Posting during IU elimination

[shanid_mp]

Hi,

I am new to BCS and searched in SCN to get the clarity on what are the postings (FS items) will be considered during Interunit elimination (one and two sided), but not found. This may be a basic question in BCS.

My question is what are the FS and line items will be posted during IU elimination with differences. I am just looking at the configuration and trying to understand the same.

I have following config settings: I will just put only one sided elimination (once I get clarity on this, hope I can get 2 sided)

One sided elimination (Revenue & Expenses)

Selection1 - FS item, i.e; 100000

Differences - Debit & Credit FS item (same item), i.e; 200000

Document type clearing items:

Clearing B/S - 300000

Clearing Income statement - 400000

Clearing Cons.unit - 500000

Considering above assignments what and how the entries are posted during IU elimination in BCS.

1) For eg: Cons unit A & B is there and balance of $1000 found in Selection 1 FS item 100000 with trad partner B.

Pls provide the entries in below format for more clarity.

FS item, Debit/credit, trading partner (if appilcable).

2) Why do we need to assign FS item in difference tab of IU method as this is a one sided elimination. (if possible with examples)

3) Importance of each FS item assigned in clearing tab of document type config.(if possible with examples)

Note: I know the difference between one sided and two sided elimination.

Regards

Shanid

[former_member211095]

Hi Shanid

One side elimination will not check the values between cons units.  It will consider the values from selection 1 and update the same in differential account.

Maintain clearing accounts in the document which helps to determine any effect/imbalances in Balance Sheet and Income Statement.  Clearing Cons unit FS Item defines for if any imbalances caused by elimination entries  on cons unit level.

Please refer one side elimination from SAP Help which provide more information.

Regards

Rajesh SVN

[shanid_mp]

Hi Rajesh,

Thanks for the reply.

What you mean by 'It will consider the values from selection 1 and update the same in differential account' - Is this mean that there will be a posting with only one line item with difference FS item (200000 in my case) as a debit value?

I have not understood below explanation related to clearing accounts, can you please explain with an example.

Maintain clearing accounts in the document which helps to determine any effect/imbalances in Balance Sheet and Income Statement.  Clearing Cons unit FS Item defines for if any imbalances caused by elimination entries  on cons unit level.

Regards

Shanid

[former_member211095]

Hi Shanid

Normally one side elimination is used for elimination of revenue and cost of goods sold.

For Example within your corporate group the revenue of 1000 USD is offset by the expenses of 900 USD.  You want to perform onside elimination on the basis of revenue values.  Then need to define expenses account as a differential item.

Using reversed debit/credit sign the system post 1000 USD to revenue account and a difference of 1000 USD to the expenses item.  This process therefore eliminates an undesired excess of 100 USD from expenses.

Clearing account:

When system generate automatic posting  check if there is any affect/imbalances in balance sheet and income statement occurs or not.  If there is affect system use the defined FS Items and post difference.  For eg. in another scenario under selection 1 mentioned balance sheet item and in differential account maintain Income statement account.  In this cause there is a effect of Retained Earnings and Net Income and also total balances of statement which will adjust values based on clearing account.  Same rule applicable for Clearing Cons unit also.

Regards

Rajesh SVN

[shanid_mp]

Hi Rajesh,

Thanks for the quick reply.

I have understood the purpose of differential item.

Not clear on clearing FS items, can you please explain with journal entries and business scenarios.

Appreciate your reply.

Regards

Shanid

[NVChaitanya]

Hi Shanid,

As mentioned in your example you can see following journal entry

Sales of Cons Unit A ------Debit ----- USD1000

COGS of Cons Unit B -----Credit ----- USD 900

Differ in Recon Cons Unit B ---- Credit --- USD 900

This entry will take place at CG level.

Basically you need to define account where difference in elimination will go. You can define tolerance limit and define to which account difference will be booked.