Consolidation Group Change and Consolidation Activity

[Former Member]

Hi Experts,

I am new in SAP consolidation, I have a question regarding the difference between the function "consolidation group change" and "consolidation activity".

If I read in the sap library, these 2 functions are separated, but if I look at the content, I saw some similarity where the consolidation group change also included the investment activity like acquisition and divestiture.

Could anyone explain what are the difference between these 2 function?

When I was a user, if the group acquiered a new cons unit, I just add a new cons unit in the consolidation group hierarchy, assign consolidation method, add the additional financial data for the ownership percentage (activity = first consolidation), enter the reported financial data, run CI function and add one more column in my report painter.

When I read SAP library, I saw the "consolidation group change" function talking about the consolidation activity, now I wonder, what are the difference? What is the business scenario for using the "normal" CI activity and the "consolidation group change"? Please anyone advise. Thank you.

regards,

[Former Member]

Dear Sam Sam,

there are clear differences about those 2 steps.

For changing units in the course of the year.

please read the description for preparations for the cons group changes:

[http://help.sap.com/saphelp_sem60ep1/helpdata/en/62/f7e73ac6e7ec28e10000000a114084/frameset.htm|http://help.sap.com/saphelp_sem60ep1/helpdata/en/62/f7e73ac6e7ec28e10000000a114084/frameset.htm]

Three different steps are possible:

- Preparation for Acquisition

- Preparation for Divestiture

- Change of Accounting Technique (Method Change)

BR

[Former Member]

Hi Ben,

Thank you for your respond, but the link that you've provided was exactly the topics that I need more explanation.

I might have a wrong understanding on the "normal" C/I activity and consolidation group change. Could anyone give some light on this?

regards,

[Former Member]

Normal C/I is a regular acquisition or divestiture. Cons Group Change could be movement of a company from one consolidation group to another (i.e., parent A sells company 1 to parent B). Or you own a company 20% and purchase an additional 60% and must switch accounting technique from Equity to Purchase. BCS will need to book Cons Group Change entries to account for the acct technique change. (In the past, at 20%, you would only book equity pickup, or equitization entries, to the parent as PL30 adjustments in the CoI. Now you must bring in the complete balances of the company due to purchase method of consolidation. BCS books consolidation-group specific adjustments to do this.)

Example....

"Normal C/I activity"

New company A needs be consolidated in Cons Group 1 starting in 03/2007. Add the company to the Cons Group master data, set the accounting technique, update additional financial data w/ activity First consolidation and load data for the new company. Run COI

"Cons Group Change"

Company A is consolidated in Cons Group 1, but starting in 06/2007 they will be sold to a parent in Cons Group 2. Update the Cons Group master data...setting company A to divest in 06/2007 from CG1 and to First Consolidate in CG2 starting in 06/2007. If using Org Change logic, create an Org Change number and define a sender/receiver relationship for CG1 --> CG2. In additional financial data, create a total transfer activity w/ org change logic from CG1 to CG2. Run Org Change task and BCS will zero out balance sheet related to company A in CG1 on posting level 02/12/22. In CG2, similar postings will book "catch up" entries in 06/2007 to bring full balance sheet into CG2. In CoI, company will be transferred to new parent.

Hopefully that makes sense...

Chris

[Former Member]

Hi

I have following question in Location of Values’ in COI.

For reading the investment and equity data if I select to read from totals data then additional tab is enabled to specify all respective items/subitem which the function will use.

But if I specify to read from AFD as source of data (Additional financial data), these additional tabs are not enabled. Then how the system will know how to read these additional financial data and which items to be used in this regard? Please don’t forward me the help.sap.com link.. anyother answer will be helpful.

[dan_sullivan]

With location of values set to AFD for investments, it is necessary to create a task and method to either manually enter the data or load it via flexible file or load from data stream.

[Former Member]

Thanks Dan,

Does it mean for AFD we have to load results manually and there is no system function for first /subsequent consolidation calculation is required? But still the goodwill will be calculated by system is it not?

I have another question, but posting as seperate thread..

Thanks..

[dan_sullivan]

Once you load AFD data manually or otherwise, the COI task will automatically record the first consolidation and calculate and post goodwill.

For subsequent consolidations, this is also automatic with the COI task, but is typically triggered by totals records from equity (retained earnings) for the period.

[Former Member]

Thanks Dan..

In this context... in the location of values when I select the invest /equity to be read from AFD, I will not be able to specify the Investment items or equity item. How the system know what accounts to select duing first consolidation.

For goodwill calculation which items it wil use, as I understand the GW is the difference between investment amount and bookvalue. For this systme need to know the investment items.. how the sysmtem will know it using AFD method for location of values..

[dan_sullivan]

In location of values I select AFD for investments and AFD & Totals for equity. Then for equity include for earnings the retained esarnings current year item(s) as well as the dividends declared item(s).

With manual AFD entry as a task in the monitor, the entry includes investment value and % ownership and subsidiary equity. The system calculates the difference of equity multiplied by % ownership less investment as goodwill.