balance”? Answer: Assigning a carry forward subitem to each subitem and then making the carry forward in the next year ensures that in a fixed-asset movement schedule, all the current year’s transactions are carried forward to the subitem “Opening balance”. 3. How can you ensure that retained earnings are identical in the balance sheet and in the income statement? Answer: You can ensure that earnings are identical in the balance sheet and in the income statement by making an assignment in the income statement for balance sheet retained earnings and carrying forward this assignment to the same time. 4. Why is it required to assign a non-balance sheet item to the balance sheet item “Retained earnings” for appropriation of retained earnings to the income statement? Answer: The assignment of a non-balance sheet item to the balance sheet item “Retained earnings” for appropriation of retained earnings to the income statement means that the balance sheet item is carried forward to the same item and additionally to the assigned income statement item. 352 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 7 Information System Unit Overview This unit provides an overview of the different reporting options in SAP Consolidation: Journal entry reports, Drilldown reporting, and Interactive Excel Unit Objectives After completing this unit, you will be able to: • Call up and evaluate reports from the SAP system • Use journal entry layouts for journal entry reporting • State the principles of drilldown reporting • Describe the architecture of drilldown reporting • Identify the types of drilldown reports • Describe how report execution is carried out • Design drilldown reports in a hierarchy display Unit Contents Lesson: Reports for Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 Exercise 17: Journal Entry Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .357 Lesson: Drilldown Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .363 Exercise 18: Drilldown Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .377 03-12-2004 © 2004 SAP AG. All rights reserved. 353 Unit 7: Information System AC660 Lesson: Reports for Consolidation Lesson Overview This lesson provides an overview of the SAP reporting. You will learn how to call up and evaluate reports from the SAP Consolidation report tree. In addition, you will learn how to use journal entry layouts to structure the journal entry reports differently. Lesson Objectives After completing this lesson, you will be able to: • Call up and evaluate reports from the SAP system • Use journal entry layouts for journal entry reporting Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You need to check the configuration. You have to analyze the consolidated data both in standard reports and in user-defined drilldown and Report Painter reports. Tools for Reporting Figure 122: Information System 354 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reports for Consolidation Report Writer and Report Painter: • Easy to use, powerful standard SAP tools to design reports • Special treatment of the version and time-dependency of consolidation groups Interactive drilldowns: • Interactive navigation within the Consolidation data cube • Reporting of exceptions, ABC analyses, comments, e-mail, and integration with Microsoft Office Journal entry reports: • Flexible selection and hierarchical displays of all consolidation documents • Master data – ConsUnits, ConsGroups, where-used list – FS items, subitems • Control data – Versions, tasks – Data entry layouts, upload methods – Currency translation – Interunit elimination – Consolidation of investments – Reclassification • Additional financial data – - Stocks, deliveries, current assets • Journal entry reporting • Use of ABAP List Viewer The cross-application ABAP List Viewer is used for master and control data 03-12-2004 © 2004 SAP AG. All rights reserved. 355 Unit 7: Information System AC660 Figure 123: Journal Entry Reporting With the help of journal entry layouts, you can structure the journal entry reports differently. You specify the structure of the report in the layout, as follows: • You determine the characteristics, such as the document type, document number, financial statement item, and subitem, according to how the journal entries should be evaluated, and the sequence in which they are to be listed. • Enter the currencies or quantity that are to be listed in the value columns of the report. 356 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reports for Consolidation Exercise 17: Journal Entry Reporting Exercise Objectives After completing this exercise, you will be able to: • Define a journal entry layout Business Example You have to define a journal entry layout and present it to your management. Task: 1. Defining a layout: In this part of your presentation, you define a journal entry layout LXY-00001 (XY = your dimension) with the following structure: Document number Entry date Time of entry User name Line item Consolidation unit FS item Subitem Partner unit Value in local currency Value in group currency Specify that you want to calculate totals in the line item field Have the text of the item be printed as well Start the journal entry report for your consolidation group, run the drilldown, and analyze the documents 2. Defining a further layout: Define journal entry layout LXY-00002 (XY = your dimension) with a different structure: Document type, FS item, consolidation unit, partner unit, and value in group currency. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 357 Unit 7: Information System AC660 Totals should be calculated for consolidation units and FS items. A text should be displayed for document types and FS items. 358 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reports for Consolidation Solution 17: Journal Entry Reporting Task: 1. Defining a layout: In this part of your presentation, you define a journal entry layout LXY-00001 (XY = your dimension) with the following structure: Document number Entry date Time of entry User name Line item Consolidation unit FS item Subitem Partner unit Value in local currency Value in group currency Specify that you want to calculate totals in the line item field Have the text of the item be printed as well Start the journal entry report for your consolidation group, run the drilldown, and analyze the documents a) Defining a layout: SAP Menu !Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation ! Information System !Define Journal Entry Layouts Select new entries. J/E Layout LXY-00001 Description Group ## Layout Select your layout and double-click on Journal Entry Layout Structure. Hint: Use the possible entries function (F4 function key) to select the technical names for the fields: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 359 Unit 7: Information System AC660 For example, choose DOCNR document number,specify the position 1 for this field so that the document number is listed first Click on New entries. Enetr the following fields Field/Data Type Value Layout DOCNR document number CPUDT entry date CPUTM time of entry USNAM user name DOCLN Line item;select Totals RBUNIT consolidation unit RITEM FS item,select Fld.text SUBIT subitem RBUPTR partner unit HSL local currency KSL group currency LXY-00001 Position 1 Position 2 Position 3 Position 4 Position 5 Position 6 Position 7 Position 8 Position 9 Position 10 Position 11 Save your entries. Start the journal entry layout for your consolidation group: SAP Menu !Accounting !Enterprise Controlling !Consolidation !Information System !Tools !Journal entries Field/ Data Type Value Dimension XY Consolidation Group G1 Version 100 Continued on next page 360 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Reports for Consolidation Field/ Data Type Value Fiscal Year Current Year Period 12 Journal Entry Layout LXY-00001 Execute 2. Defining a further layout: Define journal entry layout LXY-00002 (XY = your dimension) with a different structure: Document type, FS item, consolidation unit, partner unit, and value in group currency. Totals should be calculated for consolidation units and FS items. A text should be displayed for document types and FS items. a) Field/Data Type Value DOCTY Document type, select Fld.text RITEM FS item, select Totals and Fld.text RBUNIT Cons unit, select Totals RBUPTR partner unit KSL Value in group currency Position 1 Position 2 Position 3 Position 4 Position 5 Save your entries. Analyze the change in annual net income as a result of the elimination of interunit payables and receivables. Run the journal entry report and expand document type 21 “Elim. of IU payables/receivables” Expand document type 23. Put your cursor on the FS item 251200 and see how annual net income has changed for your consolidation units. 03-12-2004 © 2004 SAP AG. All rights reserved. 361 Unit 7: Information System AC660 Lesson Summary You should now be able to: • Call up and evaluate reports from the SAP system • Use journal entry layouts for journal entry reporting 362 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Lesson: Drilldown Reporting Lesson Overview This lesson will provide an overview of drilldown reporting. You will learn the architecture of drilldown reporting and the types of drilldown reports. You will see how the characteristics specify the options to classify the dataset. You will learn about the three types of forms used to create form reports. In addition you will examine how to use the different types of variables to configure forms and reports. Further, you will learn about report execution and external cons group hierarchies. Lesson Objectives After completing this lesson, you will be able to: • State the principles of drilldown reporting • Describe the architecture of drilldown reporting • Identify the types of drilldown reports • Describe how report execution is carried out • Design drilldown reports in a hierarchy display Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You have been asked to define drilldown reports and project the data set in a logical hierarchical format. 