Preparation for Consolidation Group Change
If, during a fiscal year, a consolidation unit is acquired by a consolidation group (acquisition), divested from a consolidation group (divestiture), or changes its accounting technique (method change), the following data must be adjusted:
Reported financial data
Standardized financial data
Consolidated data with posting level 20
Consolidated data with posting level 30
These adjustments are necessary to ensure that reporting for the consolidation group in which the above changes took place provides accurate figures. The same applies to reporting for higher-level consolidation groups.
Features
Overview of Adjustment Entries
An acquisition to a consolidation group can result in a first consolidation, a divestiture in a total divestiture.
Preparatory entries for a consolidation group change ensure that a first consolidation or a total divestiture accurately portrays reported financial data, standardized financial data, and two-sided eliminations.
The system makes the following adjustment entries in preparation for an acquisition, divestiture, or change of accounting technique:
Balance Sheet Items w/o Breakdown by Transaction Type | Balance Sheet Items with Breakdown by Transaction Type | For the following items:
| |
|---|---|---|---|
Acquisition | Correct book value of balance sheet items are added to consolidated financial statements | Correct book value of balance sheet items are added to consolidated financial statements; use of specific transaction types for acquisitions to consolidation group | No adjustments are necessary. Consolidated financial statements do not show the values of items in the periods in which there was no consolidation unit ownership. |
Divestiture | Book values of balance sheet items are cleared from consolidated financial statements | Book values of balance sheet items are cleared from consolidated financial statements; use of specific transaction types for divestitures from consolidation group | |
Change of Accounting Technique |
| ||
The system uses special logic for the treatment of retained earnings since it treats balance sheet items differently than items with item types Income Statement
and Statistical: Flow
(exception: with the enhanced posting logic for the consolidation group change with posting to the income statement).
The consolidation of investments postings enhance the preparation postings for consolidation group changes to ensure that reporting shows accurate figures.
Posting Levels
There are special posting levels for the adjustment entries.
The following table shows the posting levels in which entries were originally made, and the posting levels for the associated adjustment entries:
Original Posting Level | Posting Level for Adjustment Entries for Consolidation Group Changes | ||
|---|---|---|---|
00 | Reported financial data | 02 | Reported financial data: Consolidation group changes |
01 | Adjustments to reported financial data | ||
10 | Standardizing entries | 12 | Standardizing entries: Consolidation group changes |
20 | Two-sided elimination entries | 22 | Two-sided elimination entries: Consolidation group changes |
30 | Consolidation group-dependent entries | 32 | Consolidation-group-dependent entries: Consolidation-group-dependent changes (with the exception of consolidation of investments) |
The data records that are posted with the posting levels 02, 12, 22, and 32 are dependent on the consolidation group. They are valid in the consolidation group for which they were posted and for all consolidation groups that contain this consolidation group. (This is the same logic that is used for postings with posting level 30; that is, the system posts delta documents for consolidation groups at higher hierarchy levels.)
For posting level 22, both the consolidation unit and the partner unit must belong to the consolidation group.
Period Selection
Reporting only selects data for the periods ranging from first consolidation to divestiture accounting (final divestiture). The selection observes the indicators First Consolidation at End of Period
and Divestiture Accounting at Beginning of Period
. Data is selected only for the periods in which the reporting is started.
Document Types
For posting levels 02, 12, and 22, you can select preparation for acquisition, preparation for divestiture, as well as preparation for a gain or loss of control all in the same document type or in different document types. For posting level 32, you can select preparation for acquisition and preparation for divestiture as well as preparation for loss of control in the same document type or in different document types. There is therefore a maximum of 15 document types.
The document types can post in the following currencies:
Document types for posting levels 02 and 12 post in local currency, transaction currency, and group currency.
The document type for posting level 22 posts in transaction currency and group currency.
The document type for posting level 32 posts in transaction currency and group currency.
The document types for the preparation for consolidation group changes do not support posting of deferred taxes or automatic document inversion.
The document types for posting levels 02, 12, and 22 do not support clearing items. In document types for posting level 32, you have to specify a clearing item for offsetting entries. The system posts these offsetting entries to the consolidation unit that you specify in the Assigned End Node
field in the Customizing settings for the consolidation group.
Tasks
By assigning one or more document types to tasks, you can define tasks that process only acquisitions, only divestitures, only gain of control or loss of control, or all of these at once.
A task can post simultaneously to posting levels 02 and 12 or it can post only to posting level 22 or only to posting level 32. However, it is not possible to combine these groups of posting levels (that is, you cannot post to 02/12 and also to 22 or 32).
This means that you must define at least three tasks:
Task 1: With document types for posting levels 02 and 12
Task 2: With document type for posting level 22
Task 3: With document type for posting level 32
You can create a maximum of 15 tasks – one task for each document type.
Task Sequence and Dependency on Other Tasks
Currency translation must be performed before a preparation for a consolidation group change.
Data records for preparatory postings for consolidation group changes are neither translated nor carried forward (exception: data records created with posting level 32 are always carried forward).
Postings for consolidation of investments (first consolidation and total divestiture) and preparatory postings for consolidation group changes supplement each other.