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Figure 71: Simultaneous Consolidation

Advantages of Simultaneous Consolidation

• Detailsofalltheunitsareavailableforanalyzingtheoverallconsolidation

group.

• Thesimultaneousconsolidationprocessismorestraightforwardthanstep

consolidation.

Disadvantagesof Simultaneous Consolidation

Lackofclaritywhengroupsaretoolarge(toomuchdetail).

• Parallelsub-consolidationgroupsarepossibleforreportingpurposes, but

thisgenerallyposestheriskofbeinginconsistentwiththeoverallgroup.

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Figure 72: Step Consolidation

Advantages of Step Consolidation

Improved clarity when groups are very large

Disadvantagesof Step Consolidation

Consolidationunitsofdifferentsub-groupsdonotsharecommondetails

• When network-like investment structures are involved, disclosures and

computationsaremuchmorecomplexthaninsimultaneousconsolidations.

For example, the changeof methodsin thehierarchy or re-interpretation

of activities.

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Figure 73: Stepwise Simultaneous Consolidation

Stepwisesimultaneousconsolidationunitestheadvantagesofsimultaneousand

step consolidation:

• Details of each consolidation unit

• Details at each level of consolidation

SAPConsolidationsupportsstepwisesimultaneousconsolidation.

Customizing Method Assignment

CustomizingSAP’sConsolidationofInvestments:

Explain the 3-level customizing shown in the graphic. Emphasize that the

configurationoftheglobalsettingsandthesettingsinthedefinitionaredependent

on other system utilization decisions.

C/IUtilization/GlobalSettings/ConsolidationofInvestmentsMethod:

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Thefirstgraphicillustratestherelationshipbetweendefinitionsforutilizationof

consolidation of investmentsandtheir effects.

• For example, themethoddefinition includesacheck of theconsolidation

methods allowed in the utilization.

• The utilization determines whether an equity aging report should be

generatedornot. Ifso,therequiredactivitytypesaredefinedintheglobal

settings. Ifnoequityagingreportisrequired,thefieldsintheglobalsettings

do not even appear on the screen.

• In consolidation of investments as of 4.6A, you can eliminate hidden

reserves. Inthe subsequent Customizing of consolidationof investments

you can make global or method-specific entries for the elimination and

amortization of hidden reserves.

• You also determine how goodwill, negative goodwill, and negative

stockholders’ equity will be handled. At this point, you also determine

whetherthistreatmentshouldbethesameeverywhereinthesystem(inthis

case,youwillmaintainthedetailsintheglobalsettings). Itisalsopossible,

however, to define the expressions for each method. This makes sense

for the“Goodwill”financial statement items, forexample, sincedifferent

Goodwillfinancialstatementitemsareusuallydefinedforpurchasemethod

or equity consolidation.

Forexample,youcandefineaglobaltreatmentfornegativeequity,inwhich

caseadditionalexpressionsareonlypossibleintheglobalsettings,andnotin

themethoddefinitions. Ifyouwantamethod-specifictreatmentofgoodwill,

youcanmaintainthefinancialstatementitemsonlyinthemethod,andnotin

theglobalsettings. Thescreenschangeaccordingly.

• The treatment of fair value adjustments/hidden contingencies is planned

for a release after 4.5.

The Global Settings folio liststhoseparameters that areonlymaintained here

withadarkbackground. Thesettingswithalightbackground(markedwith(*)for

theprintouts)arethosethatdependonthedecisionsforutilizationofconsolidation

ofinvestments. Ifequitywasnotselectedthere, forexample, thennofieldsare

displayedformaintainingtheequitysubsequentconsolidationdata. Thefinancial

statementitemsforgoodwill(andforfairvalueadjustmentsinarelease>4.5A)

canonlybemaintainedherewhenglobalutilizationhasbeendefined.

TheConsolidationofInvestmentsMethodclearlydefines(darkbackground)

howtheacquisitionsshouldbecalculated–thatis,withdirectsharesorwiththe

groupshare. ThislargelycorrespondstoconsolidationbyGCC(groupshare)or

IAS/US-GAAP (direct shares).

The parameters with a light background, marked with (*), in contrast, are

dependent on the previous customizing settings, and only appear when a

method-specific treatment was selected.

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The notes for the financial statement items refer to the statistical financial

statement item “Positive goodwill”, which is required for changes in indirect

investments.

Example:

A holds 80% of B, B holds 75% of C.

BinvestmentinC100,Cequity100. AccordingtoUS-GAAP,goodwillexistsin

theamountof25, andwillbewrittenoff over5years.

IfAnowacquiresafurther10%of B(=anchangeinindirect investmentfrom

above),thenB’sgoodwillhastobecorrectedintheamount ofthedepreciation

that was already posted. This is done using financial statement item 933100

Positive goodwill, statistical.

MethodAssignment forSimultaneousConsolidation/MethodAssignment

for Step Consolidation

Explain the illustrated inheritance logic.