03-12-2004 © 2004 SAP AG. All rights reserved. 363 Unit 7: Information System AC660 Principles Figure 124: The Principles of Drilldown Reporting Characteristics determine how the dataset is classified. Consolidation unit, item, and posting level are some examples of characteristics. Notice that time categories, such as fiscal year and period, are also regarded as characteristics in this context. The master data includes the permitted values of a characteristic, which means the characteristic values. Combinations of characteristics or characteristic values are often referred to in the documentation as objects. If there are three characteristics, the relationship between them can be shown using the above figure. A cube is created. The sides represent the various characteristics, such as consolidation unit, item, and posting level. Each characteristic is subdivided into several characteristic values. The slices represent combinations of characteristic values. One possible evaluation object might be the consolidation unit, Germany, item Sales, and the posting level Reported data. There are many key figures in your application that might be relevant to the evaluation process. The key figures in SAP Consolidation are the values from transaction, local, and group currencies, and quantity calculations, based on formulae that you have defined. 364 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Architecture Figure 125: The Architecture of Drilldown Reporting As you can see in the above figure, you can include characteristics, key figures, and forms in your report definitions. The end result of a report is a number of online accessible report lists and graphics that appear on the screen. Drilldown reporting itself contains easy-to-use functions to navigate through the dataset. For example, the next step, the next object within a step, hide a step, detail list, and the drilldown list, are all easy to perform. It also contains a number of interactive report-editing functions, such as to sort data, define conditions, or rank lists. You can also send report lists, such as fax, or post them on the Internet, or transfer them as a file to Word and Excel. In addition to the online report-display functions, there are various report-printing functions in drilldown reporting that enable you to structure your report’s print layout to suit your own requirements. For example, you can insert page breaks, headers and footers, or underline text. 03-12-2004 © 2004 SAP AG. All rights reserved. 365 Unit 7: Information System AC660 A form defines the basic content and technical design of report listings. A form can be seen as a semifinished component of a report that will be completed later with characteristics and key figures when the report is defined. Characteristics are a part of both the form and the report itself. Key figures can either be selected in the form or the report. • Key figure: Value-carrying figure • Amount figure, quantity figure – “Revenue” (currency amount) – “Number of employees” (quantity) • Basic key figures – Local currency – Group currency – Transaction currency – Quantity • Calculated key figures Key figures are not only values and quantities, but also calculations based on formulae that you have defined. • They determine how the dataset (characteristics) is portrayed. • Characteristic – Non-value-carrying figure – Classifies the dataset • Types – Time reference: fiscal year, period – Version – Organizational units: cons unit, partner unit, investee unit, cons group – Account assignment: Item, subitem, and so on – Custom characteristics • Characteristic groups – Combination of characteristics to improve overview of definitions and call-ups Examples for characteristics are the SAP organizational units and master data, such as dimension, version, item, and subitem. 366 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Time reference, such as fiscal year or period, is also a characteristic. • Characteristic group: When defining a report form, you can indicate a characteristic group on the characteristic selection screen. This also narrows down the selection of characteristics for the report definition. In this way, you can improve the overview of the available characteristics with the customer-defined characteristics. Types Types of Variable Figure 126: Types of Drilldown Reports Basic reports: Users often choose this procedure when they start a spontaneous, ad-hoc search for a business matter in the dataset, and they do not know beforehand where and what they are searching for. It is relatively easy to set up this type of report. Form reports: These are more complicated to set up and are more specific. This procedure is often chosen for official reporting and is particularly suited to report printing. A distinction is made between reports that are defined spontaneously, such as basic reports, and reports based on predefined forms called form reports. Notice that form reports are based on forms with either one coordinate or two, depending on their complexity. A form is not required for a basic report. When you define a basic report, you select the characteristics you want to report on, and also the key figures and variables of interest. 03-12-2004 © 2004 SAP AG. All rights reserved. 367 Unit 7: Information System AC660 Figure 127: Basic Reports You should choose the basic report if you are carrying out a spontaneous, ad-hoc search for non-specific business information in the dataset. The basic report’s structure is simple and fairly general. To define a basic report, enter the variables, such as dimension, cons group, year, period, and version, and select the characteristics and key figures you want to view. The following characteristics are predefined in ad-hoc reports: dimension, totals consolidation group, version, and year. Figure 128: Different Form Types 368 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting The following types of forms are available: • Single-axis form without key figures: When you define single-axis forms without key figures, you choose the characteristics you want and then set whether they should appear in the form as columns or rows. When you use the Basic screen function, the first screen you see is an empty list that contains only columns. • Single-axis form with key figures: When you define single-axis forms with key figures, you select the characteristics and key figures you want and then set whether they should appear in the form in columns or rows. When you use the Basic screen function, the first screen you see is an empty list that contains only rows. • Dual-axis form with key figures: When you define dual-axis forms with key figures, you select the key figures and characteristics you want and define the rows and columns with them. When you use the Basic screen function, the first screen you see is an empty list that contains rows and columns. You choose whether to display the key figures in columns and the characteristics in rows or vice-versa. What you select depends on what you want to report on. When you create a form, you determine its name and type. • One axis with no key figure – Columns defined with characteristics only – Report: Further characteristics and key figures – Example: Planned-actual comparison • One axis with key figure – Columns with characteristics and key figures – Report: Further characteristics – Example: Planned-actual comparison in group currency • Dual axis form (matrix) – Parallel display of values by 2 independent dimensions. For example: Asset history sheet (asset item x sub-item) – Complex cell formatting, as required – Report: Further characteristics In a one axis form with no key figures, the columns are defined with characteristics only. You can define further characteristics within the form, with the help of a formula (for example deviation as the difference between the current year and the prior year). The selected characteristics in the form make the contents of the columns more precise. The selection of key figures and drilldown characteristic, that means the characteristics with whose characteristic values you want to navigate in the report, are carried out in the report definition (for 03-12-2004 © 2004 SAP AG. All rights reserved. 