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

• Is standardized to agree with the group's balance sheet valuations
• Is translated into the currency of the consolidation group
• Is purged of the effects from interunit relationships

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

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

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

The Consolidation system needs account assignments, such as partner units, transaction types, transaction currencies, etc., in order to perform the consolidation tasks. For example, automated elimination of IU revenue and expense is only possible if the system knows which partner units caused the revenues and expenses.

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

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

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

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

There are tasks:

• For the collection and standardization of reported financial data
• For the actual consolidation postings

The following graphic shows a summary of the order of the tasks in the consolidation monitor:

1. You carry forward the prior year data into the current fiscal year.

This task is only needed if prior year data already exists in the totals database.

2. You transfer the reported financial data of the consolidation units.

The system writes the reported financial data to the InfoCube for the totals data.

3. You validate the reported financial data.

This task is not required (in contrast to the validation of standardized financial data in group currency).



Nevertheless, to ensure that the reported financial data is consistent, we recommend using the validation of reported data at this point, if no consistency check has yet taken place in some other fashion.

4. You post standardizing entries to the reported financial data, if needed. These entries can be posted manually or automatically (using "reclassifications").



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

5. Prior to running interunit eliminations, you can use reconciliations to determine any elimination differences without having the system post elimination entries. By doing this, you can manually correct erroneous entries in the reported financial data, or manually post standardizing entries.
6. If the reported financial data is valued in different local currencies, you translate the data into the currency of the consolidation group.

7. You can use an allocation task, for example, to assess or distribute standardized data to multiple accounting objects (such as financial statement items or accounts).
8. You validate the standardized financial data.
9. You use tasks for interunit elimination to eliminate group-internal receivables and payables, and group-internal revenues and expenses.
10. Interunit profits are incurred from the sale of inventory items within a consolidation group. You use the task for elimination of interunit profit/loss in inventory to automatically eliminate these interunit profits or losses.
11. You use consolidation of investments to eliminate the group-internal equity holdings. This task eliminates the investment(s) of the higher-level units with their proportionate shares in the stockholders' equity of the investee units that belong to the same consolidation group.
12. You use reclassification to reclassify data that has been consolidated.

12. In a some instances it may be necessary to post manual entries to adjust the consolidated financial data.

13. When the consolidation tasks are finished, you validate the consolidated data.

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