Thedecisivefactorinsimultaneousconsolidationisthedownwardinheritance. In

contrast,upwardinheritancecanalsobeusedinstepconsolidation.

Hint: Point out that consolidation at cost and pooling of interest have

not been implemented yet.

AdditionaldocumentationisavailableasanSAPKnowledgeProduct: A

ConsolidationofInvestmentsCDthatwasdevelopedtogetherwithProf.

Dr. KütingoftheUniversityofSaarbrücken. ThisCD(materialnumberD

=50030381/E=50032811)containsbothbusinessbackgroundinformation

andmodelingintheSAPsystem. TheCDisavailablefreeofcharge.

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Figure74: Customizing SAP’sConsolidation ofInvestments

Whenyouimplementthesoftware, youhavethreeoptions:

• YoucanusetheC/Imethods, asdeliveredbySAP.

• YoucanmodifytheC/Imethodstomeetyourrequirements. Forexample,

specifythedifferentFS itemsor lifeof goodwill.

• You can define the new C/I methods.

You go through several steps to choose the functionality you need and to

customizethesettings. Thisensuresthatfunctionsthatarenotrequired,suchas

noproportionalconsolidation,canberecognizedataveryhighlevel.

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Figure 75: Consolidation of Investments Utilization

Selectionofaccountingtechniquestobeused. Accordingtothisselection,acheck

is made for the method definition to see whether this accounting technique is

eligible.

Whenequityagingischosen,therelatedglobalsettings,suchasnetdisplayand

subitems, are made.

If you determine that retained earningsappropriations are to be automatically

posted,theassociatedselecteditemsinCustomizingmustbedefined. Ifyoudo

notselectthisflag, anyexistingsettingsareignored.

You choose which the methods, such as amortization and direct elimination,

whicharevalidfortreatinggoodwillandnegativegoodwill. Youalsodetermine

how the related settings, such as goodwill items, are to be defined, whether

globally, per method, or by exceptions.

Youdecidewhethertopermitnegativestockholders’equityfortheequitymethod,

thus allowing for a negative investment book value. If the purchase method

isused, youdeterminewhether tobypass thecalculationofminorityinterest if

stockholders’ equity is negative.

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Figure 76: Global Settings

Theinvestmentdataisobtainedfromtheadditionalfinancialdata. Theequitydata

is obtained from the totals database and/or the additional financial data. You

determinewhatkindofdata(calculationbase)isprocessedbytheconsolidation

ofinvestments,whetherreportedfinancialdataorstandardizedfinancialdata. If

the equity method isselected in systemutilization, you determine from where

therelateddataisobtained,whetherfromthereportedequitydataoradditional

financial data.

You define how to treat direct or indirect partial divestitures with regard to

revenuesand expenses. You also determine how the document typesareto be

assigned. Thiscanbethroughtasksortheactivities/accountingtechnique.

If C/I utilization isset to "“global”, youdefine the properties of the following

fields: goodwill amortization and life, new goodwill, threshold value, equity

aging,andnegativestockholders’equity. Ifthetreatmentis“global”,ontheFS

item detail screen, you define the chart of accounts-based settings for posting

goodwill or negative goodwill.

Whenequityagingischosen,youdefineintheglobalsettingsifyouwantnetor

grossdisplayofequityaging. Inaseparatestep, youmaintainthesubitemsfor

the activities:

• Net display: Subitems for the equity / subitems for minority interest in

investments if you use one or more methods that calculate acquisitions

using group shares.

• Grossdisplay: Definethesubitemsforeachactivityforthegroupandthe

subitems for minority interest.

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Figure 77: Consolidation of Investments Method

Youdefineoneconsolidationofinvestmentsmethodfor eachvalidaccounting

techniquecheckedagainst theC/I utilizationsettings.

You choose between calculating additions using the direct share or the group

share,whichmeansaccordingtoIASandUSGAAP,orlocalGAAPs).

Youdefinethetreatmentof goodwill/negativegoodwill. Foreachmethod, you

choose either amortization, direct elimination,or periodicreduction. Youalso

define the life of goodwill amortization, the date of new goodwill, and the

threshold value.

If you click the “FS items” button, it takes you to the chart of accounts-based

settingsfor posting goodwill/negativegoodwill. Inrarecases, thesevaluesare

alreadydefinedbytheglobalsettings. Hereyoucanalsodefineastat. FSitem

forgoodwill,suchas933100Stat: PositiveGoodwill,whichrequiresanaccount

assignment category with a partner. This item is used for changes in indirect

investments.

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Figure 78: Method Assignment forSimultaneous Cons.

Aconsolidationofinvestments(C/I)methodisassignedtoeveryconsolidation

unitwithineachconsolidationgroupbythetimeperiodandtheversion.

The method assignment uses an “effective period” approach, which voids the

needtore-enterrepetitivedefinitionsforeachsubsequentperiod,aslongasthe

method remains consistent.

You can make the assignments easier by assigning one method to the overall

consolidationgroupandmakingexceptionsforindividualunits.