369 Unit 7: Information System AC660 example characteristics: organizational units, FS item; key figures: value in group currency). In the drilldown list, you receive a two line column header, where the key figures are in the first line and underneath it, each selected characteristic is listed in the form. The values of the drilldown characteristics are in the lines. In the detail list the characteristics, which are selected in the form, are in the columns, while the key figures are listed in the lines. The detail list shows the results of a selected characteristic value. In a one axis with key figure form, you specify the key figures which you can link with the selected characteristics, in the lines of the form. You can create further key figures within a form with a formula. Then in the report definition you only select the drilldown characteristics. In the dual axis form you define the lines as well as the columns. In this way you can include the key figures in the lines or the columns of the form as desired. Then in the report definition you only select the drilldown characteristics. • Global and local variables All variables are defined either as global or local – A global variable: – Begins with & – Is valid for all reports or forms – Is defined centrally (in Customizing) – Example: Dimension – A local variable: – Begins with $ – Is valid for one report or one form only – Is defined in the report or the form – Example: Assets Variables allow you to define your forms or reports flexibly. They are parameters in your report or form that you set when you define or execute your report. Whether you create a global or local variable depends on how often it will be used. If you want to create a variable that will be used only in one specific form or report, you should create a local variable. This will only be valid in that form or report. If you define a local variable in a form, it will be valid in each report that uses that form. If you define a local variable in the report itself, it will be valid only in that particular report. 370 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting If you want to use variables frequently, you should create global variables. This means that you can use them in all forms and reports. Global variables are maintained in Customizing. When you have maintained them, you can use global variables in a form or report by selecting them using the Possible entries function. Note: Remember that if you change a variable, this will affect all the reports and forms that use it. 1. Create form • General selections • Layout (incl. key figures, if applicable) 2. Define report • Choose key figures, if applicable • Choose characteristics for navigation/restriction • Restrict characteristics or define as variables • Predefine variables with values • Define characteristics with external hierarchies for example: cons unit, FS item 3. Execute report • Make adjustments as appropriate (report header, number formats, characteristic display, format display, and so on) Report Execution • Drilldown list • Detail list • Navigation Detail list !Drilldown list Drilldown list !Detail list • Drilldown – To analyze/explode totals Detail list: It contains the key figures in rows, the layout corresponds to that of the form. Drilldown list: 03-12-2004 © 2004 SAP AG. All rights reserved. 371 Unit 7: Information System AC660 It contains the presentation that corresponds to the selected characteristics, such as a consolidated balance sheet with breakdown by assets and liabilities, and the owner’s equity. The key figures are in the columns. In the drilldown list you can carry out a drilldown to analyze individual values. For example, you can expand the asset items to the item fixtures and fittings. After that, you can select a different presentation for this item by selecting another characteristic for the drilldown list. For example, the presentation of the item fixtures and fittings for an individual consolidation group. You can navigate between the individual drilldown lists. In every drilldown list, you can go to the corresponding detail list. You can also go back to the original drilldown list again, the basic list which is displayed when you call up the report. Then, you can start a new drilldown. In the report definition, you set whether you display the detail list or the drilldown list when you call up the report. Hierarchies Figure 129: External Cons Group Hierarchies Please note the following prerequisites with the report definition in SAP Consolidation. Reports with an analysis by consolidation group • Version must be unambiguous for each cell • If you do not execute any special accrual, FYM = (Fiscal Year) Maximum and PM = (Period 16) Maximum are calculated for each cell • The consolidation group is broken down into cons unit for each combination of version, FYM, and PM. Report without consolidation group • The cons units specified in the selection criteria are selected. 372 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Hierarchies serve to project the dataset in a certain hierarchical form. The hierarchies can either consist of the Consolidation organizational units or of items of a consolidation chart of accounts. In this way, you can design the drilldown report in a hierarchy display according to your own evaluation aims. Figure 130: Special Features of Drilldown Reporting In SAP Consolidation, when you want to generate a report using one or more consolidation groups, you always have to differentiate by the characteristics dimension, consolidation group, version, year and period. When you define and call up the report, you can propose the required recurring accruals in a display hierarchy, as standard. For the presentation of the values of a cons group, you define a FS item hierarchy. It contains the consolidation chart of accounts and a defined quantity of totals item and value items. Using hierarchies for consolidation groups and FS items, you make the maintenance and execution of a report easier. 03-12-2004 © 2004 SAP AG. All rights reserved. 373 Unit 7: Information System AC660 In every hierarchy you define • The layout the hierarchy display should have. For example, presentation of a FS item hierarchy with lines and empty rows. • Whether you want a top-down presentation or a bottom-up hierarchy of your hierarchy. • How far the hierarchy is expanded when you call up the report for the first time. For the forwarding of drilldown reports to EIS and the formatting of data by means of the graphic user interface inSight (company Arcplan), you have to create hierarchy names for organizational units and FS items. Figure 131: Report Call: External Hierarchies You can structure the Consolidation master data (characteristics FS items and cons groups) using totals items and totals consolidation groups according to your own hierarchy requirements. The consolidation groups are contained in the totals consolidation group through which you want to project the values in the report. The totals consolidation group is automatically formed from the top-consolidation group. The Consolidation master data is version/year and period-dependent. The entered accruals must be identical with the parameters for which the totals consolidation group is valid. This means that when you have entered your group structure in the version 100, you cannot select the report for the version 200. The same restrictions also apply to the items. 374 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Item hierarchies can only be displayed for the characteristic item. You use the characteristic consolidation group if you want to show the drilldowns of consolidation groups in a hierarchy display. Reporting Interface Figure 132: Reporting Interface You can call other reports from a drilldown report: • Other drilldown reports and other applications • Report Writer reports • Transactions (such as master data) • Other ABAP reports • ABAP queries 03-12-2004 © 2004 SAP AG. All rights reserved. 375 Unit 7: Information System AC660 376 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Exercise 18: Drilldown Reporting Exercise Objectives After completing this exercise, you will be able to: • State the principles of drilldown reporting • Describe the architecture of drilldown reporting Business Example Task 1: Defining an ad report: 1. Define the ad-hoc report RXY-00001 called Analysis (XY = 50 + your group number). a) The following variables should be available when the report is started: - View, totals consolidation group, version and year Check and adjust the default values if necessary. b) The values should be displayed in group currency ( !key figure). . c) The report should provide a drilldown by the characteristics FS item, consolidation unit, subitem, posting level, and document type. d) Sort your characteristics in the order shown above. Hint: The function is located in the Extras menu. e) Confine the ledger to the value “US”. f) Select the entire consolidation chart of accounts as the hierarchy for characteristic FS item. g) Specify your top consolidation group as the hierarchy for characteristic consolidation unit. Hint: The function is located in the Extras menu; or you will be prompted when you save your entries. h) Save and execute the report. 2. Navigating in drilldown reports: Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 377 Unit 7: Information System AC660 a) Analyze the item Property, Plant & Equipment by consolidation units and then by subitems. What is the amount of the increase in Property, Plant & Equipment for consolidation unit C? b) What amount was eliminated from the item Common Stock during the consolidation of investments? c) Show the characteristics with/without name/ID. d) Display the consolidation units and FS items with/without the hierarchy. e) Select the item Annual Net Income and sort the consolidation units by their proportion to the total consolidation value. Which consolidation unit has the smallest value? f) Change the scaling of value columns. g) Finally, show and hide the display of the currency key in the column heading. Task 2: Defining a form report: You need a report called RXY-00002 Valuation Changes from Local to Consolidated: 1. a) First, define the form RXY-00002 using a coordinate and a key figure. b) Choose the characteristics ledger and dimension and assign to them the value “US” and/or assign a variable ($1). c) The form should contain the following columns (elements): - reported financial data, standardization, payables, dividend, equity, total d) For all elements select “Key figure with characteristics” in group currency, and specify the appropriate headings. e) Restrict the first column to the characteristic posting level. f) Restrict the next four columns to the characteristic document type (with the values 10, 21, 23, and 51). Note: You can copy the elements. g) The last column should display the consolidated total value. Hence, no selection is required. 