Function documentationValidation of Additional Financial Data

 

You use this function to validate the additional financial data for consolidation of investments and elimination of interunit profit/loss in transferred inventory. The function tests:

  • The equality of the changes in investments and changes in equity (reported in consolidation of investments) with the corresponding totals records

  • The equality of the inventory data (reported in elimination of interunit profit/loss) with the corresponding totals records

There are two aspects in which validation of additional financial data differs from validation of totals data and documents:

  • The rules and messages for validation of additional financial data are predefined and fixed by the system. In Customizing you only specify whether the system is to validate additional financial data.

  • Because the validation logic for additional financial data is predefined and fixed, you do not need to define validation rules and you do not therefore need validation methods. You therefore make the decision as to whether to validate additional financial data at the validation task level, instead of at the validation method level.

Prerequisites

You have entered the additional financial data (for example, by means of manual data entry).

Features

In the task definition, you can specify whether the system is to validate the following additional financial data when the task is executed (and if so, which data):

  • Inventory Data

  • Investments

  • Equity

  • Noncurrent Asset Transfer

For each type of additional financial data, you can determine whether an error message or a warning message is displayed when a discrepancy is found. You do this in the customizing settings of the validation task.

Caution Caution

You can only carry out the further consolidation steps if the task for validating standardized financial data runs without errors. Otherwise, you must first ensure the accuracy of the additional financial data.

End of the caution.
Additional Financial Data for Consolidation of Investments
Which Data is Selected

Specifically, validation of additional financial data checks the following data:

  • The aggregated values for each consolidation unit –from the beginning of the specified fiscal year up to, and including, the current period

  • The investment data for each combination of item, subassignment, and partner unit (if available). The system checks the investee equity data for each combination of item and subitem. This data is aggregated across the activities and the activity numbers of consolidation of investments.

  • Reported financial data and standardizing entries with posting levels "", 00, 01, and 10 are taken into account in the totals database.

How the Data Is Checked

The system generates a message for each discrepancy it discovers between the additional financial data and the corresponding data records in the totals database. Such messages disclose the differing values.

The system generates a warning message if the function finds totals records for a subassignment that belong to an item for which the additional financial data was posted without an account assignment.

When validating the additional financial data for changes in equity, the system checks if corresponding totals records exist for the reported investment data.

Note Note

For consolidation units that use the equity method or

mutual stock method accounting techniques, it is not necessary to enter additional financial data. Validation of additional financial data for these consolidation units is not therefore beneficial.

End of the note.
Additional Financial Data for Elimination of Interunit Profit/Loss in Transferred Inventory

Validation of additional financial data for elimination of interunit profit/loss in transferred inventory distinguishes between:

  • Inventory Data Without Partner Breakdowns

  • Inventory Data with Partner Breakdowns

Inventory Data Without Partner Breakdowns

The system adds up the inventory data recorded for all partner units and checks whether the total is equal to the corresponding totals records. If they are not equal, the system issues a message.

Note Note

If the mismatch is caused by postings in which the partner unit is a company that does not itself belong to the consolidation group, you should choose Warning as the message type for inventory data. The system regards this kind of discrepancy as acceptable. You can suppress the message by manually recording the amount of the difference to the inventory data of predefined partner unit "External".

End of the note.
Inventory Data with Partner Breakdowns

Here the system examines only the inventory data of those partner units for which you have recorded data for a given inventory item. The system then checks if the total aggregated across these partner units is equal to the corresponding totals records. If the system discovers other totals records for the item that reference other partner units, the system issues a message.

Additional Financial Data for Elimination of Interunit Profit/Loss in Transferred Assets

When validating additional financial data for elimination of interunit profit/loss in transferred assets, the system performs the following checks:

  • The original value of an asset for the buying consolidation unit must be equal to the revenue gained from the asset for the selling consolidation unit.

  • For each asset transfer, additional financial data must be recorded for the retired noncurrent asset and the noncurrent asset acquired (exceptions: in-house production, sale to third party).

  • Supply chains may contain only asset transfers in which each selling consolidation unit has only one buying counterpart. Partial transfers of assets with 1:N or N:1 relationships are not supported.

In principle, the following also needs to be checked:

  • An asset cannot be sold by the same consolidation unit more than once (exception: regular, recurring asset transfers over multiple periods).

  • The capitalization date of the asset bought must be the same as the date of the asset transfer.

However, these two checks are technically incompatible with the internal data structure for validation tasks, which are based on consolidation units. Therefore, these last two checks are not supported.

Investment Data from the Totals Database

If you select the Investments checkbox, the system validates the investment data even if this data is to be read from the totals database. In this case, the system checks the consistency of the investment data for the following activities:

  • Partial transfer

  • Total transfer

  • Investment amortization

  • Investment writeup

Activities

A. Customizing: Defining a Task

  • Define the validation task as described in section Execution of Validations.

  • In the Additional Financial Data group box, select the additional financial data to be validated and, for each selection, specify whether the system is to issue an error message or a warning if an error occurs.

B. Execute the Validation Task

Execute the validation task in the consolidation monitor.

  1. Place the cursor on the intersection between the validation task and the consolidation unit or group.

  2. Choose Update Run.