A feature is planned that will automatically propose the C/I methods based

on the investment structure. The feature will require certain rules, which will

be predefined in the SAP system or made available through a user exit and a

customer’s program.

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Figure 79: Method Assignment forStep Consolidation

Inconsolidationgroupsthat consistof multiplelevels, themethodsassignedat

lowerlevelsareusedasdefaultsfortheupperlevels(upwardinheritance).

The SAP Consolidation knowsif there are anylower-level consolidation units

thatbelongtomultiplesubgroupsandpromptsyouto makeadditional method

assignments for these units.

Demonstration: Customizing Method Assignment

Purpose

Todemonstratetheutilizationofconsolidationofinvstmentsandglobalsettings

System Data

System:

Client:

UserID:

Password:

Setupinstructions:

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1. Demonstrate the steps utilization of consolidation of investments, global

settings, and method definition in the IMG. Explain the changes to

the screens that result from settings in determining the utilization of

consolidation of investments, for example:

• Equitynotallowedintheutilizationofconsolidationofinvestments

Theequityoriginwindowwillnotappearintheglobalsettings, and

noequitymethodcanbecreatedintheconsolidationofinvestments

methods; or:

• ThesystemutilizationdefinesamortizationofGWanddirectclearing

foreachmethodNomaintenancepossibleintheglobalsettings,only

inthemethoddefinitions. TheonlypossibleGWprocessingtypesare

amortizationanddirectclearing,andoneofthemmustbeselected.

Backgroundinformation: If,duringthediscussionoftheglobalsettings,

someonementionsthat anadditionaloption isrequiredtoreadtheequity

– namely reading from the additional financial data (for financial item

statementswithhistorical currencytranslation)andthetotalsdatabase(to

takevaluechangescausedbystandardizingentriesandcurrencytranslation

differencesintoaccount) –thenpleasereadnotenumber 108715 EC-CS:

ChangesininvesteeequityfromadditionalandtotalsDB.

This functionality was imported into the training system as a Support

Package.

Demonstrate the evaluation options

• Info system– Control data(consolidationof investments methods).

Expand only the first two items (utilization and global settings);

the other topics will be dealt with later. Point out that this medium

allowstheprintoutofcomprehensivedocumentationonallthesettings

involved in consolidation of investments.

• Reportdata(infosystem–reportdata–investments,equity)

• Masterdata(consolidationgroups–displayhierarchy)

• Info system –report data – group shares

Youcanpresentanoverviewofthedirectandgroupsharesinamulti-level

group.

Background information: This report largely corresponds to the old

sharereportinFI-LC.IncontrasttoFI-LC,however, thisreportisstarted

automaticallybytheconsolidationofinvestmentswhenever itisrequired

(groupsharesintheGCC).TheSAPConsolidationreportintheinfosystem

onlyhastobestartedwheninformationonthegroupshares(groupshare,

votinggroupshare,non-votinggroupshare,groupshareannualnetincome,

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directgroupshare)requiresanalysis. Inthiscase,thegroupshareswould

bepostedtothestatisticalfinancialstatementitemsdefinedundertheother

selected financial statement items.

Automatic Activities

Example Data

Thisfolioshowstheexampleusedinthecourse, inthetrainingsystemandthe

following graphics.

CalculationofFirstConsolidation/FirstConsolidation(A→B80%)

First explain the economic background and the calculation scheme for first

consolidation.

The next graphic illustrates the situation in a T account. It corresponds to the

postingrecord in theSAP system. Thestatistical financial statement itemsare

usedtocleartheamountthatwaseliminatedagainsttheparent’sinvestment.

Inthetrainingsystem, theequityvalueconsistsofonlyonefinancialstatement

item, thecommonstock. For demonstration purposes, thegraphicshowsthree

equityitemstoemphasizethepostingoptionsforminorityinterestsandstatistical

equity items.

The statistical offsetting itemsaremaintained in the IMGunder other selected

financialstatementitems,whichismentionedlaterunderthetitleOtherSelected

Financial Statement Items (1).

Thesituationismodeledinthesysteminhierarchicalformandappearsasfollows:

Resultsof the Consolidation of Investments

Thisfolioshowshowthesituation isrepresentedinthesystem. Ahierarchical

listingoftherelevantdatawithsplittingintogroupandminorityinterests,down

to the representation of the posting document. The activities can be selected

specifically(forexample,onlyfirstconsolidation),eitherbyselectingtheactivity

duringstartup or by filteringin thefinished list.

Automatic Consolidation Activities

The next graphic shows the consolidation activities that are supported

automatically. This course is not able to cover all of these activities; they are

dealt within detail in theseparateConsolidationof Investmentscourse. Itis

followed by examples for first and subsequent consolidation, depreciation of

goodwill, and step acquisition.

