Cleanup in the Next Closing (SAP Library - European Monetary Union: Euro (CA-EUR))

Cleanup in the Next Closing

Use

After changeover and reconciliation in the Consolidation application, a completely accurate opening balance in euros is still not guaranteed. You need to cleanup errors, either manually or using "normal" automatic consolidation functions during the next closing.

Activities

If you want distinguish the cleanup after the changeover from normal consolidation activities, you can do one of the following:

Close your accounts in the next regular consolidation period in the changeover year, without entering any new data or changing any exchange rates.

The resulting financial statements document the final changeover results. You print out the audit trails and then close the period as normal.

In certain cases, you can run an extra intermediate closing (for example for period 01 of the changeover year) before your regular closing in order to generate reports showing adjustments.

To do this you need to change the input type for the subgroup or consolidation group, at least temporarily.

In both of these cases, you need to remove the activities Consolidation of investments and Elimination of intercompany (interunit) profit/loss in transferred assets from the Consolidation application, so that assets are not depreciated and goodwill and hidden reserves not amortized.

The problems resulting from the changeover and the procedures for cleaning these up are explained below. All functions that are mentioned should be started for the next (special or regular) closing, unless otherwise stated.

Reconciliation of financial data to take account of validations

No validations are run during euro reconciliation.

Solution:

Run validations during the next closing.

Reconciliation of financial data with adjustment entries (in local currency)

After the changeover to the euro and the reconciliations involved, differences can occur between financial data and corresponding adjustment entries.

Example:

1000 DEM (financial data) are converted to 500 euros.

1000- DEM (adjustment entry with additional account assignment) are converted to 499- euros.

Solution:

Manually post an adjustment entry or start the function (reclassification) that automatically generated the adjustment entry. Check in Customizing to see if you can rerun this function or whether 500- euros would be posted.

Reconciliation of financial data / adjustment entries to take account of rounding rules (local currency)

The rounding logic for currency translation requires that data that conforms to rounding rules in group currency also conforms in local currency. This may not be the case, however, after the euro changeover and resulting reconciliation.

Solution:

Run currency translation in test mode in order to initially identify errors.

Manually correct financial data.

Correct adjustments by posting new entries.

Reconciliation of financial data / adjustment entries to take account of rounding rules (group currency)

After the euro changeover, data does not necessarily comply with the rounding rules for currency translation.

Solution:

Run currency translation in update mode after reversing any local currency errors in the previous step.

Reconciliation of financial data / adjustment entries to take account of validations (group currency)

No validations are run during euro reconciliation.

Solution

Run validations during the next closing.

If your local currency values are correct, correct group currency values should have been calculated during currency translation. For domestic companies or consolidation units, or when currency translation key 6 (= no recalculation) is used, you should correct errors in group currency values as soon as they are found.

Reconciliation of financial data with entries for intercompany/interunit elimination or reclassification

Group valuation (standardized) payables or receivables that have been converted to the group currency euro must be fully eliminated.

This may not be possible if the data concerned was reported in various transaction currencies but only eliminated in group currency. Database records have different levels of detail and rounding differences can occur during the euro changeover.

Example:

Transaction	Group currency before changeover	Euro
Receivable (TC = SFR)	300	150
Receivable (TC = DEM)	200	99
Elimination (TC = DEM)	500-	250-
Difference resulting from conversion		1-

Similar problems can also occur for other item sets in the balance sheet against which elimination or reclassification entries are posted.

Solution:

Run the function during the next closing.

Rounding differences (in this case 1- euro) are then posted to the differential items specified in regular Consolidation Customizing. If you want to avoid this, you should run an extra intermediate closing with a different method definition (for example posting of differences without instead of with an effect on net income).

Reconciliation of financial data with consolidation of investments entries (FI-LC)

Past errors in data entry can lead to financial data and elimination entries with differing levels of detail in the totals database (for example omission of partner breakdown when posting against an investment item). Rounding differences then result between financial data in euros and elimination entries in euros.

Although these differences may be minor, they can affect critical items in the consolidated balance sheet.

Examples:

Shares in affiliated companies not equal to 0

Subscribed capital not equal to subscribed capital of the parent company

Solution:

Make adjustments manually.

Reconciliation of additional financial for elimination of intercompany profit/loss in inventory with elimination entries (FI-LC)

Additional financial data reporting inventory and the transfer of inventory to trading partners within the corporate group have a different level of detail from the corresponding elimination entries. This results in rounding differences.

For elimination entries without automatic reversal, the system may make slightly incorrect assumptions about elimination entries in the totals database in the previous year when eliminating in the current year. As a result, elimination records may still remain in the database, even if the inventory value for the current year is 0 (zero)

Solution:

Make adjustments manually.

Reconciliation of additional financial data for elimination of intercompany profit/loss in transferred assets with elimination entries (FI-LC)

Additional financial data reporting inventory and the transfer of assets to group-internal trading partners have a different level of detail from the corresponding elimination entries. This results in rounding differences.

Therefore not all elimination records for past periods are corrected if internally transferred assets are sold to external companies.

Information about depreciation of transferred assets in the changes in depreciation table (T875E) may deviate from accumulated depreciation in the totals database. This can result in future depreciation falling slightly short of or slightly exceeding the total amount.

Solution:

Make adjustments manually.

Reconciliation of additional financial data for goodwill/hidden reserves with consolidation entries.

Information in the additional financial data tables (T874 for FI-LC, TF635 for EC-CS) is posted cumulatively to the totals database (several goodwill or hidden reserves entries). This can result in small differences after the euro changeover.

Solution:

Make adjustments manually.

Reconciliation of the balance carryforward with other SAP systems or non-SAP systems

The euro changeover and resulting reconciliation can only produce carryforward balances that are reconciled with the individual financial statements for companies or consolidation units on the company code level of the same R/3 System.

Automatic reconciliation is not possible for other companies or consolidation units.

Solution:

Cumulative values only correspond after the next closing:

If data is reported cumulatively, correct values are automatically received.

If data is reported periodically, any differences between the carryforward balances in the sender system and carryforward balances in the SAP Consolidation application must be either corrected in the data reported for the first period after the changeover, or manually corrected after the transfer of original values to the Consolidation application.