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Former Member

Controlling area

Hi all,

How is the criteria for determination of controlling area ?

If my soft-ware company has two branches, one in US & one in Australia. Each one is a legal entity. They use same chart of account. Should I assign each of them to an own controlling area, or they are in the same controlling area ?

How the consolidation is made in this case ?

DO you have any FICO configuration documents ? It's very urgent to me.

Thanks in advance 😊

Best regards,

Sylvecast.

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  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Oct 18, 2007 at 01:24 AM

    As far as consolidation is concerned, having more than one controlling area introduces a level of complexity that sometimes is not easy to surmount. If a group has companies on different fiscal year variants, it automatically implies more than one controlling area. Having different operational charts of accounts does not, ipso facto, imply multiple controlling areas. In multiple controlling areas scenarios, management consolidation can get very tricky especially the hierarchies and cross controlling area postings.

    In your situation, it does not seem to me that having more than one controlling area is warranted at all.

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  • author's profile photo Former Member
    Former Member
    Posted on Oct 04, 2007 at 06:13 PM
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  • author's profile photo Former Member
    Former Member
    Posted on Oct 05, 2007 at 06:48 PM

    Dear Sylvecast

    This doc is more useful doc to cofiguration management

    link: http://www.sap-topjobs.com/SpecialPP/FIconfiguration.pdf

    Hope this helps you

    Prem

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  • author's profile photo Former Member
    Former Member
    Posted on Oct 05, 2007 at 06:55 PM

    You dont do consolidated financials through controlling. That is a separate module by itself. Controlling is for management reporting. You have multiple companies and still they have same controlling area provided they share the same chart of accounts. By this way they can have analyze the information relating to all the company codes under one controlling area. Common controlling area does not mean that u can have consolidated financeial through controlling.

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  • author's profile photo Former Member
    Former Member
    Posted on Oct 06, 2007 at 03:57 AM

    Hi Sylvecast T

    To define controlling area for 2 company codes you need to check these two conditions then only you can maintain one controlling area

    1) Same posting periods(you can have different special postiong periods)

    2) Same chart of accounts.

    A controlling area may be assigned one or more company codes.

    1:1 relationship

    You carry out cost accounting on a cross-company code basis.

    The internal and external accounting viewpoints are identical.

    1:n relationship

    In cross-company-code cost accounting, all data relevant to cost accounting appears in a common controlling area and is available for allocations and evaluations. The internal and external accounting goals diverge. This method is preferred when, for example, a corporation posesses several independent subsidiaries and undertakes centralized cost accounting for all.

    if you maintain different controlling area you cannot allocate costs . you have to maually pass JV for cross company code postings.

    Hope this clears your creteria

    Regards

    Ashish Bohara

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  • Posted on Oct 05, 2007 at 06:14 AM

    Hello,

    It depends on the business that you're doing, if you use just one or more controlling areas.

    Using one controlling area gives you more possibilities in generating 'consolidated' reports, but if both countries can be seen as separate business units serving another market, having one controlling area won't have any added value.

    Regards,

    Johan

    Message was edited by:

    Johan Hol

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    • Former Member

      Thanks Johan Hol for your reply.

      The business which my company works on is Software. It has two branches, both work on software outsourcing. If I assign each one to an Controlling area, could I do the consolidation & how ?

      Thanks & Best regards,

      Sylvecast

  • Posted on Oct 05, 2007 at 07:39 PM

    If both Australia and US legal company codes follow the same fiscal year and chart of accounts, it may go by a single controlling area. The controlling area is only for cost accounting purpose. A single controlling area may include more than one company code that uses different currencies.

    Please also note that it is not currently not possible to make CO allocations across controlling areas, which means that you have any common cost, this cannot be allocated, except via posting through separate FI journals.

    Consolidation is done by maintaining group chart of accounts and you may use the ECCS module or the new dimension SEM-BCS.

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