To post these activities automatically, data must be entered for the individual

activities:

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Entry of C/I Activities

The activities can be entered manually, either individually or in combination

(dependingontheactivitythatyouwanttoenter)orfromthebalancesheet/totals

database. Defaultentryvaluescanbedefinedforeachactivity.

Figure 80: Example Data

The consolidation group G1 consists of the consolidation unit ’A’ and the

consolidation group “G2”.

“G2”consistsoftheconsolidationunits“B”,“C”,“D”,and“E”.

“A”istheparentunitintheconsolidationgroup“G1”. “B”istheparentunitin

the consolidation group “G2”.

Theconsolidationunit“A”isfedwithmanualdataentry. Conversely,theother

unitscollecttheir datathroughtheflexibleupload.

Theconsolidationunit“D”usesaforeigncurrency. ItslocalcurrencyisUNI.All

theother unitssharethesamedomesticcurrency, USD.

Theconsolidationunit “E” isconsolidatedusingtheequity method. Theother

unitsare consolidatedusingthepurchase method.

“B”acquiresanother20%ownershipin“C”(stepacquisition).

Atalaterdate,“B”divestsa30%interestin“C”(partialdivestiture).

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Figure 81: Calculation of First Consolidation

Consolidation under thefollowing assumptions:

• Investment book value Parent 1,000

• Investment percent Parent 80 %

• Equity Subsidiary 1,000

• Hidden reserves Subsidiary None

Calculation

• Differenceamount 1,000- 80% *1,000 =200

• Grouphiddenreserves(Groupshare*hiddenreserves)

• Goodwill 200 - 0 = 200

• Minority interest 20 % * 1,000 = 200

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Figure 82: First Consolidation (A → B: 80%)

Theinvestmentsandthegroupshareinthesubsidiaryequityareeliminated. The

minorityshareistransferredtotheminorityinterest. Anyresultingdifferenceis

either positive or negative goodwill.

Theentry“I”showstheeliminationoftheinvestmentoftheparent(“A”)andthe

equityofthesubsidiary(B).Theremainingequityofthesubsidiaryisreclassified

to the minority interest. The excess investment over equity is disclosed as

goodwill at the parent.

TheGoodwillitemneedstobespecifiedforautomaticpostings. Thisisnormally

doneintheMethodDefinition. Theitemmusthaveabreakdowncategorywith

transaction typesif youwantto report asset history.

To account for any divestitures or partial divestitures at a later date, a form of

subsidiaryaccountingisdoneusingstatisticalitems. Theamountcorrespondingto

theequity,whichwaseliminatedagainsttheinvestmentoftheparent,ispostedto

theseitems. Inaddition,thepartnerunitissettotheparentunit.

For a simpler view of the posting proposals, there is an option to turn off the

displayofstatisticalitems. TheoptionisfoundinIMG,intheGlobalSettings,

“Display statistical items”.

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Figure 83: Results oftheConsolidation ofInvestments

Consolidation of investments produces:

• Acomprehensiveaudit trailinahierarchical form

• Automatic posting of documents

Thehierarchycanbeexpandedandcompressedatwill.

The analysis criteria are:

• Consolidation groups

• Consolidation unit

• Activity,suchasfirstconsolidation“firstconsolidation”

• FS items, such as “investment”

• Document

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Figure 84: Automatic Consolidation Activities

Whenyou enter reportedinvestmentand equity data, thesystemautomatically

assigns a sequential activity number that uniquely identifies the activity. The

activitynumberisalsorecordedinthepostingdocument.

You do not enter the activities, increase/reduction in indirect investment and

indirecttransfer. Thesearederivedfromotheractivities. Example:

AnincreaseinindirectinvestmentinacompanyDcontrolledbyasubsidiaryis

achieved whentheparent company Aacquiresmore sharesin subsidiaryB. B

holdssharesinD.ThestepacquisitionbyAinBresultsinachangeintheindirect

investment in D.

Anindirecttransferoccursinthefollowingsituation: “A”ownsstockin“B”and

“C”,and“B”ownsstockin“D”,whichinturnownsstockin“E”(A-B-D-E).“B”

decidestosell“D”to“C”. Becausethistransactiontakesplacewithinthegroup,

theactivitytotaltransferisentered. Theindirecttransfertakesplacefor“E”.

The activity number of the derived activity always coincideswith the activity

number of the triggering activity.

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Figure 85: Entry of C/I Activities

TherearetwowaystoconveyC/Iactivitiestothesystem:

• Fully automatic derivation of the equity from the balance sheet of the

respective units

• Manual entry of activities

SAP Consolidation supportsseveral waysof viewing theactivitiesof a period

or a year:

• Changesininvestments,sortedbythereporting“upperunits”: Depending

ontheactivity,youeitheronlyenterthechangesininvestmentdata(separate

data entry), or simultaneously enter the changes in investment data as

well as the changes in equity data (combined data entry). Separate data

entryinvolvestheactivitiesstepacquisition,partialtransfer,totaltransfer,

partialdivestiture,totaldivestiture,andinvestmentamortization/write-up.