2. Now, define the report: Continued on next page 378 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting a) Available characteristics are totals consolidation group, consolidation group, consolidation unit, partner unit, investee unit, version, year, and FS item. b) Restrict the characteristics totals consolidation group, version, and year to a variable (always $1) and then, assign your default values to the variables. c) Define the hierarchy selection for each characteristic and save the report. d) Assign journal entry reporting to the report using the report-report interface. The application class is ECMC, the report type is RT (ABAP report), and the program name is FICJER00. e) Start the report and analyze the items Investment (170100), Goodwill (180000), IC Receivables (130100) and Retained earnings, current year (251200). f) Observing the item IC Receivables, familiarize yourself with the difference between drilldowns by consolidation units and drilldowns by consolidation groups. Task 3: Defining a further form report: 1. As in the last exercise, define the report RXY-00003 Prior Year Comparison, which uses the one-dimensional form RXY-00003. a) Values are displayed in group currency. b) The form contains the following general selections: - Ledger (“US”) and dimension (variable $1) c) The columns contain: - current year, prior year, absolute difference, relative difference Hint: Specify $FYR for the current year, and $FYR-1 for the prior year. d) The report should contain the further variables totals consolidation group and version. e) Enable drilldowns by consolidation unit and FS item. f) Assign the Valuation Changes from Local to Consolidated to the report using the report-report interface. g) What is the amount of IC Receivables from consolidation unit A? Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 379 Unit 7: Information System AC660 h) Look for this VALUE in the valuation changes report, drilled down by partners. Task 4: 1. Define the report RXY-00004 Asset History Sheet, which uses the form RXY-00004 with 2 coordinates. a) The form uses the following variables: - View, totals consolidation group, version and year Specify the consolidation chart of accounts and your ledger under the general selections. Values are displayed in group currency. b) The columns contain: - Beginning balance (100, 200), acquisition (120, 220), retirement (140, 240), transfer (170, 270) and ending balance (as a row total). c) The rows contain: - Items 191500, 195500, separator line, and total of both rows d) Choose the characteristic consolidation unit and appropriately fill the variables. e) What is the amount of the net ending balance for consolidation unit A? 380 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Solution 18: Drilldown Reporting Task 1: Defining an ad report: 1. Define the ad-hoc report RXY-00001 called Analysis (XY = 50 + your group number). a) The following variables should be available when the report is started: - View, totals consolidation group, version and year Check and adjust the default values if necessary. b) The values should be displayed in group currency ( !key figure). . c) The report should provide a drilldown by the characteristics FS item, consolidation unit, subitem, posting level, and document type. d) Sort your characteristics in the order shown above. Hint: The function is located in the Extras menu. e) Confine the ledger to the value “US”. f) Select the entire consolidation chart of accounts as the hierarchy for characteristic FS item. g) Specify your top consolidation group as the hierarchy for characteristic consolidation unit. Hint: The function is located in the Extras menu; or you will be prompted when you save your entries. h) Save and execute the report. a) Defining an ad hoc report Define the ad-hoc report RXY-00001 called Analysis (XY = 50 + your group number). SAP Menu !Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Information System !Drilldown Reports !Define Reports ! Create Drilldown Report Enter report name and description and Report type Basic. Select Create. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 381 Unit 7: Information System AC660 Select Variables tab: a) The following variables should be available when the report is started: - Dimenson, totals consolidation group, version and year Check and adjust the default values if necessary. Dimension: XY Totals CG: G1 Fiscal Year: Current Year Cons Version: 100 Entry at execution should be selected for all. Select Key Figures tab: b) The values should be displayed in group currency ( !key figure). Select Group Currency and use the left arrow icon to move it. Select Characteristics tab: c) The report should provide a drilldown by the characteristics FS item, consolidation unit, subitem, posting level, and document type. Select these items and use the left arrow icon to move them d) Confine the ledger to the value “US”. e) Sort your characteristics in the order shown above. Hint: The function is located by pressing Sort Free Characteristics icon at bottom. f) Select the entire consolidation chart of accounts as the hierarchy for characteristic FS item. Click in the hierarchy column. Choose item hierarchy and cons Chart of Accounts XY. Specify your top consolidation group as the hierarchy for characteristic consolidation unit. Click in the hierarchy column. Select consolidation group hierarchy and Continued on next page 382 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Dimension: XY Cons Group: G1 Cons Version: 100 Fiscal Year: Current Year Period: 12 Hint: The function is located by pressing the Hierarchy icon at bottom; or you will be prompted when you save your entries. g) Save and execute the report. 2. Navigating in drilldown reports: a) Analyze the item Property, Plant & Equipment by consolidation units and then by subitems. What is the amount of the increase in Property, Plant & Equipment for consolidation unit C? b) What amount was eliminated from the item Common Stock during the consolidation of investments? c) Show the characteristics with/without name/ID. d) Display the consolidation units and FS items with/without the hierarchy. e) Select the item Annual Net Income and sort the consolidation units by their proportion to the total consolidation value. Which consolidation unit has the smallest value? f) Change the scaling of value columns. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 383 Unit 7: Information System AC660 g) Finally, show and hide the display of the currency key in the column heading. a) Navigating in drilldown reports: a) Analyze the item Property, Plant & Equipment by consolidation units and then by subitems. Navigate within the hierarchy by clicking on the arrowheads. Drag Propert, Plant & Equip to Cons Unit on the left hand side of the screen. Double click on subitem. What is the amount of the increase in Property, Plant & Equipment for consolidation unit C? Double click on the Property, Plant & Equipment on the left hand side of the screen and then double-click on the FS item on the left hand side of the screen in order to return to the original display. b) What amount was eliminated from the item Common Stock during the consolidation of investments? Navigate to common stock and drag it to Posting Level on the left hand side of the screen. c) Show the characteristics with/without name/ID. MenuPath: Settings !Characteristic Display Select the options in turn d) Display the consolidation units and FS items with/without the hierarchy Select FS Items and then Consolidation Units. Click on the hierarchy icon. Choose hierarchy selection no hierarchy. e) Select the item Annual Net Income and sort the consolidation units by their proportion to the total consolidation value. Which consolidation unit has the smallest value? Navigate to IS Retained Earnings. Drag to Cons Unit. Select Gcry Column. Click on ABC icon. Select Total GCrcy. Select Total list. f) Change the scaling of value columns. Click on the number format icon. Change the factor to 100 and decimal places to 2. Continued on next page 384 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Task 2: Defining a form report: You need a report called RXY-00002 Valuation Changes from Local to Consolidated: 1. a) First, define the form RXY-00002 using a coordinate and a key figure. b) Choose the characteristics ledger and dimension and assign to them the value “US” and/or assign a variable ($1). c) The form should contain the following columns (elements): - reported financial data, standardization, payables, dividend, equity, total d) For all elements select “Key figure with characteristics” in group currency, and specify the appropriate headings. e) Restrict the first column to the characteristic posting level. f) Restrict the next four columns to the characteristic document type (with the values 10, 21, 23, and 51). Note: You can copy the elements. g) The last column should display the consolidated total value. Hence, no selection is required. a) Defining a form report: You need a report called RXY-00002 Valuation Changes from Local to Consolidated. SAP Menu !Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Information System !Drilldown Reports !Define Forms ! Form for Creating Reports a) First, define the form RXY-00002 using a coordinate and a key figure. Create. Edit !Gen Data Selection !Gen Data Selection Choose the characteristics ledger and dimension and assign to them the value “US” and/or assign a local variable ($1). Confirm. Check and Confirm. b) The form should contain the following column (element) texts: - reported financial data, standardization, payables, dividend, equity, total Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 385 Unit 7: Information System AC660 c) Double click each element and select key figure with characteristics. d) Restrict the first column to the characteristic posting level. Element1 (Column 1) should have posting level with values from 0 to 00. Click the text icon. Add the text Reported Financial DataCheck and confirm. e) Restrict the next four column to the characteristic document type (with the values 10, 21, 23, and 51). Note: You can copy the elements. Texts are Standardization, Payables, Dividend and Equity f) The last column should display the consolidated total value. Hence, no selection is required. Double-click last column and select formula. The Formular should be: Y001+Y002+Y003+Y004+Y005 Text is Total. Save your form 2. Now, define the report: a) Available characteristics are totals consolidation group, consolidation group, consolidation unit, partner unit, investee unit, version, year, and FS item. b) Restrict the characteristics totals consolidation group, version, and year to a variable (always $1) and then, assign your default values to the variables. c) Define the hierarchy selection for each characteristic and save the report. d) Assign journal entry reporting to the report using the report-report interface. The application class is ECMC, the report type is RT (ABAP report), and the program name is FICJER00. e) Start the report and analyze the items Investment (170100), Goodwill (180000), IC Receivables (130100) and Retained earnings, current year (251200). f) Observing the item IC Receivables, familiarize yourself with the difference between drilldowns by consolidation units and drilldowns by consolidation groups. a) Now, define the report: Continued on next page 386 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting SAP Menu !Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Information System !Drilldown Reports !Define Reports ! Create Drilldown Report Enter Report name RXY-00002 and description Valuation changes from local group. Select Report with form and enter form just created. Press Create. On Characteristics tab: a) Available characteristics are totals consolidation group, consolidation group, consolidation unit, partner unit, investee unit, version, year, and FS item. Select the items and use the left arrow icon to move them Restrict the characteristics totals consolidation group, version, and year to a local variable (always $1) by clicking in the variables column and entering $1 in the popup and then, assign your default values to the variables. Variables tab: Fiscal Year = Current Year Cons Version = 100 Totals CG = G1 Dimension = XY Press Hierarchy icon b) Define the hierarchy selection for each characteristic and save the report. Click on hierarchy column and select as follows : Cons Unit: Hierarchy Cons Unit Partner Unit: Hierarchy Partner Unit FS Item: Item Hierarchy Cons Chart of Accounts XY Cons Group: Cons Group Hierarchy c) Assign journal entry reporting to the report using the report-report interface. The application class is ECMC, the report type is RT (ABAP report), and the program name is FICJER00. Select Extras !Report assignment. Select insert row icon, then Other report type icon, enter RT and then program name. Save. Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 387 Unit 7: Information System AC660 Execute the report and analyze the items Investment (170100), Goodwill (180000), IC Receivables (130100) and Retained earnings, current year (251200). Observing the item IC Receivables, familiarize yourself with the difference between drilldowns by consolidation units and drilldowns by consolidation groups. Task 3: Defining a further form report: 1. As in the last exercise, define the report RXY-00003 Prior Year Comparison, which uses the one-dimensional form RXY-00003. a) Values are displayed in group currency. b) The form contains the following general selections: - Ledger (“US”) and dimension (variable $1) c) The columns contain: - current year, prior year, absolute difference, relative difference Hint: Specify $FYR for the current year, and $FYR-1 for the prior year. d) The report should contain the further variables totals consolidation group and version. e) Enable drilldowns by consolidation unit and FS item. f) Assign the Valuation Changes from Local to Consolidated to the report using the report-report interface. g) What is the amount of IC Receivables from consolidation unit A? h) Look for this VALUE in the valuation changes report, drilled down by partners. a) Defining a further form report: As in the last exercise, define the report RXY-00003 Prior Year Comparison, which uses the one-axis with key figure form RXY-00003. Define Form: Continued on next page 388 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting SAP Menu: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Information System !Drilldown Reports !Define Forms ! Form for Creating Reports a) Values are displayed in group currency. b) The form contains the following general selections: - Ledger (“US”) and dimension (variable $1) Edit !Gen Data Selection !Gen Data Selection Choose the characteristics ledger and dimension and assign tothem the value US and/or assign a local variable ($1). Confirm. Check and Confirm c) The columns contain: - current year, prior year, absolute difference, relative difference Double click each element and select key figure withcharacteristics. Restrict the first column to the characteristic Fiscal Year. Check the variable box and enter variable $FYR Click in the text box and add the text Current Yr. Check and Confirm. Restrict the second column to the characteristic Fiscal Year. Check the variable box and enter$FYR-1. Click in the text box and add the text Prior Yr. Check and Confirm. The last two columns are formulae. Double click Element 3. Select formula. The formula should be Y001 – Y002. The text is Abs. Diff. Double click Element 4. Select formula. The formula should be Y003/Y002*100 with the text % Diff. Hint: Specify $FYR for the current year, and $FYR-1 for the prior year. Now define the report RXY-00003: d) The report should contain the further variables totals consolidation group and version. SAP Menu: Tools !Customizing !IMG !Execute Project ! SAP Reference IMG !Enterprise Controlling !Consolidation !Information System !Drilldown Reports !Define Reports ! Create Drilldown Report Continued on next page 03-12-2004 © 2004 SAP AG. All rights reserved. 389 Unit 7: Information System AC660 Enter report name RXY-00003 and description Prior Year Comparison. Select Report with Form and enter the form just created. Press create. Available characteristics are totals consolidation group,consolidation group, consolidation unit, partner unit, investee unit, cons version and FSitem. Select the items and use the left arrow icon to move themRestrict the characteristics totals consolidation group and to a local variable (always $1) by clicking in the variables column and entering $1 in the popup. and then, assign yourdefault values to the variables. Variables tab: Fiscal Year = Current Year Cons Version = 100 Totals CG = G1 Dimension = XY e) Enable drilldowns by consolidation unit and FS item. Click on hierarchy column and select as follows : Cons Group: No hierarchy Cons Unit: Consolidation Group Hierarchy Partner Unit: Hierarchy Partner Unit FS Item: Item Hierarchy Cons Chart of Accounts XY f) Assign the Valuation Changes from Local to Consolidated to the report using the report-report interface. Select Extras !Report assignment. Select insert row icon, then Other report type icon, enter RE (Drilldown reporting, Application class ECMC and then report RXY-00002. Save. Save the Report. Execute the Report g) What is the amount of IC Receivables from consolidation unit A in the year 2002? h) Look for this value in the valuation changes report, drilled down by partners. Continued on next page 390 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Drilldown Reporting Task 4: 1. Define the report RXY-00004 Asset History Sheet, which uses the form RXY-00004 with 2 coordinates. a) The form uses the following variables: - View, totals consolidation group, version and year Specify the consolidation chart of accounts and your ledger under the general selections. Values are displayed in group currency. b) The columns contain: - Beginning balance (100, 200), acquisition (120, 220), retirement (140, 240), transfer (170, 270) and ending balance (as a row total). c) The rows contain: - Items 191500, 195500, separator line, and total of both rows d) Choose the characteristic consolidation unit and appropriately fill the variables. e) What is the amount of the net ending balance for consolidation unit A? a) Define the report RXY-00004 Asset History Sheet, which uses the form RXY-00004 with 2 coordinates. Define the form RXY-00004: a) The form uses the following variables: - View, totals consolidation group, version and year Specify the consolidation chart of accounts and your ledger under the general selections. b) Values are displayed in group currency. c) The columns contain: - Beginning balance (100, 200), acquisition (120, 220), retirement (140, 240), transfer (170, 270) and ending balance (as a row total). d) The rows contain: - Items 191500, 195500, separator line, and total of both rows Define the report RXY-00004: Choose the characteristic consolidation unit and appropriately fill the variables. What is the amount of the net ending balance for consolidation unit A? 03-12-2004 © 2004 SAP AG. All rights reserved. 