Defining the Group Structure of ABC Corporation
Let's go through the business case for the project for activity-based consolidation of investments.
The corporate holding in Germany owns 80% of a legal subsidiary in the United States and 90 % of a legal subsidiary in Switzerland. The United States company owns 35% of a company in Canada. The Swiss company owns 60% of the company in Denmark. These relationships form the corporate investment structure.
Corporations use consolidation groups to generate published financial statements. For example:
- The consolidation group World
- The consolidation group Europe
- The consolidation group America
This group is founded in period 12 of fiscal year 2025. All companies enter the group on the first day of period 12 as consolidation units. The figure above describes the direct shares between the investor and the investee.
Within the group, consolidation unit DE00 refers to S/4HANA integrated company 1010. The local close of company 1010, which represents consolidation unit DE00, is therefore stored in table ACDOCA of Financial Accounting and must be released to be stored in table ACDOCU of SAP S/4HANA Finance for group reporting.
The local close of USA, Canada, Switzerland, and Denmark, which are non-integrated companies, also called Spreadsheet companies, is uploaded via Flat File. The consolidation-specific corrections for consolidation unit DE00 will also be uploaded.
Focusing on the Local Close Data
Local Close Data: Local close is the year-end closing of a company that is part of a corporate group. The local close therefore only takes one company into account. The retained earnings calculated in the individual financial statements form the basis for the distribution of profit.
The following table describes the local close of integrated Company 1010.
Business Statement (BS) and Profit & Loss (P&L) Statement of Company 1010
Net Income/Loss and Net Income are not stored in table ACDOCA in Financial Accounting. General Ledger (G/L) account 18010000, which represents the investment of company 1010, contains an investment of 7000 EUR but the local close data doesn't explain in which company 1010 invested and says nothing about the investment percentage. This missing information must be uploaded in Group Reporting.
General Ledger (GL) Accounts and Financial Statement (FS) Items of Company 1010 (DE00 - Germany)
The next table shows which Financial Statement (FS) and General Ledger (GL) accounts are used in ABC Corporation's business example. See the mapping between both FS items and GL accounts below.
The mapping is relevant for the transfer of the local financial statement of integrated company 1010 into SAP S/4HANA Finance for group reporting.
Note
Financial Statement (FS) item 317000 - Retained Earnings Current Year (RE CY), and FS item 799000 - Net Income/Loss must be calculated in SAP S/4HANA Finance for Group Reporting using the Calculate Net Income task in the Data Monitor.