Combined data entry involves first consolidation, increase/reduction in

capitalization, liquidation, andhorizontal/verticalbusinesscombinations.

Youcandefinedefaultvaluestomakethemanualentrieseasy.

• Changes in equity, sorted by the consolidated units: Depending on the

activity, you either only enter the changes in equity data, such as for

subsequentconsolidationordividenddistribution,orenterbothchangesin

investments and equity data.

• Overallviewofallactivitiesofaconsolidationunit: Thisalsoshowsthe

activitiesthatwereonlyenteredforotherunits,suchasstepacquisitions.

• Youcanuseaflexibleuploadtotransferinvestmentorequitychangedata

separately for each unit

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Figure 86: Automatic Activity Recognition

Theconsolidationofinvestments(C/I)programcanaccessthechangesinequity

datarelevantforconsolidationprocessingdirectlyinthetotalsdatabase.

Notice that you always need to enter the changes in investments as additional

financial data.

Youneedtospecifyreporteditemstoenablethesystemtolocatethedataitrequires

toprocessconsolidationofinvestments(C/I)activitiesinthetotalsdatabase.

Foreachactivity, youspecifytheitems andsubitemsusedtoentertherelevant

datainthetotalsdatabase. Tosimplifythisprocedure, youcandefineandthen

specify sets of items.

Youonlyneedtospecifyreporteditemsifyouindicateintheglobalsettingsthat

youwantdataforC/Iprocessingtobereadfromthetotalsdatabaseorthereported

equitydata,insteadofbeingenteredasadditionalfinancialdata.

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Exercise 12: Consolidation of Investments

249

– Methods

Exercise Duration: 50 Minutes

Exercise Objectives

After completingthisexercise, youwillbeableto:

• Definea consolidationof investmentsmethod

• Make assignments using inheritance

Business Example

Interunit elimination is one of the consolidation tasks that you run after you

havetranslatedlocalcurrencydataandpostedstandardizingentriestoproduce

acorporatevaluationof data. Youdecidetorun alltheeliminationtasksinthe

consolidationmonitorsothatyoucanbenefitfromitsvisualstatusdisplay.

Task:

Defining a method:

1. Makethefollowingsettingstousetheconsolidationofinvestments:

Goodwill/negativegoodwillisamortizedbyspecificmethods

Appropriationsofretainedearningsarepostedautomatically

Under global settings determine that:

Standardizedfinancialdataisusedasthecalculationbase.

Thedocument typesareassignedthroughtasks.

2. Define a consolidation of investments method called PURCH for the

accountingtechniquepurchasemethodusingthefollowingproperties:

Minorityinterestiscalculatedusingdirectshares(USGAAP).

Positiveandnegativegoodwillisamortizedoverfiveyears,

no threshold value is used, and

amortizationbeginsatthebeginningofeachperiod

(Enter: 2)

Itemforpositivegoodwill(APC/VAitem) 181100

Choosetheappropriatesubitems(120, 220, 275).

Item for amortizationand write-ups: 311810

Continued on next page

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Choosethefunctionalareaadministration(0003).

Statisticalitemfortheamortizationofpositivegoodwill: 933100

Statisticalitemforcurrencytranslationdifferencesgoodwill: 940000

Makethesameentriesfortheamortizationofnegativegoodwill,exceptfor

statist. itemnegative,whichisgoodwill, 933200.

3. Assigning the method:

Go to Hierarchy Maintenanceand assign themethod, PURCH, to all the

consolidationunits, usingtheinheritancetechnique.

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AC660 Lesson: Consolidation of Investment

Solution 12: Consolidation of Investments

– Methods

Task:

Defining a method:

1. Makethefollowingsettingstousetheconsolidationofinvestments:

Goodwill/negativegoodwillisamortizedbyspecificmethods

Appropriationsofretainedearningsarepostedautomatically

Under global settings determine that:

Standardizedfinancialdataisusedasthecalculationbase.

Thedocument typesareassignedthroughtasks.

a) CompletingtheUtilizationofConsolidationofInvestments

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidationofinvestments→DeterminesystemutilizationforC/I

Specifytheaccountingtechniquespurchasemethodandequitymethod.

UnderGlobalSettings,selectAppropriationofretainedearnings.

Specify that the settings concerning the amortization of goodwill

andnegativegoodwillaredependentonthemethodused; dothisby

selectingtheappropriateindicatorinthepermethodcolumnforboth

amortizationofgoodwillandnegativegoodwill.

Save your entries.

Editthefollowingglobalsettings: Saveyourentrieswhenfinished.

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidationofinvestments→MakeGlobalSettings

In the Calculation base section choose standardized financial data.

UnderDocumenttypesassignedtoselecttheoptiontasks.

2. Define a consolidation of investments method called PURCH for the

accountingtechniquepurchasemethodusingthefollowingproperties:

Minorityinterestiscalculatedusingdirectshares(USGAAP).

