Business Consolidation (SEM-BCS) 

Purpose

You can use the SAP SEM component Business Consolidation (Consolidation) to determine the resources of a corporate group (or a similar enterprise or organizational unit), the claims by others to those resources, and the changes to those resources. Consolidation also provides the means for internal and external enterprise reporting.

You can consolidate based on customer-defined consolidation units. Consolidation units can represent, for example, companies, plants, business areas, profit centers, and cost centers. You can also portray matrix organizations (for example, using a combination of companies and profit centers).

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

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

Integration

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

All SEM components are based on BW. The transaction data processed by Consolidation is written to the BW system, which means that the BW system represents the primary data basis for all SEM components. This enables you to directly exchange data between individual SEM components without the need for interim steps or for special objects for exchanging data in BW. For example, you can:

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

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

Data from transactional SAP systems (for example, FI-GL) that has been loaded into SAP BW can be transferred as reported financial data to the Consolidation component.

Furthermore, you can load reported financial data from transactional SAP systems directly into SEM‑BCS without a prior extraction into SAP BW storage.

And, finally, you can automatically transfer master data and hierarchies from other SAP systems.

Features

Versions

You can use versions to execute parallel consolidations with different categories of data (for example, actual data, planning data, forecasting data), using different accounting principles (for example, US GAAP, IAS, German HGB), using different valuations, and/or for simulations.

Hierarchies

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

Consolidation Charts of Accounts

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

Collection and Standardization of Reported Data

You can collect individual financial statements and other relevant data into the consolidation system as follows:

·       Online data entry

·       Flexible upload from a data file

·       Load from an InfoProvider (from SAP BW or connected SAP systems)

·       Copy within the consolidation system

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

For transferring master data and hierarchies (for example, of consolidation units or financial statement items), you can use a flexible upload to upload files or InfoObjects from SAP BW or connected SAP systems.

Consolidation Tasks

You can automatically execute the following consolidation tasks (among others):

·       Currency translation (which translates the financial data into the currency of the consolidation group) and rounding

·       Validation

·       Capitalization and valuation allowances of assets and liabilities (such as fair value surpluses)

·       Preparations for consolidation group changes 

·       Interunit eliminations (for example, for payables and receivables, revenue and expense, or investment income) and reconciliations

·       Elimination of interunit profit/loss in inventory

·       Elimination of interunit profit/loss in transferred assets

·       Consolidation of investments

·       Reclassification

·       Allocation

·       Balance carryforward

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

Reporting

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

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

Execution and Monitoring of the Consolidation Process

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

Constraints

The automated execution of consolidation of investments presently only covers the purchase method, the equity method, and the mutual stock method.

You can use manual posting or, in some cases, the reclassification function to perform the consolidation tasks that are not yet automated to meet your statutory requirements for creating consolidated financial statements.