391 Unit 7: Information System AC660 Lesson Summary You should now be able to: • State the principles of drilldown reporting • Describe the architecture of drilldown reporting • Identify the types of drilldown reports • Describe how report execution is carried out • Design drilldown reports in a hierarchy display 392 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Unit Summary Unit Summary You should now be able to: • Call up and evaluate reports from the SAP system • Use journal entry layouts for journal entry reporting • State the principles of drilldown reporting • Describe the architecture of drilldown reporting • Identify the types of drilldown reports • Describe how report execution is carried out • Design drilldown reports in a hierarchy display 03-12-2004 © 2004 SAP AG. All rights reserved. 393 Unit Summary AC660 394 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Test Your Knowledge 1. What is the function of Interactive drilldowns? 2. How can you specify the structure of the report in the journal entry layout? 3. What determines the classification of the dataset in drilldown reporting? 4. How can you navigate through the dataset in drilldown reporting? 5. A basic report requires forms. Determine whether this statement is true or false. ! True ! False 6. You can specify whether to display the detail list or the drilldown list when you call up the report in the definition. Fill in the blanks to complete the sentence. 03-12-2004 © 2004 SAP AG. All rights reserved. 395 Test Your Knowledge AC660 7. What are hierarchies? 396 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Test Your Knowledge Answers 1. What is the function of Interactive drilldowns? Answer: Interactive drilldowns provide interactive navigation within the Consolidation data cube. 2. How can you specify the structure of the report in the journal entry layout? Answer: You can specify the structure of the report in the journal entry layout as follows: • Determine the characteristics of the report, (such as the document type, financial statement item, and subitem), according to how the journal entries should be evaluated, and the sequence in which they are to be listed. • Enter the currencies or quantity that are to be listed in the value columns of the report. 3. What determines the classification of the dataset in drilldown reporting? Answer: Characteristics such as consolidation unit, item and posting level determine how the dataset is classified in drilldown reporting. 4. How can you navigate through the dataset in drilldown reporting? Answer: Drilldown reporting contains functions like the next step, the next object within a step, drilldown list and detail list for navigating through the dataset. In addition, drilldown reporting also contains a number of interactive report editing functions like sorting data, ranking lists or defining conditions. 5. A basic report requires forms. Answer: False A basic report is defined spontaneously and does not require a form. 6. You can specify whether to display the detail list or the drilldown list when you call up the report in the report definition. Answer: report 03-12-2004 © 2004 SAP AG. All rights reserved. 397 Test Your Knowledge AC660 7. What are hierarchies? Answer: Hierarchies portray the dataset in a certain hierarchical form and can either consist of the SAP Consolidation organizational units or of items of a consolidation chart of accounts. 398 © 2004 SAP AG. All rights reserved. 03-12-2004 Unit 8 Versions Unit Overview The unit provides an overview of versions as a general method for alternative consolidations. You will learn how versions can be linked with one another and reused. Further, you will learn that several of the alternative consolidations can be processed in reporting. Unit Objectives After completing this unit, you will be able to: • Discuss the applications and functionality of versions • Describe add-on versions and special versions • Prepare restatements through reporting and drilldown reporting Unit Contents Lesson: Version Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .400 03-12-2004 © 2004 SAP AG. All rights reserved. 399 Unit 8: Versions AC660 Lesson: Version Concept Lesson Overview This lesson will give you an overview of versions as a general method for alternative consolidations. It will also cover add-on versions and the special versions in SAP Consolidation. You will learn how to prepare restatements using versions by applying the current “settings” to the data of a previous period and using drilldown reporting. Lesson Objectives After completing this lesson, you will be able to: • Discuss the applications and functionality of versions • Describe add-on versions and special versions • Prepare restatements through reporting and drilldown reporting Business Example The group G1 plans to introduce the SAP Consolidation by the end of this year. You have to project different datasets separately from one another in your business scenario. To do this, you need to define different versions that have the same configuration characteristics. Using the restatement as an example, demonstrate other ways to project datasets differently. 400 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Version Concept Application and Functionality • Data categories – Actual, budget, forecast, multi-year planning, and so on • Simulation – The effect of different exchange rates – The effect of step acquisitions, divestitures, and so on • Restatement – Applying the current““settings” to prior period data • Multiple GAAPs – Parallel consolidated statements according to IAS and HGB • Value Based Management (VBM) – Adjustments to the “regular” statement prior to calculating performance ratios • Base version (or simply “version”) – Disjoint subset of the consolidation database – Option of copying all/part of data between versions • Add-on version – References a base version (or another add-on version) – Available for the totals database and for hierarchies • Special Version – For additional financial data (for example, investment, equity data) – For method assignments (for example, consolidation of investments) – Reduces redundancy • Reporting – Use of reporting (without a new version) for restatements, if no group-dependent postings exist You can carry out consolidations in different consolidation versions. This enables you to carry out alternative consolidations, such as simulations, plannings, restatements, and so on parallel to the consolidation of the actual data. You can, for example, use different versions to manage, consolidate and compare different reporting data for comparisons and simulations. You can open new versions at any time. 03-12-2004 © 2004 SAP AG. All rights reserved. 401 Unit 8: Versions AC660 Add on Version 1. Referring to a version (this allows both to be observed at the same time) 2. Copying a version to perform a different calculation 3. Not defining any relationship, but instead copying the data again (for budgeting, for example) Figure 133: Add-On Versions in the Totals Database Add-on versions can contain additional reporting data and/or manual/automatic postings required for a specific country. They include a reference to a base version. Example of the use of add-on versions • Version 1 consists of the consolidated statements according to US GAAP. • Version 2 consists of additional financial data and/or manual or automatic postings. Version 2 reflects Japanese GAAP in conjunction with version 1. Drilldown Reporting and the Report Writer: • When the reporting functions use an add-on version, the data of all referenced versions are automatically used, as well. Consolidation functions and the rest of the Information System: • Always work with the data of “their” version. • Have no relationship to the referenced data of other versions. 402 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Version Concept Special Version Figure 134: Special Versions in SAP Consolidation A consolidation version is composed of special versions. These cover the different consolidation areas. For example, there are the special versions “data entry”, “tax rate”, “translation methods”. This enables you to define various consolidation versions that differ only in one or a few areas, but otherwise refer to the same special version (that is, data is not redundant). 03-12-2004 © 2004 SAP AG. All rights reserved. 403 Unit 8: Versions AC660 Figure 135: Special Versions in SAP Consolidation (Procedure) Control parameters, which are identical in various consolidation versions, need only be maintained once in special versions. All the special versions you require to consolidate your data you assign to the consolidation version in Customizing. Figure 136: Special Versions - A Currency Translation Example 404 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Version Concept You can carry out simulations to analyze the different effects of: • Different valuation options • Exchange rates • Restatements • Different reporting data (actual/plan) Using the version concept you can, for example, combine your versions for actual and plan data with alternative currency translation methods. Restatement Figure 137: Restatement via Reporting Using versions you can prepare restatements, that is, apply the current “settings” to data of a previous period. For example, if you changed the consolidation hierarchy, you could report the data of the previous fiscal year in the new hierarchy as a restatement. In this example you see data from 2001 and 2002 On the right-hand side you see that BA3 has been regrouped to SEG1, although this did not occur until 2002. The report therefore contains value 0 for SEG2/BA3. On the right-hand side of the report the data from the previous fiscal year has been included in the new hierarchy and also reported. In simple cases, you can perform such restatements using the functions of reporting without using a new version. 