Introducing the Group Reporting Process
Acquiring Data
Preparing Data
Matching and Eliminating Intercompany Transactions
Consolidating Investments
Reporting Consolidated Data
Running Balance Carryforward

Describing Consolidation Processes

Objective

After completing this lesson, you will be able to explain the key process steps of group reporting

Introduction to This Course

In the previous SAP S/4HANA Cloud for group reporting courses, you learned about the features and components of group reporting from a conceptual perspective.

In this course, as an intermediate business user, you'll run and monitor closing tasks in SAP S/4HANA to consolidate financial data for ABC Corporation. You’ll also use group reports to analyze and confirm the results. The focus is on group reporting from a practical, hands-on perspective.

Note

  • SAP offers a cloud product SAP S/4HANA Cloud for group reporting and an on-premise solution, SAP S/4HANA Finance for group reporting. This course covers both and you can assume all functionality described is equivalent for both.
  • If you are completely new to SAP S/4HANA Cloud for group reporting, please check the introductory learning journey.

An Intermediate Business User's Responsibilities

The image illustrate a person working at a desk. To represent the person on the text bellow.

Last month, you (Anthony) started a new job as an intermediate consolidation consultant. Your new assignment is to perform consolidation tasks as part of the corporate close.

Your new responsibilities involve:

  • Acquiring Data
  • Preparing Data
  • Matching and Eliminating Intercompany Transactions
  • Consolidating Investments
  • Reporting Consolidated Data
  • Running Balance Carryforward

You need foundational knowledge about how to perform these tasks using SAP software. Let's ask my manager (Peter) for guidance on where to start.

The image illustrate a person standing holding a tablet . To represent the person on the text bellow.

Hi there, Anthony! Congratulations on your new assignment. Let's go through the business scenario.

ABC Corporation recently implemented group reporting. All of the configuration is complete and now the system is ready to use. You will run and monitor closing tasks in SAP S/4HANA to consolidate financial data for ABC Corporation. You’ll also use group reports to analyze and confirm the results.

Note

  • SAP offers a cloud product SAP S/4HANA Cloud for group reporting and an on-premise solution, SAP S/4HANA Finance for group reporting. This course covers both and you can assume all functionality described is equivalent for both.
  • If you are completely new to SAP S/4HANA Cloud for group reporting, please check the introductory learning journey.

Group Reporting Key Concepts

The following summary of the most important group reporting concepts are useful when you perform the month-end closing:

  • The preparation ledger populates group reporting fields in the ACDOCA table and uses accounting substitution rules to derive consolidation units. For example, company code U.S. and profit center PC1 are used to derive consolidation unit USPC1.
  • Posting levels track data by key process steps such as, reported data, standardized data, eliminated data, and consolidated data. Each document type is assigned to one posting level and is used to determine document numbers, reversal behavior, and permitted key figures.
  • Version Consolidation version distinguishes actual from plan data, selects group currency, and determines the source accounting ledger. Special versions provide version-dependent configuration and sharing of objects among versions. Use extension versions for multiple group currencies You can stack extension versions for restatements and simulations.
  • Currency translation translates from local to group currency or retains existing group currency values.
  • Intercompany eliminations are automated for intercompany dividends, accounts payable/receivable, profit in inventory, and revenue and cost.
  • Report logic dynamically determines elimination entities by using the first-common-parent for each hierarchy node to provide a consolidation view. For example, the consolidation view shows total revenue by entity along with an elimination entity for each consolidation unit hierarchy node. Alternatively, the contribution view displays revenue net of eliminations by entity.
  • Matrix consolidation provides legal and management accounting reports without data redundancy.
  • Consolidation of investments automate postings for acquisitions, step acquisition, capital increase/decrease, divestitures, transfers, and mergers. Both the purchase and equity methods are supported. The rule-based approach is the default solution in the on public cloud. For the activity-based approach in the on public cloud you have to set up a ticket. In the private cloud and the on Premise system both approaches are available.
  • Reporting You can report with SAP Fiori apps, SAP Analysis for Office (Microsoft Excel), as well as SAP Analytics Cloud. The SAP Fiori apps include the Group Data Analysis app, which is used for routine reporting requirements. You can use Review Booklet app as a one-stop-shop for a variety of financial statements. You can use the Group Data Analysis With Reporting Rules app for special reporting requirements such as cash flow and comprehensive income.

The following image includes a few of the most important components in group reporting as well as the data flow from the ACDOCA table to the ACDOCU table.

