Maintaining the Consolidation Group Structure

Objectives

After completing this lesson, you will be able to:

  • Create the consolidation group structure

Manage the Group Structure

Course Scenario

Now that you’ve created your consolidation groups and units, you can create the ownership structure. The ownership structure for ABC Corporation is displayed in the following image:

The World consolidation group contains all five consolidation units: Germany, United States, Canada, Belgium, and France. Germany is the parent of the World group, United States is the parent of the America group, and Belgium is the parent of the Europe group.

100% of Germany is included in the World group.

100% of the United States is included in the World and America group.

35% of Canada is included in the World and America group.

100% of Belgium is included in the World and Europe group.

75% of France is included in the World and Europe group.

To set up this ownership structure, we'll follow these steps:

  1. Create the consolidation groups.
  2. Create the consolidation units.
  3. Assign the consolidation units to the consolidation groups.
  4. Import the ownership percentages.

Manage the Group Structure

Because the consolidation groups and units have already been created, now you can make your assignments.

There are two apps to manage the group structure:

  1. Group View: With this app, you manage the assignments of consolidation units for a specific consolidation group. In the following image, the consolidation units for the World group are displayed for 012.2022 and version U00.
  2. Unit View: With this app, you manage the assignments of a consolidation unit to the consolidation group(s) that it’s assigned to. In the following image, the consolidation groups for the US00 consolidation unit are displayed for 012.2022 and version U00.

Group Structure - Key Points

  • Each consolidation group typically has one consolidation unit that is assigned as the parent unit. During consolidation, parent equity values remain untouched in the group since they’re investors.
  • A consolidation unit can belong to multiple consolidation groups.
  • Consolidation units can be assigned to consolidation groups from either of the group structure apps. Or, the assignments can be imported from files.
  • In the group structure apps, a method is assigned to each consolidation unit by consolidation group.
  • The predefined methods can be accessed via: Transaction code: CXEN9 Group Reporting ConsolidationConsolidation of InvestmentsMethods.
Note

There’s no consistency check with transactional data. If you delete a consolidation unit that has transactional data, the status can be inconsistent. If you, for example, run the Preparations for Consolidation Group Changes task and respective documents are generated, these documents might become inconsistent or obsolete when you remove the assignment. However, they aren't deleted with the removal of an assignment.

Manually Assign Consolidation Units

Assign Consolidation Units Manually

When you assign consolidation units, the following information is recorded:

  • Start of Assignment: When you assign a consolidation unit to a consolidation group, the start of the assignment is taken from the filter bar. The start of the assignment must be the same as or earlier than the first consolidation. The start of the assignment can be earlier than the first consolidation. For example, to prepare the data of that consolidation unit for consolidation.
  • End of Assignment: The end of the assignment is automatically derived from the divestiture. The end of the assignment reflects the end of the fiscal year of the divestiture. The consolidation unit is assigned to the group until the end of the fiscal year even if the consolidation unit was divested during the fiscal year.
  • First Consolidation: The period and year of the first consolidation must be later than or the same as the start of the assignment and earlier than the divestiture. If you want the first consolidation at the end of the period, select First Consolidation at End of Period.
  • Divestiture: The period and year of the divestiture must be later than the first consolidation. If necessary, the changes you make to the divestiture automatically changes the end of the assignment. If you want to divest at the beginning of the period, select Divestiture at Beginning of Period.
  • Consolidation Method: Select the consolidation method. If you choose Parent, data is automatically consolidated using the purchase method.

Purchase and Equity Method

The general guidelines to determine the method are as follows:

  • If the ownership of a consolidation unit is over 50%, the purchase method is assigned.
  • If the ownership of a consolidation unit is between 20% and 50%, the equity method is assigned.
  • If the ownership of a consolidation unit is less than 20%, the consolidation unit isn’t included in the group.
Note
Direct Share is selected in most implementations. However, Group Share can be used depending on customer requirements.

Assign Consolidation Units to Groups Manually

Business Scenario

The consolidation units and groups have been created. Now you need to assign consolidation units to the World group for ABC Corporation. Use 012.2022 as the period of first consolidation because it's the start-up time-frame.

What skills will you develop in this practice exercise?

  • Assign consolidation units to the World group
  • Assign consolidation methods to each consolidation unit

Import Consolidation Unit Assignments

Import the Group Structure

Follow these steps to import the group structure:

  1. Prepare the file.
  2. Go to the Import Consolidation Master Data app. You can use the Actions to download the template or existing master data.
  3. Upload the file and check the data. You can choose Check All to make sure that the data from all uploaded entries can be successfully imported. Check the Status Detail column to see if there are any check errors or warnings. The Status Detail column also displays the reasons for any check errors and warnings.
  4. Import the assignments.
Note
After the initial setup, no changes are necessary in subsequent periods unless there’s a change to the structure.

Import Consolidation Unit Assignments

Business Scenario

The consolidation units and groups have been created. Now you need to assign consolidation units to the America and Europe groups for ABC Corporation.

What skills will you develop in this practice exercise?

  • Prepare the import file
  • Import the assignments
  • Confirm the import

Segment Reporting Impact

At ABC Corporation, you're using substitution rules to split company data into multiple consolidation units. Each consolidation unit represents a business segment. Splitting up data from companies to multiple consolidation units that represent the segments of the company is a prerequisite for segment reporting.

Also, the data of consolidation units representing a specific segment has to be consolidated.

Defining segments as groups in consolidation unit hierarchies is sufficient if no segment-related group postings are required.

Note
In this context, segment isn't referring to the dimension in group reporting called segment.

If segment-related group postings are required, you can create consolidation groups to represent segment groups. As a result, segment-related group postings can be performed. For example, you can generate posting level 30 entries for segment reports.

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