Simultaneous and Step Consolidation in the FI-LC S (SAP Library

Simultaneous and Step Consolidation in the FI-LC System: A Comparison

The following differences arise when you perform a consolidation according to the simultaneous consolidation process and the step consolidation process:

Level of information detail on the reports

Ability to execute individual consolidation steps.

Processing of minority interest

From a business point of view, there are two ways in which you can process minority interest:

Handle both minority interest shareholders and majority interest shareholders in the same way
Handle minority interest shareholders and majority interest shareholders using different methods

When dealing with multi-level groups with minority interests in investments on higher hierarchy levels, these differences will affect goodwill. The differences may also affect the amortization of hidden reserves (fair value adjustments). When shareholders are handled in the same way, the goodwill of a consolidated company not only contains the amount of the group share, but also includes the corresponding minority interest. If the shareholders are handled in different ways, the goodwill contains only the group share.

The following overview compares the characteristics of the above mentioned types of consolidation processes as of this release.

Simultaneous consolidation

Step consolidation

Standard reports

Detailed information on the relationships between the individual companies, since all the companies are consolidated in one activity.
For reporting purposes, you can also create and consolidate additional subgroups.

Summarized information only for each hierarchy level based on the transfer of the subgroup results from level to level. The differentiation between the subgroup values resulting from local valuation, corporate valuation, and corporate valuation + consolidation entries is lost when the data is transferred to the rollup company.
To keep the detailed information, it is recommended that you create an additional subgroup (= consolidated group) and perform a simultaneous consolidation.

Elimination if IC Payables/ Receivables

is fully executable;
Eliminating entries are carried out on a company pair level.

Eliminating entries are carried out on company pair level in the respective subgroup; if partner relationships cross subgroups, eliminating entries are then carried out in balanced form on the next hierarchy level. On higher levels, you cannot appropriate differences according to currency or other differences, because when the data is transferred to the rollup company, the transaction currency values are not included.
For balance reconciliation purposes (without posting), you may want define a subgroup (= consolidated group).

Elimination of IC profit and loss affecting current/ fixed assets

is fully executable;
Eliminating entries are carried out on a company pair level.

Eliminating entries are carried out on company pair level in the respective subgroup. The balanced financial reporting data necessary for the next highest hierarchy level in cross-subgroup partner relationships cannot be automatically generated.

Consolidation of investments

Eliminating entries are subgroup dependent on the basis of calculated corporate shares.

Eliminating entries are subgroup dependent on the basis of the corporate shares in the respective hierarchy level.

Disclosing goodwill

Goodwill is reported on in the amount of corporate share; goodwill apportioned to minority interest is not disclosed. System enhancements are being planned which will allow you to have the option of disclosing goodwill with minority interest when processing this type of consolidation.

Same method used for handling minority interest shareholders and the majority interest shareholders; the minority interest shareholder’s share is included in goodwill;
By modifying the procedure, you can report goodwill without the minority interest shares.

Minority interest on investment

are reported, since they are consolidated with the calculated corporate shares.

are not reported, since each hierarchy level is consolidated with the direct shares.

	Simultaneous consolidation	Step consolidation
Standard reports	Detailed information on the relationships between the individual companies, since all the companies are consolidated in one activity. For reporting purposes, you can also create and consolidate additional subgroups.	Summarized information only for each hierarchy level based on the transfer of the subgroup results from level to level. The differentiation between the subgroup values resulting from local valuation, corporate valuation, and corporate valuation + consolidation entries is lost when the data is transferred to the rollup company. To keep the detailed information, it is recommended that you create an additional subgroup (= consolidated group) and perform a simultaneous consolidation.
Elimination if IC Payables/ Receivables	is fully executable; Eliminating entries are carried out on a company pair level.	Eliminating entries are carried out on company pair level in the respective subgroup; if partner relationships cross subgroups, eliminating entries are then carried out in balanced form on the next hierarchy level. On higher levels, you cannot appropriate differences according to currency or other differences, because when the data is transferred to the rollup company, the transaction currency values are not included. For balance reconciliation purposes (without posting), you may want define a subgroup (= consolidated group).
Elimination of IC profit and loss affecting current/ fixed assets	is fully executable; Eliminating entries are carried out on a company pair level.	Eliminating entries are carried out on company pair level in the respective subgroup. The balanced financial reporting data necessary for the next highest hierarchy level in cross-subgroup partner relationships cannot be automatically generated.
Consolidation of investments	Eliminating entries are subgroup dependent on the basis of calculated corporate shares.	Eliminating entries are subgroup dependent on the basis of the corporate shares in the respective hierarchy level.
Disclosing goodwill	Goodwill is reported on in the amount of corporate share; goodwill apportioned to minority interest is not disclosed. System enhancements are being planned which will allow you to have the option of disclosing goodwill with minority interest when processing this type of consolidation.	Same method used for handling minority interest shareholders and the majority interest shareholders; the minority interest shareholder’s share is included in goodwill; By modifying the procedure, you can report goodwill without the minority interest shares.
Minority interest on investment	are reported, since they are consolidated with the calculated corporate shares.	are not reported, since each hierarchy level is consolidated with the direct shares.