Example: Execution of a Rounding

Purpose

Say, you want to check the following rules in the sequence listed for individual financial statement data that is translated from local currency to group currency.

Additions to amortization in the balance sheet + amortization expense in the income statement = 0
Total income statement = 0
Retained earnings on balance sheet = annual net income on income statement
Total balance sheet = 0

Prerequisites

The consolidation area contains:

the characteristics with the roles financial statement item and transaction type
the key figures local currency and group currency

Process Flow

To check the rules, you first create a method layout with steps. You then create a method that uses one step per rule.

A. Customizing

Define method layout

Create a method layout with the type rounding .
Define the method layout with steps.

Definition of the method layout

Define in ...	Selection 1	Selection 2	Rounding Difference
... the method
Visibility			¯
Detail Screen
Fast Entry			Item
... all steps
Visibility	¯	¯
Detail Screen	Item	Item
Fast Entry

Later, when defining the method in fast entry, this method layout definition requires that you specify the differential item for all steps, and the items for selections 1 and 2 (if applicable) in each single step.

Save your entries.

Define method

Create a method for the method layout.
In the detail screen Key Figures , select the local currency as the key figure to be checked and the group currency as the key figure to be rounded .
Continue the definition of the method as follows:

Fast Entry:

Create a step for each checking rule. For each of the two steps specify the differential accounting object to which the rounding difference is to be posted.

Step	Differential Accounting object
Additions to amortization in the balance sheet + amortization expense in the income statement = 0	an expense item,e.g. 311900 Amortization Expense
Total income statement = 0	an income statement item,e.g. 321300 Gain/Loss from Currency Translation
Retained earnings on balance sheet = annual net income on income statement	a balance sheet item,e.g. 251200 Retained Earnings, Current Year
Total balance sheet = 0	a balance sheet item,e.g. 250950 Currency Translation Differences, Rounding

Step 1 (additions to amortization in the balance sheet + amortization expense in the income statement = 0):

Rounding:

To check this rule, select rounding type 2 (selection 1 + selection 2 = 0).

For this step, select the transaction type as the additional characteristic.

Selection 1 represents the additions to amortization in the balance sheet. Choose the option Range and enter the range of balance sheet items 191100 to 191500 with transaction type 220.

Selection 2 represents the amortization expense item in the income statement. For characteristic FS item specify the range 311900 to 311950.

For the rounding difference, select the transaction type as the additional characteristic, but do not enter a value for the transaction type.

Step 2 (total income statement = 0):

Rounding:

For this rule you select rounding type 1 (selection 1 = 0).

As selection 1 you define a range over all income statement items – 300000 to 399999.

Step 3 (retained earnings on balance sheet = annual net income on income statement):

Rounding:

For this rule you select rounding type 3 (selection 1 = selection 2).

For selection 1 you define 251000 – Retained Earnings without selecting a transaction type.

For selection 2 you define 390000 – Annual Net Income.

For the rounding difference, you select the transaction type as the additional characteristic, and you enter the value 120.

Step 4 (total balance sheet = 0):

Rounding:

For this rule you select rounding type 1 (selection 1 = 0).

For selection 1, you choose the option Range for characteristic FS Item and insert all balance sheet items into the range – 100000 to 299999.

For the rounding difference, you select the transaction type as the additional characteristic, and you enter the value 120.

Note Note

To check if the total balance sheet equals zero, you also could have chosen rounding type 2 (selection 1 + selection 2 = 0). In that case, as selection 1 you would have had to define the total assets, and as selection 2 the total liabilities and equity.

End of the note.

Save your entries.

Assign method

Assign the rounding method to a task for currency translation.

C. Starting Rounding

Execute the rounding function by running the currency translation task in the consolidation monitor.

Result

The system executes the steps in the desired sequence. Once the rounding steps are carried out, the balance sheet and income statement are balanced again.

If you used key figures to be checked and errors occurred (that is, the rounding in the key figure was not fulfilled), the system displays the corresponding error messages.