The figure illustrates the flow of data from Consolidation Groups, Units, and FS Items to Global Parameters, which then feed into the Data/Consolidation Monitor. The monitor processes data for Group Reports and Data Release, interacting with ACDOCU and ACDOCA.

The global parameters are used to set your filter criteria for:

  • Consolidation Group
  • Consolidation Unit
  • Consolidation Version
  • Consolidation Chart of Account
  • Fiscal Year
  • Fiscal Period.

Use global parameters to provide default filter values when accessing the data monitor, consolidation monitor, and reports. You use global parameters throughout the consolidation process.

Note

In the ACDOCU table, the posting level is blank for data release records. In the ACDOCA table, group reporting fields like consolidation unit and FS item contain values because the preparation ledger is activated as part of the course scenario.

Month-End Closing Process

Before you begin running tasks for the corporate close at ABC Corporation, there are a few setup activities:

  • Check the master data of your organizational units. This includes possible changes to existing, as well as newly acquired, consolidation units. For example, perhaps a consolidation unit becomes integrated in period 12 of 2025 because the underlying company code is now in accounting. In addition, all changes to the consolidation group structure are performed at this point.
  • Check the financial statement (FS) items master data. This primarily includes updates to the mapping of new G/L accounts to FS items.
  • Update exchange rates. This includes the update of group reporting-specific exchange rates.
  • Set your global parameters to the closing year and period.
  • Open the period in the data monitor.

When the month-end closing data processing begins, you’ll prepare the data for consolidation in the data monitor.

After the data monitor tasks are complete, the consolidation monitor is used to perform consolidation tasks such as intercompany eliminations and consolidation of investments. Throughout the process, you can cross-check your processed data using delivered reports.

Group reporting process

The image outlines the financial consolidation process, covering stages from data collection to balance carryforward. It details specific tasks for SAP and non-SAP companies, including data preparation, intercompany transactions, investment eliminations, and reporting.

The group reporting process consists of six main steps:

  1. Data collection: Release data from SAP S/4HANA Finance and import from outside sources into group reporting.
  2. Data preparation: Calculate net income and retained earnings, perform currency translation, adjust the data to align with corporate accounting standards, and validate the data.
  3. Intercompany: Reconcile and match intercompany transactions. Eliminate intercompany activity.
  4. Investment eliminations: Record ownership data and run the investment and equity elimination.
  5. Reporting: Analyze the results with SAP S/4HANA reporting options or with SAP Analytics Cloud.
  6. Balance carryforward: In the new year, open the period and carryforward balance sheet items into the new year.

Note

Reporting takes place continuously through each process step. After the close is complete, the final balance sheet, income statement, and cash flow reports can then be viewed.

Describing the Consolidation Process

Before you begin running tasks for the corporate close at ABC Corporation, there are a few setup activities:

  • Check the master data of your organizational units. This includes possible changes to existing, as well as newly acquired, consolidation units. For example, perhaps a consolidation unit becomes integrated in period 1 of 2024 because the underlying company code is now in accounting. In addition, all changes to the consolidation group structure are performed at this point.
  • Check the financial statement (FS) items master data. This primarily includes updates to the mapping of new G/L accounts to FS items.
  • Update exchange rates. This includes the update of group reporting-specific exchange rates.
  • Set your global parameters to the closing year and period.
  • Open the period in the data monitor.

When the month-end closing data processing begins, you’ll prepare the data for consolidation in the data monitor.

After the data monitor tasks are complete, the consolidation monitor is used to perform consolidation tasks such as intercompany eliminations and investment eliminations. Throughout the process, you can cross-check your processed data using delivered reports.

Learn more about the key steps in the consolidation process in the following video.

In summary, the group reporting process consists of six main steps:

The group reporting process consists of six steps.

  1. Data collection: Release data from SAP S/4HANA Finance and import from outside sources into group reporting.
  2. Data preparation: Calculate net income and retained earnings, perform currency translation, adjust the data to align with corporate accounting standards, and validate the data.
  3. Intercompany: Reconcile and match intercompany transactions. Eliminate intercompany activity.
  4. Investment eliminations: Record ownership data and run the investment and equity elimination.
  5. Reporting: Analyze the results with SAP S/4HANA reporting options or with SAP Analytics Cloud.
  6. Balance carryforward: In the new year, open the period and carryforward balance sheet items into the new year.

Note

Reporting takes place continuously through each process step. After the closing is completed, the final balance sheet, income statement, and cash flow reports can be viewed.