Positiveandnegativegoodwillisamortizedoverfiveyears,

no threshold value is used, and

Continued on next page

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amortizationbeginsatthebeginningofeachperiod

(Enter: 2)

Itemforpositivegoodwill(APC/VAitem)181100

Choosetheappropriatesubitems(120, 220, 275).

Item for amortization and write-ups: 311810

Choosethefunctionalareaadministration(0003).

Statisticalitemfortheamortizationofpositivegoodwill: 933100

Statisticalitemforcurrencytranslationdifferencesgoodwill: 940000

Makethesameentriesfortheamortizationofnegativegoodwill,exceptfor

statist. itemnegative,whichisgoodwill, 933200.

a) Definingaconsolidationofinvestmentsmethod:

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidationofinvestments→Methods→Definemethods

SelectNewentriesandcreatethenewmethodPURCH.

• Accounting technique: PurchaseMethod

• Additions: calculateusing“directshares”

Hint: Thetreatmentofgoodwillalreadydisplaystheoption

Amortization(forpositiveandnegativegoodwill),asspecified

in C/I utilization.

Field/Data Type Value

Accountingtechnique PurchaseMethod

CalculateAcquitionsusing: calculateusing“directshares”

Press Enter.

Amortizationofgoodwilland

negativegoodwillsections: 5

Amortizablelife,numberofyears 2

Begin amortization

Caution: DonotselectThresholdvalue.

Continued on next page

316

Field/Data Type	Value
Accountingtechnique CalculateAcquitionsusing: Press Enter. Amortizationofgoodwilland negativegoodwillsections: Amortizablelife,numberofyears Begin amortization	PurchaseMethod calculateusing“directshares” 5 2

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AC660 Lesson: Consolidation of Investment

Notethatyoucanmaintainadditionalamortizationdataonly

after pressing Enter.

Save your entries.

Toenterthechartofaccounts-basedsettingsforthemethod,chooseFS

itemstotherightofthemethoddescription. SelectNewEntries. Enter

thefollowingFS itemsforBOTHtheAmortizationofgoodwilland

Amortization of Negative goodwill.

Field/Data Type Value

Acquisition Item 181100

Subitem 120

Accumulatedamortizationitem 181100

Subitem, amortization 220

Subitem, write-ups 275

AmortizationExp. item 311810

Subitem(Functionalarea) 0003(Management)

Writeup Item 311810

Subitem(Functionalarea) 0003(Management)

Stat. itempos. goodwill 933100

Stat. itemcurr. trans. diff. 940000

Stat. itemneg. goodwill 933200

Save your entries.

3. Assigning the method:

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317

Field/Data Type	Value
Acquisition Item Subitem Accumulatedamortizationitem Subitem, amortization Subitem, write-ups AmortizationExp. item Subitem(Functionalarea) Writeup Item Subitem(Functionalarea) Stat. itempos. goodwill Stat. itemcurr. trans. diff. Stat. itemneg. goodwill	181100 120 181100 220 275 311810 0003(Management) 311810 0003(Management) 933100 940000 933200

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Unit5: InterunitElimination&ConsolidationofInvestments AC660

Go to Hierarchy Maintenanceand assign themethod, PURCH, to all the

consolidationunits, usingtheinheritancetechnique.

a) Assigning the method:

AssignconsolidationmethodPURCHtoyourconsolidationunits:

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidationofinvestments→Methods→Assignmethodstothe

consolidationunits→Editmethodhierarchies→Choose

• Expandyourhierarchy,selectconsolidationgroupG1,andchoose

Change.

• In the detail screen, assign method PURCH to consolidation

group G1.

• ChooseDownwardinheritance. Saveyourentries.

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AC660 Lesson: Consolidation of Investment

Exercise 13: Consolidation of Investments

255

- Activities in the Consolidation of

Investments

Exercise Duration: 30 Minutes

Exercise Objectives

After completingthisexercise, youwillbeableto:

• Examine activities

• Make Customizing settings

• Post and analyze entries

Business Example

In the unit Data Collection you already entered additional financial data to

accommodate various activities.

Task:

First/Subsequent Consolidation

1. Examining the additional financial data:

Examinetheadditionalfinancialdatafortheactivityfirstconsolidation.

2. Defining a task:

Define a task called C/I, which will be used for all activities and all

accounting techniques.

Intheconsolidationmonitor,assignthetasktotaskgroupCONS.

AstheprecedingtasktotaskC/IspecifyDIVELIM,Elim. ofIUinvestment

income.

3. Defining the document type:

Define document type 51 with posting level 30 for the consolidation of

investments.

4. Assignment of document types:

Goto theC/Iglobal settings andfindout towhatthedocument typesare

assigned to. Then assign themaccordingly.

5. Assigningminorityinterestitemstotheequityitems:

Theminorityinterestitemsarepreassignedtomostoftheequityitems.

Continued on next page

319

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Unit5: InterunitElimination&ConsolidationofInvestments AC660

Findoutwhichequityitemsaremissingandassignminorityinterestitems

to these equity items.

