Consolidation

Finance departments of a corporation use legal consolidation to consolidate numbers from subsidiaries and produce consolidated financial statements of this group of legal entities at the end of a financial period.

This section focuses on the consolidation model set up and relevant settings required for the various tasks that are required to successfully perform legal consolidation using SAP Business Planning and Consolidation.

This section also discusses the configuration of business rules, including how to set up currency translations, intercompany eliminations, copy opening tasks, and other business rules in Planning and Consolidation Administration. Business rules provide the mathematical foundation for SAP Business Planning and Consolidation models, allowing users to manage both management and legal consolidation reporting.

Features

You perform the following activities in Business Planning and Consolidation during the financial consolidation process:

Initialize opening balances at the start of a new reporting cycle.
Enter amounts for each entity.
Match intercompany transactions. For example, AR/AP reconciliation.
Convert local currency data to the desired group reporting currencies.
Generate all the consolidation entries for the desired groups of entities, such as:
- Ultimate ownership calculation
- Elimination entries for intercompany revenue, investments, and profit in inventory
- Adjusting entries
- Reclassifications
- Minority calculations and other calculations
Make the final validation.
Generate a consolidation report.

Activities

To enable users to generate consolidated financial statements, you should configure the legal model, and set up the legal and statutory consolidation business rules, in order to perform the activities required in the generation of consolidated statements of a group of legal entities.

To set up your consolidation environment, you do the following:

Create the legal consolidation environment and set the necessary parameters. See Create an Embedded Environment.
Create required InfoObjects and InfoProviders and maintain required InfoObject attributes in BW modeling tools. See Create InfoObjects and InfoProviders and Maintain InfoObject Attributes.
Create the consolidation model. See Create or Modify a Consolidation Model.
Enable business rules. See Business Rules Management.
Make sure the EXCHANGE RATE InfoProvider and OWNERSHIP InfoProvider are maintained in Business Warehouse. See Create or Modify a Consolidation Model.
Define tasks order in task sequences. See Set Task Sequence.
Set the work status, which is optional.
Set the journal template and validation criteria. See Journal Administration.