03-12-2004 © 2004 SAP AG. All rights reserved. 405 Unit 8: Versions AC660 Figure 138: Restatement via Drilldown Reporting You could effect the restatement using a drilldown report if the report does not include postings that are dependent on the consolidation group. In a column that is not displayed the values of BA3 from 2001 and 2002 are added together and BA3 is assigned to the hierarchy of the current (most recent) year. BA3 therefore appears in the current hierarchy, the 2001 column (difference between the toal and the value from 2002) contains the value from 2001. 406 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Lesson: Version Concept Lesson Summary You should now be able to: • Discuss the applications and functionality of versions • Describe add-on versions and special versions • Prepare restatements through reporting and drilldown reporting 03-12-2004 © 2004 SAP AG. All rights reserved. 407 Unit Summary AC660 Unit Summary You should now be able to: • Discuss the applications and functionality of versions • Describe add-on versions and special versions • Prepare restatements through reporting and drilldown reporting 408 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Course Summary Course Summary You should now be able to: • Define consolidation groups and units • Create and use a consolidation chart of accounts • Collect individual financial statement data in SAP Consolidation and translate it into group currency as required • Customize and execute various consolidation functions 03-12-2004 © 2004 SAP AG. All rights reserved. 409 Course Summary AC660 410 © 2004 SAP AG. All rights reserved. 03-12-2004 Appendix 1 Appendix Consolidation of Investments: Mutual Stock Method Figure 139: Mutual Stock Method: First Consolidation The mutual stock method may only be used for managerial consolidations - internal purposes. It is an alternative to the equity method when the group share is less than 50%. Thus, ’G2’ may not be a legal entity. This accounting technique is typically applied when a consolidation unit is included in the upper hierarchy level using the purchase method, and the same unit also belongs to another consolidation group in a lower hierarchy level, where the unit is included using the mutual stock method. The reporting of financial data is similar to the equity method, that is, the financial data is not included. 03-12-2004 © 2004 SAP AG. All rights reserved. 411 Appendix 1: Appendix AC660 The adjusting entry complements that of the purchase method at the same hierarchy level. Hence, no further entry is needed in the top consolidation group ’GT’. Figure 140: Mutual Stock Method: Subsequent Consolidation Figure 141: Mutual Stock versus Equity Method One advantage of the mutual stock method is that it shows the annual net income at the affiliate, whereas in the equity method, the annual net income becomes part of the parent’s earnings from the affiliate. One disadvantage of the mutual stock method is its obstinate logic in posting minority interest. However, minority interest usually plays an insignificant role in managerial consolidation. 412 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Appendix 1: Appendix Cons C/A Dimension 01 Cons Chart of Accounts 01 Version 100 Act. Version Pe- riod 012 / 1998 ItemMedium Text for FS ItemsITSMItmCIAREBPEBCat100000A S S E T S2+100100TOTAL CURRENT ASSETS2+110000CASH AND CASH EQUIVALENTS2+ 110100Cash1+205700 110200Securities1+ 119000NET RE- CEIVABLES2+ 120000Account Receivable - Net2+ 120100Trade Receivables1+ 120200Doubtful Receivables1+ 125000Other Receivables2+ 125100Notes Receivable1+ 125200Interest Receivable1+ 125300Miscellaneous Receivables1+ SAP0130000Intercompany Receivables2+ 130100IC Trade Receivables1+ 110130200IC Notes Receivables1+ 110130300IC Interest Receivable1+ 110130500IC Due to/from1+ 110131000IC Elimination of Payables/Receiv- ables1+ X 135000INVENTORIES2+ 135100Raw Materials and Operating Supplies1+ A3135200Unfinished Goods and Services1+ A3135300Finished Products from Purchasing1+ A3135400Finished Products from Production1+ A3139900Clearing of IU Profit/Loss in Inventory1+ X 140000OTHER CUR- RENT ASSETS2+ 140100Prepaid Insurance1+ 140200Other Current Assets1+ 150000DEFERRED TAX ASSETS2+ 150100Deferred Tax Assets1+ 150200De- ferred Tax Assets - Value Adjustment1+ 160000TOTAL FIXED ASSETS2+ 170000INVESTMENTS2+ 170100Investments in Subsidiaries - Purchase1+ 1100170200Investments in Subsidiaries - Proportional1+ 1100170300Investments in Subsidiaries - Equity1+ 1100170400Investments in Parent Company’s Common Stock1+ 1100180000GOODWILL - NET2+ 1000181000Good- will2+X1000181100Goodwill - Purchase1+X1000181200Goodwill - Propor- tional1+X1000181300Goodwill - Equity1+X1100181400Goodwill - Push Down Method1+1000185000Accum. Goodwill Amortization2-X1000185100Accum. Goodwill Amortization - Purchase1-X1000185200Accum. Goodwill Amortization - Proportional1-X1000185300Accum. Goodwill Amor- tization - Equity1-X1000185400Accum. Goodwill Amortization - Push Down Method1-1000190000PROPERTY, PLANT AND EQUIP- MENT2+1000191000Property, Plant & Equipment2+1000191100Land and Real Estate1+1000191200Buildings1+1000191300Furniture and Fixtures1+1000191400Transportation Equipment1+1000191500Machinery and Equipment1+1000195000Accumulated Depreciation2-1000195200Accumulated Depreciation - Buildings1-1000195300Accumulated Depreciation - Furniture and Fixtures1-1000195400Accumulated Depreciation - Transportation Equipment1-1000195500Accumulated Depreciation - Machinery & Equipment1-1000200000TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY2-200100TOTAL LIABILITIES2-200200TOTAL CURRENT LIABILITIES2-201000Trade Payables2-201100Trade Payables1-201200Mis- cellaneous Trade Payables1-205000Other Payables2-205100Notes Payable – Current Portion1-205200Bonds Payable – Current Portion1-205300Accrued Interest Payable1-205400Accrued Wages Payable1-205500Accrued Income Taxes Payable1-205600Dividends Payable1-205700Miscellaneous Payables1-110100SAP0210000Intercompany Payables2-110210100IC Trade Payables1-110210200IC Notes Payable1-110210300IC Interest Payable1-110210400IC Dividends Payable1-110215000Income Taxes Payable2-215100Income Taxes Payable - Federal1-215200Income Taxes 03-12-2004 © 2004 SAP AG. All rights reserved. 413 Appendix 1: Appendix AC660 Payable - State1-215300Income Taxes Payable - Foreign1-220000Other Taxes Payable2-220100Sales and Use Tax Payable1-220200Foreign Withholding Taxes Payable1-220300Property Taxes Payable1-225000Deferred Income Taxes2-225100Deferred Taxes Payable - Federal1-225200Deferred Taxes Payable - State1-225300Deferred Taxes Payable - Foreign1-225400De- ferred Tax Payables -Value adjustment1+230000TOTAL LONG TERM LIABILITIES2-235000LONG TERM DEBT2-235100Notes Payable - Long Term Portion1-235200Bonds Payable - Long Term Portion1-236000Remaining Negative Differential from C/I1-5000239999B/S Business Area – Clearing Account1-240000MINORITY INTER- EST2-X6000240100Minority Interest - Common Stock1-X6000240200Minority Interest - Common Stock - ESOP Shares1-X6000240300Minority Interest - Subscribed Capital Stock1-X6000240400Minority Interest - Preferred Stock1-X6000240500Minority Interest - Additional Paid-In Capital1-X6000240600Minority Interest - Treasury Stock1-X6000240700Min. Int. - Treasury Stock, Reciprocal Holdings Bet.1-X6000240800Minority Interest - Dividends Payable1-X6000240900Minority Int. - Currency Translation Differences2-X6000240910Min. Int. - Cur.Transl.Diffs - Prop, Plant & Equip1-X6000240920Min. Int. - Cur.Transl.Diffs - Investments1-X6000240930Min. Int. - Cur.Transl.Diffs - Stockholder#Equity1-X6000240940Min. Int. - Cur.Transl.Diffs - Other1-X6000240945Min. Int. – Cur.Transl.Diffs (TC)1-6010240950Min. Int. - Cur.Transl.Diffs - Rounding1-X6000241000Minority In- terest - Retained Earnings2-XX6000241100Minority Interest - Ret. Earnings - Prior Years1-X6000241200Minority Interest - Ret. Earnings - Current Year1-X6000241300Min. Int. - Ret. Earn. - CY Prior to First Cons1-XX6000241350Min. Int. – Ret. Earn. – ANI Prior to Prop. Change1-6000241400Min. Int. - Ret. Earn. - Appropriation Transfers1-XX6000241500Min. Int. - Ret. Earn. - Appropriation Deductions1-XX6000241600Min. Int. - Ret. Earn. - Dividends Paid1-XX6000241620Min. Int. - Ret. Earn. - Dividends Paid Clearing1-X6000241630Min. Int. - Ret. Earn. - Bonus Management1-XX6000241800Min. Int. - Ret. Earn. - Appropriations1-X6000247000Minority Interest - In- vestments in Subsidiaries2-X6000247010Min. Int. – Investments in Subsid. - Purchase1-X6000247020Min. Int. – Investments in Subsid. - Proportional1-X6000247030Min. Int. – Investments in Subsid. - Equity1-X6000247040Min. Int. – Investments in Common Stock of Parent1-X6000250000SHAREHOLDERS’ EQ- UITY2-6000250050Total Subscribed Common Stock2-6000250100Common Stock1-6000250200Common Stock ESOP Shares1-6000250300Subscription Receivables1-6000250400Preferred Stock1-6000250500Additional Paid-In Capital1-6000250600Treasury Stock1+6000250700Treasury Stock - Unit1+6100250800Stock Dividends to be Distributed1-6000250900Cur- rency Translation Differences2-X6000250910Currency