Business Scenario for this Course

In a corporation, the local close is for the legal subsidiaries (company codes) to meet their own local accounting standards in their local currency. For example, a US subsidiary prepares financial reports that meet U.S. GAAP (generally accepted accounting principles) accounting requirements in USD.

On the other hand, the corporate close process involves the preparation of consolidated financial statements in the group currency with values that reflect group accounting standards. Of course, the local close occurs before the group close.

Note

One of the key advantages of group reporting is that the local and group close can take place in the same SAP S/4HANA system with the same user interfaces.

As part of the course scenario, we’ll use the following ownership structure for the ABC Corporation:

The image illustrates the consolidation structure of a global group in Germany that has subgroups America and Europe. Germany holds 100% ownership of the United States and Belgium, while the United States owns 35% of Canada and Belgium owns 75% of France.

In the preceding figure, you can see that there are five legal subsidiaries (referred to as consolidation units in group reporting) in several countries that are part of the ABC Corporation:

Germany

Belgium

France

United States

Canada.

Consolidation units are organized into consolidation groups. Consolidated financial statements are prepared for the World, America, and Europe consolidation groups. Consolidated financial statements include the balance sheet, income statements and cash flow reports.

From a currency perspective, the local currency values for each country will most likely need to be translated into Euros (because Germany is the Corporate parent). If the local financial statements are already in the group currency, then no translation is required. This is easily handled by group reporting.

In our use case, there are several intercompany transactions between the legal subsidiaries. Because intercompany transactions are internal to the Corporation they’ll need to be eliminated. This includes intercompany accounts payable and receivable, intercompany sales and cost, and intercompany profit in inventory (to name a few).

From a consolidation of investments perspective, the corporate holding company (Germany) owns 100% of the Belgium subsidiary. The Belgium subsidiary owns 75% of the French subsidiary and so on. Because Belgium owns more than 50% of France, Belgium is the controlling parent and the relevant accounting is referred to as the purchase method. Therefore, there will be some adjusting entries for the investment, the goodwill, and the non-controlling interest to consolidate the French balance sheet and income statement into the Corporation's financial statements.

In addition, because several regions are involved, there's also a need to provide consolidated financial statements using multiple accounting standards such as US GAAP and IFRS (International Financial Reporting Standards). Group reporting uses the consolidation version concept to meet this requirement.

Reviewing the Ownership Structure

Ownership Structure for ABC Corporation

In the following animation, you’ll learn about the ownership structure that we’re using for the course scenario as well as the types of intercompany transactions we need to address. In addition, you'll learn about the ownership eliminations that we need to perform as well as the U.S. GAAP and IFRS reporting requirements.

 Prepare Your User and the SAP Fiori Launchpad

After logging on to your SAP S/4HANA Cloud tenant, assign some business roles to your user. Then refresh the web page so that the Launchpad changes can take effect.

Task 1: Assign Roles to your User in the SAP Fiori Launchpad

Steps

  1. Use the tile Maintain Business Users in the Default space to assign the following 5 roles to your user:

    Business Role IDBusiness Role
    F9_GROUP_REPORTINGAll Group Reporting Classes
    BR_EMPLOYEEEmployee
    BR_ANALYTICS_SPECIALISTAnalytics Specialist
    BR_BUSINESS_PROCESS_SPECBusiness Process Specialist
    BR_GRP_ACCOUNTANTGroup Accountant

    Note

    Caution:

    Please do not remove the Z_S4C_GENERIC_ROLE and the Z_JOULE_FIN_ROLEfrom your user. Only add the new roles.

    Return to the SAP Fiori Launchpad Home Page.

    Refresh your browser.

    1. Open the Default space of your SAP Fiori Launchpad.

    2. Open the Maintain Business Users tile.

    3. In the User Name field, enter your user ID.

    4. Choose Go.

    5. In the Business Users section, select your user.

    6. Choose >(Navigation).

    7. Open the Assigned Business Roles tab.

    8. Choose Edit.

    9. Choose Add.

    10. In the Add Business Roles dialog enter F9_GROUP_REPORTING in the Search field.

    11. Choose the Search icon.

    12. In the Business Roles section of the Add Business Roles dialog select the role F9_GROUP_REPORTING .

    13. Choose OK.

    14. Follow the instructions in step i. to m. also for the other roles in the exercise.

    15. Choose Save.

    16. Choose the icon to return to the SAP Fiori Launchpad Home Page.

    17. Choose F5 on the keyboard to refresh the browser.

Learning

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