Requirements for Consolidation 

Use

The "requirements for consolidation" component assists you in preparing the for the legal consolidation of a corporate group as relates to fixed assets, using the data in asset accounting.

Features

For the purposes of consolidation or reporting, you can manage each depreciation area in the system in any desired currency. The exception is the master area (01). The master area always has to use the local currency of its company code.

The currency is a feature of the depreciation area at company code level (FI-AA Customizing: Foreign Currencies).

For depreciation areas managed in a foreign currency, all acquisition transactions are converted into the foreign currency at the exchange rate valid on the posting date. The system calculates depreciation and proportional value adjustments at asset retirement or transfer directly in the foreign currency.

Depreciation Areas for Consolidation

Generally you need a depreciation area in a foreign currency, when your company code is a foreign subsidiary that uses different rules for valuation than its parent company. Usually, you manage a separate corporate group ledger for the group consolidation in the general ledger. The values of the corporate group depreciation area should be posted to the corporate group ledger.

In this case, you must also manage a depreciation area in the local currency that is otherwise identical to the area managed in the foreign/group currency. You must define the foreign currency depreciation area so that it automatically adopts the posting values and valuation parameters from the corporate group area in local currency, making sure that these values cannot be changed. In addition, you need a depreciation area in foreign currency with the local rules for valuation. Overall, when your group has a different currency and uses different depreciation terms, you need four depreciation areas in order to ensure correct consolidation values. These depreciation areas should manage:

This is the only way to precisely distinguish between differences resulting from currency translation and differences due to different local valuation rules during the consolidation process.

For more information on consolidation in the R/3 System, see the documentation for the Consolidation (FI-LC) component, and the section on Parallel Currencies in the General Ledger.

Posting of the Corporate Group Area to the General Ledger

Posting depreciation from the group depreciation area in a foreign currency works the same as it does for of the book depreciation area. You can post periodically to the corporate group ledger using batch input (see Posting Depreciation).

You can also set up automatic posting of changes to the asset value to the corporate group ledger using batch input. Use the appropriate posting program (refer to Parallel Valuation). For these postings, the system uses the consolidation transaction type that corresponds to the transaction type that was originally used for these postings. The system determines the original transaction type from the FI document that was posted online to the local ledger. You specify the consolidation transaction types in the transaction types definitions in FI-AA Customizing. Using the consolidation transaction type is important for the group ledger. It ensures that the type of transaction is also available in the group ledger for reports, such as the asset history sheet.

The system requires the posting amount both in the foreign currency and in the local currency for the group consolidation. Therefore, the system posts the amount in group currency from the group depreciation area to the corporate group ledger, in addition to the amount in the local currency from the group depreciation area managed in local currency. Each document, therefore, contains the amount in group currency as well as in the local currency. The system posts the amount in group currency as the transaction currency for the document. It posts the local currency amount as the local currency for the document.

If you do not have special requirements in regard to consolidation, and only want to have reports in foreign currencies, you do not necessarily have to manage a separate depreciation area in the foreign currency. Instead, you can define currency translation methods in FI-AA Customizing, and enter them as start parameters for all your standard reports (see the Implementation Guide).

Different Rules for Capitalization in the Corporate Group

For more information, see Manual Handling of Delivery Costs

Handling of Intercompany Transfers

For more information, see Intercompany Transfers – Group Perspective and System Settings for Automatic Intercompany Asset Transfers