Translation Differences - Prop.,Plant & Equip.1-X6000250920Currency Transla- 414 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Appendix 1: Appendix tion Differences - Investments1-X6000250930Currency Translation Differences - Stockh. Equity1-X6000250940Currency Translation Differences - Other1-XSAP1250945Currency Translation Differences – Other (TC)1-6010250950Currency Translation Differences - Round- ing1-X6000251000Retained Earnings2-6000251100Retained Earnings - Prior Years1-X6000251200Retained Earnings - Current Year1-6000251300Retained Earnings- CY Prior to First Cons1-6000251350Retained Earnings – ANI Prior to Proportion Change1-6000251400Retained Earnings - Appropriation Transfers1-X6000251500Retained Earnings – Appro- priation Deductions1+X6000251600Retained Earnings - Dividends Paid1-X6000251620Retained Earnings - Dividends Paid1-6000251630Re- tained Earnings - Bonus Management1-X6000251700Retained Earnings - Clearing Cons of Investment1-XX6000251800Retained Earnings - Appropriations1-6000300000Net Sales2-301000Sales2-301100Sales (Third Party)1-A4301200Intercompany Sales1-A5302000Sales Discounts and Returns2-302100Sales Discounts and Returns (Third Party)1-A4302200IC Sales Discounts and Returns1-A5303000Cost of Goods Sold2+303100Cost of Goods Sold (Third Party)1+A4303200IC Cost of Goods Sold1+XA5304000Gross Operating Profit from Sales2-305000Total Expenses2+306000Operating Income2-310000Operating Expenses2+2000310100Materials Ex- penses1+2000310200Inventory Valuation1+2000310300Packaging Materials Expense1+2000310400Distribution Expenses1+2000310500Heating and Electricity Expenses1+2000310600Subcontractor Services1+2000310700Wages and Salaries1+2000310800Pension and Employee Benefits Ex- pense1+2000310900Payroll and Withholding Expense1+2000311000Medical Expense1+2000311100Building and Equipment Maintenance Expense1+2000311200Insurance Expense1+2000311300Auto Ex- pense1+2000311800Goodwill Amortization Expense2+X2000311810Goodwill Amortization -Purchase1+X2000311820Goodwill Amortization -Propor- tional1+X2000311830Goodwill Amortization -Equity1+X2000311840Goodwill Amortization -Push-down1+2000311900Depreciation Ex- pense2+2000311920Depreciation Expense - Buildings1+2000311930Depreciation Expense - Furniture and Fixtures1+2000311940Depreciation Expense - Transportation Equipment1+2000311950Depreciation Expense - Machinery and Equipment1+2000312400Rent Expense1+2000312500Postage and Shipping Costs1+2000312600Telephone Expense1+2000312700Travel Expenses1+2000312800Supplies Expense1+2000312900Other General Expense1+2000313000Other Administrative Expense1+2000313100Professional Fees1+2000320000Other Income and Expense2+320100Interest In- come1-320200IC Interest Income1-100320300Dividend Income1-320400IC Dividend Income1-100320500Other Income1-320600IC Other Income1-100320650Revenue from Divestitures1-320700Interest Ex- pense1+320800IC Interest Expense1+100320900Other Expense1+321000Loss from Write-Down Investments1+321100IC Other Expense1+100321150Expense from Divestitures1+321200Equity in Net Income of 20 - 50% Sub- sidiaries1-200321300Exchange Rate Gains (Losses)1-330000Income before 03-12-2004 © 2004 SAP AG. All rights reserved. 415 Appendix 1: Appendix AC660 Taxes2-335000Income Tax Provision2+340000Income Tax Provision - Current2+340100Income Tax Provision - Current - Federal1+340200Income Tax Provision - Current - State1+340300Income Tax Provision - Current - Foreign1+350000Income Tax Provision - Deferred2+350100Income Tax Provision - Deferred - Federal1+350200Income Tax Provision - Deferred - State1+350300Income Tax Provision - Deferred - Foreign1+360000Income from Continuing Operations2-360050Non-Continuing Operations2+360100Gain (Loss) - Discontinued Operations - Net of Tax1-360200Gain (Loss) - Extraordinary Items - Net of Tax1-360300Gain (Loss) - Change in Accounting Principle - Net1-370000Net Income before Minority Interest2-370100Minority Interest1-380000Net Income2-390000Annual Net Income1+910000Selected Item for Cur.Translation Affect.Earnings1+X930000Stat: Other Items2-X931000Stat: Annual Net Income2-X931100Total Annual Net Income1-X931200Total Annual Net Income - Offset1+X931300Minority Interest in Annual Net Income1-X931400Minority Interest in Annual Net Income - Off- set1+X931500Adjusted Annual Net Income1-X931600Adjusted Annual Net Income - Minority Interest1-X932000Stat:Stockholders’ Equity for Equity Method2-X932100Stat: Annual Net Income for Equity Method1-X932200Stat: Dividends for Equity Method1-X932300Stat: Bonus Management1-X932400Stat: Currency Translation Differences1-X932500Stat: GW Elimination in Cons Group1-X932600Stat: Adjustment of Prior Period Earnings1-X933000Stat: Goodwill2-X100933100Stat: Positive Goodwill1-X100933200Stat: Negative Goodwill1+X100939000Stat: General Offsetting Item1-X950000Stat: Stockholders’ Equity2-X6100950100Stat: Common Stock1-X6100950200Stat: Common Stock ESOP Shares1-X6100950300Stat: Subscription Receiv- ables1-X6100950400Stat: Preferred Stock1-X6100950500Stat: Additional Paid-In Capital1-X6100950600Stat: Treasury Stock1-X6100950700Stat: Treasury Stock Reciprocal Holdings1-X6100950800Stat: Stock Div- idends to be Distributed1-X6100950900Stat: Currency Translation Differences2-X6100950910Stat: Cur.Transl.Diff. - Prop., Plant & Equip- ment1-X6100950920Stat: Cur.Transl.Diff. - Investments1-X6100950930Stat: Cur.Transl.Diff. - Stockholders’ Equity1-X6100950940Stat: Cur.Transl.Diff. - Other1-X6100950945Stat: Cur.Transl.Diff. - Other (TC)1-6110950950Stat: Cur.Transl.Diff. - Rounding1-X6100951000Stat: Retained Earn- ings2-X6100951100Stat: Retained Earnings - Prior Years1-X6100951200Stat: Retained Earnings - Current Year1-X6100951300Stat: Retained Earnings- CY Prior to First Cons1-X6100951350Stat: Retained Earnings – ANI Prior to Prop. Change1-X6100951400Stat: Ret. Earnings - Appropriation Transfer1-X6100951500Stat: Ret. Earnings - Appropriation Deductions1-X6100951600Stat: Retained Earnings - Dividends Paid1-X6100951620Stat: Retained Earnings – Divi- dends Paid Clearing1-X6100951630Stat: Retained Earnings - Bonus Management1-X6100951700Stat: Ret. Earnings - Clearing Cons of Investments1-X6100951800Stat: Retained Earnings - Appropria- tions1-X6100962000Stat: Neg. SH Equity for Equity Method2-X962100Stat: Neg. SH Equity - Annual Net Income f. Equity1-X962200Stat: Neg. SH 416 © 2004 SAP AG. All rights reserved. 03-12-2004 AC660 Appendix 1: Appendix Equity - Dividends f. Equity1+X962300Stat: Neg. SH Equity - Bonus Manage- ment1-X962400Stat: Neg. SH Equity - Currency Translation Diffs1-X962500Stat: Neg. SH Equity - GW Elimination in Cons Group1-X962600Stat: Neg. SH Equity - Adjusted Pr.Period Earnings1-XC-1000Group Share1+XC-2000Group Share with Voting Rights1+XC-3000Group Share without Voting Rights1+XC-4000Group Share in Annual Net Income1+XC-5000Group Share, Direct1+X 03-12-2004 © 2004 SAP AG. All rights reserved. 417 Appendix 1: Appendix AC660 418 © 2004 SAP AG. All rights reserved. 03-12-2004 Index A Add-On Versions, 402 Asset history sheet, 164 Assets, 162 Auto Sequence, 285 B Balance carry forwards, 327 Bonus payments, 276 business area consolidation, 25 Business Object, 30 C company consolidation, 25 Cons group, 54 Consolidation, 6, 28, 293 Consolidation chart of accounts, 47 Consolidation database, 51 consolidation group, 31 consolidation types, 25 consolidation unit, 25, 52 Consolidation Units and Groups, 25 currency translation, 153 Current assets, 154 current-rate method, 153 custom characteristics, 51 Customizing settings, 273 D Data consolidation, 74 Data entry layout, 74 Data entry layouts, 20, 98 Data entry profile, 97 Data monitor, 327 Data Monitor, 83 Debit/credit signs, 311 Decentralization of Responsibility, 3 Default Sequence, 284 Dimensions, 25 Divestiture, 279 Divestitures, 275 Dividends, 278 Document Reconciliation, 211 Document type, 54 Drilldown functions, 19 Drilldown list, 371 Drilldown reporting, 365 E Elimination differences, 209 Elimination method, 208 Equity, 162 Equity method, 291 external and internal accounting, 3 F Fixed assets, 154 Fixed values, 48 Form reports, 367 Formula Builder, 127 FS item, 48 FS items, 160 G Global Enterprise, 3 Goodwill, 292 Goodwill Amortization, 281 group reporting, 25 Group Shares, 279 H Hierarchies, 372 03-12-2004 © 2004 SAP AG. All rights reserved. 419 Index AC660 I Income statement, 154 Individual financial statement, 160 Interactive Drilldowns, 355 Interunit elimination, 312 investee unit, 52 Items, 347 J Journal Entry Reporting, 356 K Key figures, 369 L Ledger currency, 27 Liabilities, 162 List processor, 22 M master data, 30 N navigation attributes, 52 P Parallel Hierarchies, 25 partner unit, 52 Periodic reclassification, 314 Posting, 208, 273 Posting level, 328 Posting Levels I, 130 Posting Levels II, 131 Postings, 128, 275 profit center consolidation, 25 R Reclassifications, 311 Reporting interface, 375 Restatement, 405 Retained earnings, 274 Rounding differences, 166 S Search function, 22 Simultaneous Consolidation, 233–234 Special Versions in EC-CS, 403 Status Monitor, 82 Step Consolidation, 233 Strategic Enterprise Management, 6 T temporal method, 153 Temporal translation difference, 163 Transaction currency, 27 Transaction type, 165 Translation, 154 V Validation, 126 Valuations, 28 Variables, 367 420 © 2004 SAP AG. All rights reserved. 03-12-2004 Feedback SAP AG has made every effort in the preparation of this course to ensure the accuracy and completeness of the materials. If you have any corrections or suggestions for improvement, please record them in the appropriate place in the course evaluation. 03-12-2004 © 2004 SAP AG. All rights reserved. 421