Create or Modify the Model

The consolidation engine leverages the following models to retrieve the information necessary to perform its calculations:

• Legal or MAIN

  This is the main model containing all financial data. All consolidation postings such as eliminations, currency conversions and minority interest calculations are posted in this model.

• OWNERSHIP

  The consolidation process uses an OWNERSHIP model, to store the definitions of each consolidation parameter. In particular, such definitions may include:

  • The list of companies being consolidated in each group

  • The consolidation method used in each case

  • The consolidation percentage for each case

  • The ownership percentage (how much of each is owned by the group)

  • The control percentage (how much of each is controlled by the group)

• RATE

  This contains all currency exchange rates for the different rate types such as average, and sport rate. The currency conversion process uses a RATE model to look up the appropriate exchange rates for each relevant currency.

  Currency translation can run on any type of reporting model. Currency conversion applies to both financial and legal consolidation models to which a corresponding RATE model has been referenced, under the condition that the reporting model contain currency (type R) dimension. The currency dimension in a rate model does not need to have the REPORTING property.

The MAIN, RATE, and OWNERSHIP models can be named as desired. Within the same environment, multiple MAIN models may exist, each one pointing to its own RATE and OWNERSHIP models. Multiple MAIN models can also share the same RATE or OWNERSHIP models, if appropriate.

The RATE or OWNERSHIP model associated with a given reporting model is defined when a new consolidation type model is created.

Each one of the above models must contain some required dimensions, while some other dimensions are optional. The required and optional dimensions are based on the standards used in the business rules. Other dimensions can coexist in a reporting model but do not impact the business rule function. For more information, see Dimension Setup in Dimension Library.

The four required dimensions are ENTITY, CATEGORY, TIME, and ACCOUNT. They can be renamed as desired. Here are some of the common requirements for these dimensions:

• The CATEGORY and TIME dimensions can be the same across the MAIN, RATE, and OWNERSHIP models. Alternatively, they must contain the appropriate matching members.

• The ENTITY dimension of the MAIN model can be the same as that used in the OWNERSHIP model or it must contain the appropriate matching members if different.

• The GROUP dimension used must be the same in the OWNERSHIP model and the MAIN model.

Generally in most cases, it is recommended that you use the same dimensions across models as it is easier to maintain.

Associate the desired RATE and OWNERSHIP models with the consolidation model and select all the consolidation business rules that need to be implemented. You can select from the following list of business rules:

• Currency conversion

  Conversion of local currency data to the desired reporting currencies.

• Calculations

  To calculate and store amounts which are required for purposes of account-based calculations.

• Intercompany bookings

  Matching intercompany transactions

• US Eliminations

  Specifically designed to address the posting of intercompany eliminations in simpler scenarios where a full legal consolidation model is not required

• Carry Forward

  Initialization of beginning balances when a new fiscal cycle starts

• Validation

  Validation of input data

• Eliminations and Adjustments

  Generation of all the consolidation entries for the desired groups of entities (for example: eliminations, adjustments, reclassifications and minority calculations.)

Consolidation business rules allow the automated processing of data to render a consolidated set of financial statements. This is commonly thought of as eliminations of investments in subsidiaries, adjustments of minority interest, reclassifications and any other postings depending on the nature of the consolidation methodologies required.

Select only the desired dimensions required for legal consolidation and deselect any others.

Set dimensions to be included in the consolidation model and also set the secured dimension to control the security through SAP Business Planning and Consolidation member access profiles.

Normally the Entity and Category dimensions are set as secured dimensions for member access control.

The Group dimension stores group currency, reporting currency and consolidation groups. The MAIN InfoProvider must contain a CURRENCY dimension to store the translated amounts. The consolidation entries, as generated by the consolidation process, are also stored by Group dimension.

Any additional dimension is optional in the MAIN InfoProvider, as far as the currency translation is concerned. For consolidation purposes, however, there are some other requirements. These are described below:

• The model may have an Intercompany dimension.

• The model may have a FLOW dimension. This dimension is optional, but, if it exists, it can be used by the following procedures:

  • The currency translation procedure details the changes in the balance sheet generated by fluctuations in the exchange rates.

  • The consolidation procedure details the eliminations applied to the movements of the balance sheet accounts.

• An Audit dimension may exist in the MAIN InfoProvider, but it is not required by the currency translation. If it exists, however, the currency translation can recognize which members of the dimension should be translated, and which ones should just be copied as is to the destination currency. However, this dimension is required for the consolidation procedure to work.

Additional (user defined) dimensions can be added to the MAIN InfoProvider (such as product, market, or division), as desired. The consolidation engine can recognize their existence and take them into account in the process, and apply custom behavior to their members.