Field/Data Type Value

250100CommonStock 240100MI-CommonStock

6. Assigning statistical equity items:

As part of the preparation for postings of subsequent partial or total

divestitures,statisticalequityitemsneedtobeassignedtoallequityitems.

DothisforthesameCommonstockFSitemthatwasaddedintheprevious

exercise.

Field/Data Type Value

250100CommonStock 950100Stat: CommonStock

7. DefinethemiscellaneousselecteditemsforC/I:

Field/Data Type Value

Annualnetincomepriortofirstconsolidation 251300

Retainearnings, Method change 251900

Clearing: consolidationofinvestments 251700

Subitems 140

Clearing, debits: 120

Equity - divestitures 370100

Clearing, credits: 370100

Acquisitions, equity

Transferstominorityinterestinannualnetincome

Deductions from minority interest in annual net

income

Annual net income 931100

Annualnetincome,offsettingitem 931200

Minorityinterestinannualnetincome 931300

MinorityinterestinANI,offsettingitem 931400

Adjusted annual net income 931500

Minorityinterestinadjustedannualnetincome 931600

Continued on next page

320

Field/Data Type	Value
250100CommonStock	240100MI-CommonStock

Field/Data Type	Value
250100CommonStock	950100Stat: CommonStock

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AC660 Lesson: Consolidation of Investment

Field/Data Type Value

Adjust ANI - goodwill 931700

Min.int. inadj. ANI goodwill 931800

Adjusted ANI - equity method 931900

Min.int. inadjANIequitymethod 931950

Overall offsetting item 939000

Hint: Do not specify any items for posting group shares,

divestitures,ornegativeinvestmentbookvalues.

8. Activating the display of statistical items:

Check and makesure that the display of statistical itemsin documents is

activated in the global system settings.

-Intheglobalsettings, youspecifiedthattheequitydataispartiallytaken

fromtheadditionalfinancialdataandpartiallyfromthetotalsdatabase. The

additionalfinancialdatahasalreadybeenmaintained.

- Reading the data from the totals database has the advantage of always

accessing current values.

9. Executing theconsolidation of investments:

Inordertodothis,youneedtospecifywhichitemsaretobereadfromthe

totals database.

You will find these transactions in the following section of the

Implementation Guide:

Consolidation Functions - Automatic Posting – Consolidation of

Investments – Activities – Reported Items for Automatic Activity

Recognition–SpecifyReportedItemsforEquity

Youwanttoreadvaluesfromthedatabaseforthefollowingactivities:

-Firstconsolidation: theitemforcarryingforwardbalances(alltransaction

types)

- Subsequent consolidation: annual net income and currency translation

differences (all transaction types)

-Distributionofdividends: thedistributionitem(alltransactiontypes)

Hint: Specify the set name, keeping the consolidation chart of

accountsand activitynumber in mind.

Continued on next page

321

Field/Data Type	Value
Adjust ANI - goodwill Min.int. inadj. ANI goodwill Adjusted ANI - equity method Min.int. inadjANIequitymethod Overall offsetting item	931700 931800 931900 931950 939000

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Unit5: InterunitElimination&ConsolidationofInvestments AC660

Field/Data Type Value

Activity 01, First

Consolidation

Set

e.g.: CSxy-zz

(xy=chart of accounts, zz=activity

number)

FS item 251100

Subitem set CS01-6000

Subitems(transactiontypes)

100 through 150

(forsubitem category 6)

Field/Data Type Value

Activity 02, Subsequent CSxy-02

Consolidation

RetainedEarningsitem

Set 251200

Currency translation differences 250900 to 250990

item

Activity 18, Distribution of CSxy-02

Dividends

Set 251600

FS item Ret. Earnings, distribution of

dividends

Youcanusethesamesubitem(transactiontype)setforallactivities.

Start task C/I for consolidation group G2 in test mode and analyze the

activities:

What is the amount of the differential from the first consolidation of

consolidation unit C?

WhatamountispostedtoCatitem950100“StatisticalCommonStock”?

Continued on next page

322

Field/Data Type	Value
Activity 01, First Consolidation Set FS item Subitem set Subitems(transactiontypes)	e.g.: CSxy-zz (xy=chart of accounts, zz=activity number) 251100 CS01-6000 100 through 150 (forsubitem category 6)

Field/Data Type	Value
Activity 02, Subsequent Consolidation RetainedEarningsitem Set Currency translation differences item Activity 18, Distribution of Dividends Set FS item	CSxy-02 251200 250900 to 250990 CSxy-02 251600 Ret. Earnings, distribution of dividends

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AC660 Lesson: Consolidation of Investment

WhatistheamountoftheamortizationofthegoodwillofBinC?

Whatamountsarepostedduringthesubsequent consolidationofCtothe

statistical items “Annual net income - total” and “Annual net income -

minority interest”?

Start task C/I for consolidation group G1 in test mode and analyze the

activities:

What is the amount of the differential from the first consolidation of

consolidationunitC?Comparethiswiththeresultforconsolidationgroup

G2. Whyisno documentposted withparent B?

HowdoestheamortizationofthegoodwillofBinCwithingroupG1differ

from that in group G2?

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Unit5: InterunitElimination&ConsolidationofInvestments AC660

Solution 13: Consolidation of Investments

- Activities in the Consolidation of

Investments

Task:

First/Subsequent Consolidation

1. Examining the additional financial data:

Examinetheadditionalfinancialdatafortheactivityfirstconsolidation.

a) ActivitiesintheConsolidationof Investments

Checkthefinancialdataforyourconsolidationgroup:

MenuPath: Accounting→EnterpriseControlling→Consolidation

→DataCollection→Additionalfinancialdata→Display

Call upthechangesininvestmentsand equity, anddisplay themby

activity.

2. Defining a task:

Define a task called C/I, which will be used for all activities and all

accounting techniques.

Intheconsolidationmonitor,assignthetasktotaskgroupCONS.

Continued on next page

324

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AC660 Lesson: Consolidation of Investment

AstheprecedingtasktotaskC/IspecifyDIVELIM,Elim. ofIUinvestment

income.

a) DefiningtaskC/IConsolidationofInvestments:

Menu Path: Tools → Accelerated SAP → Customizing →

ExecuteProject→SAPReferenceIMG→EnterpriseControlling→

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidation of investments→Definetasks

ChooseNewEntries. DefinetaskC/Iandtexts. Save.

SelecttaskC/Ianddouble-clickthedetailfolderAssignactivitiesand

Accounting technique. Select NewEntries.

Specify00for“allactivities”, and0for“allaccountingtechniques”.

Save.

Again,gototheconsolidationmonitorandassignthetaskC/Itotask

group CONS.

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→ConsolidationMonitor

→ Define task group

SelectCONSanddouble-clickAssigntaskstotaskgroupfolder. Select

New Entries and choose C/I and Save.

Select task C/I and double-click the detail folder Specify preceding

tasks. Select New Entries.

SpecifytaskDIVELIM(DividendElimination)astheprecedingtask.

Save.

3. Defining the document type:

Continued on next page

325

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Unit5: InterunitElimination&ConsolidationofInvestments AC660

Define document type 51 with posting level 30 for the consolidation of

investments.

a) Defining the document type:

Createdocumenttype51fortheconsolidationofinvestments.

MenuPath: Tools→AcceleratedSAP→Customizing→EditProject

→SAPReferenceIMG→EnterpriseControlling→Consolidation

→ConsolidationFunctions→AutomaticPosting→Consolidation

ofinvestments→DocumentTypes→DefineDocumentTypes

ChooseNewEntriesandEnterdocumenttype51withtext.

Field/Data Type Value

Posting level 30(consolidationentry)

Balance check 0(errorifbalancenot=0)

Use 6(consolidationofinvestments)

Manual posting do not select

Postingroupcurrency Select

Deferredincometaxes No calculation

Double-click Number

ranges/AutoReversalfolderon

leftandNewEntries.

Choose Define number range 30

thenInsert Interval

Number range 9999

EffectiveNumbersfrom/to 3000000000-3999999999

Saveandgo back.

Version 100

Number range 30

Automatic reversal do not select

Save.

4. Assignment of document types:

Continued on next page

326

Field/Data Type	Value
Posting level Balance check Use Manual posting Postingroupcurrency Deferredincometaxes Double-click Number ranges/AutoReversalfolderon leftandNewEntries. Choose Define number range thenInsert Interval Number range EffectiveNumbersfrom/to Saveandgo back. Version Number range Automatic reversal	30(consolidationentry) 0(errorifbalancenot=0) 6(consolidationofinvestments) do not select Select No calculation 30 9999 3000000000-3999999999 100 30 do not select

第 337 页 / 共 529 页

AC660 Lesson: Consolidation of Investment

Goto theC/Iglobal settings andfindout towhatthedocument typesare

assigned to. Then assign themaccordingly.

a) Assignment of document types:

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation→ConsolidationFunctions→AutomaticPosting→

Consolidationofinvestments→MakeGlobalSettings

Hereyouseethatthedocumenttypesareassignedtothetasks.

Assigndocumenttype51forperiod012oftheyear2002.

MenuPath: Tools→AcceleratedSAP→Customizing→Execute

Project → SAP Reference IMG → Enterprise Controlling →

Consolidation → Consolidation Functions → Automatic Posting

→ Consolidation of investments → Document Types → Assign

Document Types to Tasks

ChooseNewEntries. Task: C/I,FYEffect. currentyear,Per. 12,Doc

type 51. Save.

5. Assigningminorityinterestitemstotheequityitems:

Theminorityinterestitemsarepreassignedtomostoftheequityitems.

Findoutwhichequityitemsaremissingandassignminorityinterestitems

to these equity items.

Continued on next page

327